Reasonable Compromise, Big Spender Style


With sequestration, the debt ceiling, and the federal budget for Fiscal Year 2014 continuing to dominate headlines, Members of Congress are trying to put themselves in the best position for upcoming debates. Congressman Chris Van Hollen (D-MD), Ranking Member of the House Committee on the Budget is going above and beyond the normal rhetoric.

On August 19, Rep. Van Hollen was interviewed by Roll Call about his views on issues related to the debt ceiling, sequestration, and the federal budget as a whole. One section of the interview caught Tea Party Patriots’ eye:

But in general, Van Hollen spoke on Monday with bold confidence in Democrats’ ability to influence the year-end budget debates. Democrats in both chambers, and in the White House, have said they won’t negotiate with Republicans around the debt limit, and this time they think they have the leverage to stick with that promise.

“I think we have a lot of leverage and it’s because the Republican leadership is incapable of leading its own caucus,” he said. “Put it this way: They are incapable of leading their caucus to any reasonable compromise,” such as one that would pass muster with the Senate and win President Barack Obama’s signature.

What is a “reasonable compromise?” According to spokesperson Bridgett Frey, the Congressman proposed an alternate sequestration proposal focusing on four areas:

Elimination of subsidies for the four biggest oil companies, to the tune of $2.5 billion per year, according to a senior Democratic aide on the House Budget Committee.
A modified Buffett Rule, which would raise approximately $7.3 billion annually in new revenue from “wealthy” earners.
Elimination of direct payments to farmers.
Matching the President’s defense spending levels, which are lower (through 2021) than sequestration’s levels.

This is no compromise alternative. Big Oil has been Democrats’ whipping boy for years, so it’s not surprising to see Van Hollen single out the industry. Furthermore, raising taxes makes Van Hollen’s plan not viable because he and other anti-free market politicians don’t understand that increased corporate taxes/expenses are passed to company employees and consumers, not the executives.

Regarding the Buffett Rule, CBO data published in 2012 based upon 2009 tax returns shows the top 1% of earners paid 1,500 times as much in taxes, on average, as the bottom 20%, while making 50 times as much. Adding insult to injury, the rule increases taxes on those who already saw their tax rates rise in January’s fiscal cliff deal. Furthermore, according to Frey, the Congressman believes that over $500 billion in tax increases in January wasn’t enough; $120 billion more is needed, per year, for the next decade, as part of the House Democratic alternative budget resolution.

Additionally, the Congressman cited a new Congressional Budget Office (CBO) report claiming sequestration will cost the economy 900,000 jobs in 2014. This claim is questionable at best, as there is no evidence sequestration is actually hurting the economy in 2013. Furthermore, government agencies and departments were given flexibility by Congress in recent months, meaning they were able to cut low-importance areas of the budget. Furloughs, for example, have been cut back significantly from original estimates.

Even assuming the report is accurate, the Congressman ignores how the report directs readers to its February 2013 analysis showing more deficit reduction in the short and medium-terms will help the American economy far more by 2023 than it would hurt in 2014.

Van Hollen himself has strong ties to House Democratic Leadership, which may explain this skewed version of “compromise.” Nancy Pelosi named him to the Joint Committee on Deficit Reduction in 2011 after he served as a special assistant to her, and he has been called “The Next Democratic Speaker of the House,” by New Republic, so this “compromise” may be more about partisan positioning than solid solutions.