This fall’s legislative agenda seems like budgetary déjà vu. You’ve got an impending fight over raising the debt ceiling; a hard deadline to keep the government funded; and the threat of more across-the-board spending cuts, known in Washington parlance as the sequester. At the center of these upcoming budget battles will be Rep. Chris Van Hollen of Maryland. He’s the top Democrat on the House Budget Committee, a frequent sparring partner to committee Chairman Paul Ryan, R-Wis., and one of the White House’s closest allies on budget issues. Edited excerpts of his interview with National Journal follow.
NJ How are you feeling about this fall’s latest round of budget battles? Do you have budget fatigue?
VAN HOLLEN I’m worried. We’ve been trying to engage in budget negotiations for months now and have gotten no Republicans in the House to the table. So I’m nervous that the Republican strategy of taking us right to the cliff is creating a very risky situation for the fall. My sense is that you’ve got Republicans, especially in the House, who thought that taking these negotiations to the edge of the cliff would strengthen their leverage. The risk for Republicans is that they can’t control a major part of their caucus. My perception is that they don’t have a strategy for dealing with a core group of folks who would like to shut down the government, who would like to play a game of chicken with the debt ceiling. I am worried that the Republicans are creating the conditions for another kind of crisis mentality that will generate uncertainty.
NJ Which worries you more—a possible government shutdown in late September or the fight over the debt ceiling that will follow it?
VAN HOLLEN I see the debt limit as the bigger political challenge. It shouldn’t be. The president has been very clear that there is no negotiation over the debt ceiling. The challenge for the House leadership is to figure out how to deal with it. With the other parts of it, like the continuing resolution and appropriations, we have a series of preferences as to how we would deal with it. Our preference would be to get a comprehensive budget agreement that replaces the sequester for as long a period as possible. We’d like to do it for 10 years. That agreement would also contain a major jobs package, especially an infrastructure component. If we’re not going to be successful in getting a large agreement that includes a 10-year sequester replacement, then we would look at shorter-term possibilities.
NJ Where could revenue come from in this ideal budget compromise?
VAN HOLLEN Tax expenditures are just a way of spending through the tax code, so we believe that [they] should be treated that way. That’s what all of the bipartisan commissions have said. If you’re looking at a one-year proposal to undo the sequester, you’re looking at a smaller set of tax expenditures. You don’t need comprehensive tax reform if you’re doing a one-year proposal. If you’re talking about trying to put together a $100 billion-plus package—with $50 billion in revenue and $50 billion in cuts—then you can do some rifle shots. There’s a menu of options on the tax-expenditure side that you could look at. Our proposal has the oil and gas subsidies in it. You’ve also got the carried interest [which allows hedge-fund managers to pay taxes at a low rate].
NJ Many House Democrats have opposed a handful of budget ideas proposed by the president in past negotiations, such as changes to the formula that calculates government benefits, or cuts to Medicare. Are you worried those could end up in a deal?
VAN HOLLEN Well, you’re right. Those are provisions that are part of the president’s large package that do not have a lot of support among House Democrats. My understanding is that the White House position is that those elements, which a lot of us do oppose, would only be part of a large agreement with significant revenue. After all, that is the way the president has presented it.
NJ One quirk of next year’s sequester is that it would hit defense much harder than it did this year. Do you think that’s the carrot to bring Republicans to the negotiating table?
VAN HOLLEN If the Republicans come to the table—and I’m not saying they will—I think it will be in large part because of the defense cuts that we all oppose. We also oppose the cuts to NIH and education and [other] nondefense [programs]. Next year, the sequester will apply equally to defense. Going forward, what that means is that, compared to this year, defense will be reduced by $20 billion, whereas nondefense would be on a steady state of funding. If Republicans kept the sequester in place, then they would be making the choice to cut defense by $20 billion rather than agree to a sequester-replacement plan.