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Q&A

On Balance

Super-committee member Chris Van Hollen offers a peek at what he hopes will be the Democrats’ revenue strategy.

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A window: Chris Van Hollen(Richard A. Bloom)

Deciphering the state of the super committee’s deliberations has become something of a parlor game in Washington, especially as time runs short for the deficit-reduction panel to identify up to $1.5 trillion in savings to meet its Nov. 23 deadline. So far, the 12 members have been extraordinarily secretive—a fact that other politicians have criticized, saying it hurts their chance to build congressional support for a proposal.

But Rep. Chris Van Hollen, D-Md., has become one of the more vocal members of the super committee; he frequently speaks about the need to find new revenue sources in addition to cutting spending. He recently sat down with National Journal to chat about his hopes for tax and budget reform. Though he refused to disclose specifics about the committee’s machinations, his views offer a window into the policy mind-set he brings to the negotiations. Edited excerpts from the interview follow.

 

NJ What’s the main framework you’d like to see come out of the super committee?

VAN HOLLEN There are two important elements. No. 1, we have to focus on jobs and the economy, meaning getting people back to work and getting the economy kicked into high gear. The second is that we come up with a long-term plan to reduce the deficit. When I say a long-term plan, I don’t mean we do it another day. If you look at every other bipartisan committee’s plans to reduce the deficit, they’ve taken a balanced approach: Simpson-Bowles, Domenici-Rivlin, Gang of Six. All of them have a framework that says, “If you want to tackle this issue, you need to cut spending, but you also need to close tax loopholes and raise new revenue.” We’re a bipartisan committee. We should follow that model.

NJ Where would you like to see the revenue come from?

 

VAN HOLLEN If I was designing the mechanism for raising revenue, I might come up with a very different plan than what could reasonably be expected of a bipartisan committee. But one way is to begin to reduce and/or eliminate tax expenditures. I can support a lot of different ways. The president’s proposal would drop the value of some expenditures for high-income earners. Another idea—and these ideas are not mutually exclusive—is a concept that [economist] Marty Feldstein has pursued. I wouldn’t adopt the specific parameters he lays out, but the overall concept could provide room for compromise. Instead of immediately eliminating any particular deduction or tax expenditure, he says: “Let’s just limit the overall amount of tax expenditures or tax deductions that people can take.” If we could design that in a way that protects middle-income taxpayers, it could create a mechanism that, over time, could steadily reduce tax expenditures. You could have some of that revenue go to tax deductions and some of it to reducing rates.

NJ Where do you think the spending cuts should come from?

VAN HOLLEN There are areas of agriculture subsidies that can be cut. There are other areas for potential savings in Pentagon spending. In other areas, like Medicare, we’ve already begun to make savings. People sometimes forget that the Affordable Care Act modernized Medicare in a number of ways. Going forward, there are a number of areas we should be looking at that would create greater incentives for quality of care over quantity of health care. There are things we can do to better coordinate the care of dual eligibles, individuals on both Medicare and Medicaid. We also have to look at ways in which the current Medicare program may be in fact subsidizing some of the private health care products.

NJ How would you like to see the committee tackle tax reform in terms of individual and corporate tax rates, apart from just tax expenditures?

 

VAN HOLLEN The so-called Buffett Rule is an important concept that should be applied. On the corporate side, I would try to reduce tax expenditures and bring down the rates. A lot of this is easier said than done when you get into the weeds, especially when you get into whether you lean toward a worldwide taxation or territorial system or a variety of hybrids in between. It gets complicated quickly.

NJ Are you optimistic about the committee’s prospects for cutting a deal?

VAN HOLLEN I’m optimistic about the intention of all members. The question is whether we’ll be able to bridge the differences. The fair answer to that question is: The jury is still out and people are working hard. I know most members of the committee recognize that, in order for us to have something we could present to our colleagues by Nov. 23, we really have to put a lot of these pieces in place sooner rather than later.

This article appears in the October 22, 2011 edition of National Journal Magazine.

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