Hearing of the House Budget Committee - Opening Statement of Rep. Van Hollen, Hearing on CBO's Budget and Economic Outlook

Hearing

"Thank you, Mr. Chairman. Director Hall, I join with my colleagues in welcoming you and the CBO team.

"What struck me in looking at this budget outlook was that it was really not that different from last year's budget outlook. It showed that deficits as a percent of the economy have fallen dramatically since 2009, and remain relatively stable for a couple years, and then you begin to see increasing deficits driven primarily by an aging population and health care costs. In fact, the biggest single component of the increase in the 10-year deficit projection were the unpaid-for tax cuts that Congress voted on just last fall. $817 billion, round up you get to a trillion dollars, was added to the deficit just last November and December when our Republican colleagues put that forward and refused to pay for a single penny.

"Some of those proposals were meritorious, but we should be paying for those long-range tax cuts. And by the way, Mr. Chairman, that figure includes [the related interest costs]. Because when you bring in less revenue and your deficit goes up, so do those interest costs you just referred to. And Congress just added significantly do those interest costs by refusing to pay for those tax increases.

"The good news is that this forecast predicts stronger economic growth this year - 2.7 percent. That's good news because the economy has created new jobs for 70 consecutive months -- 14 million jobs. We need to add more jobs. And most importantly, we should get to work on strategies for boosting wages.

"Which is why it is so disappointing that in this new Congress, instead of getting to work on the business of the American people and focusing on the economy, the very first thing we did in 2016 with the new Speaker was vote for the 62nd time in a row to dismantle the Affordable Care Act. And just a little earlier this week, the 63rd time in an attempt to override the President's veto, which wasn't going to happen. And by the way that vote also included the [12th] attempt to roll back programs that protect women's reproductive health, including an attempt to defund Planned Parenthood, despite the fact that a grand jury recently vindicated Planned Parenthood and decided instead to indict their accusers.

"So rather than just repeating over and over again these efforts to dismantle the Affordable Care Act, we should be focusing on growing the economy and increasing wages. We should address those issues by investing more in our economy, which is why, Mr. Chairman, I'm a little troubled to hear some members on your side may be talking about revisiting the caps that we agreed to last year, which made room for some investment in things like education and transportation.

"But as we look to the long term deficit, we should also remember that the largest category [of spending], according to the Congressional Budget Office, are the so-called tax expenditures. These include a lot of tax breaks in the tax code that benefit the very wealthiest Americans. They include tax breaks like the carried interest loophole for hedge fund managers. Which means that folks who are managing a hedge fund pay a lower tax rate than people driving a bus, or our teachers.

"We need to end the loophole on inversions. Every day we're reading more about companies that are changing their overseas address to escape their responsibility to American taxpayers -- which, by the way, means that everyone else in the country pays more while these companies that continue to benefit from what America has to offer are paying less.

"So as you can see from this chart, if you add up the cost of tax expenditures on an annual basis, they are higher than the total cost of Medicare and Medicaid. And higher than the total cost of Social Security. Which is why it was so disappointing that rather than addressing those issues, our Republican colleagues last year voted for the largest increase in the deficit in recent times, adding over $800 billion to that 10-year deficit.

"So if we're going to get serious about this, Mr. Chairman, we're going to have to look at the tax expenditure column and end the tax breaks which disproportionately flow to the top 1 percent. 17 percent of the benefit of those tax expenditures go to the top 1 percent of the income scale. That is a rigged tax system, rigged in the favor of the very wealthy. We need to change it. Thank you, Mr. Chairman."

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