FOX News "FOX News Sunday" - Transcript

Interview

BREAK IN TRANSCRIPT

REP. CHRIS VAN HOLLEN, D-MD.: Good to be with you.

REP. PAUL RYAN, R-WIS.: Good morning, Chris.

WALLACE: Congressman Van Hollen, this week the House Democratic Caucus voted not to even bring this compromise to the floor for a vote, but that was non-binding.

So my question is as a member of the Democratic leadership, if the Senate -- and they're going to go first -- if they pass this compromise, will Speaker Pelosi bring this to a vote on the floor or not?

VAN HOLLEN: Well, this bill will come to the floor of the House in some form. Let me just say something, Chris.

WALLACE: You say it will come to the...

VAN HOLLEN: In some form it will come to the floor of the House for a vote. You know, this is -- House Democrats are being portrayed as people who haven't adjusted to the post-election reality, that we don't want to cut any deal at all. And there are some. There are some House Democrats who will refuse to go along with any deal.

Most of -- most of us understand we gotta make some tough compromises. Most of us agree with almost all of what the president negotiated. There is one thing that just was the choking point, and that deals with the estate tax break. It doesn't go to current law.

If you go with current law, you would have -- it's essentially $68 billion that it's going to cost the taxpayer over current law for 39,000 estates. We had a better compromise than that instead of the deal that was cut that provides $25 billion to 6,600 families.

That doesn't help the economy. It hurts the deficit. And most importantly, you know, the Republicans did not insist on the estate tax being part of the central portion of this deal.

WALLACE: But here's the question, then, and let's do just a little quick -- will -- if it passes in the Senate, and everybody expects that it will, will there be an up-or-down vote on the entire package?

VAN HOLLEN: There will be an opportunity for the House to work its will. What the form the bill takes as it comes to the floor is something that will be decided. People are looking at various alternatives. Again, the main sticking point for most people -- again, some are going to reject...

WALLACE: I understand.

VAN HOLLEN: ... is this particular issue with the estate tax.

WALLACE: So what do you predict is going to happen? Will the House pass this as it's -- now stands with some changes on the estate tax, or will it simply be voted down?

VAN HOLLEN: Well, I think it's unclear. I mean, the House will have an opportunity to work its will on this measure.

I am confident that when we get to January there will be no tax increases on middle-income Americans and certainly that -- also that portion of the president's deal with respect to the top rate earners will also be part of...

WALLACE: So that...

VAN HOLLEN: ... part of the deal.

WALLACE: ... you're convinced that there will be this compromise but perhaps would -- trying to take the estate tax section of it out?

VAN HOLLEN: I don't think anyone has put this question to the test. Are Republicans willing to hold up tax relief not just for middle-income Americans but also at the top rates and the whole rest of...

WALLACE: Well...

VAN HOLLEN: ... deal in order to provide a $25 billion break to 6,600 families?

WALLACE: All right. Let's ask Congressman Ryan. He's a member of the House Republican leadership and is going to be the new chairman of the House Budget Committee.

Congressman Ryan, let's put up what the issue is on the estate taxes. The compromise would set a 35 percent tax on estates over $5 million. But some Democrats, including Chris Van Hollen, want a 45 percent tax on estates over $3.5 million.

Question: Will Republicans accept any changes to this deal, especially on the estate tax?

RYAN: And so they're willing to hold up all of the other tax breaks, all of the other tax rates on middle-class families, on small businesses, so they can get this smaller increase in the estate tax.

I don't want to get into the "who's a hostage-taker" discussion here, but what is the estate tax? It's a double tax on death. Economists will tell you that it's really not a tax that soaks the rich, but it's a tax on capital that deprives business investment and therefore job creation.

But more importantly, this current policy -- we're at zero and then we're going to go to a 35 percent tax rate. That's not enough for Chris and other House Democrats and they're willing to scuttle the entire agreement, an agreement which has bipartisan support in the Senate, an agreement with the president of the United States to get this moving and prevent tax increases from hitting our economy, which would be very destabilizing, very volatile, in January.

I think if the president actually bows to this pressure and participates in scuttling this deal, then what does that speak to our ability to have competence and bipartisanship in this new era of divided government we're finding in (sic)? How well will we be able to reach agreements that will stick if people are angry in parts of the party and then they unravel these deals?

WALLACE: But, Congressman Ryan...

RYAN: So I think it's really important we stick with this agreement.

WALLACE: ... answer my question specifically.

RYAN: No. The answer is no. The answer is no. The answer is no, we are not interested in changing this deal. We're interested in passing this through.

WALLACE: Take it or leave it?

RYAN: Take it -- look, Chris, we already have an agreement with the president. We already have an agreement with some Senate Democrats. We want to go through with this. And we don't think there should be an estate tax, because it's a tax -- it's a tax that kills jobs. It kills inter-generational transfer...

WALLACE: All right.

RYAN: ... of businesses from one generation to the next.

WALLACE: I don't want to get into a debate...

RYAN: So we don't...

WALLACE: I don't want to get into a debate about...

RYAN: ... want to do this.

WALLACE: ... the legitimacy of the estate tax. But let me just ask you this. I assume, then, you're saying if the deal falls apart, Congressman Ryan, then the first order of business when Republicans take control of the new Congress...

RYAN: Yes.

WALLACE: ... after the first of the year is you will pass an extension of all the Bush tax cuts that would have...

RYAN: Yes.

WALLACE: .... gone down to defeat.

RYAN: Yes. So if the Democrats in the House scuttle this deal, we will -- that will be the first thing we do, is prevent these job- killing tax increases. And we'll do it retroactively after the first of the year.

WALLACE: Gentlemen, one of the president's main arguments in supporting this deal is that he believes that it will provide a big boost to a very weak recovery that we're undergoing now.

And in fact, he's backed up on this by respected economist Mark Zandi, who made this following projection, and let's put it up on the screen. This is for 2011. He says the compromise will increase GDP growth by 1 full percentage point and new jobs next year will jump from 1.2 million new jobs to 2.8 million.

So question for you, Congressman Ryan, because you're getting some heat from the right wing of your party, did Republicans in the end agree to give Barack Obama a second stimulus?

RYAN: Well, this is a compromise, and there are parts of this bill I do not like. I know Mark Zandi. I've looked at his models. I disagree with his conclusions. There's a lot of demand-side Keynesian spending stimulus in here that I don't think will work and produce those kinds of results.

But the worst thing we can do is hit this economy with an across- the-board tax increase on everybody in January. So I don't see this bill as a stimulus. I see this bill as preventing damage, further damage, from being done to the economy, but not as injecting pro- growth into the economy.

So I don't see it as what Zandi sees it as, but if we don't pass this, then we will have damage...

(CROSSTALK)

WALLACE: Well, I don't understand. Why -- I mean, I understand that stimulus has become a politically loaded word, but why isn't it a stimulus? Tax cuts are a stimulus. You guys think that they're the best kind of stimulus.

RYAN: Look, only in Washington is not raising taxes considered a tax cut. Nobody's getting a tax cut here. We're not cutting taxes. We're preventing tax increases from occurring.

If we were actually cutting tax rates, then we might have a stimulus. We're not actually cutting tax rates here. We're simply preventing them from being increased. That is why we do not see this as particularly stimulative. It just prevents bad policies going forward.

WALLACE: Congressman Van Hollen, are Democrats really going to even consider blocking -- and because you're talking about continuing to fight over the estate tax -- are you going to consider blocking an $858 (sic) -- call it what you will, but I'll call it a stimulus -- because of a difference over the estate tax of less, we say, than $7 billion, according to CBO, between your plan and the Republican plan?

White House advisor Larry Summers says if you don't pass this there's a good chance we'll get a double-dip recession.

VAN HOLLEN: Chris, we're not talking about blocking the whole thing for that purpose. What we're saying is we need to put this question to the test. Are the Republicans and others willing to say no to exactly what you're talking about, $800 billion-plus in tax relief and stimulus, or at least, as Paul says, making sure things don't get worse with respect to the economy, in order to provide 6,600 families with a $25 billion tax break?

Now, what Paul didn't mention was that the way they set up the estate tax, while it...

WALLACE: But -- but -- but -- I understand...

VAN HOLLEN: ... while it was eliminated this year...

WALLACE: ... but I understand -- let me just say...

VAN HOLLEN: Yeah.

WALLACE: I understand that you want to say, "Well, it's them blocking it," but the president has made a deal with Republicans. You're the odd man out -- you, the House Democrats.

VAN HOLLEN: Well, the president made a deal with the Senate Republicans.

WALLACE: Right.

VAN HOLLEN: There's no doubt about that. As somebody who was involved in the official talks, not the back-channel discussions, I know -- and to the credit of the Republicans, they did not say that this better deal on the estate tax was essential to the core deal.

If you follow the back and forth of the administration...

WALLACE: But it's in the deal now.

VAN HOLLEN: Well, the fact of the matter is it was not central to the deal, and so -- and there's a simple question. We're not going to hold this thing up at the end of the day, but we do think that simple question should be put to the test. Nobody can argue that that $25 billion ...

WALLACE: And the simple question is the estate tax.

VAN HOLLEN: The simple question is...

WALLACE: But you're saying -- I want to key into what you said.

VAN HOLLEN: Yeah.

WALLACE: You said we're not going to hold this up at the end of the day. So you're saying at the end of the day -- you may want to vote on this, but at the end of the day you're not going to hold this deal up over the difference in the estate tax.

VAN HOLLEN: Well, we're going to make sure that question is put to the test. We're going to ask...

RYAN: Right.

VAN HOLLEN: ... the Republicans and others...

RYAN: Hey, Chris?

VAN HOLLEN: ... are they going to block this entire deal in order to protect, you know, $25 billion for 6,600 people.

WALLACE: Congressman Ryan, go ahead.

VAN HOLLEN: That is the question.

WALLACE: Go ahead, Congressman.

RYAN: Well, so I think Chris just made some news. That's fairly noteworthy because as of just a day or two ago, we were thinking they were going to do a take-it-or-leave-it thing on their perspective and scuttle this entire agreement.

If what Chris Van Hollen is saying is they're going to let this agreement come to a vote and they're not going to play any -- they're not going to rig the rules with the amendment process, then we might be able to move forward here. So that's interesting to me.

I would simply say this. Look, class warfare might make for good politics, but it makes for rotten economics. And at the end of the day we have to ask yourselves questions in this country.

Are we interested in treating the symptoms of poverty and economic stagnation through income redistribution and class warfare, or do we want to go at the root causes of poverty and economic stagnation by promoting pro-growth policies that promote prosperity?

WALLACE: Gentlemen...

(CROSSTALK)

WALLACE: Wait, wait, wait, wait.

RYAN: But if Chris is saying...

WALLACE: Wait. I'm going to -- I'm going to give you a chance to respond. But, gentlemen, we've got three minutes left and I've got a Supreme Court justice in the wings here. So let me proceed a little bit.

Congressman Ryan, you are taking over, as we mentioned, as the new chairman of the House Budget Committee. But the fact is for all the talk about cutting the deficit, this plan will increase the deficit, according to the CBO, by $858 billion, almost a trillion dollars.

So let me ask you, even -- if you pass this, what do you plan to do to cut the deficit in your first three months in power with the new Republican majority in the House? What do you plan to do to cut the deficit? And will you move to bring down the tax deductions, a trillion dollars in tax deductions, and dramatically decrease the tax rates?

RYAN: So number one, what we're going to do is what the Democrats didn't do. We're going to cut spending. I mean, I find it sort of interesting that after this massive spending spree that took place over the last two years, the creation of two new health care entitlements, now there's concern about deficits when they have a chance of raising taxes.

We are not interested in raising taxes. $544 billion of that package you're talking about are simply keeping taxes where they are. The other $313 billion of this package is some of the spending stuff that you're talking about. So we don't want to see spending. We're going to come out of the gates going after spending, Chris, spending cuts, spending controls, reforms of the structure of spending. And if we get to the point of doing tax reform, which I think is an important way to go, we should go with broader based lower rates for economic growth.

Erskine Bowles, Alice Rivlin, centrist Democrats, agree with that premise. And I would love to see the chance of getting a compromise so we can have good pro-growth tax reform, which is not tax increases but lowering tax rates so we can have economic growth in America.

WALLACE: I've got a minute left.

RYAN: That to me is a step in the right direction. We'll see.

WALLACE: I've got a minute left. I want to talk to Congressman Van Hollen.

In the House Democratic Caucus this week, members were chanting "Just say no." You said the White House, quote, "got taken to the cleaners." And I want to put up what the president said about you guys. Here it is.

(BEGIN VIDEO CLIP)

OBAMA: People will have the satisfaction of having a purist position and no victories for the American people. And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are.

(END VIDEO CLIP)

WALLACE: Congressman Van Hollen, how much anger is there among liberals with President Obama at this point -- House liberals? And do you anticipate the possibility of a primary challenge from the left against President Obama in 2012?

VAN HOLLEN: The short answer is no to that last question.

WALLACE: No challenge.

VAN HOLLEN: No. There's no challenge. Look, everybody's on the same page. Everyone supports the same agenda. And there are some in the Democratic Caucus that would never go along with any compromise.

I think most people, however, just believe that on this issue the administration did get out-negotiated. We know for a fact that they gave this up in order to get about $36 billion of refundable tax credits when, in fact, the estate tax -- if it goes to current law in January, it's $68 billion. It's just not -- not a bad trade.

WALLACE: But you see a continuing problem.

VAN HOLLEN: You know, Paul -- we're going to have to -- this rhetoric about class warfare -- we're not going to be able to advance a discussion in this country if we always get into that. The fact of the matter is it's very reasonable to ask the wealthiest estates to pay their share. We did that since Teddy Roosevelt, a Republican president.

Number two, I want to make something clear. What I said was that the bill will -- the House will have an opportunity to work its will. What form the bill comes to the floor in is something that's being discussed right now.

I think there are areas of common ground. I think tax reform next year, where you remove a lot of these deductions and reduce the rates, is something I hope we could find common ground on going forward.

WALLACE: Congressman Van Hollen, Congressman Ryan, we want to thank you both so much for coming in and previewing a very big week for us in Washington. Gentlemen, you're going to be the chair and the ranking Democrat on the House Budget Committee. Both of you, please come back.

VAN HOLLEN: Thank you.

RYAN: Thanks, Chris.

BREAK IN TRANSCRIPT

Source