WASHINGTON -- House Democratic Caucus Chairman John Larson (CT) was joined by incoming Caucus Chairman Xavier Becerra (CA), incoming Caucus Vice Chairman Joe Crowley (NY) and Rep. Tim Walz (MN) - who introduced the discharge petition today calling for a vote on extending the middle class tax cuts -- for a press avail after the weekly Democratic Caucus meeting today.
Chairman Larson: Well good afternoon and thank you for joining us. I'm proud to be joined by my colleagues, the Vice Chair of the Caucus, Xavier Becerra -- soon to be the Chair of the Caucus and operating in that capacity in the 113th Congress, our new Vice Chair Joe Crowley, who joins us today as well and a person I'm found of calling, Sergeant Major, Tim Walz, who is spearheading our effort on a discharge petition.
We just came from an important caucus where again - in the aftermath of a Christmas gathering at the White House last evening, we still remain optimistic and - that we can get something done in the Congress. We remain optimistic because we believe it's in the best interest of the American people.
We have heard all kinds of data and statistics about where the American people are in terms of a sense of fairness and a sense of balance and I think the President has got it right and continues to preach the kind of message that I think the nation needs; one of compromise, but one of assurity that we are going to be looking out for the interests of the middle class and the protection Social Security, Medicare and Medicaid, for the people who are in such desperate need of those great programs that are the hallmark of our country.
We have repeatedly said -- and our caucus again affirmed that job creation equals deficit reduction. And we must put the country back to work, we have proposals that are on the floor. We still believe that even with the - what little time remains and what little time remains when we are actually working. This is still possible, this is still doable, this is not a Democrat or Republicans issue. Republicans believe that America needs to go back to work. It's just a matter of having the will to do it. The programs are out there, compromise can be made around the streamlining of regulations to make sure that we putting people back to work. If Chris Christie and Barack Obama can get together on that and with the wake - and I know Mr. Crowley knows this firsthand of what's transpired - and how the impact of our infrastructure has taken place on the eastern seaboard, something we ought to be able to rally around immediately.
And of course everyone, everyone deserves a $250,000 tax break. We all agree on that, so why not just simply adopt it? And then come back and we'll have time to address the issues as they relate to bending the cost curve on health care and focusing the vast inefficiencies, the fraud, the abuse and the waste that totals more than $750 billion annually. And when the - as from the Chairman of the AETNA, from my district said, listen it would be a way for us both to bring down the deficit, but also make health care affordable, accessible and functional for the American people. Something I believe that we must do.
With that, let me introduce the Chair-in-waiting, Xavier Becerra.
Vice Chair Becerra: Mr. Chairman, thank you very much. And it's been a pleasure serving with you as our Chairman of the Caucus.
December, how many families do you know that sitting down right now trying do some quick math on their finances and figure out how they can stay within their budget and still have a little bit left over to buy the gifts for the kids and all the loved ones, so that it can be a Merry Christmas - a great holidays for all of America's families.
They don't have any choice, but to figure to out how they are going to make sure they can squeeze in some money, to buy those gifts. Failure is not an option for them come the Holidays. And on Christmas day for a lot of families, you are going to have a lot of kids who really want to wake up with bright eyes and ready to really enjoy the day.
Well if America's families, as tight as budgets have been over the last few years for them, can figure out a way to reserve a little bit to make sure it's a great holiday, then we in Congress should be able to follow suit. The American people are way ahead of the politicians when it comes to this stuff. Failure should not be an option. And we should get the work done that the people expect.
Now we are not going to agree on everything and I believe, whether you are Democrat or Republican, you would say amen to that. And so, before we get to those Holidays, before we get to end of the year and all of these deadlines; then let's at least, do what we agree with -- do agree on.
And as our Chairman just said, I think both Democrats and Republicans alike will agree, that we are willing to make sure that for the middle class, we let them keep going forward, helping us revive this economy. We don't want to set them back. And so why not do what the Senate did several months ago in passing a bill bipartisanly that protects the middle class from seeing their taxes raised?
We only need a few dozen Republicans, quite honestly to get that done. Because we are about to-through Mr. Walz sign a discharge petition, where we are saying, declaring as Democrats, that we are ready to pass the Middle Class Tax Protection Act, which will make sure that middle class families do not watch their taxes go up, simply because Republicans are intent on protecting millionaires and billionaires and are holding middle class families hostage to that increased tax.
We believe that we could end December, certainly before the Holidays, on a really good note. Maybe still having some disagreement, but at least, let's agree that we're not going to let the American people watch Congress play this game of chicken right before the Holidays; where the American people are the hostages; when we know that we have bipartisan agreement on protecting the middle class.
And so we are thrilled that Mr. Walz has taken the lead on this and I know that we're anxious to try to get this going because while we may have disagreements, that should not stop us from moving forward where we both agree bipartisanly. We can get things done.
And with that let me welcome the incoming Vice Chairman of the Democratic Caucus, Mr. Crowley from New York.
Rep. Crowley: First, thank you two -- appreciate all that rousing applause. First, let me thank both John and Xavier for including me today in this press conference and for welcoming me to the leadership of the House Democratic Caucus.
I'm very pleased to be here at this very important moment in time in our nation's history as well. And I agree with both John, Xavier and I should say as well with, Tim Walz -- I won't steal your thunder Tim -- what you do today is important not only, I think for we as a Caucus, in terms of setting where we are at, but I think and also a strong message that the American people sent almost a month ago, that they want to see this Congress working to get things done. They re-elected the President, the President ran on an agenda of giving a tax break to 98% of the American people and that opportunity is before us. The Senate has worked their will, it's now our opportunity to do that before the Holiday season is over.
The expression time is fleeting has never been more apropos than it is today. We have very few working days left in this 112th Congress to actually act upon what the American people want us to do. And we have even fewer days now that the House Republican leadership has reduced the working days this week.
We can still get this done, but it's going to take an effort to work, as I said before, as the American people want us to do, in a bipartisan way to move forward. And I know that we have the opportunity to really set the agenda straight today.
And with that I will turn it back to the Chair, Mr. Larson.
Chairman Larson: Well, thank you Joe and without further adieu let me introduce the individual who is spearheading this effort from the great State of Minnesota, Tim Walz. Affectionately known in our Caucus as the Sergeant Major and he's got a Sergeant Major's drum beat to the discharge petition.
Rep. Walz: Well, thank you Chairman and Xavier I thank you and Joe for the work that you do. And as the Chairman said, I represent southern Minnesota's first district. It truly is the canary in the coal mine. It's a 50-50 district, I think it went 50.5 to 49.5 for President Obama; long history of pretty centrist on the issues, but very pragmatic. It's a farming district, it includes two of the most efficient health care systems in the world, the Mayo Clinic and Gunderson Lutheran; spearheading some of the reforms there.
But I have to tell you, what came through loud and clear during this last campaign season, from the people in Southern Minnesota and I would argue across the country was, why don't we try and focus on the politics of the possible of what we agree on move those things and then come back later to the things where we disagree.
And this issue of a discharge petition, to move forward, this is an issue we all agree on. There's not a single Republican who signs this is violating any pledge they took to raise taxes. This is simply going to ensure that we fix that middle class tax cut. The bulk of consumer spending falls within those people. It provides the certainty that you heard Xavier talk about during a very important economic time, spend some money during this. And I think it sends a strong signal that the kabuki dance that all of you've been covering that goes back and forth or whatever, maybe there's actually another component of this, and it's the 435 individual who have to go back home, look their constituents in the eye and say, "What did you do to make this different?"
So all were asking for is that folks are going to vote for this. I would argue almost every single person in the House will eventually vote for this anyway. We know it can be done. The Senate knows that they already did it. The President said he would sign it. Imagine that by the end of the week if this is brought forward, we have an honest debate amongst one another, we congratulate one another for agreeing on this, we send that signal to the American public that we can break this logjam, and that's set in stone. I think it changes the whole conversation going forwards.
So I'm certainly honored to be able to lead this forward. I think it comes out of that midwest pragmatism that says we're all going to have to compromise for the good. But don't hold up--and keep in mind, that's 100 percent of the American public that gets a tax credit on this, on their first $250,000. So this isn't excluding anyone, this is the true 100 percent. And it does the bulk of that, 98 percent of all taxpayers, 97 percent of small businesses have that certainty. So I'm going to encourage my colleagues to go sign it. I think there's--I know there's Republicans over there that will take a hard look at this, hopefully go over there and do the right thing and move it forward.
So thank you for that. Mr. Chairman.
Chairman Larson:Thank you, thank you Tim. Questions?
Question: Mr. Larson, the Republicans would like to see the Medicare eligibility age on the table in these negotiations; they've suggested 67. Is that something you think Democrats could support as part of maybe a bigger deal? Do you think it's fair that it's on the table?
Chairman Larson: Well, I think the President has been very clear and clearly so has our Caucus, that while we think everything should be on the table for discussion, we do have very deep, abiding concerns about where cuts would be made specifically and how fair and balanced it is. And so our criteria, as the President has said, is that it's got to be fair and balanced. If it's fair and balanced, it should be part of a discussion.
As for polling our Caucus and determining where it would be, I would say that that is something that would be a big leap our Caucus.
Question: Why is that?
Chairman Larson: Well, because I think first of all you have to see--the devil is always in the details, and where is the balance? Where's the fairness? Where's the fairness in the wealthiest nine-tenths of one percent still not doing their fair share while we exact that out of people who are in need of Medicare and Medicaid? So, I mean it's a fairness argument, it always has been, and that's what it'll continue to be.
And we would note that in a number they're proposing--I thought Steny Hoyer did a great job of putting forward the proposals of the President and the specificity that the President had outlined--which is about, if you put it on a graph would be like this--and then the Republican proposal's like this.
It's a difficult time for the Republicans, and we want to provide them with every opportunity that they can to save--not only to save face but come up with something that they can do reasonably, which is why Tim's proposal that everybody agrees with--that there be a $250,000 tax cut--that this be preserved for everybody. 100 percent of the people will receive that. Not 98. 100 percent of the people will receive that. So why not go forward with that when we can all agree on it?
Here's the President's proposal. Now, it's so small--it's in small print because it so detailed and so specific. There are the Republican proposals. Now--
Rep. Crowley: I just want to point out I can read that.
Chairman Larson: So that's our concern, and I don't know if the other leaders want to--
Vice Chair Becerra: Yeah, I'll just mention one quick point.
I think Democrats, as the Chairman just said, have always been willing to put everything on the table. We've found--we reduced the cost of Medicare by over $700 billion. We found savings of $700 billion in Medicare. So no one should question whether Democrats are willing to try to extract savings to reduce the cost of Medicare. In fact, a lot of Democrats lost their election because Republicans went out there and campaigned, accusing Democrats of cutting Medicare. And even in this presidential campaign, the President was attacked by Mitt Romney for having so-called cut Medicare. What, of course, Mr. Romney forgot to mention is that none of those cuts in spending in Medicare cut benefits. When we did the reductions in Medicare spending, we made sure none of those reductions could come at the expense of American seniors who were receiving Medicare. And the reason you can do that is because there's enough savings to be had. You could get rid of some of those Medicare mills, you can go after some of the fraud, you can go after some of the waste, the replication of services, and you get a ton of savings. And so that's what we did. And as Mr. Walz said, in his district, they've got a lot of efficiencies that we can take to learn from. So we're willing to discuss how you reduce spending on very important programs like Medicare, Medicaid, and so forth. But what we're not willing to discuss is in the first instance, how you pay for deficits that were caused by things other than these programs. We didn't pay for these two wars in Iraq and Afghanistan. We didn't pay for the Bush tax cuts that went heavily toward the very wealthy. And so why all the sudden seniors in America should take cuts to their services and benefits that they paid for in Medicare or Social Security so we can draw down deficits and debt that was caused by other things, that's where it has to be explained to us. But we've been willing to listen and we've got bona fides showing that we're willing to make reductions in spending in even very important programs like Medicare and Social Security and Medicaid.
Chairman Larson: Joe.
Rep. Crowley: I don't know if you've all been following how this has been going. We continue to proffer motions to give a middle class tax cut to the middle class. That's what Mr. Walz's discharge motion would do today. They continue to obfuscate, to blur the lines here by bringing in newer and newer issues to protect the wealthiest two percent in this country, to divert the discussion from them to other means of savings. And so I would suggest that, as Mr. Becerra said, we have also offered savings that we see in waste, fraud and abuse within the Medicare system that we're willing to discuss. What we want them to do is to stop talking about the protection of the wealthiest two percent and talk about giving a tax cut to the middle class in this country.
Chairman Larson: Yes. And just a final point on that, because I do think it has to be said, and I said it in my opening remarks, because I think Mark Bertolini's got it right. You know, when you look at the cost of healthcare, and as we're headed towards the opening of an exchange in 2014, that we know that the costs associate with out deficit and getting that under control all relate to bending that curve. And when the rest of the world is at eight to nine percent of gross domestic product that they spend on healthcare, and in many instances offer universal healthcare, and we're at 17 percent, and even with Obamacare aren't quite there, isn't it fair for us to look at bending that curve and bringing those costs down? And what we know is this: that if we work together, taking a Republican concept--Romneycare--and having exchanges, and work to bring to bear on this issue all of our innovation, all of our technology, all of the great capability and genius of the American people, we know we can reduce these costs. And the fairness argument is is it fair to always lead with reducing it on the backs of the beneficiaries as opposed to what the root problem is of the cause and the expense?
Question: So there's been a lot of talk about using tax deductions and loopholes to raise revenue, or getting rid of those sometime. Stepping aside from the debate about whether or not it should be deductions or tax rates, how do Democrats feel about the mortgage interest tax deduction, and whether or not that should be tampered with or whether or not that you could raise revenues by reducing deductions on mortgage interest rates?
Chairman Larson: When you take everything and you look at everything in a comprehensive manner, and in the total aspects of tax reform in general, everything should be included on the table. Having said that, this is the backbone of the--you know, one of the backbones of the middle class. And clearly we support and feel very strongly about sustaining the middle class, who use that mortgage deduction and mortgage buildup to, for the most part, pay for college education as well. So--
Question: So you feel that dealing with the mortgage interest deduction would hurt the middle class?
Chairman Larson: If you take it in isolation. If depends on what else, how you balance it off. Again, I think the rubric here for us is it's got to be balanced, it's got to be fair, it's got to be comprehensive in its nature. We're certainly willing and think that it should be on the table to be discussed, but we don't think that, you know, randomly you can pick things out and then without understanding the unintended consequences that that would provide.
Rep. Walz: Mr. Chairman, if I could add I do have a reform on that. Yes, on the mortgage interest deduction, as we talk about reforms on that, I have a bill that I've been sitting out there trying to garner some Republican support on that takes away the mortgage interest deduction for yachts that count as second homes. It's those types of things that we're talking about. Mr. Larson's talking about the school teacher trying to make sure that it's affordable to buy a home to raise her children in Mankato, Minnesota while there's a mortgage interest deduction that's available to people who buy yachts that include galleys, sleeping berths and all that. That's coming from the person who represents the Land of 10,000 Lakes. I don't see any yachts in Minnesota. So that's the type of reform we're talking about. But the first thing Mr. Larson pointed out again is instead of talking about and signing on for that, they come to the middle class one. I think that's where the frustration and fairness lies.
Question: If I could just ask a question about--we've heard from you all this morning and also from Steny Hoyer this morning that, you know, there needs to be some give and you guys are willing to give. But where does this give come in? You talk about balance and fairness. I remember a Caucus meeting last summer on the debt ceiling when the administration came in and chained CPI, and everybody came out of that and said no, we're not going to go for that. This sounds very similar, like you've double down on your positions. So where's the give?
Vice Chair Becerra: Mr. Chairman.
Chairman Larson: Go ahead.
Vice Chair Becerra: No, go ahead and I'll follow.
Well, first of all, we start with the Budget Act itself, with more than a trillion dollars that has been reduced in a very difficult economic recession. We start there, and then we say okay, we've put a very significant down payment during the midst of a recession, when Democrats in general believe--in general--believe that what we ought to be doing is making enormous investments in infrastructure improvement so we can put the country back to work. And so we've put the down payment on the cuts. We haven't seen anything by way of job creation which directly impacts deficit reduction, and we've said we've been willing to discuss how we further--you heard the Chairman talk about $750 billion that was taken out of Medicare already, that the AARP and everybody else recognizes was inefficiencies that can be taken off of the table. We know that in looking at--and whether you take medical devices, whether you took pharma, insurance, hospitals, doctors and the trial bar, that we ought to be able to bend that curve and that is on the table.
And so what bothers us is that when it comes down to a fairness argument, that they start always with our beneficiaries, the people. We're not called the party of the people--we're called that for a specific reason, because that's where we start, that's who we care about, and that's where we're going to continue to focus. And we've put skin in the game, and continue to do so. If you look at the extensive proposal that the President has put forward, you understand that he's serious about this. And he puts this forward at a time when economists are also saying, look, we have to be very careful here that we don't send ourselves back into a recession.
And so listen, I understand ideologically why people who believe that they want to shrink government up so small they can drown it in a bathtub may always lead that way, but it's not in the best interest of the American people in my humble opinion.
Vice Chair Becerra: Chad, I'm going to be measured in my response because you all have an obligation to ask questions. But I hope at some point you all who have heard us on this side and the other side of the aisle talking about this will do that math, quite honestly. I could tabulate very quickly for you $3 trillion worth of cuts that have now gone into law that Democrats have been there on those tough negotiations. The Chairman mentioned a trillion dollars that was exacted as a result of the Budget Control Act where the Republicans were threatening to for the first time ever have the nation default on its credit if we didn't do something. So a trillion dollars. That's already taking place, the trillion dollars in cuts.
There's another $1.2 trillion that came from the same law; we know it as the sequester that also, by law, will start to take place. That's $2.2 trillion.
We talked about the $716 billion that Democrats passed without a single Republican vote to reduce the amount of spending in Medicare without damaging beneficiaries' benefits.
That's close to $3 trillion. Where is the balance on the revenue side? Never once did any of those two proposals in the Budget Control Act have any revenues attached to them. And so when you all keep coming to us and asking us where are the cuts, what are you doing on entitlements--we've been doing it. You all either aren't paying attention or don't wish to ask based on the math.
And so finally one piece of math: you ask why Democrats who are willing to put everything on the table are so adamant about Social Security. In 2013, seniors in America are finally going to get a small cost of living increase in their Social Security. It's going to average about $21 a month. Less for some seniors, a little bit more for most. On average, seniors who on average get $14,000 in Social Security benefits a year are going to get on average about a $21 a month increase in their benefit to pay for all their medicine, increased costs of their medicine, increased cost of their rent, increased cost of daily living. $21 a month.
Republicans are saying they--in their proposal, we must cut that cost of living increase for America's Social Security recipients who paid for those benefits. At the same time they're saying we must cut Social Security benefits so we can protect the wealthiest two percent of America's wealthiest from incurring any tax rate increase, which would simply take them back to the rates that were in effect in the 1990s when they were making beaucoup bucks and we were hiring 23 million new Americans. And so Social Security hits here for us, because we know what it meant to folks during the 2008 recession when no one was willing to look at their 401(k) statement on a monthly basis because they had lost so much of their 401(k) or their IRA. But yet, Social Security: on time, in full paid benefits in 2008.
In fact, Social Security made more money in 2008 than it had to pay out. So that final piece of math is this: in the 77 years, Chad, since Social Security's been enacted, how much have you and I and every single American who's worked in this country paid into Social Security? $14 trillion. How much have your parents, my parents, every single American in this country who is collection Social Security benefits taken out of the system? $13 trillion. How much is left? Over a trillion dollars in hard cash from taxpayers in 77 years is left in Social Security. So why would you want to cut Social Security when it's one of the most successful, if not the most successful, programs this country has ever invented to help Americans in large scale?
Question: Let me play devil's advocate for just a second, and this something consistent with what Leader Pelosi has said. She has made the similar points that you guys had given these concessions, you know, big, trillions of dollars and other cuts. Does that mean there's not much to give at this point?
Vice Chair Becerra: Absolutely there is.
Vice Chair Becerra: Absolutely. You know, we'll sit down and have a balanced conversation and negotiation on everything, whether it's Medicare and all the rest. When the Republicans decide that they're going to get off this dime and say we have to protect the wealthiest two percent of Americans. 98 percent of America should not be held hostage to that. And so we're prepared. And until then, let's do this: let's not just fight and do the kabuki dance. As every one of us has said, let's at least dispose of the issue where we all agree.
Rep. Walz: Yeah.
Vice Chair Becerra: Protect the middle class from that tax rate increase. Let's get the rest of the work done. But we don't need to hold people hostage in America while they're trying to figure out how they have a good holiday.
Question: The President has included in his plan the idea of extending the payroll tax cut for another year. Is that something you would support?
Chairman Larson: Go ahead, Joe.
Rep. Crowley: I think that, for one, the payroll tax cut has put money into the hands of people who need it the most and are actually putting it right back into our economy. And eventually, what we really need to be talking about is creating an atmosphere for more jobs in America. As Mr. Larson had mentioned earlier, what we need from this Congress is an infrastructure bill, one that'll put people back to work and contribute furthermore to the growth of our country. We need to be talking about a growth agenda and not simply about patchwork. So I think for the moment right now, I think that that is something that we certainly would support, we have supported and will continue to support as well to keep money in the hands of people who need it desperately right now.
And again, just one other point is, I need to make it very clear, as Xavier has made clear as well: we continue to be sidetracked by issues taking away what clearly is the focus of what we should be talking about, and that is the 98 percent of people in the country who, if we pass the measure by Mr. Walz that he has offered today, would give every American who earns up to $250,000 a tax cut.
Vice Chair Becerra: Every American.
Rep. Crowley: Every American, including the wealthiest amongst us. And what we have here is being held hostage--that same 98 percent of America--clearly by the Republican caucus to protect the very wealthiest in this country from paying, not a fair share--it's what the responsibility of this great ship of state that we have. We have to get our ship of state continuing running in the right direction, and we're getting there, we're going to right the ship of state. But it's going to take cooperation. The American people have spoken. They did it this past November. And I know it takes a little time for things to sink in here, but that did happen. And there are consequences to elections. And it's time now that we act upon what the American people want us to do, that is pass a tax cut for the 98 percent, for the middle class of this country, all Americans quite frankly, and then get on with the business of actually furthering righting this ship of state.
Questions: So what about the argument that the payroll tax cut kind of damages the fundamental promise of Social Security, that it's something you pay into and then you get out?
Vice Chair Becerra: No, no, it doesn't. We would not support it if it did that. We made certain that if we were going to do the payroll tax cut, that none of the Social Security monies that would go into the system would be denied it. And so what we said was, what we do with a number of other programs, the general fund replaced the monies that would've gone into the Social Security Trust Fund. By the way, in that quick math, $14 trillion mine $13 trillion give you $1 trillion of unused Social Security funds? I didn't include in that Social Security trust fund monies the $1.5 trillion that those trillion dollars earned in interest by having sat in Treasury bonds for decades. And so you actually have a surplus in the Social Security Trust Fund of $2.5 trillion, real money. And so therefore it's available. And none of us believes that we should do anything to undermine it. We would never support any tax cut proposal that would undermine Social Security. Only if we had a guarantee that the money that is temporarily left out of Social Security by reducing the payroll tax, only if we know that it's replaced by general fund monies would Democrats support the payroll tax cut holiday. And under those terms we did support it, and we would support it.
Chairman Larson: Thank you very much.