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CNN "The Situation Room" - Transcript - Budget


Location: Washington, DC


BLITZER: I suspect there will be some smoozing as they say going on. Thanks very much. Let's get some more on the luncheon at the White House today, Democratic Congressman Chris Van Hollen, he was there together with Paul Ryan. He's ranking member of the House Budget Committee. He is here in THE SITUATION ROOM right now. Congressman, thanks very much for coming in.


BLITZER: How did that luncheon go?

VAN HOLLEN: It was a good lunch. It was a good meal and it was a very good conversation.

BLITZER: How long did it last?

VAN HOLLEN: It lasted I believe over an hour. It went a little bit overtime, but it was a very constructive exchange. Look, the president is trying to open every avenue of conversation and dialogue to try and get something done.

BLITZER: Was it just the three of you or other aides?

VAN HOLLEN: It was just the three of us.

BLITZER: So the three of you had lunch and you had an opportunity to talk. So how was that relationship that developed during that luncheon between -- I know you have a good relationship with the president. You're a Democrat, but what about with Paul Ryan?

VAN HOLLEN: I think the relationship was developing very well. Look, this is the first time they've had a chance to really sit down since the campaign and really sit down I think in a more intimate conversation for a very long time. So that's the kind of thing that I think is important to build trust.

BLITZER: It's significant, I think, that these initial get-togethers in the beginning of the second term are taking place. Did Paul Ryan have a chance to spell out, for example, his views on Medicare, how do deal with entitlement spending?

VAN HOLLEN: Wolf, I don't want to get into the details of the private conversation, but we did talk about the big picture as well as some of the more specific proposals. Look, obviously Paul Ryan set forth his budget structure. We're going to be debating that in the House soon. We will have a Democratic alternative, but then we need to begin to bridge some differences and try and find a solution here.

BLITZER: So do you think, based on what you heard, based what you know, forget about the luncheon, but based on what you know where Paul Ryan stands, he is a very influential Republican. They have the majority in the House of Representatives.

Is there a grand bargain deal that you could see emerging in the coming months, which would be significant entitlement spending cuts, significant tax reform, and the Democrats want that tax reform to include increased tax revenue, the Republicans say it should be neutral, there shouldn't be increased revenue coming in.

They should cut rates in order to eliminate some of those loopholes and those exemptions. That seems to be the big issue right now. Is there a deal that you can see?

VAN HOLLEN: Well, I think it's too soon to know what the end of the story is, Wolf. But what we do know is that there is not a resolution here. There's not a good ending for the country. We're going to face July and August, the debt ceiling, Republicans in the past have threatened to allow the United States to default on the debt ceiling.

The president says that's nonnegotiable. But what he has said is that he wants to find a way forward on jobs, the economy and a smart way to deficit reduction which requires balance. The president says he's prepared to make additional cuts on top of the 1.5 trillion we have already made. But as he said, he wants to make a balanced approach. That means closing tax breaks that disproportionately benefit very wealthy people. After all, the last presidential campaign both Mitt Romney and Paul Ryan talked about, all those tax loopholes. Well, they are still out there. So let's close them as part of a solution to deficit --

BLITZER: The Republicans say they are ready to close those loopholes. A lot of them eliminate some of those subsidies for big oil companies or whatever. But they want to make sure that at the same time you reduce tax rates. Is that at all doable from your perspective?

VAN HOLLEN: Well, their position in the past is that penny for penny, every time you eliminate a tax break it has to go entirely into --

BLITZER: No new taxes.

VAN HOLLEN: That's right.

VAN HOLLEN: Which they abandoned at the end of December, early January when they did raise taxes on wealthy people making more than $400,000 a year.

VAN HOLLEN: Well, some of them did. Remember, a majority of House Republicans actually voted no.

BLITZER: The speaker voted yes.

VAN HOLLEN: It did pass and that's the beginning. Of course, the plans put forward by bipartisan fiscal commission like Simpson/Bowles contain a lot more revenue. They also contain some additional cuts on top of the cuts that we've already made.

So look, I think the road map is pretty clear to people who have been following this budget debate going forward. If you want to get to an additional responsible deficit reduction, without hurting the economy so that you're growing jobs then you have to take this balance approach.

Otherwise, you end up overburdening seniors, violating commitment to seniors. It means we don't invest enough in what happens our economy grow and so you need that balanced approach and that's what the president's argued for.

And I think, Wolf, as you know, you've followed this a long time. That is the way to move forward on this debate.

BLITZER: There's still a significant gap on that significant issue. But I want to ask you about that story over the weekend in "The Washington Post," which suggested that the president's number one goal right now, number one goal was getting a Democratic majority in the House of Representatives in 2014 next year. That would require a net gain of 17 seats by the Democrats. Do you believe that that's the president's number one goal?

VAN HOLLEN: The president's number one goal is indisputably following through on the commitments that the president made during the last campaign, adopting an agenda that strengthens the middle class then makes sure we get the economy in full gear and deal with the deficit in a smart, responsible way. That's his agenda.

His preferred approach would be to have Republicans join him in that effort and that's why he's reaching out on all fronts. But you always have to have a plan A and a plan B. The bottom line is, the president wants people who are willing to work with him get that agenda done. After you all, he ran on it, he won the election and there's good reason for him to deliver.

BLITZER: If Chris Van Hollen and Paul Ryan, the chairman and the ranking member of the Budget Committee can work out a good compromise, if you will, I think everybody would be pretty much on track.

VAN HOLLEN: That's right.

BLITZER: So you're going to work with Paul Ryan? Would you try to do that?

VAN HOLLEN: We get along very well personally. We obviously have big differences on the budget, but we're looking for ways to bridge those differences.

BLITZER: Good luck. What did you have?

VAN HOLLEN: Well, we had lentils and then sea bass.

BLITZER: Sea bass?


BLITZER: A Mediterranean diet.

VAN HOLLEN: Yes. We want to be in good shape for the efforts ahead.

BLITZER: Chris Van Hollen, the Democratic congressman from Maryland. Appreciate it very much.

VAN HOLLEN: Thank you.


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