11.15.11

Chris Van Hollen on Riding the Debt Supercommittee Roller Coaster

Congress’s debt supercommittee has been on a tortured quest to agree on at least $1.2 trillion in deficit reduction. With the deadline eight days away, Democratic committee member Chris Van Hollen describes the rocky ride.

If you’re wondering what it’s like in the center of a vortex, congressional supercommittee member Chris Van Hollen can tell you. The effort to identify at least $1.2 trillion in deficit reduction is taxing everybody’s patience and stamina, while Republicans hold firm against taxing most anything else. The Maryland Democrat lost his voice after last week’s endless round of talks, and is nursing himself back to health with tea, honey, whiskey, and lemon, in what proportions he didn’t say as he described to The Daily Beast the framework his party is seeking for a deal and how the talks are proceeding.

With the deadline just eight days away, he describes life inside the supercommittee as “a little bit of a roller coaster, just when you think there’s hope, something changes; and just when you think it’s hopeless, there’s a glimmer of hope.”

The negotiating goes on among breakaway subgroups by phone or through staff, sometimes in hastily arranged meetings, in what sounds like a chaotic and perhaps desperate effort to find a formula that both Republicans and Democrats can accept. The full supercommittee of 12 members stopped convening as a group some time ago. There’s no secret hideaway where they’re crunching numbers. If a deal is found, it won’t be done with a dozen members of Congress in the room.

Van Hollen is a veteran of these high-stakes negotiations with Republicans, having been part of talks hosted last summer by Vice President Biden that fell apart when Republicans refused to budge on taxes. Biden began every meeting saying nothing is agreed to until everything is agreed to, and at the end of the process, Democrats insist that revenues be part of any package.

After six weeks of identifying potential spending cuts, Van Hollen and others asked Republicans during those summer negotiations which tax loopholes they would close, which tax breaks they would end. “Corporate jets, oil, and gas, how about a bank fee to recoup taxpayer money from the rescue—we had a lot of them,” Van Hollen recalls. “And at that point those talks came to an end. Republicans said, ‘You guys already agreed to all these cuts the first six weeks—let’s just do that.”

The lesson Democrats took from that experience was to establish a framework on an agreement up front, along with how much would come from cuts, how much from reforms, how much from revenue. They wouldn’t get snookered again, or at least not easily. “We did establish you can’t hang the picture until the scaffolding and the dry wall is there,” says Van Hollen. The framework is now a lifeline with its one-third formula from each of the components—spending cuts, reform, revenue—which translates into $2 to $3 in cuts for every dollar in revenue. “Once you have a framework, things can proceed quickly,” says Van Hollen.

Each side has its hurdles. Democrats are prepared to “modernize Medicare” but are not willing to end the federal Medicare guarantee, “which would force seniors into the private market where they would have to eat the costs,” says Van Hollen. For Republicans, he says, “the big issue is the looming specter of Grover Norquist,” the influential anti-tax activist who has so far refused to grant any meaningful exemptions in his no-tax pledge.

Some members of Congress who signed the pledge back in the 1990s tried to get out of it, including New Jersey Democrat Rob Andrews. But Norquist refused, saying it is a lifetime pledge. “That should be a lesson to all of us,” says Van Hollen. “The only pledge should be to the Constitution of the United States.”

The T-word, as in taxes, is so toxic for Republicans that most never use it, referring instead to revenue. That’s why over the weekend when supercommittee co-chair Texas Republican Jeb Hensarling said “increasing tax revenues could hurt the economy, but within the context of bipartisan negotiations with Democrats, clearly they are a reality,” it was hailed as the breakthrough many were waiting for.

Or maybe it is just political positioning so Republicans won’t get blamed for blowing up the talks. Van Hollen points out that the plan advanced last week by Republican Sen. Pat Toomey that won praise for putting $300 billion in tax revenue on the table is actually a step backward. Every other bipartisan group over the last 18 months—Simpson-Bowles, Rivlin-Domenici, the so-called Gang of Six—all assumed that $800 billion was the starting point, revenue gained from allowing the Bush tax cuts to expire at the end of next year for the top 2 percent.

“Just when you think there’s hope, something changes; and just when you think it’s hopeless, there’s a glimmer of hope.”

In exchange for offering less revenue than any other group that’s looked at deficit reduction, the Toomey plan would drop the top rate from the current 35 to 28 percent, “Which means you would shift the relative burden of taxes to the middle class,” says Van Hollen. Independent tax analysts who looked at the Republican plan confirm it would benefit the wealthy at the expense of the middle class.

With an election looming, you would think that a political party would want to adjust its image, especially in light of the recent Congressional Budget Office report that documents the growth of income inequality. “Some people are totally immune to that reality,” Van Hollen says.

The son of a diplomat, and a diplomat himself by nature, Van Hollen declined to single out any individuals. He didn’t have to. The characterization fits not only today’s GOP, but a Congress that seems hell-bent on deepening its disconnect with the American people.