Contact: Drew Hammill/Ashley Etienne, 202-226-7616
Washington, D.C. – Democratic Leader Nancy Pelosi and House Budget Committee Ranking Member Chris Van Hollen held a press conference today announcing the House Democratic proposal to avoid the detrimental impact of the across the board spending cuts set to take effect March 1st as a result of the sequester. Below is a transcript of the press conference:
Leader Pelosi. Good afternoon. We are on the floor on the legislation that affects what we're here to talk to you about, so my apologies for running a few minutes late. This week on Capitol Hill, we have a tale of two priorities; Democrats want solutions, Republicans want sequesters. In fact, one of them has even said it would be a ‘home run’ for the American people. Democrats stand with the President's call for a balanced approach to create jobs, strengthen the middle class, grow the economy, and responsibly reduce the deficit. Republicans prefer obstruction, delay, and across the board cuts that are harmful to our economy, the education of our children, the security of our country.
On Monday, I sent a letter to Speaker Boehner. The question I asked: How can we leave for recess when we're so close to a sequester and we're so close to what could possibly be a shutdown of the government if we do not act? Everyone is working. House Democrats are working, the Senate is working on their proposal, which you have seen the Senate Democratic proposal. I'm here with my colleague, Congressman Chris Van Hollen, who has excellently led the Democrats on the Budget Committee. He'll present our proposal that meets the standard of balance and fairness, averts the sequester through the end of the calendar year. It's consistent with what the Senate Democrats are unveiling today and has responsible spending cuts, revenues, and job growth as well.
We don't think there's any time to waste. Every minute counts, and it's really hard to understand how we explain to the American people that tomorrow we'll be leaving for more than a week when a deadline is looming that is really something that should, [the] sequester should be out of the question.
With that, I'm pleased to yield with the greatest respect and admiration for his work, to our distinguished Ranking Member on the Budget Committee, Chris Van Hollen of Maryland.
Mr. Van Hollen. Thank you, Leader Pelosi. I just ask everybody to keep in mind two numbers. The first number is 750,000. That's the number of jobs that the independent nonpartisan Congressional Budget Office says will be lost between March 1st and the end of this calendar year if we allow the reckless across the board sequester to take place. Seven-hundred and fifty-thousand American jobs lost. It will reduce our economic output for this year by a full third. It equates to erasing the number of jobs gained between October of last year through January of this year, wiping out five months of job growth.
The second number I hope you'll keep in mind is four. Four is the number of times the House Democrats have put forward a plan in this Congress to prevent those across the board cuts from taking place with the 750,000 jobs lost. We offered it last year, and we've now offered it twice in this 113th Congress, most recently going to the Rules Committee last night and asking this Congress to have an up or down vote on our plan, which would achieve the same amount of deficit reduction without any of that job loss because we spread that deficit reduction over a period of time, and we do it in a balanced way, we do it through a combination of cuts and revenue, cuts from eliminating some of the excessive subsidies to agribusinesses, the direct payments, and revenues from eliminating taxpayer giveaways to the Big Oil companies, and applying the Buffett Rule, which says that for people who make more than two million dollars a year they should pay at least a 30 percent effective tax rate, so they can't take advantage of all the special interest preferences and loopholes in the tax code. And if you do that, as I said, you get the benefit of the deficit reduction, the same amount, without any of that job loss, and that's why Leader Pelosi and I and others are introducing that as a bill right now, just to continue to urge our Republican colleagues in the House to take it up because the only thing that's standing in the way of preventing 750,000 jobs lost is having a vote in the House, which we actually think would pass, you know. We think that our Republican colleagues are afraid of bringing that bill up for a vote because it really clearly presents the priorities that are before us: Do you want to lose 750,000 jobs or do you want to ask the Big Oil companies to get rid of their taxpayer subsidies?
So, that's the choice behind it, before us. Again, we tried four times, four times in the House, most recently today, and we're going to introduce a bill on behalf of the Democratic Caucus today in the House to keep fighting, and we should stay here, as Leader Pelosi said, to get that done rather than going away while that clock ticks down to March 1st, which is the countdown to 750,000 jobs lost.
So, our bill is entitled the ‘Stop the Sequester Job Loss Now,’ and we hope we can get this bill taken up.
Leader Pelosi. Thank you very much, Mr. Chairman, Mr. Ranking Member. Any questions? Yes?
Q: Given what you think is the popularity of it, Mr. Van Hollen, do you anticipate trying to do a discharge petition on this? And also, if you guys can't get the sequester undone, would you favor a targeted waiver for the Sandy aid that would be hit by the sequester?
Leader Pelosi. Well, first of all, we want to introduce this bill and hope that it could be brought up. A discharge petition is certainly an option that we have. It takes a little more time than just giving them, asking them to let us – we could have brought this bill up today on the floor. In fact, we'll have a vote on it on the previous question, which is a procedural vote really and not the vote on the bill, and most likely we will not win that procedural vote, as you know.
The fact is we want to avoid the sequester, period. People have come up to me and said: ‘how about if we carve out biomedical research, how about if we carve out defense, how about if we carve out this?’ Let's just, let's just be mindful of the consequences of what is happening and do the right thing and not have the sequester. It is mindless.
Any other questions? None?
Q: Pentagon officials were up here this week already talking about the plans they are making. If the sequester goes into effect, it also hits Congress. I'm just wondering how you personally are making plans for your leadership office, your personal offices. Do you think Members should take a pay cut? Would you take a pay cut if you had to make up the cuts in your offices?
Leader Pelosi. Well, as you know, that's why I don't like across the board cuts because – you used one example, but there are many other examples where an across the board cut may not make the best sense. Why should people who work on Capitol Hill pay that price and be treated as Members of Congress are? It's a hard question to ask me because most of my colleagues are the breadwinners in their families. A pay cut to me doesn't mean as much. I mean, I don't think we should do it. I think we should respect the work we do. I think it's necessary for us to have the dignity of the job that we have rewarded, but [if there is] an across the board cut, there's an across the board cut, that's just the way it is.
Mr. Van Hollen has been a leader, as Mr. Hoyer has, and others, on the impact that this will have on federal employees, including people on Capitol Hill, and I wanted to yield to him to talk about that.
Mr. Van Hollen. Well, thank you, Madam Leader. As you know, federal employees have seen no cost of living increases, these aren't regular raises, these are to keep pace with the cost of living, for two years, and that was appropriate in the sense that they're willing to do their share. What federal employees are not willing to do is to bear the entire burden of deficit reduction, to be scapegoated and have everybody point fingers at them, and that has been the Republican strategy. I just want to remind people who these federal employees are. I mean, these are the nurses in hospitals around the country who are taking care of our wounded warriors, these are the FBI agents who helped save the young boy in Alabama, these are folks who are helping track down al Qaeda around the world. These are the air traffic controllers that help make sure that we have air safety, these are the people who do meat inspections, these are people who teach our kids in terms of the funds that will go to education. So these are middle class families, and they deserve to be treated with dignity and respect.
Now, Congressman Ami Bera, one of our new Members, went to the Rules Committee last night and asked to have an amendment put in order that would continue to freeze congressional pay, which I support. They wouldn't allow that as a separate vote on the floor. Mr. Connolly from Virginia has also introduced a bill to extend the freeze on congressional pay, which I support. So, you know, but it's one thing to say that we're going to freeze congressional pay, but we really should not be taking it out on these hard working federal employees. But, again, I mean, it's bad enough that that's what they're focusing on. What's just as bad is that with less than two weeks to go, the clock is ticking down to a sequester that will cost the American people 750,000 jobs.
By the way, those are not federal employee jobs, the 750,000. I mean, federal employees will be furloughed, but the 750,000 jobs lost are throughout the private sector because you're going to be taking $120 billion out of the economy during the period from March 1st to the end of the year, and as a result you will have one third less economic growth and 750,000 American jobs lost, and that's absolutely unacceptable from our perspective when there are clearly viable alternatives.
Leader Pelosi. And why? And why? Because the Republicans refuse, refuse, for example, to end tax subsidies to Big Oil, refuse to have millionaires, people making two million dollars a year pay their fair share. That's why. And this is just, it's just wrong. It's not a responsible way to proceed, and again you can pick out this or would you do this or do that. The fact is overall, overall we have to do what is responsible, and I hope that the Republicans in the Congress would see the light to do that in the House.
Now, we can't do that if we're not here, and that's why, why are we leaving, why will they not make millionaires pay their fair share and Big Oil give up their tax subsidies and instead to take it out on the public safety, the education of our children, our national security? Why are we leaving when we should be staying here to work this out? March 1st is right around the corner. It will be fewer than two weeks, fewer than, what – 13 days or something when we come back after tomorrow's adjournment, recess. So, it's – this is not – again, I've said it before, it's not worthy of the responsibility that we have here to come together to resolve our differences, to make our compromises to do the right thing for the American people. What it will do is deter growth with the jobs, and that's exactly what we need right now, growth with jobs.
Q: Ms. Pelosi, some folks on the Republican side are saying that the reason why they want to allow the sequester to go through is because they could negotiate the CR under the 974 number. Am I correct, 974? Can you tell me about what that strategy means and how negotiations would look about 974, what could be cut with so much discretionary spending already being cut over the last two years?
Leader Pelosi. Well, the 974 is a cut, as you know, already, but the fact is I was missing the point as to whether this was a strategy did you say?
Leader Pelosi. Let the government shut down, we'll lose 750,000 jobs, we'll have uncertainty as to our economic growth so that they can negotiate better on the CR? I mean, again, I say the priorities, this is a tale of two priorities. What you have just described is an irresponsible course of action, and it's a path that I would hope people who care about our economy, our growth, our national security, and the rest would weigh in with the Republicans and say what you just described is a luxury our economy cannot afford. It's frivolous, it's irresponsible, it's immature, and it is not in the interest of growing the economy of our country. Okay?
I just wanted you to make the point, though, about – we said what the job loss will be and what the number of times that we've brought this bill up. Let's talk on the positive side. We could come together and find a way to say: ‘okay, how much are we going to have in spending cuts, what are we going to do on revenue, how does this promote growth, how much better are we off to resolving the – to having a solution in advance and then go discuss the CR? This is not hard. It's complicated, it's challenging, but if we can't do this, it's hard to explain why we couldn't, and the answer so far seems to be because they don't want to touch tax cuts, the income of people making over two million dollars a year.
Did you have any other thing, Mr. Van Hollen?
Mr. Van Hollen. The only thing, Madam Leader, I would say is just to remind everybody that when it comes to this discretionary spending, the ongoing operations of the federal government, we've already cut $1.5 trillion over the next 10 years through a combination of caps in the budget control agreement as well as reductions earlier in that year, so over the last couple years we've achieved that. That does not include the interest savings on those cuts, the $1.5 trillion, which will take that category of federal spending down to the lowest level as a part of the economy since the Eisenhower Administration, and as Leader Pelosi has said, if you keep going, what you're going to do is shortchange our kids and our future and our economy and our ability to compete in the global economy. You're going to be slashing investments in science and research, slashing investments in our kids' education, slashing investments in infrastructure all, as Leader Pelosi said, in order to protect taxpayer subsidies for Big Oil companies and to make sure that folks who earn more than two million dollars per year can take advantage of tax preferences that they disproportionately benefit from. So that's the trade off here, and we just need to make it clear, and then people need to make their choice.
Leader Pelosi. It is – these cuts, across the board cuts on the domestic side, and we're concerned about the domestic cuts as well as the defense cuts, but on the domestic side they will have a terrible impact on women and children and caregivers and seniors and the rest. It really is so irresponsible, especially as Mr. Van Hollen said, we've already made those cuts in the Budget Control Act that are very significant, $1.6 [trillion], combining budget control and caps legislation, so $1.6 trillion vis à vis $600 billion in revenue. So, it's more than two to one in spending cuts to revenue so far. So, no, we've demonstrated that we're willing to cut, make the cuts. Mr. Van Hollen has suggested others, but yet you cannot, as the President keeps saying, cut your way to getting rid of the deficit. You have to have revenue coming in. That's why we're so proud of him the other night in his speech where he just took on the issue head on saying that we had to have a balanced approach, and let's work together to get that done. Yes, sir?
Q: Just to clarify, what are you looking for the Republicans to support in terms of tax increases on incomes over $2 million?
Leader Pelosi. Well, for the Buffett Rule, as Mr. Van Hollen suggested.
Mr. Van Hollen. We've proposed that we continue to take a balanced approach. As the Leader pointed out, we've done $1.5 trillion in spending cuts, we did about $600 billion in revenue by asking higher income individuals to pay more, but we have not yet enacted Speaker Boehner's plan. He said he had a plan to raise $800 billion in revenue. How? By taking away special tax breaks and loopholes. In fact, I recall repeatedly that Mitt Romney and Paul Ryan talked about all those tax breaks and loopholes that are in the tax code. Guess what? They're all still there. So we would like to see Speaker Boehner's plan. We have not, as part of the fiscal cliff agreement, addressed any of those tax breaks or loopholes. So, let's do it as part of a balanced plan going forward, including getting rid of all those special breaks in the, like the oil and gas. I would say Dr. Elmendorf from CBO testified the other day, he said that all those tax breaks in the tax code, it's just spending through the tax code, spending through the tax code.
Leader Pelosi. So, when people talk about a spending problem, they should be including the tax expenditures because they are a cost to the economy, to our federal budget, and just to go back to the Buffett Rule and the 30 percent that Mr. Van Hollen was talking about, under the bill that was passed at the end of last year, the rate for people making that much money would be 39.6 percent. This says you can take some deductions, but you cannot have your tax bill go below 30 percent. So they still have about 10 points of deductions that they can take, and it's just, as Mr. Buffett said, he shouldn't be paying a lower tax rate than his secretary, and that's what people will do if they can take an endless number of loopholes, but all of those loopholes, whether it's Big Oil, subsidies for Big Oil, $38 billion, $37 billion over 10 years, all of those are expenditures. They're what we call tax expenditures. So put them in the spending column and let's cut those, too.
One last question.
Q: Just to follow up on that, if you do address all the tax expenditures and close these loopholes, would that make comprehensive tax reform at some point later this year, would that make it more challenging or does it take away some of the, I guess, prospect for Republicans to join you in that?
Leader Pelosi. Mr. Van Hollen.
Mr. Van Hollen. We're not opposed to raising some of this revenue through tax reform. We think there are some tax breaks that are so egregious that we should just decide right now in the interest of protecting taxpayers, reducing the deficit, protecting the economy… Big Oil companies – you know this is something President Bush proposed, getting rid of the tax breaks for Big Oil companies. Mitt Romney conceded that, that would be a tax break that would have to go. So there are lots of, you know, tax breaks that shouldn't stay in the tax code for another second.
In terms of some of the other provisions, we're happy to do as part of tax reform, but again as Leader Pelosi said, we can make the decision today that folks who are making two million dollars a year should not have a lower effective tax rate than the people who work for them. I don't think we have to have hours and hours of hearings and meetings to recognize that that's the right thing in order to protect 750,000 American jobs.
Leader Pelosi. And I think that if we got rid of the sequester, and in fact it would improve the climate for us to come together, and say we're going to look at mandates, we're going to look at revenue, we're going to look at all of these things out of the heat of battle, but in a time of reflection where we can make the right decisions.
You know, the tax code and all of these loopholes, that probably is the biggest cottage industry in Washington, D.C. It probably is the source of more unfairness in our budget process because of who gains from it, and who gains from it are usually the very special interests. So we really must, to answer your question, go to the table and look at the tax code for fairness, for simplification, for getting rid of obsolete and duplicative provisions in it. But if you want to inject fairness and balance into what we do, then let's just objectively, and in a very – I always say agnostic – way just put it on the table. But the more people know about that tax code, the more unfair they will know the situation is when it comes to them. They're effectively saying right here, we're not going to get rid of the tax subsidy for Big Oil, but let's get rid of that same amount of money from Pell Grants or Meals on Wheels or you name it, education, public safety, you name it. Those are not the priorities of the American people. And why should there be a special interest that has all of this spending on its behalf, tax expenditures, and when we say we have to cut spending when it comes to the education of our children, the safety of our neighborhood, the comfort of our seniors, it's a big debate, and it's what we have come here to do, to have that debate. But we should not be doing it in the wake of a sequester. We should be doing it after we've gotten rid of the sequester, which we could do if we stayed here the next couple of weeks. But then dispassionately and objectively, and with transparency, and in full view of the American people, let every one of those tax breaks be justified or not, but I say always [over] every dollar that is spent, every taxpayer dollar that is spent should be subjected to the harshest scrutiny. Is it worth it? Is it duplicative? Is it obsolete? Is it doing the job it set out to do? And we should be subjecting those tax expenditures, that spending on behalf of the special interests to the same scrutiny, and that's what I hope that we can do. And I think it's all better served if we don't have the sequester as well – as I think, in answer to your question, is that the debate on the CR and the omnibus and the appropriations measures are better served without a sequester.
To be continued. Happy Valentine's Day.
Mr. Van Hollen. The last point is, even if there is some Republicans who want to slash the investment in education, which would be very shortsighted, or cut the social safety net, the question that we're posing to them now four times, if you don't care about that, which you should, what do you care more about, protecting the special interest tax breaks or investing in national security, defense and protecting the economy? So Republicans who choose to oppose this effort are saying that it's more important to them to protect taxpayer giveaways to Big Oil companies than it is to invest in our national security and protect the economy, simple as that.
Leader Pelosi. Again, to be continued. As you may have noticed, many of us are wearing red today, in association with the [American] Heart Association, which is focusing on women's health and heart disease among women. So, when you see the floor later, you'll see many in red. It's not about Valentine's Day, although they may have chosen this day for that reason, but it's about a very, very important issue, and all of the medical research and all of the attempts at finding cures and targeted personalized, customized care for people, whatever their diagnosis, would be greatly affected by a sequester that would slash the biomedical research.
And I will just conclude by saying this one thing. That and investments in education are investments in the future. Nothing brings more money to the Treasury than educating the American people. Early childhood, thank you, Mr. President, to lifetime learning, and everything in between. Nothing brings more money to the Treasury.
So if we think by cutting investments in education that we are reducing the deficit, we are not, and that's how we have to think about this, about how, what our goals are as a country, what our values are, and how that budget is a statement of values.
Thank you all very much.