Van Hollen Would Consider Tax Cuts for Wealthy for Another Year

U.S. House Democrat Chris Van Hollen said he would consider extending Bush-era tax cuts for wealthier Americans for a year if Republicans would agree to make the reductions permanent for “middle class” taxpayers.

Republicans, including House Minority Leader John Boehner, have insisted that the tax cuts should be extended for all Americans for two years. Taxes are expected to dominate the agenda when Congress returns next week.

“If they were to come back and say, ‘hey, let’s just do one year for the top 2 percent, and permanent for the middle class,’ that would be something that obviously people would have to think about,” Van Hollen said in an interview on “Political Capital with Al Hunt” airing this weekend on Bloomberg Television.

He said he was speaking “individually” and not on behalf of Democratic leaders.

Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee, predicted his party “will hold onto a majority in the House” even in the face of polling that shows Republicans are poised to retake control.

“I think a lot of the doom and gloom you hear in the national media is not playing out in each of these local districts,” Van Hollen said.

He criticized Boehner of Ohio, the Republican leader who would be House speaker if his party wins a net 39 seats in the Nov. 2 midterm elections.

‘Go-Go Times’

Voters “need to know that one of Mr. Boehner’s top priorities is to repeal the Wall Street reform bill,” Van Hollen said. “I’m sure there are a lot of folks and bankers on Wall Street that would love to go back to the go-go times where they were able to leverage to the hilt, but we know what happened when the bubble burst.”

“It just didn’t hit Wall Street,” he said. “It hit everybody throughout the economy.”

Boehner attacked President Barack Obama’s economic policies during a speech last month in Cleveland. He called for the president to fire Treasury Secretary Timothy Geithner and the other members of Obama’s economic team.

On the tax-cut fight, Van Hollen said it would be fiscally irresponsible to allow a permanent extension of the tax relief for the wealthy.

Obama has spelled out “a very clear contrast” between the parties by insisting that tax cuts for the wealthiest 2 percent of Americans should be allowed to expire at the end of this year, he said.

$2.2 Trillion

Obama and most congressional Democrats want to extend the tax cuts only for households earning up to $250,000, about 98 percent of all taxpayers. That would cost the federal treasury $2.2 trillion in forgone revenue over the next decade, according to the Pew Economic Policy Group.

The Republicans’ proposal to also keep the tax cuts for wealthy Americans would cost another $1.1 trillion over the same period, Pew said. Republicans say the tax cuts should be retained without reducing spending or raising taxes elsewhere.

“As we come out of this recovery, economists tell us the one thing that could really slow things down is if we don’t get our fiscal house in order,” Van Hollen said. Adding more to the deficit “is a very bad idea,” he said.

Van Hollen rejected any notion that Obama has overreached with his agenda or lost the ability to connect with voters that he displayed in his 2008 presidential bid. The Democrats’ plight is driven by the economy, not Obama’s actions, he said.

“I don’t think he’s lost it,” he said. Rather, he said, voters had “very high expectations” for a strong economic recovery. “And that obviously hasn’t happened. What we have succeeded in doing is stabilizing a very tough situation.”

“We’ve seen eight consecutive months of positive private sector job growth,” though it hasn’t been “this sort of miracle cure,” Van Hollen said.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

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