Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Van Hollen Calls Simpson-Bowles a Framework for Debt Deal

Van Hollen Says Simpson-Bowles Will Be ‘Framework’ for Debt Deal
Representative Chris Van Hollen said Obama “was exactly right” during the Denver debate when he said Romney had previously said he would reject a deficit-cutting plan even if it included $10 in spending cuts for every $1 in higher taxes. Photographer: Joshua Roberts/Bloomberg

Oct. 4 (Bloomberg) -- Representative Chris Van Hollen, the House Budget Committee’s top Democrat, predicted the proposal by President Barack Obama’s 2010 deficit panel will be the “framework” for averting the so-called fiscal cliff of spending cuts in January.

The deficit-cutting plan was offered by commission co-chairmen Al Simpson, a Republican former Wyoming senator, and Erskine Bowles, a Democratic former White House chief of staff. It called for $3.8 trillion in spending cuts and $1 trillion in more tax revenue by 2020 through rate increases or eliminating deductions. The commission recommended cuts in Medicare and Social Security benefits.

It didn’t get the required 14 votes on the 18-member commission to be sent to Congress for a vote. Obama also didn’t embrace the recommendations, and his Republican challenger, Mitt Romney, criticized him for that at their first debate last night in Denver.

“We’re going to see the framework of Simpson-Bowles” in a deal to avert $109.3 billion in automatic federal spending cuts in January, Van Hollen said on Bloomberg Television’s “Capitol Gains,” airing this weekend.

“That mix of cuts, but also revenue, is the right way to go,” the Maryland lawmaker said.

Among the debt commission members who voted against the proposal was Representative Paul Ryan of Wisconsin, now the Republican vice presidential nominee. Republicans who opposed the plan cited its tax increases.

‘Exactly Right’

Van Hollen said Obama “was exactly right” during the Denver debate when he said Romney had previously said he would reject a deficit-cutting plan even if it included $10 in spending cuts for every $1 in higher taxes.

Asked during the debate whether he supported the Simpson-Bowles plan, the former Massachusetts governor said “I have my own plan; it’s not the same as Simpson-Bowles.” Still, he said Obama “should have grabbed that” and fought for it in Congress.

Instead of allowing the automatic spending cuts to begin in January, Congress may devise “replacement deficit savings” to postpone some of the reductions for three to six months, Van Hollen said.

Van Hollen said the Dec. 31 expiration of the Bush-era tax cuts is a separate issue because Obama “has been very clear” that Congress should continue them for most income while letting them expire for couples’ income above $250,000.

Republicans say the tax cuts must be continued for all income levels.

Action by Congress to postpone the spending cuts while allowing the tax cuts to expire on top earners “will require our Republican colleagues recognizing that balanced deficit reduction requires some revenue contribution,” Van Hollen said.

To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.