Van Hollen Wants to End Hedge-Fund Tax Break (Transcript)
Representative Chris Van Hollen of Maryland, ranking Democrat on the House Budget Committee, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that Congress should eliminate a tax break for private-equity and hedge- fund executives to pay for extending a payroll tax cut for workers.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the show with the ranking member on the House Budget Committee, Democratic Congressman Chris Van Hollen of Maryland. Thank you for joining us, congressman.
REPRESENTATIVE CHRIS VAN HOLLEN: Great to be with you, Al.
HUNT: The president gives a State of the Union next Tuesday. The White House has said, other than the payroll tax, they really don’t expect much to happen this year, so this session really is all about politics.
VAN HOLLEN: Well, I wish I could say that we’d have a more productive session this year, but given the history of the House Republican leadership on so many of these issues, it’s hard to say that would happen.
For example, the president has had his jobs package in front of the House now since last September. And with the exception of the payroll tax cut, or the two-month piece that we already put in place, they haven’t taken any action on that.
HUNT: Do you think the Republicans will wage a big fight over that in February? Or they were burned in December, will they just go through the motions?
VAN HOLLEN: I don’t know. It depends on what lessons they learned or, more importantly, I guess, what the Tea Party wing of the House Republican Party -
HUNT: What’s your sense now, though? You talk to them a little bit.
VAN HOLLEN: Well, I know a lot of them have been on record in the past not wanting to do a payroll tax cut, which is always curious, since they’ve always been in favor of tax cuts for the folks at the very top. But in any event, the question is going to be whether they try and add all these extraneous provisions, unrelated provisions, as they did before.
HUNT: And you don’t have -
VAN HOLLEN: I don’t know yet. We have not had a conference meeting. Our first conference will be held on next Wednesday - Tuesday or Wednesday.
HUNT: There’s also the question of how to pay for it. You’ve talked about higher levies on bank transactions and oil and gas. How about carried interest that private equity and hedge funds get? Pete Peterson, Warren Buffett all say it’s indefensible, could raise some money. Would you be willing to consider putting that in there, to change carried interest on your income?
VAN HOLLEN: Not only would I consider it, I think that we should, because if you look at a lot of the hedge fund activities, these are people who are not putting their own capital at risk. They’re not putting their own dollars in the mix. They’re getting a special deal that’s not available to other people in the economy. Obviously, it’s become an issue in the presidential race.
HUNT: Could it become part of the payroll tax pay-for?
VAN HOLLEN: I think it should.
HUNT: It should?
VAN HOLLEN: Now, you know, I don’t know if our Republican colleagues will go along. I believe it should be part of it. I think it’s an inequity in the tax code and it needs to be fixed.
VAN HOLLEN: And just for clarification, it’s not a - I wasn’t proposing a tax on bank transactions. This is the - a fee on the big banks to recoup the TARP money that they received. No, but there’s - it’s an important distinction, that’s all.
HUNT: You’re absolutely right. You’re right. I misstated it. A number of your colleagues in the House - Democrats - say that this White House has been politically tone-deaf when it comes to dealing with Democratic members of Congress. There are increasing complaints. Is that a fair criticism? And are they learning? Are they getting their act together?
VAN HOLLEN: I don’t think it’s a fair criticism, personally. I mean, I’ve heard it. I, in fact, think that the White House has done a good job, especially in the last four or five months, of communicating very clearly what their position is, what they’re doing in following through.
HUNT: Congressman, what are the political implications if the Supreme Court should throw out the Obama health care measure?
VAN HOLLEN: Well, first, let me say what I think the implications for the country would be. I mean, you’d have about 30 million people who now would not get affordable health insurance. You would also - if they threw out the whole thing - throw out all the patient protections that were part of the bill, making sure that people could stay on their parent’s insurance until they’re age 26, making sure that kids couldn’t be discriminated against based on pre- existing conditions.
And I think that, if that were to happen, the Supreme Court were to do that and you were to take it into the election, there are a lot of people who have already begun to benefit from some of the patient protection provisions in the health care bill that all of a sudden would realize that it - it meant more to them than they realized.
HUNT: So it would boomerang?
VAN HOLLEN: I think it would be terrible for the country. I think politically - I don’t - I don’t think - I know Republicans may think they would benefit somehow from that politically. I don’t believe that’s the case. In fact, I think -
HUNT: And Democrats even can benefit politically, even though you don’t want it to happen?
VAN HOLLEN: Well, I think Democrats would - would point out the good things that were in the bill, the patient protection provisions, the fact that it actually helps close the donut hole for Medicare prescription drugs. I mean, if they really threw the whole thing out wholesale, a lot of Americans are going to stand to lose a lot in terms of their health care protection and coverage, especially the people who will get more affordable care when it fully kicks in.
HUNT: Let’s take a look at national politics. From the vantage point of a Democrat, who do you hope the Republicans nominate? Who would be the easier to beat or who would be the toughest to beat? Ask it the other way. Mitt Romney or Newt Gingrich?
VAN HOLLEN: Well, Al, one thing I’ve learned, not surprising, is don’t wade into Republican politics, because the guy that you think you may be advantaging or harming by your comments, the other guys can use -
HUNT: OK, assess them, then. Let me ask you to assess them as potential nominees.
VAN HOLLEN: Well, look, I mean, obviously, Romney is the current frontrunner in the Republican race, but he has huge vulnerabilities. And his major vulnerabilities is the sense that he’s just out of touch. And we’ve heard about the whole issue with Bain Capital, and he made a big mistake trying to argue he was a job-creator. What he was, was a guy who tried to maximize return for his investors, mostly very wealthy investors. That’s fine; that’s what he’s supposed to do.
But by trying to argue that he was, in fact, this big jobs creator, you then have all these stories about how they went into some of these ventures, essentially, you know, cleaned out some of the pension funds, they took a big return in many cases, and then you have the further point where his tax policy, when it comes to capital gains, is something that would give him, Mitt Romney, an additional huge tax break.
HUNT: So that’s his problem. How about Newt Gingrich?
VAN HOLLEN: Well, Newt, obviously, has all sorts of issues that his own colleagues have raised. You know, Rick Santorum pointed out that Newt has sort of taken every different position on the map. Obviously, he has a particular issue with respect to social conservatives, but it doesn’t appear to have made a difference so far in South Carolina.
But, look, Newt has obviously been an unsteady hand. I think Rick Santorum raised the right question, which is, you know, you don’t know what he’s going to say two hours from now.
HUNT: Democrats complained bitterly when the Republicans tried to impeach Bill Clinton over allegations of sexual misconduct. Is it unfair that Newt Gingrich then is facing some of the same criticism now?
VAN HOLLEN: Well, the issue with Newt Gingrich has been, in many ways, the difference between what he says and what he does. I mean, it’s a hypocrisy issue. I mean, what you have in Newt Gingrich is somebody who was impeaching Bill Clinton, but at the same time, obviously, had all these issues going on in his personal life. Look, I’m going to leave that -
HUNT: Having an affair while he was speaker of the House. That’s a - that’s a -
VAN HOLLEN: While he - while he was speaker of the House and while he was engaged in impeachment proceedings against the president based on the president’s associations. In any event, these are obviously all issues for the voters to judge, but I think the big issue in this election is going to be who’s best for jobs and the economy and who’s most in touch with, you know, the American people.
VAN HOLLEN: Well, I think people have to have a sense that things are improving. I don’t think the specific number is as important with the -
HUNT: But it has to be coming down?
VAN HOLLEN: - with the direction the country feels it’s going in, in terms of the economy.
HUNT: Chris Van Hollen, thank you so much for being with us today.
VAN HOLLEN: Thank you.
HUNT: And when we come back, all eyes on South Carolina. Bloomberg reporters join us from Charleston.
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