Senator Barrasso and Rep. Van Hollen on "State of the Union"

Senator Barrasso and Rep. Van Hollen on "State of the Union"

By State of the Union - May 1, 2011

I'm Candy Crowley. And this is STATE OF THE UNION.


CROWLEY: Adding to the political mix, jaw-dropping gas prices and skyrocketing oil company profits. It has renewed sharp debate over whether tax-payers should be underwriting the oil industry.

(BEGIN VIDEO CLIP) OBAMA: I do have a problem with unwarranted taxpayer subsidies that we have been handing out to oil and gas companies to the tune of $4 billion a year.

REP. JAMES LANKFORD (R), OKLAHOMA: The president may think he's punishing CEOs of big companies, but his plan will hurt the everyday consumer of energy and imperil the jobs of millions of hard-working people in American-based companies.


CROWLEY: Joining me now, Republican Senator Barrasso of Wyoming, vice chairman of the Senate Republican Conference; and Democratic Congressman Chris Van Hollen, the top Democrat on the House Budget Committee.

First to you, Senator, is it not a pretty tough sell when Americans wake up to $4 and sometimes $5 a gallon gasoline and then find out that the top oil companies in this country have 50 percent increase in profits and more, and yet they are subsidizing these very same companies?

BARRASSO: You know, Candy, I'm a conservative and I believe if you tax something more you get less of it. And we're at a point where we need more American energy. And I think this pain at the pump that we're seeing that's adding $800 per year this year to families in terms of the cost of their gasoline, which takes money away from them if they are trying to deal with bills and with mortgages and with kids, makes it that much harder for families and the quality of their life.

So adding costs by adding taxes is something to me that makes it harder for us to become secure with our own energy. It's going to drive American jobs overseas.

CROWLEY: So their argument, Congressman, is that if you take away these tax breaks for the oil companies, it will make prices go up and not down. So, A, do you believe that and, B, would you at least concede that it probably overall won't have much effect on the price of gasoline?

VAN HOLLEN: Well, it certainly isn't going to make prices go up. I mean, oil prices are set on an international market and there's absolutely no justification to ask American tax-payers to provide these big subsidies and windfall profits to these oil companies when they are already making record profits.

So what the president has said is, let's not invest that by giving to it oil companies, let's try and invest it in our nation's future energy supply. I would say with respect to price, we've seen a supply disruption as a result of Libya, which has helped feed a speculative bubble. And the only way to address that in the very short term is to consider releasing some of the oil from Strategic Petroleum Reserve.

CROWLEY: Something which the president has said he is not -- you know, that is supposed to be something that's on -- if the supply diminish, Libya, obviously, gives us very little oil. And it has mostly been a speculative increase, as I understand it.

So would you -- even despite that, you think the president ought to release oil from the strategic oil reserve?

VAN HOLLEN: Well, it's about 1.5 million of barrels of oil a day from Libya. But that has been fed, this speculative bubble. If you want to pop that bubble, you have to take some action. Unfortunately, our Republican colleagues have fought efforts to reduce rampant speculation in the markets.

I mean, they opposed the Wall Street Reform bill, and then they have been fighting efforts to allow the regulator to establish position limits to prevent manipulation in the oil markets.

But the one thing we can do now and quickly to pop the bubble would be to take - release some of the oil. And you get a good price for the American tax-payer too.

BARRASSO: And I disagree completely. The strategic reserve has oil in it basically for about 66 days of how much we use in this country. It's there for specific emergencies, and this isn't it.

Prices are up now because there is increased global demand for oil. The dollar is terribly weak right now internationally, and it's because of the economic policies of this administration and our incredible debt, and also there is turmoil in the Middle East, which is why we need to become more American energy dependent as opposed to foreign energy dependent.

We keep spending money and sending it overseas when we should be developing American energy. This administration has blocked our efforts and we should be exploring for energy offshore on federal land and in Alaska. And this administration continues to block efforts to develop American energy resources.

CROWLEY: Let me move you to the debt ceiling because you all come back to budgets, debt ceilings. Just a really simple question off the top and that is, do either one of you see any way that Congress will refuse to increase the debt ceiling, thereby allowing the U.S. to default?

VAN HOLLEN: Well, I certainly hope not. It would be disastrous for the American economy. It would put people back out of work. It would make the last recession look like a cake walk. And so I hope wiser heads will prevail as we move forward because you cannot risk the full faith and credit of the United States.

Should we work together to come up with a deficit reduction plan? Yes. And we should do it now. But nobody should take the position that if they don't get 100 percent of what they want in terms of deficit reduction, that they are going to threaten to put people out of work. That's just reckless.

BARRASSO: And I'm not ready to give the president what he wants. And what the president is asking for is a blank check and a new credit card. And that's absolutely irresponsible. We need to quit the spending and cap the spending.

There are a number of things we need to do. No one that I know wants to default on the debt. But that doesn't mean that we have to raise the debt ceiling at this time. What, 84 percent of Americans, I don't know if you're going to put the numbers up on the screen, are against raising the debt ceiling. They want us to get spending under control. And that's what we need to do.

So even The Washington Post has said, if you are going to raise the debt ceiling, you had better tie it to limiting the spending and dealing with this incredible deficit and debt.

CROWLEY: Well, not even just The Washington Post, but your Democratic colleagues, I want to put up on the screen for our viewers, something that Senator Mark Udall, Democrat from Colorado, said: "As catastrophic as it would be to fail to raise our debt ceiling, it's even more irresponsible to not take this opportunity to own up to our unsustainable spending path. If we do not take action to reduce our deficit spending, Congress will be facing this same debt ceiling vote in the near term still with no to end our deficits in sight."

And he joins several other Democrats on the Senate side that have said -- you know, Kent Conrad, Joe Manchin, and Mark Pryor all said, look, we've got to have not just, oh, yes, we have got to deal, we all think debt is terrible, but substantial use that go along with that debt ceiling. Would you go along with something that was attached to the debt ceiling, spending cuts?

VAN HOLLEN: What I think we need to do right away is, yes, come up with a deficit reduction plan. It has to be a balanced approach to the deficit, not the one-sided approach that you saw in the House Republican plan that ends the Medicare guarantee at the same time they give a 30 percent cut in the top rate for millionaires and billionaires.

We're not going to agree to that. But the idea that we should come up with a balanced deficit reduction plan is right. But what's wrong is to say that if one side doesn't get 100 percent of what it wants in terms of coming up with that plan that they will put the entire economy at risk.

And then there's this plan, I hope John doesn't support it, but some of his Republican colleagues do, which says we will pay our foreign creditors, like the Chinese government, before we pay our troops in the field and before we pay Social Security beneficiaries. That is irresponsible as well.

CROWLEY: Well, let me ask...

BARRASSO: The president used the word "balanced approach," but they don't use the word "balanced budget," which is what families in Wyoming have to do, live within their means. Our state has a balanced budget. We have to live within our means in the state of Wyoming. I was in the state senate. This country needs a balanced budget amendment to the Constitution.

We need to live within our means. Not a balanced approach but a balanced budget.

CROWLEY: Very long term, a balanced budget amendment, because it has got to go through the states and all of that.

BARRASSO: Yes, sure.

CROWLEY: You know, I want to -- since you brought up Medicare, this has been a very huge thing. It's the Paul Ryan plan, basically says we will eliminate Medicare as we know it, and replace it with subsidies so that seniors can buy private insurance.

One of the things -- and you're a doctor, one of the things that I find when I talk to doctors is that they say, you know, Medicare is like the one reliable payment, you know, that we get. They actually like Medicare because they don't go through all of the hoops they do for private insurance.

Are you for that particular part of the Ryan plan?

BARRASSO: I'm going to support the Ryan plan. I'm telling you as a doctor who spent about half of his time in the office taking care of our seniors on Medicare, it is a program that intentional -- intentions to work are much better than the way it's working today in terms of practicality.

We need to save and strengthen and fix Medicare. Seniors realize Medicare is broken. The president takes $500 billion away from Medicare, not to save Medicare but to start a whole new government program and he puts a panel to decide what hospitals get paid and what don't. I was at a hospital in Cody, Wyoming this week. I know you've been to Cody, they are worried about things they are not going to be able do as the president's independent payment advisory board turns the screws, ratchets it's down and makes it much harder for patients to get care.

Plus, Candy, you know doctors right now are running away from Medicare. Many, many doctors, I think 57 percent of doctors don't want new Medicare patients because the system we have right now is broken, it's unsustainable. We have to fix it.

Paul Ryan makes one approach. And there are things that we can do to improve Medicare. We need to do those.

CROWLEY: So, but you're not for getting rid of Medicare, which is what the Ryan plan calls for, or are you?

BARRASSO: I'm going to support the Ryan plan. I have to tell you as a doctor, 25 years of practice, not as a politician using talking points, as somebody who has taken care of Medicare patients, we can make it a lot better. People want choices and right now they don't have that with Medicare.

CROWLEY: Seniors are now seen as in play for Democrats, particularly for the president because he's not been all that -- it's a group that he's not been popular with. Are seniors in play because of this Medicare plan?

VAN HOLLEN: Well, I think so because they are taking a look at this plan and they are understanding exactly what it does, not just seniors, but a whole lot of people are affected. Let's be clear about what the Republican plan does with respect to Medicare. It ends the Medicare guarantee. It requires seniors to go into the private health insurance market, where they are going to get a double whammy according to the independent Congressional Budget Office. Number one, prices are going to go up. The whole reason we have Medicare for seniors is the private insurance market couldn't provide affordable care in the first place. So prices go up and the government support goes down. And so seniors are going to be required to eat the whole cost.

With respect to the $500 million that John mentioned -- yes, that was part of the Medicare reform. You know what we did? We ended the overpayments to the Medicare Advantage plans, the private Medicare Advantage plans that were being subsidized at 114 percent, and we used some of that money to close the prescription drug doughnut hole. Now the Republican plan in the House, it takes the $500 billion that they said was terrible, but at the same time they don't use some of the savings to close the doughnut hole. They reopen it.

So what we're saying is let's look at things where we don't put the big hit on seniors.

CROWLEY: Congressman Chris Van Hollen, Senator John Barrasso thank you so much for joining us. Appreciate it.


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