Rep. Van Hollen Warns of Budget Battle Impact on Stocks
The budget-balancing plan from House Budget Committee Chairman Paul Ryan is a "total uncompromising" blueprint, Democratic Rep. Chris Van Hollen told CNBC on Tuesday.
In a "Squawk Box" interview, the ranking member on the panel warned that going from "manufactured crisis to manufactured crisis" will put a drag on the economy.
Van Hollen said he's glad the stock market has been "performing well," but he expressed concern about whether Republicans will hold "the debt ceiling hostage" for more spending cuts when it needs to be raised in the coming months.
He acknowledged that government spending must be reduced, but insisted that tax increases also need to be part of the mix.
In an op-ed in The Wall Street Journal, Ryan wrote that his plan—unveiled Tuesday—would balance the federal budget in a decade with no new taxes.
Under our proposal, we'll spend $41 trillion. On the current path, spending will increase by 5% each year. Under our proposal, it will increase by 3.4%. Because the U.S. economy will grow faster than spending, the budget will balance by 2023, and debt held by the public will drop to just over half the size of the economy.
The Wisconsin Republican and 2012 vice presidential nominee said his budget would expand opportunities in domestic energy, repeal and replace the president's health care law, extend the 1996 welfare reform model to other federal aid programs and pave the way for comprehensive tax reform.
(Programming Note: Watch Rep. Paul Ryan on "The Kudlow Report" Tuesday at 7 p.m. ET)
Also appearing on "Squawk Box" Tuesday, Republican Rep. Tom Price, vice chairman of the budget panel, said the Ryan plan was designed to "contrast with the other side" and start the conversation with Democrats, who staunchly oppose the GOP approach.
"Why a budget that balances in a 10-year period of time would be dead on arrival with our friends on the other side of the aisle is simply beyond me," he said.
Price added that he feels there's some common ground on the goal of saving Medicare, reforming the tax system, and capitalizing on American energy. Van Hollen expressed cautious optimism and basically said the devil is in the details.
The budget is on President Barack Obama's agenda this week as he continues to reach out to lawmakers. He is visiting Capitol Hill three days this week, looking for common ground in hopes of replacing the automatic spending cuts of the sequester with a more targeted approach.