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Rep. Chris Van Hollen: The President's Budget Is Not Smoke and Mirrors

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The President's right hand man on budget, Jack Lew, will be making a trip to Capitol Hill Tuesday to testify before the House Budget Committee on the President's 2012 budget proposal.

Chairman Rep. Paul Ryan (R-WI) is holding two days of hearings, and by all accounts this will be Wall Street's version of "must see t.v." I spoke with Budget Committee Ranking Member Rep. Christopher Van Hollen (D-MD) about the hearing as well as his outlook on spending reform.

LL: In my interview with Pete Sepp from the National Taxpayers Union, he called the savings from the budget "smoke and mirrors" What do you say to such criticism?

CVH: We will have the opportunity to ask questions to Jack Lew today on the budget. In respect to the $400 billion in cuts to domestic discretionary spending is not smoke and mirrors, those are real cuts and as the President indicated those are reductions that he would not make in ordinary times but we've got to be tightening our belt.

The fact is, begining this year the President will start reducing the deficit (which the President inherited) and by 2017 will reach its primary balance. This is not a smoke and mirrors budget. If anybody wants to look at budgets that were based on smoke and mirrors, they should look to budgets from the Bush Administration which did not take into account the wars, they also didn't budget for AMT—they assumed the AMT would go up without being recognized.

LL: We are a long road away to finding middle ground on this budget. House Budget Committee Chairman Paul Ryan said the "President's budget accelerates our country down the path to bankruptcy." Do you think there will be any compromise here?

CVH: That's a good question, I certainly hope the two parties can come together and work out a budget. Obviously there are key disagreements but its going to require for everyone to work together to solve some of these problems.

My concern is that among some on the Republican side the word compromise is a dirty word. But the fact is at this moment with a Democrat in the White House and a Democratic Senate and a Republican House everyone will have to do a little give and take. It just can't be all take.

LL: Do you think a budget will be passed this year?

CVH: I hope so. I think at this point of time you've got lots of different issues colliding at one moment. It's a combustible mix. But I hope we can sort something out. But I'm not going to make a predication at this point in time.

LL: Senator Conrad has said the budget proposal is a good start but needs more focus on entitlement programs and tax reform. Do you agree and what should be done?

CVH: I think this is a multi-step process. This is the beginning of the conversation. I think the President has made a very good faith effort to show he wants to reduce the deficit. This is an important first step. I also agree we need to get together on a bipartisan basis to look at some of the issues including tax reform and entitlement programs. That needs to be included in the conversation. I think the Presdient's bipartisan commission on deficit and debt reduction put a lot of issues on the table and while not everyone agrees on every recommendation, that should be part of the discussion going forward.

LL: What would you like to see in terms of tax reform?

CVH: We do have an opportunity to clean out the weeds that have been growning in our tax system over a period of time and many were well intentioned. I support the broadening the base and reducing the rates. When it comes to broadening the base, one person's special interest is another person's priority and that's where we have to come together and figure out what makes sense and what doesn't.

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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."