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Coburn, Van Hollen Wrangle on Budget

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Sen. Tom Coburn is a member of the “gang of six” Senators who are working on bipartisan budget legislation.

Updated: 12:01 p.m.

Two days after the House adopted a Republican budget proposal, Sen. Tom Coburn (R-Okla.) and Rep. Chris Van Hollen (D-Md.) disagreed Sunday on the plans methods and the importance of raising the debt ceiling.

The $1.019 trillion fiscal 2012 budget resolution, authored by House Budget Chairman Paul Ryan (R-Wis.), is below the $1.121 trillion in discretionary spending that President Barack Obama requested, and it has an unlikely path forward with a Democratic-controlled Senate and White House in the way. The House rejected an alternative plan by Van Hollen, who is the Budget Committees ranking member, in another vote Friday.

You cant criticize Paul Ryans plan until you have one that accomplishes the same thing, Coburn said on Fox News Sunday. The presidents [plan] doesnt come close to that. So what we need is not the partisan bickering and not the labeling, what we need is: What is good about Paul Ryans plan that [Democrats] can live with, and what is good about [Van Hollens] plan that [Republicans] can live with?

Van Hollen disputed the recent GOP talking point that the country does not have a revenue problem. Taxes will be a key component to any deficit reduction deal, he said on the show.

I am willing to work out a plan to reduce the deficit it should not just involve spending cuts, as the fiscal commission has said. And as Tom has said, we need to deal with the revenue piece, Van Hollen said.

Coburn is a member of the bipartisan gang of six Senators who are also working on budget legislation based on the recommendations of the presidents National Commission on Fiscal Responsibility and Reform. He said the group will offer a separate budget plan that no one will like which he called a good sign.

Nobody is going to like what we come up with, he said. The left isnt going to like it, the right isnt going to like it. Thats one of the things that would be an indicator that its probably the best compromise were going to be able to get.

Another member of the gang of six, Sen. Mark Warner, faulted Ryans plan on Sunday for not seeking new revenue and for leaving defense spending untouched.

That means the only place that he can go to get his deficit reduction is this massive transfer of moral responsibility onto our seniors in terms of paying for health care, the Virginia Democrat said on CBS Face the Nation. Now thats one approach. Its not an approach that I think the vast majority of Americans would want.

Ryan defended his plan on the CBS program by noting that his overhaul of Medicare would not affect anyone age 55 or older and that it is based on the same principles supported by the presidents fiscal commission.

Were basically taking a page out of the playbook of the fiscal commission: Broaden the tax base, lower the tax rates for economic growth, Ryan said. Keep tax revenues where they are dont lower tax revenues but clean up the tax code so it works.

Meanwhile, the nation is rapidly moving closer to reaching its debt ceiling, but Coburn said Sunday that he would not support an increase unless it is paired with mandatory spending limits. The Treasury Department estimates that the nation will hit the ceiling by May 16 and that emergency measures can delay a default on debts until early July.

The debt limit is ridiculous, he said, noting that it does not cap what the country spends. I need absolute certainty that weve made the critical changes that are necessary to put this country back where it needs to go. Unless we do that, there is no way I support it.

Ryan added on Face the Nation: We want financial controls, we want cuts in spending to accompany the debt ceiling. ... Nobody wants to play around with the countrys credit rating. Nobody wants to see default happening. But we also think its important to get a handle on future borrowing as we deal with raising the debt limit.

Van Hollen cited the dangers in tying raising the debt ceiling to spending caps.

We have to make good on the full faith and credit of the United States, otherwise well have an economic catastrophe, he said. Linking the two and saying youre only going to vote for the debt ceiling if something particular happens on deficit reduction is playing Russian roulette with a loaded revolver.

Treasury Secretary Timothy Geithner said he was confident that lawmakers would not allow the nation to hit the ceiling and default on its debt.

I want to make perfectly clear that Congress will raise the debt ceiling, he said on ABCs This Week.

They told the president that on Wednesday in the White House, Geithner added, referring to a meeting between Obama and bipartisan Congressional leaders. And I sat there with them, and they said, we recognize we have to do this. And were not going to play around with it. Because we know we know that the risk would be catastrophic.

Payments to Medicare, Medicaid, Social Security and veterans benefits would otherwise halt, Geithner said. Wed have to stop paying all the other payments on all the other things the government does, he added. And then we would risk default on our interest payments. If we did that, wed tip the U.S. economy and the world economy back into recession, depression. I think it would make the last crisis look like a tame, modest crisis. It would be much more dramatic. The cost of borrowing would go up for everybody, and it would have a permanent devastating damage on our credit rating as a country. And thats why there is no responsible person that would take any risk that we allow the world to start to fear that the U.S. would court that that tragedy.

The administration would work with lawmakers on a long-term plan to reduce the deficit in parallel with legislation to raise the debt ceiling, Geithner said on NBCs This Week.

Even though Obama struck a deal in December to extend tax cuts enacted under President George W. Bush, the country cannot continue to extend those cuts for the top 2 percent of earners, Geithner said on This Week.

Chairman Ryans budget helps explain why this is going to be essential, because if you want to extend these tax breaks for the top 2 percent, then either you have to ask me to go out and borrow trillions of dollars from the Chinese or from foreign investors or from Americans, from our children, or you have to cut as he proposes to do very, very deeply into basic benefits for seniors, the disabled, the poor, he said. And we dont need to do that in order to restore balance for our fiscal position.

Geithner also proposed altering the tax code to eliminate tax breaks that go disproportionately to the wealthiest Americans.

Although Defense Secretary Robert Gates and Secretary of State Hillary Rodham Clinton have already announced that they do not intend to remain in their posts should Obama be re-elected in 2012, Geithner said he still has much work he would like to do, without specifically saying he would be around for a second term.

I got a lot on my plate still, and weve got a lot of challenges ahead, he said. And I want to tell you, this is hard, but I believe in this work and I enjoy these challenges. ... Im going to keep at trying to fix whats broken here, make sure were helping get the economy growing and help deal with these long-term challenges.

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