Van Hollen warns of GOP plans to cut spending 'blindly'

GOP plans to scale back federal spending will hinder economic recovery efforts and increase unemployment, the senior Democrat on the Budget Committee warned. 

House Republicans last week approved a resolution instructing Budget Committee Chairman Paul Ryan (R-Wis.) to cut spending this year to 2008 levels or lower. But Rep. Chris Van Hollen (D-Md.), the panel’s ranking member, says that plan is a recipe for economic disaster.

“Democrats are committed to putting our fiscal house in order, but we must also keep the economy strong by pursuing actions that will create jobs and support working families,” Van Hollen said in a Jan. 31 letter to House Democrats.

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“Blindly slashing investments in important priorities, as proposed by our Republican House colleagues, will slow down our fragile economic recovery and put more people out of work. The proposed cuts put our Republican colleagues at odds with business leaders, economists, and the President’s Bipartisan Fiscal Commission.”

Van Hollen’s concerns highlight the stark differences between the two parties as Congress tries to nibble away at an unemployment rate that remains above 9 percent.

For the past two years, Democrats addressed the crisis through a series of temporary tax cuts and spending increases that have sent annual deficits soaring. The Congressional Budget Office estimated recently that the federal government will spend $1.5 trillion more than it will take in for the fiscal year ending Oct. 1 — a figure expanded by the compromise tax-cut package enacted in December.

In Jan. 2009, just before Obama took office, CBO estimated the year's deficit would be $1.2 trillion.

Those stimulus efforts follow the Bush administration’s bailout of Wall Street banks and other financial institutions, which was supported by Democratic and Republican leaders alike.

Republicans more recently have railed against deficit spending as an economic recovery strategy, arguing that the extra federal funds have encroached on the private sector at the expense of jobs. 

“By spending money we don’t have, running up the huge budget deficits, we create more uncertainty in the private sector,” House Speaker John Boehner (R-Ohio) said on Fox News Sunday. “This is where cutting spending will create jobs because it is going to bring greater fiscal responsibility here in Washington, D.C., end some of the uncertainty, and allow jobs to be created in America.”

As part of his State of the Union address, President Obama last month proposed freezing discretionary spending at current levels for the next five years. The White House will consider additional cuts put forth by Republicans, Obama added, if the country “can honestly afford to do without” that spending. 

“But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens,” Obama added. “And let’s make sure what we’re cutting is really excess weight. 

“Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.”

Van Hollen this week also urged Democrats to protect last year’s healthcare reform law, which House Republicans voted to repeal last month. That bill, the Maryland Democrat reminded colleagues, is estimated to reduce deficit spending by $230 billion over the next decade.