• With: Rep. Chris Van Hollen, D-Md.

    This is a rush transcript from "Your World," August 13, 2012. This copy may not be in its final form and may be updated.

    (BEGIN VIDEO CLIP)

    ERSKINE BOWLES, FORMER CO-CHAIRMAN, NATIONAL DEBT COMMISSION: Paul Ryan is amazing.

    I always thought I was OK with arithmetic. This guy can run circles around me. And he is honest, he is straightforward, he is sincere. And the budget he came forward with is just like Paul Ryan. It is a sensible, straightforward, honest, serious budget.

    (END VIDEO CLIP)

    NEIL CAVUTO, HOST OF "YOUR WORLD": All right, that was from September of 2011, Erskine Bowles, of course, the co-chair of this president's debt commission, a former chief of staff for Bill Clinton, who had some good things to say about the man who would emerge as the vice presidential candidate for the Republican ticket in 2012.

    Reaction now from Democratic leader and Paul Ryan's budget committee rival Chris Van Hollen.

    So, obviously, then and now, there are -- this is not a unanimous point of anti-Ryan views out there among your colleagues. What do you make of that and what Erskine Bowles was saying about Ryan?

    REP. CHRIS VAN HOLLEN, D-MD.: Well, Neil, as you may well know, I get along very well personally with Paul Ryan.

    On the Budget Committee, we disagree fundamentally on key issues, but we always do it in a civil manner. There's no doubt that Paul Ryan understands his math. And I think everybody understands that, if you're going to provide a huge additional tax breaks to folks at the very top and say at the same time you are interested in reducing the deficit, it means you're going to hit everyone and everyone else a lot harder.

    And this is going to be a great debate.

    CAVUTO: But does that mean, Congressman, that you -- you ignore the runaway costs associated, for example, with Medicare, not that you cut it, but -- in half and all?

    He was curbing the growth of it and looking for alternatives to address the grenade that you and others have acknowledged is out there if we don't fix this thing. And yet he's been harangued as all but pushing granny off a cliff. I believe in one ad, that's exactly what he's doing. Is that fair, is that right, and does it do a great disservice to Paul Ryan when many in your party espouse that view?

    VAN HOLLEN: Well, Neil, it's the way that the Ryan plan and now the Romney-Ryan plan would deal with Medicare.

    There's no doubt that we need to modernize the Medicare system. And we began to do that in the Affordable Care Act. The issue is whether you do it by trying to reduce the overall health care costs by changing some of the very misaligned incentives in the program.

    Right now, there's an incentive to provide a greater volume of care, greater quantity of care, as opposed to value of care. We began to change that. What's different about the Ryan and Romney approach is they would simply shift the ever-rising health care costs on to senior citizens.

    We don't think that's the right way to go. And we think it's totally unbalanced when you do that at the same time that you are providing huge tax breaks to people like Mitt Romney.

    CAVUTO: But when you look at this, Congressman -- I know you and I have chatted about this before.

    VAN HOLLEN: Yes.

    CAVUTO: But, clearly, the system cannot go on as it's going. And he is not addressing present Medicare recipients. He's looking at those much younger today, 55 and under today, and by the time this were enacted, likely 53 and under today, more or less saying, in order to make sure there's a benefit for you, here are the adjustments we can make now.

    And yet that's being treated as if he were Satan with a spreadsheet. I don't know if that's right.

    VAN HOLLEN: No. No, I don't think that's accurate, Neil. Let me say this.

    CAVUTO: Have you heard what Harry Reid has said about him?

    (CROSSTALK)

    VAN HOLLEN: Let me make two points. The first is that the Ryan and Romney plan will have an immediate impact on many seniors on Medicare in two ways. One, it will immediately increase costs for people with high prescription drug use, because they reopen immediately the prescription drug donut hole that was closed as part of the Affordable Care Act.

    Second, when it comes to preventative health care services for seniors, it will become immediately much more costly. In the longer term, what I reject and object to with the Ryan approach and the Romney approach is that they will give seniors a much worse deal than they give to members of Congress.

    Members that...

    CAVUTO: But what about younger people, those who are not seniors now? And we can quibble as to whether the impact you talk about would be what you say it is. But I'll defer to you.

    What I am saying is what about all the other people who are coming up and growing older, the 10,000 who are joining the system per day in this country? What about assurances for them that it will be there? Because, you know, Congressman - and you know these numbers, I think, better than anyone -- that, the rate we're going, it is not sustainable.

    We can quibble with the Ryan approach. We can quibble with the Romney approach. But there's no denying the fact that, as we are going, we've got to make some adjustments. And some Democrats are not doing it.

    VAN HOLLEN: Well, two things.

    First of all, I'm doing more than quibbling with that approach. I think it's a fundamentally flawed approach. But there's no doubt, as I said, Neil, we need to make some changes. Now, people need to recognize that the Affordable Care Act extended the life of Medicare by over seven years. We're talking about Part A of Medicare. That's according to the Medicare actuary.

    We need to build on that. And the way we would build on that is to change some of these incentives. Right now, there's an incentive -- there's no incentive for hospitals, for example, to prevent a patient from being readmitted multiple times based on the same condition, because the hospital gets paid every time.

    We need to move to a payment system that encourages the coordination of care. That's the way to save money, not by off-loading rising health care costs onto seniors on Medicare...

    CAVUTO: All right.

    VAN HOLLEN: ... whose median income is $23,000.

    CAVUTO: Congressman, it's always good having you. Agree or disagree, never disagreeable.

    VAN HOLLEN: Thanks.

    CAVUTO: Good seeing you again.