Press Releases

U.S. Representative Adam Smith (D-WA) made the following statement today concerning President Bush’s FY 2006 Budget:

“President Bush’s FY 2006 Budget is another example of lost opportunity and fiscal irresponsibility. The budget that President Bush is proposing today is a farce and is purposely misleading the American people. By not including in this budget expected costs for continued military operations in Iraq and Afghanistan, $2 trillion dollars in expected funds for Social Security reform or the costs of making permanent his first-term tax cuts, Bush is using smoke and mirror tactics in claiming that this budget is bare bones and fiscally responsible. This budget adds more than $4 trillion to the deficit over the next 10 years. As a matter of fact, the federal deficit is projected to reach a record $427 billion this year alone.

The budget also has its priorities all wrong.  For example, his budget cuts funding for the The Community Oriented Policing Services, or COPS program, which provides grants for state and local agencies to hire police officers.  The COPS program, in the President’s budget, would be cut by $480 million, and his budget slashes funding for local firefighters by $215 million, cuts of 80 percent and 30 percent, respectively.

In addition to the cuts to the COPS program and firefighters, in the budget for 2006, discretionary spending -- meaning other than entitlement programs such as Social Security, Medicaid and Medicare -- would rise just 2.1 percent, lower than the expected rate of inflation. Within that category, extra money would go to defense and homeland security, leaving most other discretionary programs frozen or falling.

Along with sub-standard increases in needed discretionary funding, the proposed budget does not adequately address the needs of the servicemen and women in our military.  Also, given the current strain on our military, the President’s budget only provides a bare minimum pay raise of 3.1 percent.  It does not provide targeted pay raises to the troops who we most need to retain:  senior enlisted personnel and junior and warrant officers. The budget raises health care costs for hundreds of veterans, imposing new co-payments on prescription drugs and enrollment fees that will cost veterans hundreds of millions of dollars. Callously, the President’s budget does not contain funding to increase the death gratuity for the families of those killed in service to our nation.  Although funding may be included in the upcoming supplemental request, those funds will only cover fiscal year 2005. Our efforts overseas will not end with the fiscal year on September 30, 2005—why should this important funding? Finally, this budget puts off a decision to permanently increase the end-strength of the Army and Marine Corps – at a time when we are engaged around the world and our military is stretched thin. 

Finally, as a Member of the House Armed Services Committee and someone who cares deeply about making sure the Pentagon leverages technology, I’m committed to making sure our servicemembers have the best and most advanced equipment in the world.  I’ll work to protect R&D and technology funds at the Pentagon so that we maintain technological superiority.

In addition to not fully funding the critical needs of our military, the President’s budget does not go far enough in cutting corporate farm subsides. It is well past-time that we started to eliminate corporate farm subsidies in this country. Farm subsidies are fiscally irresponsible and that’s why I voted against the bloated farm bill. Not only do they hurt our trade relations with other countries, but they stunt sustainable development efforts overseas. Corporate farm subsidies are the worst form of government handouts and that is why I am introducing legislation to create bipartisan commissions to identify wasteful government programs and subsidies, and recommend them for elimination. The Program Reform Commission Act and the Corporate Subsidy Reform Commission Act would urge Congress to promptly consider legislation that would implement the Commissions’ findings and recommendations.

This is a time when we need to be truly fiscally responsible and put everything on the table, including the President’s tax cuts for the very wealthy. The Republicans control the House, the Senate and the White House, yet they can’t control their spending. As Members of Congress, we need to lay out a reasonable plan with the right priorities to get us back on track to a balanced and fiscally responsible budget."

 

U.S. Rep. Adam Smith (D-WA) announced today that he has again been named to serve on the House Armed Services (HASC) and House International Relations (HIRC) Committees. On HASC, he will maintain his seat on the Terrorism, Unconventional Threats and Capabilities Subcommittee and will, once again, serve on the Tactical Air and Land Forces Subcommittee.

“It is an honor for me to continue to serve on the House Armed Services Committee,” said Smith. “The men and women serving in our Armed Forces are truly America’s guardians and it is a privilege for me to work with them and help to ensure our nation’s security. I will continue to keep vigilant on unconventional threats facing our military. Having Ft. Lewis and McChord Air Force Base in my District continues to highlight the importance of serving on the Tactical Air and Land Forces Subcommittee. I look forward to continuing my work to make our Air Force and Army the best air and land forces in the world.”

On the HIRC, Smith will continue his role on the Asia/Pacific Subcommittee and will add the Europe and Emerging Threats Subcommittee to his responsibilities.

“Washington State has huge ties, not only in trade, but also in culture and family, to the Asia-Pacific region of the world. I’m glad that I will continue to serve on this important subcommittee and am excited about my new role on the Europe and Emerging Threats subcommittee.” Smith continued, “This opportunity will allow me to shape America’s foreign policy and continue my work on international economics and development.”

 

The following is a statement from Congressman Adam Smith (D-WA) on his reaction to President Bush’s 2005 State of the Union Address:

 “The President’s speech tonight fell short in a number of key areas.

First and most importantly, there wasn’t a lot of discussion about how we are going to get back to a fiscally responsible federal government. This year’s deficit could reach over $420 billion and while the President mouthed support for fiscal responsibility, he gave no ideas about how he was going to curb his spending and tax cuts.

Clearly, his most important domestic priority is reforming Social Security, yet he did not give details of his plan; a plan that would cost upwards of $2 trillion for private accounts. In the long term, the impact on our economy, in fact the world economy, will be hurt if we don’t balance our books. The President’s plan on social security will place in jeopardy the core purpose of Social Security: provide seniors in this country with a guaranteed benefit. While social security is not meant to be the sole means of one’s retirement, at the end of the day, it must be there as the constant part of a diversified portfolio that can include investments in stocks, bonds and other forms of investment.”

The following is a statement by Rep. Adam Smith (D-WA) on the new Congressional Budget Office (CBO) Economic Outlook for Fiscal Years 2006-2015:

“The economic outlook affirms what we already know: Washington D.C. has thrown fiscal responsibility out the window.  In the last four years, the Bush Administration and Congress have taken a ten-year surplus of $5.6 trillion and created a deficit of at least $2.6 trillion.  The new CBO budget forecast projects a deficit of $855 billion over the period of 2006-2015, although this projection underestimates the deficit because of the assumptions that the CBO is required to make by law.   CBO must assume in its baseline that all current tax cuts scheduled to expire in the future do so, while also assuming spending on annual appropriations only grows with the rate of inflation. The estimated $ 855 billion also does not account for the estimated deficit for fiscal year 2005 which is expected to be at least $ 368 billion. 

There are three fundamental problems with CBO’s new economic forecast: 

  1. The CBO is assuming that when the Bush tax cuts expire, they will not be renewed. Every indication that I have seen from this Administration and the Republican-controlled Congress, is that they plan to make the tax cuts permanent and possibly install additional cuts.
  2. The CBO is also assuming that no additional costs for the wars in Iraq and Afghanistan in future years because there is no new funding in the budget for 2005 to be carried forward. And yet, an $80 billion supplemental spending bill is being prepared to be sent to Congress in the next few weeks.
  3. The CBO also disregards what the President has said about proposed spending such as reforming Social Security, including privatization, even though his plan would add approximately $2 trillion to the deficit over the next ten years.

Congress must give the American people a truthful estimate of our fiscal state and this report does not give them those answers.  The three factors I have outlined must be included in any projection as they are all likely, if not definite, spending the federal government is expected to act on this year.  The CBO estimates along with projections by the Bush Administration are not accurate reflections of our economy but instead they are filled with accounting gimmicks to make the future appear rosier than it will be.  The time to come up with a real plan to pay down the debt and get our budget back on track is now. Otherwise, the costs will be enormous not only to our children and grandchildren, but they will also wreck havoc on our economy and plunge this country into a worse financial crisis for decades to come.”
 

The United States Treasury Department issued rules on Thursday related to a provision in HR 4520.  Rep. Adam Smith (D-WA-09) has been a leader in advocating for this proposal since he introduced HR 1162, “The Invest in America Act” which was introduced in March of 2003.   

“I’m pleased that the Treasury Department has issued guidelines for the reinvestment provisions contained in last year’s broader tax legislation,” said Smith.  “In introducing the Democratic version of this provision, my goal was to enact a fiscally responsible, short-term tax incentive designed to stimulate the economy, encourage job growth and promote investment in domestic needs. This has been a long fight but companies today have some guidance to make business decisions that will bring funds back to the United States and help grow our economy.”

Smith introduced HR 1162 in March 2003 and garnered the support of 29 House colleagues.  This legislation was a key priority of the New Democrat Coalition (NDC) and was broadly supported by the NDC membership.  Smith led the Democratic effort to ensure inclusion of this proposal in the larger tax legislation. 

The law approved by Congress would let companies take advantage of the lower rate if they put forward a board-approved domestic reinvestment plan to reinvest their profits in ways that enhance employment in the United States.  Specifically, it allows companies a one-time opportunity to bring a total of as much as $500 billion in foreign profits into the United States and pay a tax rate of 5.25 percent, instead of the standard corporate tax rate of 35 percent.

Under the guidelines announced by the Treasury Department today, firms can use the repatriated earnings for hiring and training workers, capital investments, research and development, certain acquisitions, and advertising and marketing.  The repatriated funds cannot be used for executive compensation, intercompany transactions, increased dividends, stock redemptions, portfolio investments, purchase of debt instruments or tax payments.

“I’m pleased that the Treasury Department has adopted rules that will ensure companies using the repatriation tax provision will truly be investing in America’s economy,” Smith said.  “I’ll continue to monitor the law as we move forward.”