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Congressman Adam Smith (D-WA) Reaction to President Bush's 2005 State of the Union Address

February 2, 2005

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.”

Congressman Adam Smith Reacts to New Congressional Budget Office Economic Outlook for Fiscal Years 2006-2015

January 25, 2005

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.”
 

Congressman Adam Smith Reacts to Treasury Department Guidance for "The Invest in America Act"

January 14, 2005

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.”

U.S. Rep. Smith Speaking from Jerusalem, Expresses Optimism on Day of Palestinian Election

January 9, 2005

U.S. Representative Adam Smith (D-WA) spoke on CNN and Fox News today from Jerusalem about his thoughts on the Palestinian elections and their impact on the Middle East peace process. Smith noted that, “The Palestinian people have not had true leadership. They have had a corrupt and ineffective government that they had no faith in.” With the likely victory of Mahmoud Abbas, the Interim Chairman of the Palestinian Liberation Organization (PLO), as Prime Minister of the Palestinian people, Smith noted that “with a legitimate government where the people of Palestine have a chance to have a voice, to have a say, to have some control over their destiny, that just opens a wide range of options.”

More broadly, Smith believes that the elections bring a “great opportunity to bring democracy to the Middle East. Once the Palestinian people feel that freedom of empowerment to elect their own government, they will have a more responsive government and that could change the entire dynamic between the Palestinians and Israel.”

Smith stated that the United States needs to “enhance [its] credibility in the Arab world and other Muslim communities as well so that [the United States] can get some credibility back to be an effective partner in the Middle East.”

Smith also stated that “If Mahmoud Abbas gives the Palestinian people a better life, more opportunity, more freedom, then they can see democracy makes a concrete difference in their lives.”

Smith is the only Democrat that serves on both the House Armed Services and International Relations committees. He represents the 9th District of Washington state and is currently serving in his 5th term in Congress.

Congressman Adam Smith Statement on the Death of Rep. Robert Matsui (D-CA)

January 3, 2005

Rep. Adam Smith (D-WA) made the following statement on the death of Rep. Robert Matsui (D-CA):

“America has lost a great leader with the death of Rep. Bob Matsui. His story embodies so much of what is great about America: after being imprisoned in a World War 2 internment camp for Japanese-Americans, he worked hard and made his way to Congress so that he could fight for the rights of all Americans.  His leadership in rectifying the wrongs of the World War 2 internment camps is but one notable accomplishment in his long career in public service, but it is such an important one that he will undoubtedly be forever remembered for it. 

His commitment to the Asian-American community was unending and he was determined that every American should be treated equally. I enjoyed working with him on issues ranging from Social Security to trade to taxes.  We will miss Congressman Matsui’s counsel, his strong but patient leadership and his clear vision for a strong future for all Americans.”
 

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