Press Releases

H.R. 1259 Passes House

May 26, 1999

Today the House overwhelmingly passed H.R. 1259, the “Social Security Lock Box Act,” which prohibits official government entities from using the Social Security surplus to mask the size of the on-budget deficit and establishes “points of order” (allowing Members to halt pending legislation) against considering any measure that would use Social Security surpluses for any purpose other than reforming Social Security and Medicare.

“H.R. 1259 is very similar to the ‘Honesty in Budgeting Act’ that I introduced earlier this year,” Smith explained. “I am proud to see the House of Representatives take various similar ideas and combine them into one bipartisan bill to protect the Social Security surplus from being used for other purposes.”

Smith says the problem is the government has used the Social Security surplus for other purposes and counted it as income for many years. “That’s very misleading, because that money is not income – it’s borrowed, and it has to be paid back plus interest,” he said. “The first step towards ending this practice is to be honest with the American public and stop using the Social Security surplus to mask the true size of the deficit. That was the primary goal of my ‘Honesty in Budgeting Act’, and the legislation passed today will help get us there.”

“Requiring CBO and OMB to exclude Social Security figures from their official reports is a key step in changing the perception that we have a budget surplus,” Smith continued. “For example, although we’ve heard pronouncements that we had a $70 billion surplus in 1998, that just isn’t the case. We had a $99 billion surplus in the Social Security trust fund and a $29 billion deficit for the rest of the government. Since we have to pay that $99 billion back to Social Security, we don’t have a $70 billion surplus — we have a $29 billion deficit.”
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Latest CBO budget figures, released on February 1, project the U.S. will have a non-Social Security surplus of $800 billion in the next ten years. “Real surpluses are obviously welcomed,” Smith said. “The point of my bill is to clarify the numbers and make it easier for citizens to understand how much money truly have in the bank.”

Ninth District Congressman Adam Smith today will vote to overhaul bankruptcy law and require debtors to repay some or all of their debt when they are financially able.

“Reforming bankruptcy laws is all about personal responsibility,” said Smith. “People who can afford to repay their debts should do so.”

The Bankruptcy Reform Act of 1999 (H.R. 833) is expected to pass the House today.

Under current law, bankruptcy filers may file under Chapter 7 and be absolved of all debt, or file under Chapter 13, preventing repossession of property but agreeing to repay some or all of their debt. H.R. 833 institutes a needs-based formula to steer more debtors into Chapter 13 and thereby require greater debt repayment.

“The formula is very balanced and fair,” explained Smith. “First of all, it only affects taxpayers earning more than the median income. It then provides allowances for living expenses, exempts child support payments, exempts secured debts such as mortgage and car payments, exempts retirement and education savings, and determines an individual’s ability to pay their debt. If there is an extenuating circumstance, such as job loss or medical emergency, a judge can still opt to forgive the debt. If it is determined that the debtor can afford to repay some of the debt, he or she is required to do so.”

It is estimated that bankruptcies cost each American household $400 per year in the form of higher prices for goods and services. Bankruptcies also restrict access to credit for lower- and middle-income families. 

Smith says bankruptcy reform will provide fairness for the vast majority of consumers who do pay bills on time. “It is unfair that many higher-income families are declaring bankruptcy even when they have the ability to repay some of their debts, costing other families hundreds of dollars a year.” he said.

Small businesses are another victim of irresponsible bankrutpcy filings, according to Smith. “A small business can be devastated by just one or two debtors declaring bankruptcy and not paying their bills,” he explained. “The Bankruptcy Reform Act will change this by only allowing those consumers truly in need of bankruptcy reform to be absolved of their debts.”

The legislation also ensures that child support payments are first priority for debt repayment, unlike current law which places child support seventh on the list of priorities for repayment.

Smith says he supports the legislation because it emphasizes the value of personal responsibility. “We need to ensure that government policy promotes values like personal responsibility,” said Smith. “Requiring people to pay off the debt they incur whenever possible is a very basic tenet of personal responsibility.”

Ninth District Congressman Adam Smith was named to the Honor Roll on the Concord Coalition Tough Choices scorecard, which scored Members of Congress on their votes related to fiscal discipline and responsible budgeting.

The Concord Coalition is a bipartisan, grassroots organization advocating fiscal responsibility and entitlement reform to protect their viaiblity and fairness for all generations. Their “Tough Choices” scorecard rates 12 votes in the House of Representatives that promote fiscal discipline. Priorities include protecting the budget surplus until the long-term Social Security problem has been solved, keeping the budget enforcement procedures, such as the pay-as-you-go rules, intact, and eliminating wastefull or unnecessary government programs.

The 12 votes scored by the Concord Coalition were weighted according to their relative importance to deficit reduction. The median score in the House of Representatives was 36.

Smith earned a raw score of 74 and was in the 97th percentile, which places him number 12 out of 435 Members of Congress. The top fifteen include Members of both parties from around the country: Representatives Mark Sanford (R-SC), David Skaggs (D-Colo), Tom Barrett (D-Wis), Ron Kind (D-Wis), Michael Castle (R-Del), Lloyd Doggett (D-Tex), Bill Luther (D-Minn), David Minge (D-Minn), Pete Stark (D-Calif), Barbara Lee (D-Calif), Vic Fazio (D-Calif), Ben Cardin (D-Md), Adam Smith (D-Wash), Charles Stenholm (D-Tex), and Ron Paul (R-Tex).

“Although I don’t vote based on how I will be rated by any organization, I’m very proud to be on the Concord Coalition’s honor roll,” said Smith. “The Concord Coalition is extremely well-respected and is the leading advocate of fiscal responsibility. Since maintaining fiscal discipline and reducing the debt is a top priority for me, it is nice to be recognized by an organization that prioritizes these issues.”

Ninth District Congressman Adam Smith will donate $400 to the South King County Multi-Service Center to purchase books for the agency’s HEART (Homeless Education to Achieve Readiness for Tomorrow) program.

In 1997, Smith voted against a Congressional pay raise; however, it passed and Members of Congress received a 2.3 percent raise. Since then, Smith has donated that raise to education and community programs in the Ninth District.

“The South King County Multi-Service Center does a great job of providing services to families in our area that are in need of health services, transportation, education or training, or basics like food and clothing,” Smith said. “I’m very pleased to donate a portion of my pay raise to purchase books for the center’s literacy program. I strongly believe that we need to ensure that every child is ready to learn and possesses the skills necessary to achieve in the next century, and I am happy I have the chance to help.”

The HEART program is targeted towards children living in the Kent homeless shelter sponsored by the South King Cunty Multi Service Center. It is held after school and offers tutoring for basic skills, homework hour, and learning activities led by trained literacy staff members and volunteers.

Smith will present his donation on Friday, April 9th at 3:30 p.m. at the South King County Multi-Service Center at 1200 S 336th Street in Federal Way.

Washington state Congressman Adam Smith today announced his support of the Crane-Dooley Sanctions Process Reform legislation, which establishes new procedures for consideration of future U.S. unilateral sanctions.

“Unilateral sanctions don’t work,” Smith explained. “I am a strong supporter of this legislation because it’s clear that unilateral sanctions do not help advance U.S. foreign policy goals; on the contrary, unilateral sanctions can work to our disadvantage because they erect further barriers between America and the rest of the world.”

The Crane-Dooley Sanctions Process Reform bill creates a more deliberative and thoughtful approach to unilateral sanctions, according to Smith. “The bill requires that we answer some common sense questions, such as whether or not the unilateral sanction will be effective, if it is working towards a specific objective, and whether or not the proposed sanction will actually undermine other U.S. security, foreign policy or humanitarian objectives,” Smith said. “It also requires us to take into account the economic costs imposed on our own country. Our companies are competing globally, and unilateral sanctions simply allow other countries to capture foreign markets, which can have grave consequences on American companies, workers, and the economy. Between 1993 and 1996, 61 new unilateral sanctions were authorized. Currently, U.S. companies are prohibited from exporting to 41 percent of the world’s population because of sanctions.”

Smith also noted, “As a New Democrat, I feel that it’s critical that we examine other options before immediately resorting to a unilateral sanction. This legislation requires us to examine other options, and it is my hope that we will avoid unilateral sanctions in the future and instead adopt policies that are more effective.”