Sen. Voinovich Votes in Favor of Fiscal Accountability

SEN. VOINOVICH VOTES IN FAVOR OF FISCAL ACCOUNTABILITY

‘So many talk of the death tax. I'm concerned about the birth tax.'

U.S. Senator George V. Voinovich (R-OH) tonight voted in favor of fiscal accountability by voting against the so-called "Trifecta" bill since it included a reduction in the estate tax yet did not provide an offset. The senator's vote — that of the Senate's top "deficit hawk" — reflects his strong belief that the decisions he and his colleagues make in the Senate today will affect the lives of their children and grandchildren. Under current law, of the 2.4 million deaths nationally of people 25 years old or older in 2004, less than 1 percent incurred the estate and gift tax. The voted failed to pass the Senate.

"I voted to repeal the estate tax in 2001 when it was projected that the United States would have a 10-year surplus of $5.6 trillion. Today, we are 180 degrees from where we were then. The Congressional Budget Office is projecting a 10-year, $1.4 trillion cumulative deficit, which does not include over $400 billion in war costs and assumes that the current tax reductions will expire in 2010," Sen. Voinovich said. "Repealing the estate tax, which would cost $267 billion from 2007 to 2016, would be incredibly irresponsible when we must fund the war, secure the homeland and when we know the tidal wave of entitlements are coming due. The numbers just don't add up. Congress should heed Americans' demand for fundamental tax and entitlement reform before we move even deeper into the red."

The national debt has increased from $5.6 trillion in 1999 to $8.4 trillion today — an increase of 50 percent. Just this year, the House increased the debt limit to nearly $10 trillion, which is an increase of 78 percent since 1999. Currently, the national debt is 66 percent of the nation's GDP. In addition, the percent of debt owned by foreign countries has grown from 35 percent to 55 percent over the past five years. If Central Banks in those foreign countries grow nervous about the U.S. fiscal health and pull out, the United States could see an astronomical increase in interest rates.

"Reforming the estate tax just delays what this country should be dealing with — real tax and entitlement reform," Sen. Voinovich said. "True fiscal conservatives should be focused on making the tax code simple, fair and honest. Fundamental tax reform could, by some estimates, save taxpayers over $265 billion in costs associated with preparing their taxes. That would be a real tax reduction and it would not cost the Treasury one dime. It would be a tax cut that would guarantee people are paying their fair share and would bring more money into the Federal Treasury."

On June 12, 2006, Sen. Voinovich introduced his Securing America's Future Economy (SAFE) Commission Act. The SAFE Act would establish a national commission to examine our nation's tax code and entitlement systems and present long-term solutions to place the United States on a fiscally sustainable course and ensure the solvency of entitlement programs for future generations. Rep. Frank Wolf (R-VA) has introduced a similar bill in the House.

The Commission will be comprised of 15 voting members, three of which will be appointed by the president, three by the Senate Majority Leader, three by the Senate Minority Leader, three by the Speaker of the House and three by the House Minority Leader. The director of the Congressional Budget Office and the Comptroller General of the United States will be appointed as non?voting ex?officio members of the Commission to lend their expertise. The president will have the ability to appoint the chair from among the 15 voting members.

The Commission will bring together the best minds associated with budget and economic policies to examine the long-term fiscal challenges facing the United States and recommend reforms. A minimum of six public town hall meetings will be held throughout the country within one year to determine the scope of the problem and consider solutions. The Commission may consider all policy options, including:

Limiting the growth of entitlement spending to ensure that the programs are fiscally sustainable; Strengthening the safety net functions of entitlement programs to provide assistance to the neediest; Making the tax code more efficient and encouraging economic growth; and Looking at ways to increase private savings.

"America's fiscal situation is dire. Nothing is off the table when it comes to ensuring our long-term prosperity and increasing our competitiveness in the global marketplace," Sen. Voinovich said.

At the conclusion of the town meetings, the Commission will present a report to Congress detailing the fiscal problems facing future generations as well as a framework of long-term solutions.

Within 60 days of the presentation of their report to Congress, the Commission will transmit to Congress a legislative proposal designed to:

Address the imbalance between long-term federal spending commitments and projected revenues; Increase net national savings to spur domestic investment and economic growth; and Improve the budget process to place greater emphasis on long?term fiscal issues.

The administration and Congress will each have 60 days to review the proposal and develop equivalent proposals if they deem necessary. Any alternative from the administration or Congress would be considered as an amendment in the nature of a substitute. Congress will be required to vote on the proposals within a specified time period. The proposal with the greatest number of votes would be the Congressional body's preference going into conference.

"The task is daunting, but now is the time to act," Sen. Voinovich said. "I am thinking not only about the present, but about our children and grandchildren and the legacy - or burden - we will leave them. So many talk of the death tax. I'm concerned about the birth tax."

http://voinovich.senate.gov/news_center/record.cfm?id=261292&