Our nation is facing its greatest economic crisis since the Great Depression. A series of financial institution failures and frozen credit markets imperiled our economy.
We need to take bold action to create jobs, provide liquidity for small businesses and provide real assistance to families bearing the weight of the crisis. The risky business schemes of companies like Merrill Lynch and Lehman Brothers had an enormous impact on our economy, and we must dramatically increase our oversight of all financial institutions and increase capital standards to insure that that can never happen again.
There are two significant actions that we can take in the short-term to help our economy, one we've completed and one still to do. The first is to pass health care reform legislation. The health care reform President Obama signed into law will go a long way towards reigning in health care costs, freeing up money to go into the pockets of working Americans through pay raises and new jobs. The second is to pass comprehensive climate change and energy legislation that creates jobs, advances America's energy security, and reduces carbon emissions. A study by the Peter G. Peterson Institute recently showed that this legislation will add over 200,000 jobs every year to the American economy, while also saving American consumers on their energy bills, freeing up more money to go into our economy.
We also need to make tough choices, fight wasteful spending and spend tax dollars effectively. In the last decade under the Republican policies of George W. Bush, the federal budget went from record surpluses to record deficits. Restoring fiscal responsibility in Washington matters to everyone who cares about our future. That is why I support a constitutional line item veto and the "Pay as You Go" requirements that force the Congress to pay for all new entitlement spending and tax cuts. Finally, I supported the establishment of a bipartisan fiscal commission that will help address long-term federal budget deficit issues.
Our tax code also needs reform to be simpler and more fair. In 1940, instructions to the Form 1040 were about 4 pages long. Today the instruction booklet fills more than 100 pages, accompanied by more than 10 schedules and 20 worksheets. It's time we end the "separate and unequal" system that taxes money earned by wealth so much more favorably than it does money earned by work. We also need to reward hardworking middle-class families with tax breaks and close corporate loopholes.
Last Congress, I introduced S. 2775, the Fair Share Act of 2008 which was enacted as part of the Heroes Earnings Assistance and Relief Tax Act of 2008 (P.L. 110-245). This legislation ends the practice of U.S. defense contractors setting up sham corporations in tax havens in order to avoid their share of Social Security and Medicare taxes. In addition, I introduced S. 2199, the Offshore Deferred Compensation Reform Act of 2007, which ends the practice of hedge fund managers and corporate CEOs from deferring unlimited amounts of compensation offshore. This legislation closes an inequity in the tax code which allows U.S. based hedge fund managers who operate offshore investment funds to defer unlimited amounts of compensation offshore while most Americans are limited to the amount of income that they can defer in a retirement account.