| Since first being elected to the Senate in 1986, Senator Conrad has made balancing the federal budget and bringing fiscal discipline to Washington, D.C. a top priority. Through his role as the senior Democrat and now Chairman of the Budget Committee, Senator Conrad has been a leading voice for fiscal responsibility.
Protecting Social Security and Medicare
Reducing Deficits to Strengthen the Economy
Supporting Tax Cuts for Middle-Class Workers
A Record of Fighting for Fiscal Responsibility
Returning to Policies That Worked in the 1990's
Addressing the Tax Gap, Offshore Tax Havens, and Abusive Tax Shelters
Protecting Social Security and Medicare
Senator Conrad believes it is vital that we bring the budget back into balance, protect Social Security and Medicare, and return to paying down debt in preparation for the retirement of the baby boom generation. He believes that reaching these goals is crucial to ensuring that we meet our commitments to provide for the retirement and health care needs of our elderly and to ensuring that future generations won't be burdened by the debts of those who came before them.
Reducing Deficits to Strengthen the Economy
Senator Conrad is particularly concerned about the soaring federal debt that is forecast for the nation's long-term budget outlook. He believes that reducing this debt burden is essential to the future strength of the nation's economy. Over time, large deficits and debt will raise interest rates, crowd out private sector investment, and slow long-term economic growth.
Senator Conrad is also concerned that the United States is becoming increasingly indebted to foreign countries - with Japan, China, "oil exporting" countries, and "Caribbean Banking Centers," among the largest foreign holders of U.S. debt. Economists warn that if these foreign investors stop loaning money to the U.S. to cover our debts, U.S. and international financial markets could be destabilized and the American economy placed in further jeopardy.
Supporting Tax Cuts for Middle-Class Workers
Senator Conrad supports tax relief for middle-class workers to make the tax code fairer and to strengthen the economy. His budgets in 2007 and 2008 provided for the extension of important middle-class tax relief, such as the continuation of marriage penalty relief, the $1,000 child tax credit, and the 10-percent bracket.
Senator Conrad also supports fixing the Alternative Minimum Tax (AMT), the old 'millionaire's tax,' which is rapidly becoming a middle-class tax trap. Without a legislative fix, nearly 26 million people could get caught up paying higher taxes under the AMT in 2008.
A Record of Fighting for Fiscal Responsibility
During his first term in office, Senator Conrad founded a deficit reduction caucus and proposed far-reaching deficit reduction packages to force the deficit issue onto the congressional agenda. In 1993 these efforts paid off when a historic deficit-reduction package was signed into law. Those reforms went a long way toward significantly reducing the deficit, while helping our economy build strength in the late 1990's. In 1997, Senator Conrad supported a bipartisan budget agreement that finished the job of eliminating the deficit, while further cutting taxes for working families.
As a result of the 1993 and 1997 packages, the federal budget was balanced in 1999 and 2000 without counting Social Security trust fund surpluses. For the first time in almost 30 years, the federal government began to pay down debt. In fact, over the period of 1998 through 2001, the U.S. Treasury paid down $453 billion of debt, the largest pay down ever. And by 2001, the nation faced a record projected 10-year surplus of $5.6 trillion.
Senator Conrad warned that those surplus projections could be over-stated and called for using the anticipated surplus to provide a responsible tax cut aimed at middle-class workers, fund key priorities such as defense, education and health care, and further pay down federal debt to begin to prepare for the coming retirement of the baby boom generation. Instead, over Senator Conrad's objections, large tax cuts, designed primarily to benefit the wealthiest, were pushed through in 2001 and 2003. Those over-sized and poorly structured tax cuts left the nation ill-prepared to deal with a simultaneous economic downturn, war on terrorism, and conflict in Iraq.
Returning to Policies That Worked in the 1990's
Senator Conrad is working to return to the policies of fiscal discipline and debt reduction that brought such economic success in the mid-to-late 1990's.
In 2007, as the new Budget Committee Chairman, Senator Conrad led the effort to adopt a fiscally responsible budget plan that would put the country back on a sound fiscal course. His plan funded critical national priorities, such as kids' health, education, and veterans' health care, provided middle-class tax relief, and returned the budget to surplus by 2012.
Importantly, Senator Conrad's budget restored a strong pay-go, or pay-as-you-go, budget enforcement tool. The pay-go rule, which requires that any new mandatory spending or tax cut legislation be paid for, or get 60 votes in the Senate, was instrumental in helping the federal government move from deficit to surplus in the 1990's.
In 2008, Senator Conrad led the effort to adopt another fiscally responsible budget -- marking the first time Congress adopted a budget during an election year since 2000. His plan provides middle-class tax relief, makes needed investments in energy, education and infrastructure, and returns the budget to balance in 2012 and 2013 -- without raising taxes.
Addressing the Tax Gap, Offshore Tax Havens, and Abusive Tax Shelters
Senator Conrad believes that to address the deficit, the first step we should take on the revenue side of the ledger is to close the tax gap, restrict the use of offshore tax havens, and shut down abusive tax shelters.
The tax gap represents the difference between the amount of taxes owed under current laws and the amount actually paid. The size of the tax gap problem is staggering. The IRS has estimated that the tax gap was $345 billion in 2001. It is likely that it has grown much larger than that since then. The added burden on taxpayers is very real. IRS's National Taxpayer Advocate has testified that the tax gap effectively added more than $2,600 to the average tax bill in 2001.
At the same time, the Permanent Subcommittee on Investigations has found that the use of offshore tax havens is costing the Treasury close to $100 billion a year, with abusive tax shelters costing tens of billions of dollars more.
Addressing these sources of revenue loss will lower the tax burden on the vast majority of Americans, who year after year pay what they owe. Senator Conrad believes that when the American people pay their taxes, they deserve to know that they aren't paying higher amounts because others are avoiding their responsibilities.
Addressing Long-Term Fiscal Challanges
Senator Conrad believes that the fiscal challenges facing our nation, including the retirement of the baby boom generation and the long-term imbalance between spending and revenues, can only be addressed in a bipartisan fashion. That is why in 2007 he joined the Ranking Member of the Senate Budget Committee, Senator Judd Gregg (R-NH), in proposing a bipartisan task force to address these long-term fiscal challenges. Senator Conrad believes that we cannot continue to ignore the coming crisis and hope that future leaders will solve the problem. He believes that the longer we wait, the harder the choices will become, and the time for action is now. |
