Giannoulias unveils Fiscal Discipline Agenda

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Chicago, IL  – U.S. Senate nominee Alexi Giannoulias outlined a series of proposals to restore fiscal discipline in Washington, D.C. and bring down the national debt.  His plan, which is one of a series of comprehensive proposals to get our economy moving again and restore accountability to Washington, D.C., stands in stark contract to Republican Congressman Mark Kirk’s call to return to the economic policy embraced by George W. Bush.

“It is a simple truth that under President George W. Bush, the national debt doubled. Congressman Kirk voted for every one of those debt-doubling budgets,” said Giannoulias. “He even managed to vote himself a pay raise six times. So when Congressman Kirk tells you he is a fiscal conservative, you know that’s about as true as his claims to have come under fire in combat, claims he even admits are not true.”

Growing federal deficits and debt threaten to continually push our weak economy back into recession and put the U.S. at a significant disadvantage with our global competitors. As the United States becomes more beholden to large creditors like China, America’s sovereignty and national security are compromised. Alexi believes that erasing yearly budget deficits and paying down the national debt should be the number one fiscal priority when we rise out of the current recession. 

Alexi’s full plan is available at

As State Treasurer, Alexi demonstrated fiscally responsible leadership by streamlining services, cutting costs and making the Treasurer’s Office more efficient, while at the same time expanding services and improving outreach. Alexi reduced his staff by 17 percent while adding programs that have opened credit for small business, encouraged energy efficient investments and helped people stay in their homes. In his first fiscal year budget, Alexi cut discretionary spending by $100,000. By auctioning the state’s unclaimed property on eBay, Alexi has generated nearly $1 million in new revenue while defraying thousands of dollars in costs associated with live auctions, including staff overtime pay, transportation fees, and contracts for professional auctioneers.

President Bush and Congressman Kirk’s reckless spending turned a historic budget surplus into a record $458 billion deficit by 2008, and the national debt nearly doubled.  While claiming on the campaign trail that all new spending should be offset by savings elsewhere, Congressman Kirk voted against reestablishing pay-as-you-go budgeting in the House while voting for trillions of dollars in tax cuts for the wealthy with no accompanying offset.  Kirk voted for every one of Bush’s deficit-growing budgets, and he opposed the 2008 budget that provided middle class tax relief and reversed some of the damage caused by years of failed Bush economic policies.


Reform the budgeting process to end deficit spending

It’s no wonder that America’s fiscal house is in disorder.  The budget policies of the last decade have added $8 trillion to the American credit card, and efforts to impose pay-as-you-go budgeting rules have been thwarted by Republicans – both when they were in the majority and the minority.  Alexi will push simple, commonsense efforts that will force Congress to spend within its means and empower citizens with more information to hold their elected representatives accountable.

  • Follow pay-as-you-go budgeting. No American family would survive if it budgeted like the U.S. government. The Democratic Congress’ commitment to pay-as-you-go budgeting is an important step to stabilizing our economic future. Alexi supports this provision as a way to ensure that every new spending bill must be offset by savings or increased revenue elsewhere.  Mark Kirk voted against this commonsense provision when it was brought to a vote last year.
  • Restore the line-item veto. Congress should give the president the ability to strike individual items from appropriation bills to cut down on unnecessary and wasteful spending.  Alexi supports a line-item veto authority that passes the constitutional test – it would empower the president to submit items to be rescinded for 45 days after a spending bill has been signed into law, and then give Congress 25 days to vote the rescissions up or down without amendments.
  • Reform the earmark process. There is no justification for no-bid earmarks that support private corporations and are added to unrelated spending bills at the last minute.  Alexi will never put Illinois at a funding disadvantage when he is in the Senate, but he will spearhead efforts to build on the reforms that the Democrats passed in 2007 to eliminate wasteful earmarks.  He will work to require a competitive bidding process for all earmarks that go to private, for-profit companies, and will post his funding requests for Illinois projects on his Senate website.
  • Shine a light on government spending. The ability of citizens to participate and hold their elected officials accountability is greatly affected by their access to government data. All non-emergency legislation should be posted online, it its final format, at least 72 hours before it is scheduled for consideration so that the American people have the chance to see how their taxpayer dollars are to be spent before funds are appropriated.  Alexi will abide by this rule with all legislation he sponsors, and will push his colleagues to do the same.

Make the tax code more efficient and equitable

The American tax system is confusing, complicated and contains far too many tax loopholes that only benefit large corporations and the very wealthy.  While Alexi does not support a consumption tax or a transaction tax on trades, he is committed to making the system fairer and simpler, and to ensuring that large corporations and wealthy Americans are not able to evade paying their fair share.

  • Extend middle class tax cuts and allow the Bush tax cuts for the wealthiest two percent of Americans to expire. Tax cuts should go to those who most need them and are most likely to put the extra income to use. The Bush tax cuts for the wealthiest Americans generated some of the largest deficits in U.S. history and contributed nearly $2 trillion to our long-term debt. Allowing the tax cuts for the wealthiest two percent to return to the rate that they were under President Bill Clinton – which coincided with one of the greatest expansions of wealth in American history – will avert nearly $1 trillion in added debt over the next ten years.
  • Close corporate tax loopholes. The nonpartisan Government Accountability Office has found that nearly three-quarters of all foreign corporations and more than half of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.  More than a quarter of the largest corporations – those making over $250 million – paid no federal income tax in 2005, despite $372 billion in gross receipts. The federal government should close corporate loopholes to make sure that all American companies pay their fair share.  Alexi supports closing the loophole that incentivizes corporations to hold their profits overseas, which will cost the U.S. government $200 billion over the next ten years; cracking down on the practice of “transfer pricing” which occurs when corporations transfer intangible items like copyrights and trademarks to subsidiaries overseas, costing the government $17 billion a year; eliminating tax preferences for oil, gas and coal, which will save $39 billion a year; and denying tax deductions for fees paid to the government for punitive damage claims.
  • Hold tax cheats accountable. The U.S. Treasury Department should be armed with the tools and manpower necessary to stop the abuse of tax shelters and offshore tax havens and to help close the $350 billion gap between taxes owed and taxes paid.
  • Permanently extend the estate tax. The estate tax should be permanently extended at its 2009 level. This tax affects only the wealthiest one-quarter of one percent (0.25%) of households – those worth more than $7 million.  Only 1 in 460 deaths result in a taxable estate, but $15 billion is generated from the provision each year.  Alexi opposes raising the estate tax exemption to $10 million, which would cost $250 billion over the next decade.
  • Treat all income equally. Americans who invest money for a living should not be allowed to pay a lower income tax rate than those who earn a wage as a teacher, police officer, or doctor.  Warren Buffett once famously said that he pays taxes at half the rate of his secretary.  Alexi believes that short-term capital gains and carried interest should be taxed as ordinary income.

Expand health insurance cost-containment strategies

The federal government spends 21 percent of its budget – $753 billion – on health insurance through Medicare, Medicaid and the Children’s Health Insurance Program (CHIP).  The landmark health insurance reform passed by Congress in March will play an important role in bringing down federal health care costs, slowing the growth rate of costs, and reducing the budget gap.  The nonpartisan Congressional Budget Office estimates that the heath care reform measure enacted will reduce the federal deficit by more than $1 trillion over the next two decades.  But much more can be done to reduce federal deficits through health care reform.

  • Crack down on health insurance companies.  Congress must immediately pass legislation that would require health insurance companies to provide more information to consumers on healthcare prices, empower federal regulators to sign off on premium increases, and strip insurers of their exemption from antitrust laws to allow more competition.
  • Bend the cost curve. Health insurance reform made a number of changes to the way the federal government pays for and delivers health care, with a focus on a significantly slowing health care cost growth. The bill invests in wellness and preventative medicine, incentives for hospitals to reduce costly readmissions and slows the growth of the payment rate to providers.  Alexi believes we should actively monitor the new cost-containment programs in the bill – those that fail to show economic benefit should be cancelled, and the funds freed from those programs should be invested in expanding the strategies that work.
  • Make Medicare and Medicaid more efficient. The health insurance reform legislation eliminates overpayments to private Medicare Advantage plans, saving $170 billion over the next decade. The bill also has a number of provisions designed to cut waste and fraud through increased screening and oversight.  The programs that prove to be the most effective at preventing and uncovering waste and fraud in Medicare and Medicaid should be extended and expanded.
  • Implement recommendations of the Payment Advisory Board. The legislation establishes an independent Medicare commission that would submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost growth, and improving the quality of care delivered to Medicare beneficiaries. The Board also ensures that Medicare payment policy is determined by independent experts, not by those susceptible to the influence of special interests.  Alexi will support any recommendation made by the Board that helps to rein in costs while ensuring that seniors continue to receive excellent care.

Heed Secretary Gates’ call to rein in non-essential defense spending

The Federal government will spend about 20 percent of its budget – $715 billon – on defense and security related activities in 2010. The underlying Department of Defense budget comprises most of that figure, but it also includes the ongoing operations in Iraq and Afghanistan, which are expected to cost $172 billion in 2010. The share of the federal budget devoted to defense spending grew rapidly during the Bush administration. Even when you exclude the wars in Afghanistan and Iraq, regular defense spending grew at an average annual rate of 4.8 percent per year over inflation since 2001, more than twice the rate of Medicare and Social Security. The Department of Defense’s spending on day-to-day operations, excluding the war efforts in Iraq and Afghanistan, has doubled in the last ten years, to $200 billion. Defense Secretary Robert Gates and Senator John McCain have argued for reining in defense spending in this time of growing budget deficits.

  • Eliminate unnecessary weapons programs. Congress often appropriates weapons programs that the Pentagon does not need and does not want at the cost of billions of dollars to taxpayers. For example, the Defense Department did not include the alternative engine for the F-35 Joint Strike Fighter and the C-17 airlifter programs in this year’s budget request and yet Congress still may appropriate them. President Obama has threatened to – and should – veto the defense appropriations bill if they are included.
  • Streamline the Pentagon. The Pentagon should reform its budgeting practices and minimize overhead costs. According to the Department of Defense, overhead costs make up forty percent of the Defense budget. The bureaucracy that supports the military mission should be streamlined, cutting down on waste and inefficiencies. Defense Secretary Robert Gates cites a story that a request for a military dog-handling team for Afghanistan had to be processed and validated through five four-star headquarters before being approved. Cutting overhead costs would give the military the resources they need to modernize our forces and take care of human and environmental needs without contributing to the deficit.

The Record: Cutting waste and streamlining operations in the Treasurer’s Office

As State Treasurer, Alexi has demonstrated his commitment to fiscally responsible leadership – he streamlined services, cut costs and made the Treasurer’s Office more efficient, while at the same time expanding services and improving outreach.

  • Since taking office, Alexi has reduced his staff by 17% while adding programs that have opened credit for small business, encouraged energy efficient investments and helped people stay in their homes.  The Treasurer’s Office has saved $30,000 in travel costs by opening satellite offices throughout the state when free office space became available.
  • In drafting his first fiscal year budget, Alexi cut discretionary spending by $100,000, despite absorbing rising costs for union and merit pay employees as well as an increase in benefits paid as a percentage of payroll. In fiscal year 2009, he voluntarily implemented layoffs and furlough days to save taxpayer dollars.
  • Upon taking office, Alexi terminated two contracts for services processing claims for the office’s Unclaimed Property Division that together saved more than $750,000 annually.
  • He also terminated the contracts of more than a dozen part-time employees from the state payroll, resulting in hundreds of thousands of dollars in cost savings.
  • Alexi saved nearly $18,000 annually by reducing the number of parking spaces the office paid for.
  • By putting auctioning the state’s unclaimed property on eBay, Alexi has generated nearly $1 million in new revenue while defraying thousands of dollars in costs associated with live auctions, including staff overtime pay, transportation fees, and contracts for professional auctioneers. 

The Choice: Congressman Kirk’s decade-long record of deficit spending and tax cuts for corporations and the wealthy

Mark Kirk helped George W. Bush turn a historic budget surplus and flourishing economy into record-breaking debt and a devastating recession.

  • When George W. Bush and Mark Kirk took office in 2001, they inherited a $236 billion budget surplus, and the CBO predicted that the surplus would reach $5.6 trillion over the next decade.  However, Bush and Kirk’s irresponsible spending turned a historic budget surplus into a record $458 billion deficit by 2008.  [New York Times, 1/30/03; Office of Management and Budget; Congressional Budget Office]
  • Under the watch of President Bush and Mark Kirk, the national debt nearly doubled.  When Bush and Kirk took office, the national debt was $5.7 trillion, and when Bush left in January 2009, the national debt had reached $10.7 trillion. [U.S. Department of Treasury, Bureau of the National Debt]
  • Congressman Kirk voted to raise the debt limit at least four times.  [S2578, Vote 279, 6/27/02; SCR95, HR4613, Vote 198, 5/19/04; HR4613, Vote 280, 6/22/04; S2986, Vote 536, 11/18/04]
  • Despite Mark Kirk’s claims that he only supports deficit neutral legislation, he voted against reestablishing pay-as-you-go budgeting in the House. [HR2920, Vote 612, 7/22/09; HJR45, Vote 48, 2/4/10]
  • Kirk voted for every one of Bush’s reckless budgets from FY 2001 to 2007, and he opposed a FY 2008 budget that would provide middle class tax relief and reverse some of the damage caused by years of failed Bush economic policies.  [HCR353, Vote 79, 3/20/02; HCR95, Vote 141, 4/11/03; SCR95, Vote 198, 5/19/04; HCR95, Vote 149, 4/28/05; HR4241, Vote 601, 11/18/05; HCR376, Vote 158, 5/18/06; SCR 21, Vote 377, 5/16/07]
  • Kirk supported Bush’s 2001 and 2003 tax cut packages that primarily benefited the wealthy and added trillions of dollars to our national debt, and he wants to make the Bush tax cuts permanent.   [HR3, Vote 45, 3/8/01; HR6, Vote 75, 3/29/01; HR8, Vote 84, 4/4/01; HR1836, Vote 118, 5/16/01; HR1836, Vote 149, 5/26/01; HR3090, Vote 404, 10/24/01; HR3529, Vote 509, 12/19/01; HR586, Vote 103, 4/18/02; HR2143, Vote 219, 6/6/02; HR4019, Vote 229, 6/13/2002; HR2, Vote 182, 5/9/03; HR2, Vote 225, 5/23/03;]
  • In addition to wanting to keep taxes low for the wealthy, Kirk voted repeatedly to protect tax breaks for oil companies and corporations that ship jobs overseas. [HR1586, Vote 518, 8/10/10; HR4213, Vote 324, 5/28/10; HR6, Vote 445, 7/28/05; HR 4297, Vote 109, 4/27/06; Vote 258, 6/17/04; HR3090, Vote 404, 10/24/2001; HR3529, Vote 509, 12/19/01]
  • Kirk voted for the $724 billion Republican overhaul of Medicare that resulted in the creation of a costly prescription drug benefit program that gave billions to the health care industry and widened the coverage gap for seniors.  He opposed adding provisions to the bill to allow Medicare to negotiate for lower prescription drug prices and provide more coverage for seniors.  [HR1, Vote 669, 11/22/03; Vote 668, 11/21/03; New York Times, 2/12/05]

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