U.S. Sen. Lincoln Chafee addressed Social Security reform, asbestos litigation issues and the explosion of consumer bankruptcy filings at the New England Council’s Congressional Breakfast program at the Biltmore Hotel in Providence March 31.
The senator touched on subjects at the forefront of debate in Congress with New England Council members, a group of business leaders that works to find solutions to economic challenges.
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Chafee made note of the passage of tort reform legislation to protect businesses from frivolous lawsuits. Both of Rhode Island’s senators, Chafee and Sen. Jack Reed, voted for The Class Action Reform Act of 2005, which passed the Senate by a 72-26 vote, the House and was signed by the president in February.
Chafee pointed to asbestos reform, Social Security and the explosion of consumer bankruptcy as issues he hopes Congress will remedy this session.
On April 22, 2004, the Senate failed to reform the asbestos litigation system by a vote of 50-47, with 60 votes needed to end debate. Congress is working to reach a conclusion on a fair compensation system, the size of the trust fund and what to do if the fund runs out. Creating a $140 billion trust fund to compensate victims of asbestos is under debate.
Chafee is also pushing for bankruptcy reform and voted for the legislation that passed in the Senate last month by a 74-25 vote. It now heads to the House.
The bill aims to force people who can repay their debts to file bankruptcy under Chapter 13 instead of Chapter 7, which allows debtors to erase their credit issues and start fresh.
“There has been an explosion of consumer bankruptcies. This bill is not perfect, but it will have an overall net plus; it would lower the cost of credit for all consumers,” Chafee said.
Chafee did not vote with his fellow Republicans for the budget resolution adopted by the Senate by a 51-49 vote, saying it will lead the country further into deficit.
Chafee, who visited Iraq recently, spoke of the enormous cost of fighting the war on terror. He said the war costs the United States about $1 billion each week and is contributing an exorbitant amount of debt to the national deficit.
The U.S. Senate approved the $2.6 trillion 2006 budget resolution 51-49 last month and rejected an amendment that would have stripped protection for extending current tax policy, including capital gains and dividend rate reductions. The Senate rejected amendments that would have increased spending by a total of $197 billion and raised taxes by $142 billion over five years, according to a U.S. Senate Republican press release.
The budget approved by the Senate provides for more than $134 billion in tax cuts – $34 billion more than the president requested and $64 billion more than the Senate leadership initially proposed.
The Senate also expanded tax relief by $64 billion to repeal taxation of Social Security benefits.
With the imminent retirement of baby boomers in a few years, the government will be paying out more Social Security benefits than it collects by 2018, and by 2042, the funds will be completely bankrupt.
Bush launched a campaign to restructure Social Security by creating private investment accounts, but public support for his program remains weak. Chafee suggests that Bush’s Social Security plan is faulty and said raising the cap
on Social Security taxation from its current $90,000 income cap to around $140,000 would increase Social Security funds by $1.4 trillion, offsetting some of the debt.
