WASHINGTON – Newt Gingrich blasted the financial services bill now before Congress here at the annual meeting of the Association for Advanced Life Underwriting.
Former House Speaker Gingrich, a Republican from Georgia, talked about the financial services bill Monday during the AALU meeting’s opening general session.
The financial reform legislation Congress is considering will add an unnecessary layer of bureaucracy and additional costs to the existing regulatory structure, ensuring that the next bank meltdown will be even more expensive the last one, Gingrich said.
Gingrich faulted both Democrats and Republicans for their handling of the credit crisis, saying that both Henry Paulson, the Treasury secretary of former President Bush, and Timothy Geithner, the current Treasury secretary, are “New York insiders taking care of New York insiders.”
But Gingrich talked mainly about the “cultural conversation about the kind of country we are” that he believes is now under way.
“This is not a Democratic or Republican issue,” Gingrich said. “This is an old order versus new world kind of issue, which has resulted because of a breakdown in systems that arose after World War II.”
The challenges that will force the United States to restructure are an “explosion” in science and technology; rising competition from developing nations; and a government “bubble,” Gingrich said.
Contributing to government crises will be budget-straining pension and health care obligations, created in part by public-sector unions, Gingrich said.
“Americans will come to realize that people who are supposed to be public servants are now making more than the taxpayers who are paying them,” he added. “When that sinks in, people will get very unhappy.”
Gingrich has proposed a 50% reduction in the Social Security and Medicare taxes paid by employers and their employees. The reduced levies would “dramatically increase” companies’ liquidity and ability to grow, Gingrich said.
Gingrich also has proposed allowing businesses to write off the full expense of new equipment acquisitions within the first year after purchase and harmonizing the corporate income tax rate with the international average, which now stands at 12.5%.
U.S. corporations, he said, are among the highest taxed in the world, placing them at a competitive disadvantage.
Gingrich wants to eliminate capital gains and estate taxes.
Phasing out the “death tax” would have only a minimal effect on life insurance professionals, because affluent clients would still have plenty of non-tax reasons to engage in estate planning, Gingrich said.
Later, in response to a question, Gingrich said he expects to make a “formal decision” about running for president in 2012 by March 2011.