[Congressional Record Volume 143, Number 36 (Wednesday, March 19, 1997)]
[Senate]
[Pages S2563-S2569]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE NATIONAL MONUMENT FAIRNESS ACT OF 1997

  Mr. HATCH. Mr. President, along with my colleague, Senator Bennett, I 
am pleased to introduce the National Monument Fairness Act of 1997. 
This act will promote procedural fairness in the creation of national 
monuments on Federal and State lands under the Antiquities Act of 1906 
and further congressional efforts in the area of environmental 
protection. Identical legislation is being introduced today in the 
House of Representatives by Congressman Jim Hansen with the support of 
Congressmen Merrill Cook and Christopher Cannon.
  As my colleagues know, on September 18, 1996, President Clinton 
invoked the Antiquities Act of 1906 to create the Grand Staircase/
Escalante Canyons National Monument. The 1.7 million acre monument, 
larger in size than the States of Rhode Island and Delaware combined, 
locks up more than 200,000 acres of State lands, along with vast energy 
reserves located beneath the surface.
  Like the attack on Pearl Harbor, this massive proclamation came 
completely without notice to the public. Although State officials and 
members of the Utah congressional delegation were told that the 
Administration would consult us prior to making any change in the 
status of these lands, the President's announcement came as a complete 
surprise. The biggest Presidential land set-aside in almost 20 years 
was a sneak attack.
  Without any notification, let alone consultation or negotiation, with 
our Governor or State officials in Utah, the President set aside this 
acreage as a national monument by the stroke of his pen. Let me 
emphasize this point. There was no consultation, no hearings, no town 
meetings, no TV or radio discussion shows, no nothing. No input from 
Federal managers who work in Utah and manage our public lands. As I 
Stated last September, in all my 20 years in the U.S. Senate, I have 
never seen a clearer example of the arrogance of Federal power than the 
proclamation creating this monument. It continues to be the mother of 
all land grabs.
  We in Utah continue to work with the hand President Clinton has dealt 
us. That is, we are attempting to recognize and understand the 
constraints placed upon the future use of the land and resources 
contained within the monument's boundaries. We are trying to identify 
the various adverse effects this action will have on the surrounding 
communities.
  Personally, while I would have preferred a monument designation 
considerably smaller in scope, I could have enthusiastically supported 
a monument designation for the area covered by the proclamation had I 
been consulted prior to last September and invited to work with the 
President on a designation that was tailored to address the many 
concerns we have heard over the years on this acreage. Two of these 
concerns involve the 200,000 acres of school trust lands captured 
within the monument boundary and the locking up of 16 billion tons of 
recoverable, low-sulfur, clean-burning coal.

  Remember, our wilderness bill considered last year proposed 
designation of approximately one-quarter of this land as wilderness. I 
wanted to protect most of it; the people of Utah wanted to protect most 
of it. But, we were not consulted; we were not asked; our opinion was 
not sought. Rather, in an effort to score political points with a 
powerful interest group 48 days before a national election, President 
Clinton unilaterally acted.
  In taking this action in this way, the President did it all 
backwards. Instead of knowing how the decision would be carried out--
and knowing the all ramifications of this implementation and the best 
ways to accommodate them--the President has designated the monument and 
now expects over the next 3 years to make the designation work. The 
formal designation ought to come after the discussion period. It is how 
we do things in this country. Unfortunately, however, the decision is 
now fait accompli, and we will deal with it as best we can. I hope the 
President will be there to help our people in rural Utah and our school 
system as the implementation of the designation order takes place.
  The legislation we are introducing today, the National Monument 
Fairness Act, is designed to correct the problems highlighted by the 
Clinton Antiquities Act proclamation in Utah. It will do this in two 
significant ways.
  First, the act makes a distinction between national monument 
proclamations greater in size than 5,000 acres, and those 5,000 acres 
and less. The President retains his almost unfettered authority under 
the Antiquities Act over monument designations 5,000 acres and less. 
Specifically, the Antiquities Act delegates to the President discretion 
to declare as a national monument that part of Federal land that 
contains historic landmarks, historic and prehistoric structures, and 
other objects of historic or scientific interest--but only as long as 
the declared area is confined to the ``smallest area compatible with 
proper care and management of the objects to be protected.'' The 5,000 
acre limitation will give effect to this ``smallest area compatible'' 
clause, which both the courts and past Presidents have often ignored.
  For areas larger than 5,000 acres, the President must consult, 
through the Secretary of Interior, with the Governor of the State or 
States affected by the proposed proclamation. This consultation will 
prevent executive agencies from rolling over local concerns--local 
concerns that, under the dictates of modern land policy laws such as 
the Federal Land Policy and Management Act of 1976 [FLPMA] and the 
National Environmental Policy Act, certainly deserve to be aired.
  The National Monument Fairness Act also provides time constraints on 
the consultation requirement. From the date the Secretary of Interior 
submits the President's proposal to the appropriate State Governor, the 
Governor will have 90 days to respond with written comments. Ninety 
days after receiving the Governor's comments, the Secretary will then 
submit appropriate documentation, along with the Governor's written 
comments, to the Congress. If the Governor fails to comment on the 
proposal, the Secretary will submit it to the Congress after 180 days 
from the date of the President's proposal. These time constraints 
assure that the process will be fair. It will prevent State officials 
from unnecessarily delaying proposed proclamations, but will allow 
appropriate time for State and localities to voice their concerns 
through the Governor's comments on the President's actions.

  Consequently, the consultation requirement ensures that large 
monument designations will be made fairly, and in a manner that allows 
the participation, through their Governor, of the people most directly 
affected by the proclamation.
  Second, the National Monument Fairness Act allows all citizens of the 
United States to voice their concerns on large designations through 
Congress. The act provides that after the Secretary has presented the 
proposal, Congress must pass it into law and send it to the President 
for his signature before the proposal becomes final and effective. 
Thus, the Nation, through its elected representatives, will make the 
decision whether certain

[[Page S2564]]

lands will become national monuments. This is the way our democracy 
ought to operate. Indeed, it furthers the intent of the Framers in the 
Constitution who anticipated that laws and actions affecting one or 
more individual States would be placed before the legislature and 
debated, with a State's representatives and senators able to defend the 
interests of their State.
  Mr. President, the purpose of our legislation is to ensure that a 
fair and thorough process is followed on any future large-scale 
monument designations under the authority granted in the Antiquities 
Act. Since Utah is home to many other areas of significant beauty and 
grandeur, I am concerned that this President or those within his 
administration, or a future President or administration, might consider 
using this authority in the same manner as last September. In other 
words, it will be ``deja vu all over again.'' We cannot afford to have 
the entire land area of our state subject to the whims of any 
President. Many have proposed plans, including myself, for these areas, 
that have been the subject of considerable public scrutiny and comment. 
The consensus building process must be allowed to continue without the 
threat that a Presidential pen will intervene to destroy any progress 
and goodwill that has been established or that may be underway among 
the citizens of our State.
  I am aware that Interior Secretary Babbitt stated publicly last month 
that ``there are no plans for any additional executive withdrawals'' 
during the remaining years of the Clinton administration. That is fine. 
However, as my colleagues know perfectly well, Secretary Babbitt told 
me and other members of our congressional delegation last December that 
there was no final decision to designate the Grand Staircase/Canyons of 
the Escalante Monument and that we, the congressional delegation, would 
be consulted prior to any designation. Since then, we have learned from 
press reports that many decisions leading to the monument announcement 
had already been made, if not finalized, prior to our meeting with the 
Secretary.
  But, regardless of whether the Clinton administration plans to 
designate any more monuments, I do not think it is unreasonable to look 
at the authorities contained in the Antiquities Act--particularly the 
authority that permits such sweeping and long-lasting changes for 
individual States and towns without State input and congressional 
approval. That is the issue.

  That is why we are introducing this legislation today. This matter of 
due process for State and local officials--as well as for small 
business people, ranchers, school systems, and many others affected by 
locking up lands--is an issue about which I believe all Senators and 
Congressmen need to be concerned. While Senators representing the so-
called public lands States may need to pay particular attention, if the 
long arm of the Federal Government can do this to Utah without so much 
as a day's notice, it can do it to your State as well.
  It is time we incorporate some common sense protections for all 
States into the Antiquities Act. I continue to believe that last 
September's act was a Federal land grab, and I unwilling to stand by 
and let it happen again in my State or any other State without a fair 
and proper airing in the court of public opinion.
  Some may ask why this legislation focuses only on proposed areas over 
5,000 acres. First, it is not our desire to completely withdraw the 
authority granted the President in the 1906 act. But, the original act 
is clear when it States that this authority should be limited to ``the 
smallest area'' possible. In my mind, this authority should be 
available for those areas that are small in nature that may require 
quick or emergency protection for which a monument designation is 
warranted. That is how I envision this authority being used.
  Second, there is already precedence in Federal law for 5,000 acres as 
the threshold amount for determining certain pending or future Federal 
action or consequence. For example, the Wilderness Act of 1964 defines 
wilderness as having ``at least 5,000 acres of land.'' Also, FLPMA 
authorizes the Secretary to withdraw 5,000 acres or more for up to 20 
years ``on his own motion or upon request by a department or agency 
head.'' And, there is reference to ``roadless areas of 5,000 acres or 
more'' in that section of FLPMA that authorizes the 15-year Bureau of 
Land Management wilderness study process.
  I am sure that any detractors of this bill will State that had our 
bill been enacted in the past, some of the Nation's most gorgeous and 
long lasting monuments would never have been designated as a national 
monument. I would say two things to this point.
  First, our bill will not prevent the establishment of any monument 
consisting of 5,000 acres or more. The bill simply modifies the process 
by which proposed monuments of acreage above this amount can be 
designated. Second, and most importantly, I understand that there are 
72 national monuments in the United States. Of that number, only one-
third, or 24, have a total acreage figure greater than 5,000 acres. 
Enactment of our bill will not bring a halt to the ability of 
Congress--or even the President--to designate national monuments.
  In addition, I realize that some of our existing national parks, such 
as Arches and Canyonlands National Parks in Utah, were originally 
established as national monuments, only to be designated a park 
afterward. It is not fair to say that had our bill been in law prior to 
the designation of these monuments that parks like Arches and 
Canyonlands or the Grand Canyon National Park would never have been 
designated. Certainly, any monument proposal consisting of more than 
5,000 acres that is proposed by the President where a consensus exists 
within Congress that such a designation is warranted would be favorably 
received and acted upon by Congress. And, at least home State senators 
and representatives have a voice. In many cases, it is likely that they 
would pursue a designation of these areas prior to the President 
exercising his authority under the Antiquities Act.

  But, let's not lose focus of the purposes of this bill. We simply 
want to ensure that a public process is undertaken prior to any large 
monument designation under the Antiquities Act. As I stated earlier, we 
conduct such a process whenever a similar proposal is introduced in 
Congress; why can't Congress insist that it be done when the President 
desires to achieve the same purpose?
  I mentioned that we are in the process of recognizing and 
understanding the constraints this proclamation will place on the 
economic and social aspects of the surrounding communities. When an 
area the size of the Grand Staircase-Escalante Canyons National 
Monument is withdrawn from public use and given a special designation, 
there are many ramifications that need to be addressed, the burden of 
which falls primarily on the shoulders of the local community. These 
include the following items:
  First, county land-use plans will have to be studied and amended to 
address necessary changes relating to the new monument.
  Second, consideration of the transportation improvements required to 
improve the existing inadequate transportation system to access the new 
monument for visitors to the area.
  Third, increased visitation to the area will place greater burden on 
services provided by local government, such as law enforcement, fire, 
emergency, search-and-rescue, and solid waste collection.
  Fourth, increased visitation to the area will place greater burden on 
the proper disposition of limited natural resources, such as water, 
both for culinary and irrigation purposes.
  These are just a few items that are currently being discussed and 
reviewed by local leaders in the area of the new national monument. 
These are not trivial matters; they are critical to continuing the 
livelihood of the cities and towns in the area. So, no one should think 
that creating a new monument of this size, as endearing a concept as 
that is, does not create significant matters that must be addressed.
  Of course, the other consequence the creation of this monument has 
created which continues to be of utmost concern to me is the final 
disposition of the State school trust lands captured within the 
monument's boundaries. The inability to access the natural resources 
contained on these lands will

[[Page S2565]]

have a devastating impact on providing crucial funds to Utah's public 
school educational system. The Utah Congress of Parents and Teachers 
has indicated that ``the income from the mineral resources within the 
Monument could have made a significant difference in the funding of 
Utah schools now and for many generations to come.'' It remains to be 
seen the manner in which the President will fulfill the promises he 
made to the children of Utah last September when he created the new 
monument. Specifically, he said ``creating this national monument 
should not and will not come at the expense of Utah's children.'' He 
also added that it is his desire to ``both protect the natural heritage 
of Utah's children and ensure them a quality educational heritage.'' I 
am eager to work with him to fulfill these promises.

  I mention these items to simply paint a picture for my colleagues 
that there are many pieces to the monument puzzle that remain to be 
resolved. The President can come to town--or 75 miles to the south in 
another State--and designate a monument, but Utahns are left to pick up 
the pieces of his action to make sure that it works--and that it works 
properly. That is what I want, and I am sure that is what the President 
wants.
  Finally, Mr. President, I must point out that the adoption of this 
act will likely result in more stringent environmental protection of 
Federal lands. The most ironic fact of the administration's monument 
designation in Utah is that national monuments permit a greater level 
of activity than does a wilderness designation. Last year, the Utah 
delegation proposed that 2.1 million acres of land on and around the 
Grand Staircase/Escalante Canyons area be declared wilderness, under 
the language of the Wilderness Act of 1964. The wilderness designation 
is far more stringent than the administration's monument designation 
and prevents the construction of the roads and visitors centers 
envisioned under the monument designation. The Utah proposal of the 
104th Congress included more area than BLM had officially recommended 
to Congress following its 13-year inventory of the lands in Southern 
Utah. This is yet another compelling reason why it is vital for local 
and State officials to be consulted prior to national monument 
declarations.
  Mr. President, the Antiquities Act is antiquated. It needs to be 
updated. It can be amended in a manner consistent with today's pressing 
land policy concerns without destroying the original intent behind the 
act. That is what we have proposed in this legislation and why I urge 
passage of the National Monument Fairness Act of 1997. This bill will 
preserve the President's ability to act to protect lands of historic 
and scientific significance that are threatened with development. 
However, the act will promote greater environmental stewardship by 
forcing the executive branch to consider the views of local and State 
officials prior to making large-scale changes in land designation and 
management.
  Finally, the requirement that massive monument proposals be passed 
through the Congress, under the strictures of article I of the 
Constitution, will ensure that all Americans have a say in land policy 
decisions that fundamentally change the Nation. And, this, Mr. 
President, may be the most compelling reason of all to enact this 
measure.
  I invite Senators to join me in support of this legislation and ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 477

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, 

     SECTION 1. SHORT TITLE.

       This act may be cited as the ``National Monument Fairness 
     Act of 1997.''

     SEC. 2. CONSULTATION WITH THE GOVERNOR AND STATE LEGISLATURE.

       Section 2 of the Act of June 8, 1906, commonly referred to 
     as the ``Antiquities Act'' (34 Stat. 225; 16 U.S.C. 432) is 
     amended by adding the following at the end thereof: ``A 
     proclamation under this section issued by the President to 
     declare any area in excess of 5,000 acres to be a national 
     monument shall not be final and effective unless and until 
     the Secretary of the Interior submits the Presidential 
     proclamation to Congress as a proposal and the proposal is 
     passed as a law pursuant to the procedures set forth in 
     Article 1 of the United States Constitution. Prior to the 
     submission of the proposed proclamation to Congress, the 
     Secretary of the Interior shall consult with and obtain the 
     written comments of the Governor of the State in which the 
     area is located. The Governor shall have 90 days to respond 
     to the consultation concerning the area's proposed monument 
     status. The proposed proclamation shall be submitted to 
     Congress 90 days after receipt of the Governor's written 
     comments or 180 days from the date of the consultation if no 
     comments were received.''.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Murkowski, Mr. Torricelli, Ms. 
        Landrieu, Mr. Craig, Mr. Kerrey, Mr. Hagel, Mr. Baucus, Mr. 
        Lott, Mr. Breaux, Mr. Nickles and Mr. Hutchinson):
  S. 479. A bill to amend the Internal Revenue Code of 1986 to provide 
estate tax relief, and for other purposes; to the Committee on Finance.


           THE ESTATE TAX RELIEF FOR THE AMERICAN FAMILY ACT

  Mr. GRASSLEY. Mr. President, I rise today to introduce a bipartisan 
effort to relieve the estate tax burden on the American family. I want 
to thank the other original cosponsors and particularly the Majority 
Leader. Estate tax relief is on the respective top ten legislative 
objective lists of both parties. It is my honor to lead the effort for 
my party. I think that estate tax reform will happen in this Congress. 
Therefore, I encourage my colleagues to associate themselves with our 
bipartisan legislation. It doubtlessly will become the focus of the 
estate tax reform efforts in the Senate efforts. The list of original 
cosponsors already includes Senators Baucus, Lott, Breaux, Nickles, 
Murkowski, Kerrey, Hagel, Torricelli, Landreiu, and Mr. Hutchinson.
  I will go about this introductory statement in two steps. First, I am 
going to discuss the importance of this legislation to my state of 
Iowa. Then, I will make some remarks about the specific provisions of 
the bill.
  In nearly every area of my state and the nation, we saw in the past 
decade estate tax ultimately confiscate many family farms. For example, 
in 1981, the children of two family farmers in Hancock County, Iowa, 
inherited tracks of land that were debt free. In both of these cases a 
father was passing the farm to one of his children. The estate was 
forced to borrow the amount to pay for both the state inheritance tax 
and the federal estate tax. At the time, the profitability of farming 
was low, and the value of farm land plummeted. In both cases the estate 
tax unfortunately brought about the foreclosure of these farms which 
had been in each family for four generations.
  That was sixteen years ago, and the estate tax has hardly improved 
since then. The general estate tax exemption has risen to $600,000, but 
that number is over $200,000 behind the rate of inflation. The 
important thing to keep in mind about estate tax reform is that estates 
do not pay taxes, surviving families pay taxes. This bill is simply 
about fairness and equity for families. Furthermore, it is about 
correcting latent defects in the estate tax rules that make tax lawyers 
rich, but also make families crazy.
  Reform in this legislation comes in three major parts. First, we 
increase the broad based estate tax exemption from $600,000 to 
$1,000,000 over a period of six years. Second, we grant family owned 
businesses relief similar to what was introduced by former Senators 
Dole and Pryor. For businesses passed down among the family, this bill 
provides a complete exemption for the first $1,500,000 of family 
business assets. It also provides an additional 50 percent exemption on 
the next $8,500,000. Thus, there is a $10,000,000 cap on our family-
owned business relief. This provision is therefore a smaller provision 
than the original Dole/Pryor legislation.

  Finally there is a section that I call repair and maintenance. Here 
we improve some popular existing provisions. For example, housekeeping 
and improvement is done to special use valuation. The Government 
financed estate tax deferral provision is improved. A generation 
skipping tax equity problem is fixed that has already been passed twice 
but vetoed for unrelated reasons. Finally, an IRS gift tax audit 
statute of limitations problem for families is fixed.

[[Page S2566]]

  Because it is especially complicated, I want to discuss the 
generation skipping transfer tax problem that is addressed in the 
repair and maintenance section of this bill. For reference purposes, 
this legislation was known as bill number S. 1170 in the 104th 
Congress. It too was passed on the Balanced Budget Act of 1995 which 
was subsequently vetoed.
  The GST tax is an extra tax that families pay when a grandparent 
makes a gift to a grandchild. The provision in our bill has the support 
of over 200 charities in the Nation including the public universities 
in my State of Iowa. It has passed twice in the last 10 years, but was 
not enacted because the greater legislation was vetoed for unrelated 
reasons.
  Our provision expands the current law predeceased parent exception. 
This is an exception to the GST tax where a grandparent gifts to a 
grandchild but the grandchild's parent has already died. The grandchild 
steps up into the place of the parent. In our bill, this exception is 
broadened to include gifts not only to grandchildren with predeceased 
parents but also grandnieces and grandnephews. The expansion to include 
these gifts that are affected by trusts is necessary to promote 
charitable giving and also protect families. The White House supported 
this provision during the debate of the Balanced Budget Act of 1995, 
given the prospective effective date as in our bill.
  Humility requires me to admit that each of these provisions passed as 
part of the vetoed Balanced Budget Act of 1995. In some places we have 
made technical improvements suggested by the tax experts, but by and 
large there is little original thought here. If you have good 
legislation you don't need to improve upon it.
  Some will ask about how this estate tax bill fits into the debate 
over a balanced budget. The answer is that the balanced budget is still 
a No. 1 priority and this bill will need to fit in a balanced budget. 
Since the White House has supported provisions in the President's 
budget similar to these provisions, we should expect the White House to 
offer assistance to us in resolving the estate tax problem. If the era 
of big government is over, then the White House should step up to the 
plate and aid us in eliminating estate tax theft upon surviving 
families.
  Mr. BAUCUS. Mr. President, I am very pleased to join with Senator 
Grassley and my other colleagues in introducing the Estate Tax Relief 
for the American Family Act of 1997 today. This bill is designed to 
provide farmers, ranchers, and others who own family businesses and 
much needed relief from the estate tax.
  Montana is a small-town, rural State, Mr. President. People run 
farms, ranches, and work in small businesses. One of the wonderful 
things about life in rural Montana is the way these operations stay in 
the family. It holds communities together, and creates a lasting bond 
between generations.
  As I listen to farmers, ranchers and small business owners, one topic 
comes up every time, and that is the estate and gift tax. I hear about 
the burden it puts on agricultural producers and small businesses, and 
about how difficult this tax makes it to hand down an operation to your 
sons and daughters.
  To avoid this tax, an operation today has to be under $600,000 in 
value. That amount hasn't budged since 1987. Our State, one the other 
hand, has changed a lot in that time. In 1988, the average Montana farm 
was worth $579,735. In 1995, that amount was up to $867,769. If we had 
figures for today, I am confident this amount would be even higher.
  So if you're an average fellow, you often have three choices when 
your farm goes on to the next generation. You can subdivide the land 
and thus decrease production. You can sell off part of the farm to pay 
the taxes. Or, you can sell the whole thing and get out of farming 
altogether. None of these options are good for the family, nor are they 
necessarily good for the community. Unbridled development brings with 
it its share of problems, and changes the nature of Montana life--not 
always for the better. Our farms, ranches and other small businesses 
are a part of our heritage and valuable contributors to our economy and 
the Montana way of life. It is simply not right to destroy them with 
onerous estate taxes.
  The Estate Tax Relief for the American Family Act of 1997 is the 
first step toward bringing the estate tax up to date and making it more 
fair. Our bill raises the unified credit to cover estates up to $1 
million, which is roughly where the cap would be if the credit had kept 
pace with inflation all these years. We give folks a bit longer to pay 
off the bill when they do have a tax due, by lengthening the deferral 
from 10 years to 20. We provide additional exemptions for family-owned 
small businesses, by allowing them to exclude completely the first $1.5 
million in value of their estates, and one-half of the next $8.5 
million. We also make a few other common-sense changes to make it 
easier to keep these business operations in the family.
  That's good news for farmers, ranchers and small business owners. 
It's good for the communities they live in. And more than anything 
else, it's the right thing to do. So I'm very proud to be a part of 
this effort today, and I look forward to working with my other 
colleagues, and with the administration, to get this relief enacted 
into law this year.
  Mr. LOTT. Mr. President, I am delighted to take part in introducing 
the first bipartisan family tax relief bill of the 105th Congress--the 
Estate Tax Relief for the American Family Act.
  Today, the Government can confiscate up to 55 percent of an estate in 
tax when a person dies. This tax is a grotesque relic of an earlier era 
when some people believed it was the Government's job to determine who 
should be allowed to keep what they earn. They believed it was the 
Federal Government's job to confiscate the hard-earned dollars of 
working Americans when they died.
  The estate tax is a monster that must be exterminated. If it were up 
to me, we would simply repeal the estate tax in its entirety. 
Unfortunately, our budget process does not allow us to completely 
repeal this tax all at once. We must do it in stages.
  Therefore, the bill we are introducing today will increase the amount 
of every estate that will be exempt from estate tax. When fully phased 
in, up to $1 million will be automatically excluded from every estate 
before imposition of the estate tax.
  The bill also creates a new category of excludable assets for family-
owned businesses that are passed on to succeeding generations. No 
longer will small business owners be forced to sell part or all of 
their business assets merely to feed the voracious tax appetite of the 
Federal Government. Our bill allows an exclusion of $1.5 million of the 
assets of a family-owned business from the estate tax, and 50 percent 
of the next $8.5 million. For many small businesses this will make the 
difference between staying viable and closing their doors. It will 
preserve jobs, give many communities around the country stability and 
certainty, and encourage entrepreneurship. It is the right thing to do 
for our farmers, for our ranchers, for every American who owns a small 
business that he or she wishes to keep in the family.
  These businesses are, after all, the engines of prosperity in 
communities across America, and we must help them to remain so.
  This bill is the first step. The tax on death should be zero, and 
that is what we will continue to work for.
  I want to thank Senator Grassley for his leadership on this bill, and 
Senator Baucus and Senator Breaux as well for joining in this 
bipartisan effort to reduce the crushing tax load on all Americans.
  Mr. BREAUX. Mr. President, today I join with several of my colleagues 
to introduce the Estate Tax Relief for the American Family Act of 1997.
  Tax policy should meet two criteria. It should provide an effective 
and efficient way to collect taxes for the operation of our Government 
and it should encourage positive economic and social policies. This tax 
does neither. After looking at the current system, I have concluded 
that Federal estate and gift taxes are not worth the cost to our 
economy, to businesses and to American families.
  In 1995, the estate tax generated $14.8 billion in revenue, only 1.09 
percent of total Federal revenues. Conversely, the cost of collecting 
and enforcing the estate tax to the Government and taxpayers was 65 
cents of every dollar collected.

[[Page S2567]]

  The effects of the estate tax are felt most by family-owned 
businesses. More than 70 percent of family-owned businesses do not 
survive the second generation and 87 percent do not survive the third 
generation. Many families are forced to liquefy their businesses in 
order to pay the estate tax.
  There is a definite need to remedy these problem and this bill takes 
steps in the right direction. The legislation would increase the estate 
tax exemption from $600,000 to $1 million, and allow estate tax-free 
transfers of certain qualified small business assets.
  I hope that any tax bill we put forth this year will include estate 
tax relief based on the principles we have put forth in this bill.
  Mr. NICKLES. Mr. President, I have always believed that economic 
freedom is a critical part of life, liberty, and the pursuit of 
happiness. Unfortunately, the Internal Revenue Code does not always 
promote or encourage economic freedom, and one area where this is 
strikingly clear is the confiscatory, anti-family, anti-growth estate 
tax.
  Most Americans work diligently throughout their lives to provide for 
their families and give their children and grandchildren a better 
future. This work often results in the accumulation of assets like 
homes, businesses, and farms; all acquired with hard work and bought 
with after-tax dollars. Unfortunately, those without high-paid lawyers 
and accountants realize too late that up to 55 percent of those assets 
could be confiscated by the Federal Government upon their death.
  Some people mistakenly believe estate taxes only affect the rich, but 
there are thousands of small businesses and farms throughout the 
country owned and operated by middle-income Americans that are affected 
by existing estate tax laws. These small businesses may appear to be 
economically significant on paper, but often they have little liquid 
assets to cover estate tax liabilities. Historically, these businesses 
have created most of the new jobs in this country and fueled the growth 
of the economy.
  The unfortunate result of high estate taxes is that families are 
frequently forced to sell off part of the family business to pay the 
taxes incurred by the deceased family member's estate. This liquidation 
of productive assets to finance tax liabilities is anti-family and 
anti-business. At the very least, families and businesses are forced to 
employ an army of expensive experts to avoid the worst estate taxes, a 
make-work exercise that exacerbates the inefficiency of the system.
  Mr. President, I believe it is patently unfair for the Federal 
Government to assume that it has the right to take an individual's 
hard-earned assets and redistribute them to others. If our goal as a 
society and a government is to encourage long-term, private savings and 
investment we cannot continue the policy of confiscating estates. With 
an average savings rate in the United States of 2.9 percent, which is 
lower than that of any other industrialized country, we should be 
encouraging individuals, families, and businesses to save and invest.
  Since 1987, a unified tax credit for gifts and estate transfers has 
effectively exempted $600,000 worth of assets from estate taxes. This 
basic exemption has increased modestly over the years, from $60,000 in 
the 1940's, 1950's and 1960's to $225,000 in 1982. Unfortunately, the 
current estate exemption of $600,000 has been greatly eroded by 
inflation.
  The legislation I am introducing today with the Senate majority 
leader, Senator Grassley, Senator Breaux, Senator Baucus, and others 
addresses the problems associated with the estate tax in a thoughtful, 
bipartisan manner. It is not the perfect solution to these problems, 
Mr. President, but it is a good first step. I believe that ultimately 
we must radically restructure the estate tax by reducing marginal 
rates, which now exceed 55 percent for estates larger than $3 million, 
and I believe we must strive to treat all types of family businesses 
equally. However, I recognize the budget constraints Congress is 
working under, and I believe it is important to move forward in a 
bipartisan manner.
  The legislation we are introducing today increases the estate tax 
exemption from $600,000 to $1,000,000, thus allowing more homeowners, 
farmers, and small businesses to keep their hard-earned wealth. 
Further, our bill would provide special relief for closely-held family 
businesses. We would allow estate-tax free transfers of up to $1.5 
million in small business assets to qualified family members, and a 50 
percent exclusion for up to $8.5 million in assets above that 
threshold, as long as the heirs continue to operate the business.
  The legislation we are introducing today makes simple pro-family, 
pro-business, and pro-economy changes to our tax code. It will allow 
more homeowners, farmers, and small businesses to keep their hard-
earned wealth. I encourage my colleagues to join us as cosponsors of 
this bill.
  Mr. TORRICELLI. Mr. President, I am proud to include my name as an 
original cosponsor of the Estate Tax Relief for the American Family Act 
of 1997, which was introduced today. This is a critical tax reform bill 
that will modernize our antiquated estate tax policy, provide 
significantly improved economic security for family businesses, promote 
efficient and pro-growth economic policy and ensure sound financial 
practices for millions of American working families.
  This legislation gradually increases over 6 years the estate and gift 
tax exemption from the current limit of $600,000 to $1 million. The 
graduated time schedule would increase the exemption by $100,000 in 
each of the first 2 years following enactment and $50,000 in each of 
the next 4 years.
  For families with their own small business, the bill would provide a 
new small business exemption of $1.5 million of business-related assets 
above the first $1 million in an estate as well as 50 percent of the 
next $8.5 million of such assets. This proposal would provide new 
safeguards for family business solvency that is not currently provided 
under current law.
  These changes are desperately needed as our current estate tax policy 
has not been upgraded in a decade. Even worst, the current policy has 
proven to be a economic failure. Estate and gift taxes are one of the 
smallest sources of revenue, collecting only $10 to $15 billion per 
year, mostly because Americans have found legal means of avoiding the 
tax. Indeed, Prof. Douglas Bernheim of Stanford University has 
theorized that more income tax revenue may be lost through clever 
estate planning than is actually collected through the estate tax.
  Even worse, the current policy encourages Americans to spend capital 
on consumption items rather than save because saving their money would 
increase the value of their estate and, ultimately, their estate tax 
liability. Indeed, it has been estimated that the tax cost of a dollar 
saved increases by an amount somewhere between 7.4 cents and 55 cents 
because of current estate tax law.
  And for small business, the current policy is devastating. The 
family-owned pizza parlor, dry cleaning store, grocery and family farm 
are failing to provide the kind of generational economic continuity 
that national policy should be encouraging. Indeed, more than 70 
percent of family businesses don't survive the second generation and 
almost 90 percent don't survive to a third generation. Most of these 
failures occur because current estate tax policy drains a family's 
financial ability to keep a business afloat as it passes from one 
generation to the next.
  The existing estate tax policy creates economic inefficiencies and 
places its heaviest burdens on the middle class. The rates of estate 
taxes are excessive, unfair, punitive, and contrary to the interests of 
both business owners and their employees. Indeed, these taxes destroy 
the work of a lifetime and the dreams of a generation of Americans. The 
time to make genuine and sensible changes is now.
  Enactment of the Estate Tax Relief for the American Family Act of 
1997 is an essential part of any plan to balance the budget by 2002. It 
would likely provide a net increase in revenues while at the same time 
restore tax fairness for millions of Americans. I am proud to be an 
original cosponsor of this legislation and will be a tireless advocate 
for its enactment into law.
                                 ______
                                 
      By Mr. WELLSTONE:
  S. 480. A bill to repeal the restrictions on welfare and public 
benefits for aliens; to the Committee on Finance.

[[Page S2568]]

                     THE FAIRNESS TO IMMIGRANTS ACT

 Mr. WELLSTONE. Mr. President, on April 1, the Nation will 
begin to see the disastrous effects of the Personal Responsibility and 
Work Act of 1996, passed and signed into law in the 104th Congress. 
When Congress debated the bill, strong arguments were made for getting 
people off welfare and back to work. I supported those intents. 
However, I believed then as I do now that the bill we were debating 
went beyond what is humanly justifiable in terms of repealing basic 
assistance to people who are in need. This bill was not about able 
bodied people working. It was about good people suffering. Under the 
guise of able bodied people working, we are forcing disabled and 
elderly people into hunger, into homelessness.
  Beginning around April 1, roughly 500,000 legal immigrants will lose 
their SSI benefits and about 1 million will lose food stamps. By the 
year 2002, approximately, 260,000 elderly immigrants and 140,000 
children will lose Medicaid coverage.
  The bill I am introducing today restores those benefits to elderly 
and disabled immigrants by repealing provisions of the Personal 
Responsibility Act of 1996.
  When the American people supported welfare reform, they supported 
that able bodied people would work. I want that. You want that. 
However, I do not think that the American people intended the ensuing 
consequences.
  These consequences are people like Yanira, who, with her husband came 
to the United States legally 20 years ago from her native El Salvador. 
For 20 years they raised three children. For 20 years, they paid income 
taxes. For 20 years, they paid sales taxes. For 20 years they paid 
State taxes. For 20 years, they paid their car registration. For 20 
years, they abided by the laws and rules here.
  Then Yanira's husband divorced her. So, Yanira got a job. For about 8 
years she cleaned toilets, washed floors and laundered towels in a 
hotel near her home. Eventually, the work became too demanding 
physically and she quit. At 64, Yanira has received SSI for a few 
years. Soon, she will not.
  Since her husband is no longer married to her, she is not entitled to 
count her husband's work history toward the required 40 quarters--10 
years. In spite of the fact that we willingly took her taxes and other 
fiscal contributions, we are denying her the basics for human survival, 
human dignity. How will Yanira survive? She doesn't know. Neither do I.
  Yanira's situation is not isolated. There are Yaniras living in 
Minnesota, in Ohio, in New York and Mississippi. They are here legally 
but will not receive SSI until they become U.S. citizens. Many of them 
are elderly and cannot work and considering their age, learn all that 
is necessary to become citizens. They will be denied benefits for the 
rest of their lives.
  Gladys has lived in the United States for 40 years, working as a 
nanny--caring for children in our Nation. Though she paid taxes and 
followed all the rules of the United States, she will lose her SSI 
benefits in July. She does have the option of struggling through forms 
and tests to become a citizen. Sounds like a good option until you 
realize: Gladys is 105 years old, blind and housebound. Gladys spent a 
good share of her times caring for and nurturing our children. She now 
needs the same.
  Lucrecia has lived here for 17 years. For 8 of them, she labored in a 
factory, assembling artificial Christmas trees. At 75, facing the loss 
of her sole means of support, Lucrecia is desperate.
  Rose, a 92-year-old, came from Lebanon 76 years ago. She has lived in 
a nursing home for the past 30 years. She has dementia. In December, 
she received a letter from the Government. The letter said, in essence, 
Rose had been shirking her responsibilities and she will no longer 
receive her benefits that support her stay in a nursing home. She can't 
speak for herself. I think we should speak for her. We should send the 
message that this is unacceptable. We must not let this happen to Rose.
  During my many visits with communities in Minnesota and while talking 
with folks here, I have never seen more fear in the faces of so many 
people, so many good people, people who came to this country and 
followed the rules. I hear stories every day of people so full of fear 
that they take their own lives.
  The Personal Responsibility and Work Opportunity and Reconciliation 
Act has abjured the contributions the legal immigrants like Yanira have 
made to our economic livelihood. I ask, How will their contributions be 
rewarded? Taxation without benefits is morally wrong.
  Last year, we discussed and debated the merits and failings of the 
welfare reform law. As you know, I voted against it. I did not vote 
against it because I am against people working, people contributing to 
our country. I did not vote against it because I am against paychecks 
replacing welfare checks. I voted against it because I am against 
pushing the unemployable into poverty. I am talking about benefits for 
the disabled and elderly immigrants in our country. On April 1, we will 
see the first trickle in the torrent of suffering that this bill will 
inflict on our Nation's most vulnerable.
  Around this time last year, we heard testimony from Robert Rector of 
the Heritage Foundation that ``welfare is becoming a way of life for 
elderly immigrants.'' A picture was painted depicting newly arrived 
immigrants being picked up by a sponsor at the airport and driven in a 
Cadillac directly to the welfare office to sign up for benefits such as 
SSI and food stamps. While I will not argue with you that there has 
been some abuse, I think this assertion is absurd.
  Last year, Robert Rector also testified that ``the presence of large 
numbers of elderly immigrants on welfare is a violation of the spirit, 
arguably, the letter, of U.S. immigration law.'' I beg to differ. This 
country was based on the dignity of the human spirit, fairness and 
equity. The spirit of this country is to give voice to the voiceless, 
to care for the elderly and to nurture the children.
  When we talk about reform, we should focus on change for the better, 
improvements to the system, revisions on our mistakes. When we talk of 
reform, we should not be discussing more people in hunger, more people 
who are homeless, more people in poverty. That is what this ``reform'' 
has led to.
  People who supported the welfare reform bill said they ``responded to 
the wishes of the American people and put an end to the widespread use 
and abuse of our welfare system.'' I am asking you now to respond to 
the voice of the American people. A recent nationwide L.A. Times poll 
found that 56 percent of the American people favor restoring cuts to 
legal immigrants. Not too long ago, several Republican Governors were 
here. They are already anticipating the effects of this legislation. 
The American people do not want people like Gladys and Lucrecia left 
hungry and homeless. They want responsible, ethical government.
  Responsible, ethical government costs money. I know that. I propose 
that instead of taking food from our Nation's elderly and children, we 
tax oil companies, we tax tobacco companies, we tax pharmaceutical 
companies. Why should wealthy corporations flourish and benefit from 
our policies while hardworking, law abiding people go hungry? This is 
not reform. This is a sham. Furthermore, it is shameful.
  People like Gladys and Lucrecia don't have high-paid lobbyists. 
Privileged industries avoid paying their fair share of taxes because of 
the efforts of lobbyists. I propose that we take away the privileges of 
the wealthy and provide necessities for the poor.
  Today, I am imploring you to look beyond politics and look beyond 
polls and see the faces and hear the stories that this reform will 
portend. This is no longer a political issue. This is an issue 
concerning humanity. To disregard this population, to turn our backs on 
those who are so vulnerable is disgraceful and dishonorable. Tonight, 
you know where you are sleeping. Tonight, you know what you will eat. 
Soon, Gladys and Lucrecia will not be able to say the same.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 480

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REPEAL.

       (a) In General.--Title IV of the Personal Responsibility 
     and Work Opportunity Reconciliation Act of 1996 (Public Law 
     104-193;

[[Page S2569]]

     110 Stat. 2260-2277), as amended by title V of the Illegal 
     Immigration Reform and Immigrant Responsibility Act of 1996 
     (Public Law 104-208; 110 Stat. 3009-1772-3009-1803), is 
     repealed.
       (b) Notice and Redetermination.--Not later than 30 days 
     after the date of enactment of this Act, any Federal or State 
     official responsible for the administration of a Federally 
     funded program that provides benefits or assistance to an 
     individual who, as of such date, has been determined to be 
     ineligible for such program as a result of the provisions of 
     title IV of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 (Public Law 104-193; 110 Stat. 
     2260-2277) (as so amended), shall--
       (1) notify the individual that the individual's eligibility 
     for such program shall be redetermined; and
       (2) shall conduct such redetermination in a timely 
     manner.

                          ____________________