[Congressional Record Volume 147, Number 75 (Saturday, May 26, 2001)]
[Senate]
[Pages S5770-S5796]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001--CONFERENCE 
                                 REPORT

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate 
now proceed to the consideration of the conference report to accompany 
H.R. 1836, the tax reconciliation bill.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The clerk will report.
  The assistant legislative clerk read as follows:

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     1836), to provide for reconciliation pursuant to section 104 
     of the concurrent resolution on the budget for fiscal year 
     2002 having met, have agreed that the House recede from its 
     disagreement to the amendment of the Senate, and agree to the 
     same with an amendment, and the Senate agree to the same, 
     signed by a majority of the conferees on the part of both 
     Houses.

  The ACTING PRESIDENT pro tempore. The Senate will proceed to the 
consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record (continuation) of May 25, 2001.)
  Mr. DURBIN. Mr. President, about 15 minutes ago I was handed this 
stack of paper. It is not uncommon for us to receive bills of great 
consequence and great moment only a few minutes before we are asked to 
vote on them. We rely on good staff work and hope they give us some 
insight into what the legislation means.
  This piece of legislation, of course, represents the proposed tax 
bill--457 pages. I will hazard a guess that very few Members of the 
Senate will have a chance to study it or reflect on it or even ask for 
a response from others before we are asked to vote in a very few 
minutes. That is not unusual.
  I don't want to suggest that this is an extraordinary situation, but 
it is extraordinary in this respect: What we are being asked to vote on 
in this tax bill will literally have an impact on America for 10 years, 
long after many of us have gone from the scene. Long after this 
President has finished his tenure in the White House, the impact of 
this bill will still be felt. So it is important for us to pause and 
reflect on what we are doing. We are being asked to sign onto a tax cut 
proposed by the White House, originally, and now crafted by the leaders 
in the House and the Senate, which will have a dramatic impact on the 
economy of this country.
  It is a tax bill which doesn't affect just next year but in fact goes 
into effect sometimes 5, 6, 7, 8, 9, 10 years from now. Someone noted 
that the marriage tax penalty provisions, which I believe under the new 
bill go into effect in 2009 or 2010, will go into effect after many 
currently married couples are no longer married; many who are 
contemplating marriage will have been married and perhaps will no 
longer be married. The provisions about the estate tax will go into 
effect about 10 years from now after many people who are watching this 
debate are long gone.
  The reason I raise this point is to try to put in some historic 
perspective the vote we are about to take this morning. I think this 
tax bill is a serious mistake. The Congress of the United States made a 
grievous error in the early 1980s under President Reagan when we 
accepted his message--and many voted for it--that called for a massive 
tax cut. It is easy to preach the gospel of a tax cut. What could be 
easier for a politician than to go to people and say, I want to reduce 
your taxes. There can't be anything more appealing.
  But we have a responsibility in the Congress to reflect on what the 
tax cut means and whether or not it is the right thing to do. In the 
Reagan years, when many yielded to the siren call for a tax cut, they 
created a deficit situation in this country which crippled our economy 
for more than 10 years. History tells the story. With the Reagan tax 
cut and with the increase in spending on military affairs and other 
things, America did not have enough money to meet its basic needs for 
Social Security, Medicare, education, transportation, for the things 
which people expect this Government to provide in a civilized society.

  As a result, we took the accumulated debt of America when President 
Reagan became President and saw it explode to the point where it is 
today of $5.7 trillion--$5.7 trillion in national debt, a national debt 
which requires us to collect in taxes $1 billion a day across America 
simply to pay the interest. That was a serious mistake. The bill we are 
considering today, unfortunately, could jeopardize our future just as 
much.
  This morning's Washington Post gave us information about the 
productivity over the last several months in America. The projected 
productivity we hoped for did not occur. In this time of slowdown, in 
this time bordering on recession, we have seen our economic activity 
and growth reduced in America.
  Many people who only 8 or 10 months ago were sure we were in 
prosperity and expansion were proven wrong. It was only 8 or 10 months 
ago when Alan Greenspan, the Chairman of the Federal Reserve, who is 
viewed as the wisest man in all of Christendom when it comes to our 
economy, guessed wrong. He was raising interest rates because he was 
afraid of inflation. Now Alan Greenspan is struggling and running as 
fast as he can to reduce interest rates. He was wrong.
  This bill on which we will be voting is based on the best guess of 
the economists for President Bush that we will have continued 
prosperity for the next 10 years--10 years. There is no economist who 
would wage their reputation on where we will be 10 months from now, let 
alone 10 years. It is based on pure speculation about anticipated 
surpluses, and that is a significant shortfall in the logic behind this 
tax cut.
  It is important we have a tax cut, but we should go carefully to make 
certain we do not go out too far or too big and jeopardize our economy. 
That is what is at stake.
  Most Americans will tell you: A tax cut is important to me; even more 
important to me is what is going to happen to the economy, how will my 
family do in just the next few years, how will small businesses do.
  We have seen an unparalleled period of economic prosperity over the 
last 8 or 9 years: 22 million new jobs in America, a recordbreaking 
number of small businesses created, record home ownership, the lowest 
inflation in decades,

[[Page S5771]]

welfare rolls coming down, crime rolls coming down, a clear indication 
we were on the right track. This bill puts it all at risk. This bill 
says we will give a tax cut to some in America and hope we are right 
that the money will be there over the next 10 years.
  I will give some illustration of what this bill does. The Senate tax 
bill gave 35 percent of all of the tax cut benefits to the top 1 
percent of taxpayers. What does that mean? A $44,000 tax break for 
people with incomes above $373,000 a year. I do not believe that was 
responsible. Quite honestly, if there is to be a tax cut, it should be 
a tax cut for all Americans, not heaped on the wealthiest in this 
country. But hold on. The new bill, this product of a conference 
report, does not make this tax cut any fairer.
  Under the conference agreement, the average tax cut for these same 
people making over $373,000 a year has increased by 23 percent. Instead 
of a $44,000 tax windfall for the highest 1 percent of taxpayers in 
America, it is now a $54,000 tax windfall for those with incomes in 
excess of $373,000.
  Some come to the floor and say: Wait a minute, the top 1 percent of 
taxpayers pay the most taxes; shouldn't they get the most when it comes 
to tax cuts. Those in the top 1 percent pay about 22 percent of Federal 
taxes. The Senate bill gives them 35 percent of the benefits of this 
tax cut. This conference agreement raised that share to 38 percent. 
They paid 22 percent of the taxes; they receive 38 percent of the 
benefits. There is no fairness here.
  I suggest that sending a $300 check to a taxpayer sometime this year 
as an indication of good will with this tax cut is cold comfort when 
one considers the wealthiest in this country will receive $54,000 a 
year in tax benefits under this proposal we are considering.
  Quite honestly, we should have a tax cut, but one that is fair. This 
is not fair.
  I also reflect on the fact that this tax cut does nothing to protect 
funding for Social Security and Medicare. The Senator from North 
Dakota, Mr. Conrad, is in the Chamber. He will speak in a moment. He 
has said to us repeatedly that in 10 years the baby boomers will show 
up for Social Security and Medicare. When they show up, we had better 
be prepared. We promised them those programs would be ready and funded, 
but there is absolutely no way to fund this tax bill without raiding 
the Social Security trust fund, as well as Medicare benefits. That is 
totally irresponsible. For us to offer $300 checks to people today and 
run the risk that 10 years from now, when they show up for Social 
Security or Medicare, it will not be adequately funded is totally 
irresponsible. This bill raids Social Security and Medicare, and for 
that reason alone it should be defeated.
  The final point I will make is this. This bill eliminates our ability 
to make necessary investments in the future of this country, the most 
important being education. All the speeches that have been given about 
bipartisan commitment to funding new education programs really 
disappear in a heartbeat when we vote to pass a tax cut which takes 
away the money that is absolutely essential for us to make sure that 
our kids in the 21st century are well prepared to lead the world.
  I encourage all of my colleagues to oppose this bill, to vote for a 
tax cut for American families that is fair, one that does not go too 
far and jeopardize our economy, Social Security, or Medicare.
  Mr. President, I yield the floor. Senator Schumer and Senator Gregg 
are seeking recognition.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, finally, finally, the American people are 
going to get some of their money back. The American people have been 
paying more money into the Federal Government than we need to operate 
the Government.
  Over the next 10 years, it is projected they are going to pay $5.6 
trillion into the Federal Government that we do not need. But the other 
side of the aisle does not want to give any of that money back. They do 
not want to let the American taxpayers keep some of their hard-earned 
money. No, they want to spend it. They have programs; they have ideas; 
they have initiatives; they have things on which they have to spend 
money.
  There are a lot of good things to spend money on as a government, but 
one of the best things we can spend money on as a government is the 
taxpayers, by allowing the taxpayers to keep some of their hard-earned 
income so they can make decisions with their dollars, so they can make 
the decisions as to whether or not they want to buy a new car, spend 
more money on their children's education, improve their home, or save 
their money.
  It is about time we return to the American people some of this 
surplus.
  I congratulate the President; I congratulate the chairman of this 
committee; I congratulate the ranking member of the committee, the 
Senator from Montana, who will soon be the chairman of the 
committee for pulling forward a bill which is to some extent 
bipartisan--although, obviously, not a majority on the other side 
support it--which returns to the American taxpayers their hard-earned 
income. Hallelujah, it is about time.

  Let's look at what this tax bill does. For people in the lowest 
rates, they get the highest percentage cut, from 15 percent down to 10 
percent. For people who don't even pay taxes today but have families 
and have issues with raising their children, they are going to receive 
a direct payment. Not an income tax refund, because they are not paying 
income taxes, but a direct payment to assist them in raising their 
children, a child tax credit.
  This is a bill which is directed at the middle-class Americans--
Americans who are working hard every day to make ends meet, some of 
them in a low enough tax bracket so they don't pay taxes but still they 
need assistance; Americans who know the dollars they are sending to the 
Federal Government, to some extent, are not needed down here anymore. 
They are not needed in Washington because Washington has this huge 
surplus. They are needed at home. Americans across this country need 
those dollars to manage their family budgets better.
  The representation was made on the other side of the aisle that we 
have this huge debt and we need to pay this debt off. Every projection 
we have says this debt will be paid off by, at a minimum, the year 
2011. The public debt of the Federal Government will be zero by the 
year 2011 and will probably be zero long before then. We will pay down 
more debt faster than at any time in this country's history while still 
cutting these taxes. Why? Because the surplus is so large. So this debt 
argument is a red herring.
  The argument has been made on the other side that we are not 
protecting Social Security with these funds. That is totally 
inaccurate. The fact is, the Social Security trust fund is running a 
$2.5 trillion surplus over this period. Not only can you protect the 
Social Security trust fund--and it is protected under this proposal--
but we are actually going to be in a position, as a result of those 
surpluses in the trust fund to, I hope later down the road, allow 
American citizens who are paying Social Security taxes to save those 
taxes and actually own the assets which they have in the Social 
Security trust fund through some sort of personal or individual savings 
account.
  The Social Security system is in a very healthy situation. It is 
getting stronger for the next few years. Regrettably, in the outyears, 
it has serious problems which need to be addressed. But this tax bill 
does not in any way negatively impact the surplus of the Social 
Security trust fund, nor does it impact the surplus of the Medicare 
trust fund.
  First off, there is not a surplus in the Medicare trust fund; there 
is only a surplus in Part A. Part B is running at a deficit. If they 
merge the two, they run a deficit overall. The fact is, money is in 
this account; it is there for the purposes of Medicare, and we are 
talking about a significant increase in Medicare funding so we can fund 
the prescription drug benefit.
  After we have done this--paid down the debt, protected the Social 
Security and Medicare trust funds, after we put in place preserving 
funds for prescription drugs--we still have a surplus at the Federal 
Government level because we are running so much more in revenues than 
we are in expenditures.
  What do some of my colleague on the other side of the aisle say? They 
do not

[[Page S5772]]

want to return the dollars to the American taxpayer but spend it and 
create more programs.

  This is not a debate as to whether or not the money is available. It 
is a debate about what we should do with the money. The President has 
set the correct course. He has said, when the Federal Government takes 
in more money than it needs to operate, after it has committed to 
protecting Social Security, Medicare, and paying down the debt 
completely, then those dollars should be returned to the American 
taxpayer because it is their money, not our money. That is the 
difference. We understand it is the taxpayers' money; it is not 
Washington's money.
  I congratulate the leadership of this committee in putting forward a 
balanced, fair, and appropriate bill, one which will give much needed 
relief to the taxpayers of this country who for too long have been 
asked to pay too much.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Crapo.). The Senator from Montana.
  Mr. BAUCUS. I yield 5 minutes to the Senator from New York.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. SCHUMER. I thank my friend, the soon-to-be chairman of the 
Committee on Finance, for yielding and for the work he has done.
  At the outset, let me say I will oppose this conference report out of 
strength of conviction. There are some good things in it. I think the 
child tax credit is good. I think tax relief, particularly for middle-
class people, is good. I am particularly proud of the tuition 
deductibility. While I have wished it would go further, there is $5,000 
of tuition relief, tuition deductibility. It is aimed at middle-class 
families.
  For far too long we have ignored middle-class families, not only in 
tax relief but in the biggest financial nut they face--if God gives 
them good health--and that is paying for tuition for the kids. To have 
that in there is really important.
  I salute the leaders of the bill. I will vote against it but with a 
little bit of sadness because that provision is in the bill, something 
for which I have worked long and hard. I salute my colleague from New 
Jersey, Mr. Torricelli, for working hard to get it included, as well. I 
thank him for that, as well as the other Senators who pushed hard for 
that legislation.
  I am opposing this bill for five reasons. First, it is filled with 
gimmicks. This is not tax policy--put a provision in, sunset it; put 
another provision in, sunset it. The most laughable provision is the 
estate tax. Under this new proposal that has come back to us, the only 
year in which you can die and have your estate free from tax is 2010. 
If you die in 2009, you pay an estate tax. If you die in 2011, you pay 
an estate tax. All those who are so strongly for repeal of this ought 
to hope that, if God is going to take them, he takes them only in 2010, 
because that is the only year that the estate tax is repealed. What 
kind of policy is that?

  In my city of New York, we have hundreds, probably thousands, of 
lawyers who are busy planning estates. Boy, are they going to be happy 
because they will have to plan estates aimed at an estate tax bill that 
goes up, that goes down, that goes up, that goes down. We do the same 
for many other provisions. The bill is filled with gimmicks. It is not 
tax policy. It is politics--to have to reach $1.35 trillion, no more, 
no less.
  The writers of this bill tied themselves in a knot like a pretzel. We 
cannot have a policy, even for tuition, that expires in 2006. We cannot 
have a policy that tells American parents, you might have your tuition 
deductible in 2005 or 2006 but not 2007.
  Second, the relief is disproportionate for well-to-do people. I do 
not believe in class warfare. I think people who work hard and earn 
money should, indeed, get relief. I voted for a capital gains cut 
because I would like to see the encouragement to channel that money 
into job creation, build a new business, invest in equity, invest in a 
bond.
  I hear on the other side we are talking about working families. I 
listen to the speeches; I listen to the speeches in the House. Tell the 
truth: Working families get small relief. The most well-to-do in 
America get large relief.
  It is said they pay the taxes. Yes, they pay more of the income 
taxes, but if you add in payroll taxes, if you add in sales taxes, the 
people making $50,000 pay about the same percentage of taxes as the 
people making $500,000. So why is the relief so disproportionately 
directed at the high end?
  This bill is befuddling and confounding in that way. Let us assume 
you believe Government has too much money. Let us assume and believe 
you think we should send it back. Why do we send so much of it back to 
the highest end when, if you look at their total Federal tax bill, it 
is working people who pay as high a proportion as high-end people. We 
are not even doing it in a way to encourage investment and savings. 
That is the second reason I am against the bill.
  Third, needed programs. Perhaps the greatest hypocrisy in this budget 
we have passed is this: Our President says he is the education 
President as he is going around the country. When the good Senator from 
Vermont became an Independent, he said: That is not true. I am fighting 
for education. Yet his budget has no money for education.
  The President last week gave an energy speech and he, again, cut all 
tax credits for energy.
  I yield my time because I know we have important business to do. I 
ask when we resume business I could be given 3 minutes to finish up my 
speech.
  The PRESIDING OFFICER (Mr. Allen). Is there objection? Without 
objection, it is so ordered. The Senator from New York will reserve 3 
minutes when the time comes. The Senator from Idaho.
  Mr. CRAPO. Mr. President, I ask unanimous consent the time between 
now and when we vote be divided for debate as follows: Mr. Baucus, 5 
minutes; Mr. Kennedy, 5 minutes; Mr. Dodd, 5 minutes; Mr. Conrad, 10 
minutes; Mr. Grassley, 5 minutes.
  I further ask consent that at the expiration of this time the Senate 
proceed to a vote on the adoption of the conference report with no 
intervening action or debate.
  The PRESIDING OFFICER. Is there objection?
  Mr. CORZINE. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. CORZINE. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Idaho has the floor. The 
Senator from New Jersey cannot suggest the absence of a quorum. He may 
state his objection.
  Mr. CORZINE. I withdraw the objection.
  The PRESIDING OFFICER. Is there objection to the request? Without 
objection, it is so ordered.
  The Senator from Montana, Mr. Baucus.
  Mr. BAUCUS. Mr. President, I will yield myself a very short period of 
time because there is a Senator who very desperately needs to vote 
quickly and get home. In deference to him, I will speak briefly.
  The British statesman Benjamin Disraeli said that, ``in politics, a 
week is a long time.''
  The past week or so is a good example.
  On the tax bill, we have gone from a handshake deal, through a day-
long markup in the Finance Committee, through 43 votes on the Senate 
floor, and then through a brief but difficult conference that, more 
than once, veered close to a breakdown.
  It is almost always difficult to reconcile two different bills in 
conference. That was the case here. The stakes were high, time was 
short, and some of the differences were profound.
  But I am delighted to join our chairman, Senator Grassley, in 
announcing that we have a conference agreement that embodies a solid, 
balanced, bipartisan compromise.
  Let me describe the key elements of the compromise.
  The centerpiece of the Senate bill was the immediate creation of a 10 
percent rate, to cover the first $12,000 of taxable income. This 
benefits low and middle income taxpayers the most.
  And it provides a boost to the economy.
  The conference report adopts this provision lock, stock, and barrel.
  Another key element of the Senate bill was the set of provisions 
geared to low and middle income families. Here, again, we did well.

[[Page S5773]]

  The conference report expands, and simplifies, the earned income tax 
credit. And it incorporates the Senate proposal to make the child 
credit refundable.
  Putting the 10-percent rate, the EITC, and the child credit 
provisions together, we have, to my mind, written one of the best tax 
bills ever for middle income working families.
  That's an accomplishment we all can be proud of.
  On top of that, the Senate bill included new incentives for 
retirement savings and for education, and the conference report 
includes a large measure of each.
  Let me step back for a minute, and describe why, to my mind, this 
bill represents a balanced package.
  In the first place, everybody who pays income taxes will get a tax 
cut. The government has a surplus. We can afford to give some of it 
back. That's good news, not bad.
  The President deserves credit for making this point.
  But his proposal fell short, in one critical respect.
  The President's proposal was aimed primarily at society's winners. 
People in the top tax brackets. People with large estates.
  We should not begrudge these people their success.
  But, at the same time, we should not stop there. In writing a bill of 
this scope, we have an unique opportunity to reach out. To lend a hand, 
and give an incentive, to families that are working hard, raising kids, 
and dreaming dreams.
  The Senate bill did that. And so does this conference report.
  As I have explained, we cut taxes for working families.
  We create new incentives for education, like the new deduction for 
college tuition.
  We create new incentives to save for retirement, through IRAs, 
401(k)s, and the new low income matching program.
  These are important provisions that create new opportunities.
  And there is more. For example, thanks to Senator Landrieu, we expand 
the tax credit for adoption.
  Thanks to Senator Kohl, we create a new tax credit to encourage 
employers to provide child care for their employees.
  All told, the conference report contains dozens of positive 
provisions.
  Does the conference report have flaws? Sure.
  As the debate has gone on, I have taken heed of the warnings of 
Senator Conrad, who fears that the tax cut may use up too much of the 
surplus.
  I hope he's wrong. But I agree that we must watch the budget closely, 
and make corrections if necessary.
  There are other flaws. For example, I don't think we should have cut 
the top rates so steeply. I don't think we should completely repeal the 
estate tax. I wish we could have made the R&D tax credit permanent.
  But, putting all of the provisions together, I believe that this is a 
good compromise that deserves broad bipartisan support.
  At this point, let me say a few things about the bill's impact on my 
state of Montana.
  From the very beginning, the impact of the tax cut on Montana has 
been something of a paradox.
  On one hand, Montanans are rugged individualists. We do not like 
regulations and we do not like taxes.
  On the other hand, Montana's economy is hurting. Incomes are low. A 
tax cut like the one proposed by the President, that was aimed 
primarily at high-income folks would not help us very much.
  In fact, under the President's proposal, Montana would have received 
less of a tax cut, per capita, than any other state in the nation.
  Fortunately, the conference committee has produced a bill that, for 
Montana, improves dramatically on the President's proposal.
  We cut taxes, across the board. But we pay special attention to 
working families.
  As a result, the conference report will give Montanans a tax cut that 
is, on average, 15 percent higher than under the President's proposal.
  And we will cover almost 70,000 more Montana children, under the 
child credit, than the President's proposal--70,000.
  Just as important, the conference report retains key incentives for 
education, which is at the very heart of our work to generate new jobs 
for the new economy.
  And it creates new incentives to help small businesses set money 
aside for their employees retirement.
  These incentives will help with the most important task in Montana, 
economic development.
  All in all, you might say that this is a tax cut that was made in 
Montana.
  Pulling it all together, this bill is good for working families. It 
is good for education. It is good for the economy. It is good for 
Montana.
  This legislation is good for the country, it is good for America. It 
is much better than the legislation we would otherwise have before us.
  I worked with Senator Grassley, the chairman of the committee, to 
produce a Finance Committee bill which has provisions that are much 
better from a Democrat's perspective than we would otherwise be faced 
with on the floor. I worked with Chairman Thomas, chairman of the House 
Ways and Means Committee, and produced a conference report that is much 
better than what we would otherwise be voting on on the Senate floor 
from the point of view of most Democrats. This is a much better bill.
  This conference report is much less backloaded--less backloaded by a 
third compared with the House-passed bill. It is, in terms of the 
frontloading/backloading, the same as the Finance Committee-passed 
bill.
  It retains the child credit refundability provisions so important to 
so many people, particularly the children in our country who otherwise 
do not get benefits. This proposal was championed by Senator Snowe, 
Senator John Kerry, and many others. We are proud to have that 
provision in the bill.
  It also very much helps the distribution of this bill toward middle- 
and low-income Americans. Every American gets a tax cut from this bill. 
The most wealthy get a greater tax cut because they pay the most taxes. 
But I might say middle-income Americans also get a very significant tax 
cut. In fact, they receive proportionately more than current law. The 
only exceptions to this proportionality are the estate tax provisions 
and, of course, many Senators favor those estate tax provisions whether 
they oppose the rest of the bill or not.
  All in all, this is a bill which is fair. Its provisions are for the 
country.
  In the education section, for example, Senator Torricelli's provision 
is excellent. Senator Mary Landrieu's adoption tax credit is an 
excellent provision as well. The pension provisions, which are very 
important to both sides, are in this bill. There is modest--not much 
but a modest alternative minimum tax cut provision. We, obviously, have 
to address that situation, and we will in the future.
  The conferees worked off the Senate bill, not the House bill. This 
explains why we have all the provisions in the Senate bill that were 
not in the House bill.
  On upper rates, we moved about halfway toward the House, but, 
frankly, the House moved more than halfway toward the Senate on upper 
rates. We create a 10-percent bracket retroactive to the first of this 
year.
  One final point I would like to make. Some may complain that this 
bill is more expensive than the $1.35 trillion allowed in the budget 
resolution. Their complaint is that the bill sunsets at the end of 2010 
rather than September 30, 2011.
  A point of order would lie against this conference report had we not 
moved the sunset date. As it is before us, all of the tax provisions in 
this bill terminate in 10 years, which means any estimates of cost over 
the subsequent 10 years are meaningless. There is no cost from this 
bill beyond 2011 because of the sunset. The change in the sunset date 
was necessary because of Senate rules. It also helped us make sure we 
have the provisions that we care about: education, child tax credit 
refundability, 10 percent rate; widening the bracket of 15 percent, and 
others.
  I see my time is expiring. I urge Senators to remember, perfection 
should not be the enemy of the good. Nothing is perfect, even this 
bill, but it is a good bill.
  I yield to whomever next seeks time.

[[Page S5774]]

                  CONGRESSIONAL BUDGET ACT COMPLIANCE

  Mr. DOMENICI. Mr. President, pursuant to section 313(c) of the 
Congressional Budget Act of 1974, I submit for the Record a list of 
material in the conference agreement on H.R. 1836 considered to be 
extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of 
section 313. The inclusion or exclusion of material on the following 
list does not constitute a determination of extraneousness by the 
Presiding Officer of the Senate.
  To the best of my knowledge, H.R. 1836, the Economic Growth and Tax 
Relief Reconciliation Act of 2001, contains no material considered to 
be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of 
section 313 of the Congressional Budget Act of 1974.


  submitting changes to committee allocations, functional levels, and 
                          budgetary aggregates

  Mr. DOMENICI. Mr. President, section 310(c)(2) of the Congressional 
Budget Act, as amended, provides the chairman of the Senate Budget 
Committee with authority to revise committee allocations, functional 
levels, and budgetary aggregates for a reconciliation conference report 
which fulfills an instruction with respect to both outlays and 
revenues. The chairman's authority under 310(c) may be exercised if the 
following conditions have been satisfied:
  1. The conferees report a bill which changes the mix of the 
instructed revenue and outlay changes by not more than 20 percent of 
the sum of the components of the instruction, and,
  2. The conference agreement still complies with the overall 
reconciliation instruction.
  I find that the conference report on H.R. 1836 satisfies the two 
conditions above and pursuant to my authority under section 310(c), I 
hereby submit revisions to H. Con. Res. 83, the 2002 budget resolution. 
The attached tables show the current 2002 budget resolution figures as 
well as the revised committee allocations, functional levels, and 
budgetary aggregates.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

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  Ms. CANTWELL. Mr. President, I support efforts to provide hard-
working Washingtonians and all Americans with tax relief such as 
eliminating the marriage penalty, making college tuition tax 
deductible, providing estate tax relief, and assisting workers in 
saving for their retirement.
  That's why I voted for the amendment offered by Senator Daschle that 
would have provided roughly $900 billion in tax relief, including 
immediate $300 refund checks for all American taxpayers, given all 
income taxpayers a tax cut by creating a new ten percent income tax 
bracket, provided marriage penalty relief right away, as opposed to 
years from now as in the conference report, wiped out the estate tax 
for the vast majority of taxable estates, established a permanent 
research and development tax credit to stimulate research and 
innovation, provided a deduction for college tuition, enhanced 
incentives for retirement savings, and created a package of energy 
conservation and efficiency tax incentives, among other important 
provisions. This amendment also made sure that Social Security and 
Medicare are protected and reserved sufficient funds to enact a 
Medicare prescription drug benefit.
  Unfortunately, that amendment failed and instead the Senate today 
considered, and passed, a $1.5 trillion tax cut. When you take away all 
the gimmicks, some estimate $1.9 trillion. This cost explodes to over 
$2 trillion when you add interest costs and exceeds $4.3 trillion in 
its second ten years. I believe that the bill we have passed today is 
short-sighted and fiscally irresponsible. Comprehensive tax relief must 
be measured against the need to maintain fiscal discipline, and 
stimulate economic growth through continued federal investment in 
education and job training, as well as giving relief to citizens in 
times of surplus. The conference report passed today fails this test.
  The tax cut is based on the promise of budget projections for the 
next ten years--projections that are notoriously inaccurate. Ten years 
is just about the worst planning horizon possible--too long for 
accuracy, too short for completeness. Moreover, these tax cuts are 
premised on a surplus that may or may not appear. Budget projections 
are notoriously inaccurate and, therefore, highly likely to be wrong, 
especially when projected out ten years. Indeed, the nonpartisan 
Congressional Budget Office says its surplus estimate for 2001 could be 
off in one direction or the other by $52 billion. By 2006, this figure 
could be off by $412 billion. It is very likely that we will only be 
able to afford this tax cut by raiding the Social Security and Medicare 
trust funds.
  We need to invest in our nation's economic future by making a 
commitment to research and development to maintain our status as a 
global leader. Even though the Senate included a permanent extension of 
the research and development tax credit in its version of the bill, 
that provision was dropped in conference. That was a mistake. We need 
to do more, not less, in these times of economic uncertainty to 
stimulate investment and spur our economy forward.
  The country is at a critical juncture in setting our fiscal 
priorities: our choices are maintaining our fiscal discipline and 
investing in the nation's future education and health care needs, or 
cutting the very services used daily by our citizens. I am afraid that 
today we have gone down the wrong path. Our approach should be more 
balanced. We should provide tax relief to all Americans but retain our 
ability to invest in our citizens education and pay down the debt. This 
will best help continue and enhance our long-term economic strength.
  Mr. NELSON of Florida. Mr. President, I rise in opposition to the 
conference report to H.R. 1836, the reconciliation tax legislation. I 
strongly support paying down our national debt. I support fair tax 
cuts, marriage penalty relief, and estate tax repeal. I voted for a 
substitute for a $900 billion tax cut, and another substitute which 
provided for a $1.2 trillion tax cut.
  But this bill does not meet my criteria that the Social Security and 
Medicare trust funds will not be touched now or in the future. Because 
of the fiscally irresponsible way the bill was drafted, with gimmicks 
like changing the beginning and ending dates of key tax provisions, 
this bill is flawed public policy that will in fact cost our country 
much more than the $1.35 trillion allowed by the budget resolution.
  As a fiscal conservative, I cannot in conscience, nor in substance, 
vote for this bill. This legislation is the height of fiscal 
irresponsibility.
  In order to make the tax cut fit into the limits of $1.35 trillion 
over 10 years imposed by the budget resolution, this bill suspends the 
tax cuts in the ninth year, reverting to the status quo of current law 
with no tax cuts in the tenth year. This is fiscal deception at its 
worst.
  If the tax cut is extended in the tenth year by future Congresses, as 
expected, the cost then becomes $1.53 trillion over 10 years, which 
breaks the budget agreement, and therefore, throws us into fiscal 
chaos.
  This legislation greatly increases the likelihood that the Federal 
Government will use up all of the projected surplus and there will not 
be any left over to pay down the national debt without raiding the 
Medicare and Social Security trust funds. That would be tragic.
  And if there are additional investments needed over the next decade, 
as there certainly will be, such as for education, the environment, 
health care, and national defense, then the federal budget will be 
written in the red ink of deficit spending.
  In other words, we would be spending more than we have coming in, and 
therefore, increasing the national debt.
  I will not take such a risky course with our economy, and I must 
express myself in the strongest possible terms.
  Mr. CORZINE. Mr. President, I rise in strong opposition to this 
conference report.
  I have been in the Senate for 143 days, and I have felt honored to 
serve with senators from both sides of the aisle. Today, however, we 
vote on a conference report that fails the tests of intellectual 
honesty, fairness, and fiscal responsibility.
  The conference report is not intellectually honest. It cynically 
includes a variety of provisions designed to hide its true costs. Some 
provisions are not effective for several years. Some are sunsetted 
after a few years. And all are eliminated after 9 years. In addition, 
the conference report fails to extend the research and development tax 
credit, it fails to extend many of the other expiring provisions that 
we know will be extended, and it fails to provide relief from the 
alternative minimum tax that we all know will be necessary. These are 
nothing more than deceptive inventions to shoehorn tax provisions that 
far exceed $1.35 trillion, the limit agreed to in the in the budget 
resolution. These deceptions are intended to divert the American people 
from the real costs of the legislation. Ultimately, they will only 
reinforce the public's cynicism about politics.
  The conference report also is fundamentally unfair. It would provide 
tax benefits averaging more than $50,000 for the top one percent, whose 
average incomes well exceed one million dollars. Meanwhile, the 
overwhelming majority of ordinary taxpayers, 72 million of whom are in 
the 15 percent tax bracket, will receive no marginal rate relief at 
all. That is not fair, and it is not right.
  As a matter of fairness, how can the top one percent of taxpayers, 
who pay 22 percent of federal taxes, receive 38 percent of this 
legislation's benefits? Where is the tax relief for those working 
Americans who carry the heavy burden of payroll taxes, sales taxes and 
property taxes?
  Finally, Mr. President, this conference report is fiscally 
irresponsible. In fact, this tax bill returns America to a dangerous 
formula for fiscal affairs which runs the risk of promoting financial 
instability as this legislation unfolds. We surely jeopardize the 
financial stability of Social Security and Medicare by limiting federal 
revenues which could be used to shore them up for the impending 
retirement of the baby boomers, and to provide a prescription drug 
benefit for seniors today.
  But maybe the most important financial consideration is the 180 
degree turn from our recent commitment to fiscal responsibility and the 
reduction of our public debt. The return to fiscal irresponsibility in 
the 1990's led to the

[[Page S5784]]

greatest expansion we have enjoyed since World War Two. We have 
experienced thriving entrepreneurship and productivity gains. 22 
million jobs have been created. Two million businesses were 
established. And we have enjoyed the longest period of low inflation in 
decades. All of this is now at risk.
  Once global financial markets--currency, debt, and equity--begin to 
fully understand the long-term implications for fiscal discipline, I 
fear in the intermediate or long-term we will have instability in these 
markets. That instability potentially will limit investment due to 
rising interest rates, a depreciating dollar and lower equity 
valuations. It may take some time for the full impact of this tax 
package's implications to be understood, but I believe the analysis 
will come and the problems will occur.
  We all support a legitimately sized and directed tax cut. It is 
unfortunate that we have chosen this tax cut, which limits our ability 
to secure Social Security and Medicare for the long-term, which will 
make it impossible to pay off our national debt, and limit our ability 
to deal with important domestic and defense priorities we all say we 
support.
  I hope that my colleagues will reflect on the concerns I have 
outlined with respect to intellectual honesty, fairness and financial 
stability, and vote no on the conference report.
  Mr. CRAIG. Mr. President, I rise in support of the Conference Report 
for H.R. 1836, the Economic Growth and Tax Relief Reconciliation Act of 
2001.
  I commend the leadership and hard work of the chairman and ranking 
member of the Finance Committee, as well as the many colleagues who 
have actively helped shape this bill. This bill is a true 
accomplishment, and a truly bipartisan one at that.
  As an adoptive parent, myself, I especially want to comment on one 
section: Section 202, for the extension, expansion, and improvement of 
the adoption tax credit and adoption assistance programs.
  I am happy to note that this section is virtually identical to the 
Senate floor amendment proposed by the Senator from Louisiana, Ms. 
Landrieu, and myself. This is a perfect example of a bipartisan effort 
that will accomplish much good for so many people in need.
  The adoption provisions include the following:
  Extending the regular adoption tax credit, and the exclusion from 
income for adoption assistance programs, making them permanent, like 
the currently-permanent special needs adoption tax credit; Increasing 
both the tax credit and the income exclusion to $10,000; For families 
adopting special needs children, de-linking the special needs credit 
from cumbersome and inflexible IRS regulations that currently exclude a 
wide range of legitimate adoption expenses related to these children; 
Protecting the benefit of the adoption tax credit by allowing the 
credit against the alternative minimum tax, permanently; and Making 
both the adoption credit and exclusion for assistance available to more 
families--and more children needing adoption--by lifting the cap on 
income eligibility to $150,000.
  It is not possible to overstate the importance of these provision to 
the many families and many children who have hoped to build an adoptive 
family, but have found so many barriers to doing so. In agreeing to 
include these provisions in this conference report, the Congress has 
taken a giant pro-adoption and pro-family step forward. More children 
will have loving and permanent homes. I thank my colleagues for that.
  Overall, this bill signals a great day in America. The Congress has 
delivered the tax relief the American people voted for when they put 
George Bush in the White House, and elected this Congress.
  There has never been a more important time to reduce the tax burden--
right now Americans are more heavily taxed than at any time in history 
and pay more in taxes than they spend on food, clothing, and housing 
combined.
  This tax relief agreed upon today is a quality example of how 
Republicans and Democrats can work together to get the job done for the 
American taxpayer.
  This bill means relief for every American who pays taxes. Compared 
with their current tax burdens, this bill provides the most relief to 
modest--and middle-income families. It is good for small businesses and 
jobs, and it will help jump-start the economy at a critical time. This 
bill means hardworking Americans and their families will have a little 
more freedom, and the Federal Government a little less control over 
their lives.
  I commend my colleagues for passing this bill, and I applaud our 
President for having the vision and tenacity to initiate this tax 
relief and see it through to becoming law.
  Mrs. FEINSTEIN. Mr. President, I rise today in support of the 
reconciliation conference report currently pending before the Senate.
  I do so for a simply reason: I strongly believe that when the 
Government is in position to be able to return money to the American 
taxpayers, we should.
  Likewise, I believe that when times are tough the Government has an 
obligation to consider increasing taxes to meet the need of the Nation. 
This is what we did in 1993, when I first came to the Senate and we 
were facing mounting deficits and an increasing national debt.
  And today, thanks to those hard choices, the budget is in balance and 
we have surplus projections for the next decade. We are in a position 
to return some of the hard-earned money of the American people.
  This approach to taxes--that the Government taxes when it must, and 
decreases taxes when it can--is the approach that I took when I was 
mayor of San Francisco, and it is the approach that I continue to 
follow to this day.
  Additionally, I believe that this tax package is important to my 
State, California, which today stands on the precipice of a major 
economic slowdown.
  California is the largest taxpaying State in the Nation, with some 13 
million income taxpayers. In fact, California is a net contributor to 
the federal budget, giving more in taxes than we receive in benefits.
  Today, as many of my colleagues are aware, a serious and acute energy 
crisis is causing businesses in California to shut down, and people to 
be laid off of work.
  Already this year it is estimated that between $25 and $30 billion 
have been taken out of the California economy to be spent on increased 
energy costs. If things continue on the same course this figure will 
mushroom in the months ahead. This is a major problem, and one whose 
impact will not just be limited to California.
  In my judgment the benefits provided under this tax package are 
important, at this time, to help California and Californians face the 
economic challenges created by this energy crisis. For example, the 
creation of the new 10-percent income tax bracket, for example, will 
result in an annual tax cut of $300 for an individual, $600 for a 
couple for all California income taxpayers. This new 10-percent bracket 
is retroactive, and for people seeing their energy bills spiral up and 
up, receiving these refunds checks will be a big relief.
  Likewise, this conference report has accelerated the tax relief in 
the upper tax brackets, so that middle class families in the 28-percent 
and 31-percent brackets will see their tax bills decrease in 2001 and 
2002, with the lower withholding rates going into effect this July, 
just as the energy crisis in California is projected to reach a new 
plateau.
  And the child credit provisions, refundable as per the Senate-passed 
bill, will provide much-needed assistance to California families 
earning as little as $10,000--and there are 1.5 million households in 
California that make between $10,000 and $20,000.
  As I discussed on the floor earlier this week, I also believe that 
other provisions of this bill--providing marriage penalty relief, 
estate tax relief, providing pension and education incentives, and 
making a down payment in addressing the alternative minimum tax 
problem--are likewise important to assure the continued long-term 
economic health of the California economy, and will benefit many hard-
working American families.
  I would not argue that this is the perfect bill. Nor would I claim 
that it is the exact bill that I would have drafted.
  Some of my colleagues, for example, have raised concerns that the 
size of this tax package may threaten to undermine future fiscal 
stability. I share these concerns. But I would remind my colleagues 
that although this bill may be larger than some on our side 
contemplated at the beginning of the year,

[[Page S5785]]

it is also far smaller than the proposal put forward by the President. 
And I would also remind them that this bill contains ``sunset'' 
provisions--critical to my decision to support this legislation--which 
will allow us to revisit the components of this bill in the future, and 
make adjustments if and as need be.
  The bottom line is that I believe that this is a bill that will 
provide significant relief to the people of California and the people 
of the United States. I urge my colleagues to join me in support.
  Mr. BINGAMAN. Mr. President, I rise to note that on today's vote on 
the tax reconciliation bill conference report, I will be pairing with 
my colleague, Senator Domenici. My position on this tax bill is well 
known, as is Senator Domenici's. Were I actually casting a vote, it 
would be a ``no'' vote, just as it has been in the Finance Committee 
and on the Senate floor previously. I have grave concerns about this 
bill and its implications for our future budgets, and its implications 
for New Mexico, and I remain opposed to the substance of this 
conference report.
  Since he had important commitments in New Mexico during the past 48 
hours, Senator Domenici is unable to be here for today's vote, and he 
has made a personal request that I pair with him. As a courtesy to my 
colleague. I have agreed to do so, and would ask Senate records to 
reflect my position on this bill as a ``no'' vote.
  (At the request of Mr. Daschle, the following statement was ordered 
to be printed in the Record.)
 Mrs. BOXER. Mr. President, just as I voted no on the Senate 
version of this tax bill because it was fiscally irresponsible, raided 
Social Security and Medicare, and would force cuts in investments in 
working Americans, including education, so too do I oppose this 
conference report. It is even worse, and if I were able to be present 
for the vote, I would vote no.
  The top marginal tax rate--that for the wealthiest of Americans--is 
reduced even more than in the Senate bill. Instead of dropping to 36 
percent, it drops to 35 percent. And with other changes in the bill, 
the administration is claiming that the top rate has been effectively 
reduced to 33 percent.
  The refundability of the child tax credit--a key to helping children 
in low-income families--has been changed. By indexing the eligibility 
threshold, it will leave children behind.
  And I continue to oppose the repeal of the estate tax. This 
overwhelmingly benefits the wealthiest Americans. Only 2 percent of 
Americans are subject to the estate tax.
  All of this means, that the richest 1 percent of Americans, earning 
an annual average salary of over $1.1 million, will, according to The 
Washington Post, receive about 40 percent of the tax cut. That is 
unfair.
  Finally, this tax bill plays a game with our fiscal future. To meet 
the target of $1.35 trillion of tax cuts over the next 10 years, all of 
the tax cuts in this bill expire in nine years. Why? Because if they 
were in effect 10 years from now, the cost of this bill would be 
astronomical, and it would be very clear to the American people that 
this tax bill is nothing but a riverboat gamble with our children's 
future.
  Mr. LIEBERMAN. Mr. President, I am deeply disappointed with the tax 
bill that we are voting on today. As I have expressed for some months 
now, I believe that we can afford a significant and responsible tax cut 
and I would very much like to vote for one. However, the bill that we 
are considering today has come back to us from the conference committee 
as an even more irresponsible piece of legislation than the already 
bloated and gimmicky bill that we passed out of the Senate earlier this 
week. With a wink and a nod, this legislation backloads and sunsets 
provisions in order to squeeze a tax cut of at least $1.7 trillion into 
a reconciliation package requiring a much smaller $1.35 trillion tax 
cut. Even more alarming, because so many provisions of this bill are 
heavily backloaded, the full cost can really be seen only by examining 
the cost in the second 10 years, from 2012 to 2021. This is the first 
period in which all of the measures in the bill would be fully 
effective. This bill would cost more than $4 trillion during its second 
ten years.
  This tax cut squanders the hard-earned prosperity that our country 
has built over the last several years of historic economic growth. It 
returns us to the fiscal nightmare of the 1980s. This huge tax cut will 
bust the budget, resurrect the deep deficits of the past, and drive our 
economy into a ditch. For these reasons I will vote against this bill 
and urge my colleagues to do so as well.
  Ms. SNOWE. Mr. President, I rise in support of the bipartisan 
conference report on the fiscal year 2002 tax cut reconciliation 
package that provides much needed tax relief for the American people, 
including a provision that I and Senator Lincoln and others fought to 
retain: a new refundable per child tax credit for low-income, working 
families.
  I first want to thank and commend Chairman Grassley and Ranking 
Member Baucus for working so closely together to develop a fair and 
balanced tax bill that passed the Senate by a vote of 62 to 38 last 
week--and for fighting to retain the structure and focus of that 
package so effectively in the ensuing House-Senate conference. Because 
of their efforts--and the manner in which they so successfully defended 
the Senate's position--I believe the conference report we are now 
considering deserves at least the same level of bipartisan support as 
the original Senate bill, and urge its adoption.
  No package could truly be said to produce fairness without including 
a refundable child tax credit. That's why, as part of the original 
Senate package, I worked with Senators Lincoln, Kerry and Breaux--as 
well as both the Chairman and Ranking Member--to include a provision 
that builds on the President's proposal to double the $500 per child 
tax credit by making it refundable to those earning $10,000 or more, 
retroactive to the beginning of this year. That's why I offered an 
amendment last week that called for the retention of this provision in 
the House-Senate conference--an amendment that was adopted by a vote of 
94 to 4. And that's why, during the conference, I continued to fight to 
retain this provision in the face of strong resistence by detractors.
  Through these efforts--and because of the unyielding support of 
Chairman Grassley and Ranking Member Baucus--families earning the 
minimum wage will be able to receive a refundable per child tax credit 
for the first time. Let there be no mistake, this is introducing a 
wholly new concept with respect to that child tax credit, and one that 
is most assuredly warranted.
  How will this help? In its original form, the tax relief plan would 
not have reached all full-time workers--the tax reduction would have 
disappeared for wage-earners with net incomes of less than about 
$22,000. Indeed, without refundability, there are almost 16 million 
children whose families would not benefit from the doubling of the 
Child Tax Credit. To give an idea of how many children we're really 
talking about, that's about twice the population of New York City or 
about thirteen times the entire population of my home State of Maine.
  Thanks to this provision, the bill now provides a substantial tax 
credit to a total of 37 million families and 55 million children 
nationwide who might otherwise have gained no benefit from the proposal 
to simply double the per-child credit.
  Many of these are families earning minimum wage, struggling to make 
ends meet in addition to paying their share of State and local taxes, 
payroll taxes, gasoline taxes, phone taxes, sales taxes, and property 
taxes. All told, the average full-time worker earning the minimum wage 
pays more than $1,530 in payroll taxes, and more than $300 in federal 
excise taxes.
  This is no small burden to working families already living on the 
fiscal edge. In fact, despite America's strong economy, one in six 
children live in poverty, and the number of low-income children living 
with a working parent continues to climb. My provision to make the 
child tax credit refundable will give these families a hand up as they 
strive for self-sufficiency, and give these kids the hope of a 
childhood without poverty.
  When fully phased-in, the partially refundable credit will provide a 
benefit of up to 15 cents on every dollar earned above $10,000 per 
year, adjusted for inflation. Likewise, the maximum refundable credit 
will rise from $500 to $600 this year, increasing to $1,000 by

[[Page S5786]]

2011. Families with more than one child would also receive a refundable 
credit based on their income.
  Will this tax relief solve all the financial problems faced by 
eligible families? No. But it will help to purchase essentials, like 
groceries, heating fuel, or electricity. And it sends an important 
message of encouragement that we want those who work hard and strive to 
improve their lives to succeed. Refundability shows that tax relief is 
for all full-time working families.
  With these kinds of adjustments, we take a critical first step in 
ensuring that the balance of this package in its totality will help 
lower and middle income taxpayers.
  The fact of the matter is that the case for tax cuts has never been 
more compelling. As a percent of GDP, federal taxes are at their 
highest level, 20.6 percent, since 1944--and all previous record levels 
occurred during time of war or during the devastating recession of the 
early-1980s, when interest rates exceeded 20 percent and the highest 
marginal tax rate was 70 percent.
  The fact of the matter is, it would be irresponsible not to return a 
reasonable portion of the surplus--which is really just an overpayment 
in the form of taxes--to the American taxpayer. And there should be no 
mistake--if we fail to enact meaningful relief package, we will fail 
both working families and the economy upon which their work depends.
  And let us not forget that this package is nearly 25 percent smaller 
than was proposed by President Bush in his budget. Let us not forget 
that it will utilize less than one-half of the projected surplus over 
the coming 10 years, 45.7 percent, excluding both Social Security and 
Medicare surpluses.
  In fact, even with a $1.25 trillion tax cut over the coming ten 
years, we will still have about $1.5 trillion available for other 
priorities, including the funding of a new prescription drug benefit 
and additional debt reduction. This package is neither unreasonable nor 
irresponsible.
  Just as importantly, many of us fought hard to ensure that the 
benefits of this tax cut package will be weighted toward those who need 
relief the most--middle and lower-income taxpayers--and that weighting 
has been retained.
  We have before us a thoughtful proposal that addresses concerns I, 
myself, had with the distributional effects of the original package. 
And it does so in a variety of meaningful ways--retroactively creating 
a new ``ten percent'' bracket, providing much-needed AMT relief for 
middle-income families, and ensuring marriage penalty relief for all 
couples while bolstering the Earned Income Tax Credit.
  And that's not all. The bipartisan education package that the Finance 
Committee reported in March is included in this bill, along with a new 
deduction of up to $4,000 for higher education tuition paid--a 
provision that I sought along with Senators Torricelli and Schumer. 
With the cost of college quadrupling over the past 20 years--a rate 
nearly twice as fast as inflation--this provision will provide critical 
assistance to individuals and families grappling with higher education 
costs.

  It also includes the bipartisan IRA and pension package--introduced 
separately by Senators Grassley and Baucus that will not only 
strengthen and improve access to pensions and IRA's, but also enhance 
fairness for women who frequently leave the workforce during prime 
earnings years, and suffer from reduced retirement savings accordingly.
  Again, this is a balanced and fair package. In looking at the various 
analyses of the changes we made to the package, the Joint Tax Committee 
estimates that those earning less than $50,000 will see their share of 
federal taxes drop from 14.3 percent under current law to 14 percent in 
2006. Conversely, in the same year, the share of federal taxes paid by 
those with incomes of $100,000 or more will increase from 58.4 percent 
to 58.7 percent.
  Moreover, as a result of the refundability of the child tax credit, 
according to Joint Tax, those in the $10,000 to $20,000 income range 
will see their share of federal taxes reduced from 1.5 percent to 1.4 
percent--a reduction of $3 billion. And by 2006, this level is down to 
1.1 percent.
  And in terms of the overall package, it is worth noting that creation 
of the new 10 pecent bracket accounts for $421 billion, while 
reductions in all other brackets amount to $420 billion--that's 50 
percent of the cuts going to the lowest bracket alone.
  As for the compromise we developed that results in a reduction of the 
uppermost bracket from 39.6 to 35 percent, it's worth noting that many 
individuals in that bracket are small business owners whose business-
related income is taxed as personal income.
  According to the Treasury Department, in 2006, 63 percent of the tax 
returns that would benefit from reducing marginal rates in the top two 
brackets would be reporting some income or loss from a business. And in 
my home State of Maine, for example, about 97 percent of all businesses 
are small business.
  The reality is, small businesses have played a central role in our 
Nation's economic expansion. From 1992 to 1996, for example, small 
firms created 75 percent of new jobs--up 10.5 percent--while large-
company employment grew by 3.7 percent. So why--when we're talking 
about such a tremendous impact on individuals and the economy--when the 
top corporate tax rate is 35 percent--why should we continue making 
small business men and women pay more?
  And let's face it, the economic impact of this tax cut cannot be 
dismissed. In fact, given the warning signs in our economy, I believe 
the timing of this tax package is fortuitous. One Business Week article 
spoke of a terrible first quarter, stating that ``The earnings of the 
900 companies on Business Week's Corporate Scoreboard plummeted 25 
percent from a year earlier--The first quarter profit plunge was the 
Scoreboard's sharpest quarterly drop since the 1990-91 recession.''
  Productivity fell at a 0.1 percent annual rate in the first quarter--
the first quarterly drop in six years. And layoffs are at their highest 
levels since they were first tracked in 1993, with major corporations 
announcing more than 572,000 job cuts this year. Little wonder, then, 
that the unemployment rate has risen to 4.5 percent, with April's job 
loss the largest since February 1991.
  Even more ominous is Business Week's recent observation that if wide 
layoffs of high wage earners continue, the likelihood of recession 
becomes even greater.
  And the Washington Post noted recently that Federal Reserve cuts in 
interest rates have been the most aggressive since the second quarter 
of 1982--the worst recession since the great depression--and that 
observation came before the most recent half-percent rate cut.
  And while it is true that a tax cut may not actually prevent a 
recession, if one is in the offing, I well remember the words of 
Federal Reserve Chairman Alan Greenspan, who came before the Finance 
Committee in January.
  Chairman Greenspan stated that tax cuts, while perhaps not having an 
immediate effect, could act as ``insurance'' should our recent downturn 
prove to be more than an inventory correction--that it could soften the 
landing and shorten the duration of any recession should it occur. And 
let's keep this in mind as well--``blue chip'' economists have 
indicated just this week that they are factoring the tax cut in their 
projections.
  Given our growing economic uncertainty and the grim repercussions it 
could have, I am pleased that--as I urged on the floor last week and in 
a letter to the Senate conferees--the final conference report ensures 
that even more money will be in the hands of taxpayers this year than 
was originally anticipated in the Senate bill. Specifically, by 
providing for the delivery of refund checks to taxpayers this fall--
$300 for single taxpayers and $600 for couples--tax relief will be 
accelerated during the current year, and hopefully help get the economy 
back on track.
  I think the American public often thinks about tax cuts the way they 
would think of winning the lottery--it would be great if it really 
happened, but it in reality it really only happens for ``the other 
guy''--that tax cuts will only apply to someone else--and if they do 
happen, they'll be so small as to have no appreciable effect on 
everyday life.
  Well, the American people should know that this tax cut applies to 
everyone, and especially those who could

[[Page S5787]]

use the break the most. And that's true not just on paper, but in 
reality--in the real world.
  This is no phantom tax cut--this is real, this is balanced, and this 
is fair. And what this all comes down to is, if you're really serious 
about cutting taxes, you should support this package that begins the 
process of providing some relief given, once again, the status of our 
economy and the tax burden on the American people.
  We know we're never going to get unanimity on an issue of this 
magnitude. But we can have progress and we can come to some kind of 
consensus. This package represents a bipartisan effort that, in the 
aggregate, is good for our future and good for the American taxpayer 
today. And it deserves our support. Thank you very much.
  Mr. ROCKEFELLER. Mr. President, I rise today in strong opposition to 
this fiscally irresponsible conference report. Today, this tax cut 
perpetrates a fraud on the American people.
  Their hard work created this surplus and this opportunity to sustain 
our economy and strengthen Social Security and Medicare. But no one 
should be fooled that this conference report is anything but an 
irresponsible, unfair, and politically motivated giveaway to the 
wealthiest in our society.
  I deeply regret that we have failed to take this historic opportunity 
to provide a meaningful tax cut to all Americans, and at the same time, 
continue to make real progress paying down our national debt and 
reserve sufficient resources to invest in our future.
  I voted for a $900 billion tax cut that would have allowed us to 
provide all Americans with an immediate and meaningful tax cut across 
the board and that included important education and energy provisions, 
and would have allowed us to pay down the debt and provide a Medicare 
prescription drug benefit, as well leave room for other West Virginia 
priorities.
  The conference report's tax cut is far too large to protect West 
Virginia's priorities and its future whether it's education, a Medicare 
prescription drug benefit, federal investments in roads and aviation 
safety, or safer communities. In fact, the true cost of this bill is 
probably over $1.7 trillion over the 10 years of the budget. And 
because of backloading of the tax cuts, which means that the effective 
dates for many of the tax cuts don't occur for at least 5 years, the 
tax cut cost will explode in later years.
  Even more farcical, the conferees have hidden even more of the true 
costs of the tax cut by making it appear that it will expire, and taxes 
substantially rise, after 2010. The Chairman and Ranking Member of the 
Committee know this is simply not what will happen, but they have 
nevertheless used this gimmick to make it appear that they have held to 
the Senate-passed Budget Resolution. It is ludicrous to think that the 
Congress would impose a quarter of a trillion dollar tax increase on 
the American people in 2010 when this tax cut proposal expires. These 
tax cuts will be extended, and their cost will thus explode to $4 
trillion and more. That's not responsible, and it's bad economic 
policy.
  What's even worse, this bill is just not fair to hardworking 
Americans who created the surplus.
  This tax conference report simply gives too much to the wealthiest 
Americans and does too little to reduce our national debt. This tax 
plan endangers our ability to provide a desperately needed Medicare 
prescription drug benefit to 39 million American seniors and taps into 
the Medicare Trust Fund. It threatens Social Security just when our 
``baby boomers'' start to retire. It leaves us too little to invest in 
our children's education, and jeopardizes our efforts to improve our 
Nation's transportation infrastructure. It chokes our ability to 
improve our national defense and veterans health care--ironically, just 
as many Members of Congress are planning to return to their states to 
honor their veterans on this coming Memorial Day. This tax bill short-
circuits critical components of a balanced energy policy to invest in 
clean coal research and encourage alternative fuels and energy 
efficiency.

  And this tax giveaway will, undoubtedly, return us to the huge budget 
deficits we worked nearly a generation to eliminate. All of us remember 
the consequences of the Reagan tax cut--two decades of spiraling 
deficits. And for my state of West Virginia, the consequences were 
devastating. As a Governor, I know how my state suffered. I don't want 
to return to those days, and West Virginians don't either. This 
proposal, regretfully, sets us on that path.
  As the second ranking Democrat on the Senate Finance Committee, I was 
officially named a conferee on this tax legislation. I had hoped to 
work hard to improve the Senate-passed bill where we could, and, at a 
minimum, retain the Senate's provisions. While the Senate's tax 
proposal was backloaded and cost the same unaffordable $1.35 trillion, 
it included some essential improvements for lower and middle income 
families. As grave a mistake as I believe this tax package is, and as 
dangerous as I believe it will be for our Nation's economic future, I 
was prepared to support these Senate provisions in conference and do 
what I could to prevent further erosion of the already tilted tax cut 
for the rich. I deeply regret to report, however, that neither the 
Minority Leader nor I were included in the negotiations of this bill. 
We were presented with this conference report after it had been 
completed and at the same time my nonconferee colleagues learned of the 
package's content. I note this procedural point only to raise my 
concern that we have deviated from the traditional committee processes 
and from any semblance of true bipartisan negotiating, to our Nation's 
and the Senate's ultimate detriment. The Chairman's repeated assertions 
that this matter has been conducted in an open and inclusive process 
does not reflect reality.
  Let me outline the most obvious problems with this irresponsible tax 
cut. The tax conference report has several fatal flaws. It plays games 
with the effective dates of the tax cuts in order to mask the real cost 
of this tax proposal. Those games mean that married people won't get 
relief from the marriage penalty for 5 years, until 2006. The reason 
why married people have to wait for their tax cut is because the 
conference report chose to give even more money to the wealthiest 
Americans at their expense.
  The top income tax rate that was reduced from 39 percent to 36 
percent in the Senate bill is now lowered to 35 percent by the terms of 
the conference report--that's a 1.6 percent deeper cut than any other 
income tax bracket. While there is no reduction in marginal rates for 
the 15 percent income tax bracket--where most Americans and most West 
Virginians pay their last dollar of tax--there is a 4.6 percent 
reduction for the wealthiest Americans who need it the least. West 
Virginians will not be fooled by that; they will see that this is 
unfair. When we get the best analysis from the experts, it will no 
doubt document just how much is robbed from middle income taxpayers to 
finance the tax break for the wealthiest. Only 0.3 percent of West 
Virginians are in the top income tax bracket. And let's not be misled 
by the rhetoric that the wealthy get more of the benefit only because 
they pay more taxes. Of course, the wealthiest Americans pay a 
significant share of Federal taxes--about 22 percent. The President's 
proposal would have given those wealthiest Americans 43 percent of the 
tax cuts. This conference report will give them roughly 38 percent of 
the entire tax cut. They pay in 22 percent, but they get 35 percent of 
the surplus. I can't explain why they have been rewarded with more of 
the surplus than they deserve at the expense of hardworking West 
Virginia families, and I can't support it. I can't support a tax cut 
that gives about 15 percent of our Nation's surplus to the bottom 60 
percent of taxpayers, and 38 percent to the top 1 percent.

  The estate tax provisions of this bill, also a benefit solely for the 
wealthy, begin almost immediately--in 2002, but middle income married 
couples are told they must wait for their relief until 2006. The estate 
tax is also totally repealed in 2010. But another startling fact about 
this tax bill is that the entire bill--even the tax relief for lower 
and middle income people, the child credit, and EITC improvements, all 
sunset in 2010 in order to pretend that this bill really costs $1.35 
trillion over 10 years. We know that this is a sleight of hand. We know 
Congress won't sunset or trigger off the tax cuts in 2010. So the true 
cost of this bill, while it purports to be $1.35 trillion--will be

[[Page S5788]]

well over $4 trillion in the next 10 years. The Senate-passed bill cost 
$1.35 trillion over 10 years, but to finance the upper income tax cut, 
that timeframe was shortened by a year so about $90 billion could be 
used to transfer it to the wealthiest Americans.
  I should note that there are needed provisions to help lower and 
middle income families with children in this bill that I think we can 
all be proud of, even as they are set in the context of a tax bill for 
the wealthiest Americans. I do not support this massive irresponsible 
tax cut. But I do support the provisions to make the child tax credit 
partially refundable. I do support the provisions to increase the 
Earned Income Tax Credit, EITC, and to simplify and reduce errors in 
the EITC. As the Chairman of the National Commission on Children years 
ago, we issued a bold bipartisan report calling for a fully refundable 
child tax credit of $1,000. The child credit and EITC provisions of 
this bill are a major step in that direction, and it will help millions 
of children and their families. I believe that tax relief should be 
directed towards the families that need it the most: the parents who 
are working and playing by the rules, but struggling to raise their 
children on low-wages. I cannot support this overall package because I 
do not believe it helps the majority of West Virginia families. But 
some of its provisions, like the partially refundable child tax credit, 
the EITC, and the education provisions will help families in my state 
who need and deserve help.
  The Senate-passed tax bill, bloated as it was, included a permanent 
extension of the R&E tax credit. The conference report fails to include 
this provision. The R&E tax credit is a highly successful way of giving 
businesses an extra incentive to invest more in research and 
experimentation that is highly beneficial but otherwise can be beyond 
the reach of private companies. This investment benefits all Americans 
by allowing companies to expand our understanding of science and 
technology, and by enabling the marketplace to bring better products 
and services to everyone. Congress should permanently extend the 
credit, rather than leaving companies in limbo every few years about 
whether it will be merely extended, in order to provide businesses with 
the certainty they need to engage in long-term planning and resource 
allocation. If businesses can count on the credit, they can make the 
long-term, continuous investments that are necessary for real 
breakthroughs.
  I am glad that this conference report included pension provisions 
that will help some middle income families save and improve 
portability. Again, here, I would have done more for the majority of 
taxpayers that need to be encouraged to save, but the balance of the 
bill is an important savings tool.
  Finally, the sad fact is that this tax cut is now so large that it 
commits every dime of the surplus for tax cuts and current obligations, 
leaving nothing--0--for Medicare solvency, new defense needs, or any 
other future or unanticipated emergencies.
  I will conclude by saying I regret that we are passing this bill 
today without much opportunity to review its details, but knowing that 
overall it gives too much to those who already have much, and reserves 
too little for our Nation's most important priorities. I cannot support 
this tax bill, and I hope that my fear that this bill will endanger our 
Nation's economic future will be proven incorrect. It will 
unquestionably make meeting the many needs of my state more difficult.
  Mr. McCONNELL. Mr. President, this bill is about righting wrongs in 
the tax code that are so flagrant as to transcend partisan rancor. It 
is not fair to penalize Americans for marrying. It is not fair to 
penalize Americans for dying. And it is not fair to ask the American 
citizen to pay more taxes than ever during a peacetime economy. The 
average American works almost two hours a day, or more than four months 
a year, to pay his or her federal tax burden. Tax Freedom Day did not 
arrive until May 3rd this year, the latest date ever.
  It is fair, however, to help families shoulder the costs of raising 
children and to encourage Americans to save their hard-earned money for 
retirement and for education. This bill does just that. One provision 
of this bill of which I am extremely proud of is the proposal to make 
savings from qualified state tuition savings plans tax free. We are all 
aware of the high costs of obtaining a college education. Even when you 
account for inflation, we have seen a steady and stifling increase in 
the costs associated with attending an institution of higher learning. 
One of the most promising tools available to families who are trying to 
save for these rising costs is the qualified state tuition savings 
plan. These plans aide those families trying save for college by using 
the power of compounded interest. For those families who use a state 
tuition savings plan to save, compounded interest can be a blessing. 
For those who must borrow to afford tuition, compounded interest can be 
a heavy burden.
  My home state of Kentucky has been at the forefront of those states 
offering such plans, and in 1994 I introduced the first legislation to 
make savings from qualified state tuition savings plans tax free. Since 
that time, it has been my pleasure to work with my colleagues Senators 
Sessions and Graham to enact several measures to facilitate the use of 
these savings tools with the eventual goal of making qualified state 
tuition savings plans tax-free. Earlier this year, I once again 
introduced legislation, the Setting Aside for a Valuable Education, 
SAVE, Act to do just that. I am honored at the tremendous support for 
this provision from the members of the Finance Committee and I thank 
them for again including it in their bill. I also want to express my 
profound gratitude to the House and Senate conferees for including this 
important provision in the Conference Report.
  Indeed, it is fair to say that this tax bill restores tax fairness 
and promotes financial flexibility with respect to our most basic 
American institutions--education, marriage, children, and retirement. 
The next generation of Americans will have better access to education 
because of this bill. They will marry without paying a penalty. They 
will pay less to the Government, and therefore, will have more money to 
raise their families. They will be able to save more money to retire 
with dignity. And finally, when their parents pass away, they will not 
have to sell a family business to pay a death tax. These are not 
Democratic or Republican goals, these are American ideals.
  So, you might ask, why are our opponents complaining? I don't think 
they are complaining about restoring tax fairness and financial 
flexibility to American families. No, I think their real complaint is 
that we did so while doing what our opponents have always claimed was 
impossible--lowering taxes and protecting Social Security and Medicare, 
and paying down the debt, and continuing to balance the budget. For 
years we heard that any tax cut, no matter how fair it may be, would 
rob Social Security, balloon the national debt, and raid domestic 
spending. But now we have called their bluff: we have tax fairness that 
is fiscally responsible. We finally are shedding some light on the 
real, albeit unacknowledged, complaint of our opponents--that there 
won't be as many spending sprees in Washington over the next 10 years.
  Frankly, I wish we could do more in the way of tax relief. For 
fairness sake, I wish we could repeal the death tax and the marriage 
penalty immediately. And I wish we could push income tax rates even 
lower.
  We have spent a lot of time arguing about what Americans want when it 
comes to tax relief. Well here's a novel idea--let's ask them. A Zogby 
poll found that 8 out of 10 Americans think the maximum tax rate should 
be less than 30 percent. Fox News reported similar results. And Gallup 
found that 65 percent of Americans feel like they pay too high a 
federal income tax.
  My office has been filled with constituents coming to complain about 
the death tax. As hard as it may be for some of my Democratic 
colleagues to believe, most of these constituents are not tycoons. No, 
they are small business owners, and they are fed up with the estate tax 
looming over their families and their businesses. If only a tiny 
fraction of small businesses are affected by the estate tax, as our 
opponents constantly claim, why are all these people calling, writing, 
and coming to see me? I'll tell you why. It's because they, and others 
who own small businesses, all pay a price for the death tax. Some may 
have to sell their businesses before they die to avoid the

[[Page S5789]]

death tax, and many of them pay a fortune in estate planning fees to 
avoid the death tax. For those that can't escape the tax and whose 
heirs may be forced to sell their businesses. Both the heirs and the 
communities served by these small businesses suffer tremendously. Our 
opponents rarely compute these collateral costs when they wave their 
partisan statistics.
  And to those who continue to argue about reform, rather than repeal, 
of the death tax, I say this: it simply is not fair, as a moral, 
political, or philosophical matter, to tax someone for dying. Dying is 
not a choice, Mr. President, but passing on hard-earned assets to loved 
ones is a choice, and one that our Government should not penalize by 
making Americans visit the undertaker and the IRS on the same day.
  To close, and to re-emphasize the issue of fairness, I want to 
crystallize the two sides of this debate. Imagine if you overpaid your 
mortgage bill to the bank for ten consecutive years. Because that's 
what we're about to do--overpay our bill to the Government for the next 
ten years. My guess is that everyone in this chamber would demand his 
or her money back from the bank. I don't think we would accept 
listening to the bank tell us that it had devised other plans to spend 
our money. Indeed, we would be absolutely outraged at the very idea 
that the money wouldn't be returned to us immediately.
  And this is the crux of the debate: There are those, myself included, 
who believe that taxes paid over and above the cost of government 
belong to the American people--that the money should be returned to 
them immediately for them to spend as they choose. And then there are 
those who believe that taxes paid over and above the cost of Government 
still belong to the Government and that the Government has the right to 
choose whether to return it to the taxpayers or to spend it as they see 
fit. Well, I am proud to say that I believe that this surplus belongs 
to the American people, and I am glad we are going to give it back to 
them.
  Mr. McCAIN. Mr. President, I rise to oppose the Conference Report on 
the Reconciliation bill. I do so after having expressed hope that the 
progress we made in the Senate bill to scale back the benefits going to 
the top rate taxpayers to make room for more tax relief to lower income 
Americans would prevail in the final tax bill.
  During the debate on the Senate version of the tax reconciliation 
bill, I had urged my colleagues that substantial tax relief to middle 
income Americans should be our top priority. While I regret that my 
amendment to cut the top rate by one percent to 38.6 percent so 
millions more middle class Americans would fall into the 15 percent tax 
bracket failed on a tie vote, Senator Grassley did move in that 
direction in the Senate bill by insisting that the top rate should be 
cut to only 36 percent. As a result, I reluctantly voted for the bill 
but pledged to vote against the Conference Report should further 
reductions in the top tax rate be made at the expense of the majority 
of Americans who are in much greater need of tax relief.
  Unfortunately, the Conference Report did just that by jettisoning the 
commendable work both Senators Grassley and Baucus did in crafting a 
Senate reconciliation bill that provided more tax relief to middle 
income Americans. This Conference Report lowers the top rate cut to 35 
percent, at the cost of delaying, for several years, much needed tax 
relief for married couples unfairly penalized by our tax code.
  I regret having to vote against this Conference Report. We had an 
opportunity to provide much more tax relief to millions of hard-working 
Americans. I supported a $1.35 trillion tax cut despite my concern that 
a tax cut of that size would restrict our ability to fund necessary 
increases in defense spending. But I cannot in good conscience support 
a tax cut in which so many of the benefits go to the most fortunate 
among us, at the expense of middle class Americans who most need tax 
relief.
  Mrs. LINCOLN. Mr. President, today we have the opportunity to 
demonstrate that bipartisanship is working in Washington.
  We have before us what is no longer just the President's tax plan.
  Just a few short weeks ago, the majority of our colleagues in the 
other body rubber stamped President Bush's plan that heavily tilted tax 
cuts to the rich while delaying most of them until after 2006. That 
plan would not have helped my State or many other southern States for 
that matter. In fact, almost 50 percent of the wage earners in Arkansas 
would not have received a tax cut under President Bush's original plan.
  But with the input of Senate moderates, both Republican and Democrat, 
we have created tax cut opportunities for millions of low and middle 
income taxpayers almost immediately. We have stubbornly refused to give 
in to the argument that because people work for less than $21,000 a 
year, they don't deserve a tax cut. They may not earn enough to pay 
income taxes but they are surely taxpayers in every sense of the word. 
They are hard working Americans who pay payroll taxes, sales taxes, 
excise taxes and just about every other form of tax other than the 
Federal income tax.
  I am proud that the final plan before the Senate today recognizes 
their contribution to our economy.
  I want to extend my gratitude to my colleague on the Finance 
Committee, Senator Snowe from Maine. Together we have stood fast in our 
insistence that the child tax credit should be refundable so hard-
working, low-income families would receive a tax cut. By doubling the 
child tax credit and making it refundable up to $1,000, this tax plan 
rewards hard work and recognizes that all Americans truly deserve a tax 
cut. I mean no disrespect to my male colleagues in this body, but I 
believe this provision might not exist in this plan had women not had a 
seat at the Finance Committee table.
  Senate moderates have changed the President's original plan in other 
important ways.
  The amount of income subject to the alternative minimum tax will be 
increased immediately. This is a critical issue which the President 
ignored. In fact, his original plan would have accelerated the pace at 
which middle income taxpayers are forced into the alternative minimum 
tax category. His tax cut would have actually resulted in a tax 
increase for some unfortunate taxpayers.
  The revised tax plan will allow people to increase their 
contributions to IRAs and 401(k) plans, an extremely important change 
in an era when we have seen America's national savings rate drop to its 
lowest point in 40 years.
  Another change expands the 15 percent tax bracket for married couples 
so that more of their income is subject to the lower tax.
  And, while I believe that the top income tax rate of 35 percent could 
still be higher, I am gratified that Senate moderates forced a 
substantial increase from the President's original 33 percent rate.
  We can thank bipartisanship in the U.S. Senate for making this plan 
better and one that truly accomplishes the promise of a tax cut for all 
Americans. The real thanks, however, goes all the way back to 1993 and 
to the American people. When our nation was deep in the deficit ditch, 
the U.S. Congress went to the people of this great nation and asked 
them to bare the burden of program cuts and higher taxes in order to 
balance the budget. We now have a balanced budget and budget surpluses 
and we can now responsibly lift that burden with gratitude to the 
citizens of this country.
  I want to especially thank three of my distinguished colleagues on 
the Finance Committee, Senators Grassley, Baucus and Breaux, who have 
earnestly negotiated the final terms of this bill during the last days. 
I believe that in most important aspects, it remains true to the 
principles advanced by the Senate earlier this week.


                 massive tax cuts starve national needs

  Mr. BYRD. Mr. President, 8 years ago, this Congress built a bridge so 
that future generations would be able to cross from budget deficits to 
budget surpluses. That bridge resulted in lower interest rates, a 
booming economy, and provided the nation with an opportunity to fix 
Social Security and Medicare and retire the national debt.
  The senate today blew up that bridge, and plunged our grandchildren 
and ourselves into the deficit ravine below.
  I have spoken many times in recent months about my concerns regarding

[[Page S5790]]

the size of this tax cut. The events of recent days do not change these 
concerns, as the fundamental dynamics of the fiscal year 2002 budget 
and appropriations process remain the same.
  While I would favor a much smaller tax cut, the fiscal year 2002 
budget resolution that was put into place in April, and this $1.35 
trillion tax cut package that was passed today, will make it impossible 
for this Congress to come up with the appropriations necessary to fully 
address our Nation's priorities.
  I fear that this tax cut will return us eventually to annual deficits 
and impede our efforts to retire the national debt.
  I fear that this tax cut will consume vital resources that could 
otherwise be used to ensure the long-term solvency of Social Security 
and Medicare and provide for a prescription drug benefit.
  I fear that this tax cut will put this Congress in a position where 
it will be unable to adequately finance our nation's fiscal and human 
infrastructure needs. For all of the promises being made as the senate 
debates the education reform bill, the Congress will not have the funds 
it needs to appropriately address these necessary reforms.
  The administration has tried to assuage these fears by promising the 
best of all worlds: massive tax cuts that will maintain budget 
surpluses without draining resources away from infrastructure 
investment and retirement programs.
  Abraham Lincoln said in his 1862 Message to Congress that ``we cannot 
escape history. We of this Congress and this administration will be 
remembered in spite of ourselves.''
  History will hold us accountable for what we did here today in 
passing this monstrous tax cut. This tax cut, which mainly will benefit 
the wealthy, is based on pie-in-the-sky projected surpluses which 
probably will not materialize. History will not forget that the 
national needs of today and of future generations have been sacrificed 
for the sake of carrying out a political promise made in the heat of a 
political campaign last year.
  The PRESIDING OFFICER. The Senator from Massachusetts, Mr. Kennedy, 
is next on the list.
  Mr. BAUCUS. Mr. President, I do not see any Senators seeking time. I 
will have to, therefore, suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Oklahoma, Mr. Inhofe.
  Mr. INHOFE. Mr. President, I seek recognition.
  The PRESIDING OFFICER. Is there objection? The Senator from Nevada.
  Mr. REID. What is the request?
  Mr. INHOFE. I was going to request a few minutes, instead of going 
into a quorum call.
  Mr. REID. We have a unanimous consent agreement. I think it would be 
best for everyone if we could move forward under the time agreement. 
Senator Conrad.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I support a significant tax cut for all 
Americans. I proposed and voted for a $900 billion tax cut. I think 
that is a level we can afford, one that will accommodate protecting the 
Social Security and Medicare trust funds, one that will permit us to 
set aside money to strengthen Social Security for the future, one that 
will allow us to reserve resources for important domestic priorities.
  I cannot support this conference report because it does not permit us 
to protect Social Security and Medicare. It threatens to put us back 
into deficit. It threatens to put us back into building debt after a 
decade of getting our fiscal house in order.
  This morning's Washington Post labels this conference report for what 
it is, ``Tax Fraud.'' It says:

       The House-Senate tax cut conferees came up with a way, 
     yesterday, to stuff even more cuts into the bill without 
     appearing to break the cost ceiling that Congress virtuously 
     imposed on itself earlier in the year.

  They went on to say:

       Without apparent embarrassment, they adopted the mother of 
     all accounting gimmicks. To keep the supposed 10-year cost of 
     the bill at $1.35 trillion, they will pretend that major 
     provisions expire after nine years.

  What they have done is alter the calendar. In a bill that is to cover 
10 years, they just took off the last year. What is the effect of that? 
The Washington Post says:

       This is a permanent tax cut masquerading as temporary. But 
     the masquerade is all that matters. The accounting 
     conventions allow the conferees to claim that they've done 
     what they said they would. Once again what they've really 
     done is mortgage the long-term future for short-term 
     political gain.

  They go on to say:

       When the gimmicks are removed from the bill, the true cost 
     is three times what the sponsors pretend--perhaps $4 trillion 
     over [the second] 10 years.

  Instead of a $1.35 trillion tax cut, which is what was agreed to just 
weeks ago, the true cost of this bill over the period of the budget is 
$1.7 trillion.
  Those who have said they somehow negotiated a reduction from what the 
President was seeking, to be more fiscally responsible, have come back 
with a conference report that does not do it. It does not reduce the 
size of the President's proposal because they take the 10 years, and 
put it into 9. If you make an honest assessment of the full 10-year 
cost, you are at $1.7 trillion.
  The accounting gimmicks do not end there. As the Washington Post 
indicated, this bill is massively backloaded. It is advertised, in the 
first 10 years, as costing $1.35 trillion. But in the next 10 years it 
explodes in cost because they have backloaded provision after provision 
after provision. The result is that the cost absolutely explodes right 
at the time the baby boomers start to retire. They are digging a deep 
hole for the United States.
  The New York Times labeled it ``The $4 Trillion Tax Cut.'' They said:

       The tax cut's $1.35 trillion price tag is a deception. The 
     figure was calculated with an array of artificial devices 
     that disguise the true cost. Some of the tax cuts to be 
     enacted abruptly expire before the 11-year period is up. . . 
     .

  This was written before the last gimmick was inserted, the gimmick of 
just taking an entire year out.
  Remember that Republicans, a couple years ago, tried to put 13 months 
into a 12-month year as a gimmick to disguise the effect of their 
budget proposals. This time they have taken an entire year off the 
calendar.
  The New York Times goes on to say:

       Other provisions are phased in slowly, with most of them 
     not fully enacted until 2009, 2010 and 2011. This means that 
     although the tax cut technically costs $1.35 trillion in the 
     first decade, its cost in the second decade--when the baby 
     boomers will all be retired--is more than $4 trillion. The 
     tax cut cannot be paid for except by raiding the Social 
     Security and Medicare trust funds. It is a scheme that seems 
     deliberately aimed at wrecking the basic American retirement 
     programs, perhaps to force their dismantling or 
     privatization.

  I think the New York Times and the Washington Post have it right. We 
are in a period of surplus now. But we all know that in the next decade 
we move to massive deficits. That is when this tax cut, because of the 
way it has been designed, absolutely explodes: from $1.35 trillion, it 
balloons to $4 trillion in cost over the second 10 years.
  When one examines the real budget--the defense expenditures the 
President is asking for, the alternative minimum tax that must be 
fixed, the education expenditures the Senate is in the midst of 
approving now--as we consider the education bill, the emergencies, and 
just the average emergencies we have experienced over the last 10 
years, fast forward them to the next 10 years: We are not only going to 
be raiding Medicare, we are going to be raiding the Social Security 
trust fund as well.
  We estimate that this bill, when combined with the real budget 
reflecting what will actually be spent over the next 10 years, will be 
raiding the Medicare trust fund by $311 billion and raiding the Social 
Security trust fund by $234 billion. Make no mistake, this vote has 
real consequences.

  It is not just that it is fiscally irresponsible. In fact, this bill 
is a monument to fiscal irresponsibility. But in addition to that, this 
bill is not fair. The top 1 percent get more than twice as much of the 
benefit as the bottom 60 percent. In fact, the bill has been made much 
worse in terms of its fairness when you compare what left the Senate to 
what has come back in the conference committee. The top 1 percent get 
nearly 38 percent of the benefits. The bottom 60 percent get less than 
15 percent of the benefits.
  This bill cannot pass any fairness test, or any fiscal responsibility 
test. It does not pass the fundamental test we ought to apply to any 
tax bill. This

[[Page S5791]]

final tax bill is clearly unfair. The top 20 percent get 71 percent of 
the benefits. The bottom 20 percent get 1 percent. Seventy-one percent 
of the benefits to the top 20 percent; 1 percent to the bottom 20 
percent.
  We heard our colleagues say that this bill is much more fair than the 
Bush proposal. Well, it is a little bit more fair but not much more 
fair. Seventy-one percent of the benefits in this bill go to the top 20 
percent. In the President's proposal, 72 percent of the benefits went 
to the top 20 percent.
  One of the things I think is most revealing about this proposal is 
what happens to the various tax brackets. It is fascinating what has 
come back from the conference committee. Those who are the wealthiest 
among us get by far the biggest rate reduction--by far. Those who are 
in the top 1 percent, who on average earn $1.1 million a year, they get 
a 4.6 percentage point reduction, which is, in overall percentage, 
about a 12-percent reduction in their marginal rate. They are getting 
4.6 points of reduction in a 39.6-percent bracket. That is about a 12-
percent reduction.
  The other brackets get 3 percentage points. They roughly average 
between 8 and 11 percent of rate reduction. So those at the very top 
get the very most. And the final bracket, the 15-percent bracket, where 
70 percent of the American taxpayers are, gets no rate reduction--none, 
zero. You talk about a bill that is weighted to the very top, the very 
wealthiest; this bill is a testimony for campaign finance reform.
  Have we learned nothing from the past? We tried this same approach in 
the 1980s, and it skyrocketed the deficits and the debt, and it took us 
15 years to end it.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CONRAD. Mr. President, I ask unanimous consent for 30 additional 
seconds.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, some have said: But we are paying down the 
debt. Make no mistake, we are paying down the publicly held debt, but 
the gross debt is going up, because the debt to the trust funds is 
skyrocketing under this proposal.
  Let me just end. This is a chart that shows what is happening to the 
gross Federal debt. It is $5.6 trillion today. At the end of this 
period, it is going to be $6.7 trillion. The debt is not going down, 
the debt is going up. This bill ought to be defeated.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Connecticut.
  Mr. DODD. Mr. President, I commend our colleague from North Dakota 
for his very thoughtful presentation. He has laid out the arguments 
against this tax bill rather well.
  Mr. President, we all are familiar with the famous expression of 
George Santayana which says that those who fail to remember the 
mistakes of history are destined to repeat them. I regret that we are 
about to do that today with the vote on this tax bill.
  There are a handful of us here today who were on this very floor in 
this Chamber 20 years ago when a similar, although smaller, tax cut was 
being proposed. No one doubts today the damage that proposal had on our 
economy over the ensuing years. Its author, in fact, the head of the 
Office of Management and Budget, has written extensively about the huge 
mistakes that Congress made in the early 1980s in crafting a tax 
proposal that was way out of balance, and had no sense of 
proportionality in terms of the economic needs of the country.
  It took us more than a decade to recover from that tax cut. Luckily, 
we began doing so in the early 1990s and, ultimately, we reached the 
point we are at today where we are enjoying budget surpluses.
  I am sure my colleagues are familiar with the mythological figure 
Sisyphus, the King of Corinth, who was condemned to roll a heavy stone 
up a hill only to have it roll down again as it neared the top. This 
legislation is much like Sisyphus's dilemma. Just as we start to 
produce surpluses, to reduce that $220 billion a year in interest 
payments on our national debt that don't build a new school, that don't 
make anyone healthier, and don't contribute to the environment, just as 
that rock gets up to the top of the hill, we are about to let it fall 
back upon us by adopting a proposal that sends us right back in the 
wrong direction.
  I am for a tax cut, and I believe we have plenty of room for one. But 
a tax cut of this size that eats up $1.35 trillion of the surplus in 
the coming years is the height of irresponsibility, especially since we 
don't have any real clear idea of how this Nation's economy will look 
3, 4, 5, let alone 10 years from now.
  I regret deeply we are limited to this short amount of time to debate 
a proposal of this importance and significance in light of what our 
country experienced as a result of a similar tax cut. I hate to say 
this to my colleagues--I said it in 1981; I will repeat it today, 20 
years later--we are about to make the same mistake again. The 
difference is, we will not have the time to correct it as we did with 
the mistake made 20 years ago. At the very hour that millions of 
Americans will look to us for Social Security and Medicare, this 
proposal is going to create a train wreck with those programs.
  I urge, in the waning moments of this debate, that those who may be 
wavering to please think again, not about the Democrats or Republicans, 
liberals or conservatives. This is an excessive tax cut and one that we 
cannot afford. I urge our colleagues to reject this proposal. Go back 
to the drawing board. It is only May. We have plenty of time to do this 
in a far more thoughtful, prudent, and balanced way.
  For those reasons, I urge rejection of this conference report and 
urge our colleagues, whom I know have worked very hard on the Finance 
Committee, the Ways and Means Committee, to go back and try again to 
see if they can't come up with a more balanced approach that treats all 
taxpayers fairly and leaves room for the needy investments that America 
must make if it is going to be the great power of the 21st century that 
it has been in the 20th.
  With that, I yield the floor to my colleague from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, this is the final vote on a tax cut which 
is far larger than the country can afford. It has been pushed through 
Congress by the Republican leadership in unprecedented haste without 
adequate debate. They have sought at every turn to avoid a serious 
discussion about national priorities. They pretend that we can have it 
all--that this massive tax cut will not affect our ability to 
adequately fund our education and health care needs, to reduce the 
debt, and to financially strengthen Medicare and Social Security for 
future generations. This view is a fantasy. The reality is that this 
tax cut will have a direct and substantial effect on our ability to 
fulfill our responsibilities in each of these areas.
  Let's focus on one of these priorities--education. The budget 
resolution on which this $1.35 trillion tax bill is based also 
eliminates $308 billion of funding for education which had the support 
of a majority of Senators. We recognized that those funds are essential 
to providing a quality education for every child. Yet the enormous size 
of this tax cut is incompatible with real education reform. Sadly, 
Republican priorities place the needs of the wealthiest taxpayers for 
new tax breaks above the needs of America's school children. Democrats 
support a substantial tax cut--one that would cost nearly a trillion 
dollars over the next 10 years and one that would give working families 
a fair share of the tax benefits. Under Democratic plans, the vast 
majority of American families would receive the same, or even more, tax 
relief than the Republicans provide, but at a fraction of this bill's 
cost. That is possible because the Republican bill gives such a huge 
windfall to the rich. Four hundred and fifty billion dollars will go to 
the wealthiest 1 percent of taxpayers. This tax cut reported from the 
conference committee is clearly excessive. It is neither fair nor 
affordable.
  The conference report gives even larger tax breaks to the rich than 
the Senate tax bill did. It reduces the rate of the top income tax 
bracket by an additional percent, but still fails to provide any 
reduction in the 15 percent tax rate that nearly three quarters of all 
taxpayers pay. The extra dollars consumed by reducing the top income

[[Page S5792]]

tax bracket come from budget gimmicks that make the bill even more 
fiscally irresponsible in the long run.
  Over one of every $3 of tax breaks in this conference report will go 
the wealthiest 1 percent of taxpayers. Once the tax breaks are fully 
implemented, the richest 1 percent will receive an average tax cut of 
over $37,000 each year--more than the pay most families take home in an 
entire year. The $37,000 a year that this bill provides to the 
wealthiest 1 percent could pay the salary of a new teacher in most 
school districts. But now there won't be funds for new teachers. The 
Republicans decided that wealthy taxpayers need the money more.
  Education is far and away the most important concern of Americans, so 
I offered a number of amendments to protect education from the adverse 
effects of the most extravagant parts of the tax cut. Again and again 
Republicans chose tax breaks aimed exclusively at the wealthiest 1 
percent of Americans, people with average incomes of $1.1 million, over 
full funding of elementary and secondary education for disadvantaged 
children, over full funding for the Individuals with Disabilities 
Education Act, over teacher quality improvements for all students, over 
increased access to safe after-school activities, over bilingual 
education, over Pell grants, over HOPE Scholarship Tax Credits, and 
over Head Start. The President's rhetoric may say ``leave no child 
behind,'' but this tax bill leaves a whole generation of children 
behind. It leaves them behind so that the very wealthiest taxpayers can 
get a half-trillion dollars in new tax breaks. If we do not have 
adequate resources to provide all our children with a quality 
education, then we certainly don't have the excess revenue that 
justifies new tax breaks for millionaires. Nationwide, there are 129 
million income tax returns filed each year, but only 900,000 of these 
report income in the top marginal income tax bracket, which is 
presently 39.6 percent. These are the wealthiest men and women in 
America, and tax cuts that exclusively benefit them should not displace 
the education funding that the Senate has already agreed is necessary.
  Only by the use of smoke and mirrors and budget gimmicks has this tax 
bill been made to comply with the mandate of the budget resolution to 
report a tax bill costing $1.35 trillion over eleven years. But the 
real cost are even higher. The real costs of this bill explode in the 
out years. Most disturbing of all is the extreme use of back-loading to 
conceal the enormous cost of these tax cuts when they completely take 
effect. The rate reduction is not fully implemented until the year 
2006. Marriage penalty tax relief does not even begin until the year 
2005. The amount of the child credit does not reach the full $1,000 
until the year 2010. The estate tax is not repealed until that year as 
well, so that almost none of the cost of the repeal shows up until the 
year 2011.

  These tactics are the height of fiscal irresponsibility. The 
excessive cost of the bill in the first decade is troubling enough. But 
that cost will more than triple in the following ten years. A $1.35 
trillion tax cut in the first 10 years will mushroom to substantially 
more than $4 trillion in the next 10 years--precisely when the nation 
will confront unprecedented new costs in Medicare and Social Security 
from the retirement of the baby boom generation. Funds urgently needed 
to strengthen these basic programs are being consumed by reckless tax 
cuts. The Republican leadership could easily have accepted the recent 
Senate vote on the Harkin budget amendment reducing the size of the tax 
cut by 20 percent and investing the resulting $250 billion in education 
over the text 10 years. A responsible proposal like that would enable 
vital improvements to be made in education throughout America, while 
still leaving $1 trillion for tax cuts that both Democrats and 
Republicans support. Unfortunately, they refused.
  Across America, 12 million children live in poverty--but we currently 
provide the full range of title I Federal educations services to only 
one in three of these children. Four of every 10 children in poverty 
are taught by teachers who lack an undergraduate major or minor degree 
in their primary field. Gym teachers are teaching math. English 
teachers are teaching physics. Nearly one in five first-through-third 
graders are attempting to learn in overcrowded classes of 25 or more 
students. In these cases, some students inevitably lose in the 
competition for essential teacher time.
  In addition, over 7 million latchkey children are left alone to fend 
for themselves after school each day, without constructive after-school 
activities to keep them off the streets, out of gangs, and away from 
drugs and other dangerous behavior. Even though Head Start ranks as the 
public's favorite government program, inadequate funding continues to 
deny Head Start to half of all eligible children.
  Students with disabilities suffer from the same Federal neglect. The 
Federal Government has long promised to fund 40 percent of disability 
education. Yet it still only funds 17 percent. For years, parents and 
States have called on the Federal Government to live up to its 
commitment to disabled students. Almost 14 million children attend 
schools in inadequate facilities--schools that are overcrowded with 
classes held in hallways and trailers and schools that are crumbling 
and unsafe. Seven million children attend schools with severe safety 
code violations.
  While money may not guarantee quality education, it is impossible to 
provide quality education in today's schools without substantial new 
investments. ``Reform'' without resources will have no real impact on 
what takes place in America's classrooms.
  The massive tax cut contained in this bill will shortchange an entire 
generation of children. Nowhere are Republicans' misplaced priorities 
clearer. After all the talk about the importance of education to 
children's lives and the Nation's future--after all the talk about 
unmet needs in the Nation's schools--after all the Senate votes to 
increase investments to meet the most basic education needs, the 
Republican tax cut crowds out new investments in education. It tells 
millions of children who attend inadequate schools that they don't 
count. If the Federal Government lacks the resources to provide both, 
shouldn't the education of our children take precedence over new tax 
cuts for the wealthiest taxpayers? Who in this Chamber would openly 
declare that the wants of 900,000 millionaires are more important than 
the needs of millions of school children? That, in essence, is what we 
are voting on today.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. GRASSLEY. Mr. President, I thought we were going to let the 
Senator from Minnesota speak.
  Mr. REID. Would the Senator from Massachusetts yield his time to the 
Senator from Minnesota?
  Mr. KENNEDY. I yield my remaining time to the Senator.
  The PRESIDING OFFICER. The Senator from Massachusetts has 2 minutes 
19 seconds remaining.
  Mr. KENNEDY. I yield that to the Senator from Minnesota.
  The PRESIDING OFFICER. The Senator yields his 2 minutes 19 seconds to 
the Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I rise to strongly oppose this 
conference report. As I have said consistently, I support tax relief, 
and have voted for more modest alternative tax cut packages. But I 
believe in tax cuts that reward work, not wealth. That are distributed 
fairly across the economic spectrum, with a special emphasis on relief 
for those most in need, who bear an unjust proportion of the tax 
burden, including payroll taxes, already--working families. The 
original Senate bill did not meet this test. Sadly, when confronted by 
the priorities of the most extreme elements of the House Republicans, 
the conference committee has made a bad bill even worse--more grossly 
unfair, with more of the benefits tilted toward the very wealthiest 
Americans.
  The worst possible outcome for this decade would be a return to a 
1980s mentality of huge tax breaks for the rich, increases in a bloated 
military budget, and neglect of our social infrastructure, including 
key insurance programs like Social Security and Medicare. Yet that 
appears to be where the President and the Congressional majority would 
have us go. We are making a terrible mistake if we pass this conference 
report today.
  I can't say it more plainly than that. We are making a grave mistake. 
If the economy goes south, this conference

[[Page S5793]]

report will almost certainly leave us without sufficient funds to make 
key reforms in Medicare like providing for a new prescription drug 
benefit, or for reforming Social Security in a way that will secure its 
future for generations to come. The costs of these tax cuts, so 
obviously backloaded, will explode just at the time when a huge 
generation of baby boomers prepare to retire in 10 years. And they will 
be left holding the bag, along with the generations that come after.
  The American people should not have any illusions about what we are 
about to do. The economy and hard choices made in the past have endowed 
us with budget surpluses. In a time of growing economic uncertainty, 
it's not yet clear how large they'll be; private economists, the 
Congressional Budget Office, and even White House (OMB) estimators have 
all readily acknowledged the uncertainty of their projections. But it's 
clear there is some surplus, and Congress has to decide how to spend 
it.
  If we had crafted a fairer, more modest tax bill, the benefits of 
which would have been distributed according to some principles of 
fairness, I would have supported it. But this conference report is 
nothing but a Robin Hood in reverse raid on the federal treasury. When 
fixes to the Alternate Minimum Tax and interest costs are added in, the 
tax cut will cost over $2 trillion over the next ten years. The cost 
will likely top $4 trillion over the following ten years (2012-2022). A 
vote for this bill is a vote to squander the opportunity to address our 
nation's most pressing problems. We could lift up all children and 
restore the shining promise of equal opportunity by investing in the 
education and health care of our kids, over 20 percent of whom still 
live in poverty in this country. We could move to restore the dignity 
of older Americans by providing affordable prescription drugs, long-
term care, and securing the Social Security system. We could invest in 
responsible, long-term energy policies which protect our environment 
while boosting our energy capacities. Instead, we are today almost 
certainly deciding to ignore these priorities for years to come. We are 
surrendering on environmental conservation and protection. We are 
surrendering on investment in clean energy technologies. We are 
surrendering on tax relief for low and middle income Americans. And we 
are surrendering on decisions to invest in the health, character, 
skills and intellect of our kids.
  But it isn't just that we are spending nearly the whole surplus for 
the foreseeable future in one vote. It is what we are spending it on: 
tax cuts for the rich, the powerful, the connected.
  These tax cuts are still overwhelmingly weighted toward the 
wealthiest Americans: 35 percent of the benefits go to the wealthiest 1 
percent of Americans. Altogether, 55 percent of the cuts go the 
wealthiest 10 percent, while less than 16 percent of the cuts go to the 
60 percent of American families who earn $44,000 or less.
  Put another way, 80 percent of Americans will get 30 percent of the 
benefits in the bill, while 70 percent of the benefits in the bill will 
go to the 20 percent of Americans with the highest incomes.
  There are provisions of this bill I support. There is modest tax 
relief in this bill that goes to those who most need it. But not nearly 
enough. And the price we pay for this meager relief for working 
families is tax cuts three times larger targeted to the richest 
Americans. That's not a deal that I would want to explain to the 
working people in my state.
  Consequently, Americans who earn between $27,000 and $44,000 will get 
an average tax cut of merely $596. But the wealthiest Americans, with 
an average income of over $900,000, will see an average cut of $44,536.
  Additionally, 10 million children, 1 in 7 children, live in families 
that will still get no benefit from the legislation, because the 
parents or guardians do not earn enough to qualify for the tax cuts in 
the bill.
  In contrast, in 2010, the plan fully repeals the estate tax. This 
will cost the Federal Government $30 billion in that year alone and 
will cost nearly $1 trillion over the next 10 years. Yet the vast 
majority of estates, and nearly all small business and farms, will 
already be exempted from the estate tax when the repeal goes into 
effect because of the other estate tax reforms in the bill. By 2010, 
under the bill, a couple would be able to shield $7 million from estate 
taxes. Full repeal on top of those high exemptions will only benefit 
the richest of the rich.
  In Minnesota, in 1999 only 636 estates paid any estate tax. Only 636 
estates out of the nearly 5 million people who lived in my State. Only 
36 of those estates were valued at over $5 million!
  Now let me give credit where credit is due. At the strong insistence 
of some of us on the Democratic side, the child credit expansion that 
is included in the bill is a significant improvement over the 
President's proposal. It would be refundable to families earning more 
than $10,000 per year, phasing in at 15 percent of earnings above that 
amount. So, for example, a family earning $11,000 a year would get $150 
and a family earning $16,000 would get $900 as a refund from the IRS. 
If this provision becomes law, half a million children will be lifted 
out of poverty. This proposal offers some modest relief for certain low 
and moderate income families with kids, and the Committee should be 
applauded for at least including a partially refundable child credit in 
this bill.
  However, the partial refundability provision in this bill would still 
leave 10 million very poor children behind. That includes every child 
of a parent who works full-time at the minimum wage. Children left 
behind with the partial-refundability proposal include: 2 million 
children with a disabled parent; more than 300,000 children who live 
with a grandparent or other family members who are not working because 
they are retired; more than 6 million children whose parents work 
during all or part of the year; and 4 million children whose parents 
together worked at least 26 weeks--or half the year.
  Like the Reagan tax cuts of the early 1980s, this bill is too big, 
and fiscally irresponsible. It is grossly unfair. Its benefits go 
mostly to the wealthiest Americans. It will crowd out critical 
investments in education, health care, protecting the environment, 
energy conservation and renewables, and other key priorities for years 
to come. It will severely limit our ability to protect Social Security 
and Medicare, just as the baby boomer generation is preparing to 
retire.
  In conclusion, Mr. President, as we get ready to vote, I thank my 
colleagues for all their cooperation on this vote and say, with a 
twinkle in my eye, to my good friends on the other side, that in some 
ways this tax cut has finally made me a fiscal conservative because, as 
I look at what is going to happen in the out years, I see a huge 
erosion of the revenue base.
  I am so worried that at the very time people reach the age where they 
qualify for Social Security and Medicare, we are not going to have the 
resources. This is a mistake. It is a profound mistake, though I 
understand the good intentions and goodwill of, for example, the 
Senator from Iowa, Mr. Grassley.
  On another point: Whatever happened to the President's goal of leave 
no child behind? Whatever happened? The Senator from Massachusetts is 
absolutely right.
  The huge victory here--if you want to call it that--for those who 
believe there is no positive role for Government to make in the lives 
of people is that there will not be the revenue. So for those children 
who come from disadvantaged backgrounds, we are not going to have the 
funding for title I. We won't be able to make the commitment to make 
sure the children are kindergarten-ready or that higher education will 
be affordable. We won't be able to renew our national vow of equal 
opportunity for every child.
  I believe these tax cuts are directly antithetical to what our 
country is about, which is equal opportunity for every child. That is 
why I will vote no.
  The PRESIDING OFFICER. The Senator from Iowa, Mr. Grassley, is 
recognized.
  Mr. GRASSLEY. Mr. President, do I have 5 minutes?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. GRASSLEY. Mr. President, I yield the first 2 of my 5 minutes to 
the Senator from Texas, Mr. Gramm.
  The PRESIDING OFFICER. The Senator from Texas, Mr. Gramm, is 
recognized.
  Mr. GRAMM. Mr. President, I had the great good fortune of being here 
20 years ago and being involved in the

[[Page S5794]]

Reagan tax cuts--tax cuts that let working people keep more of what 
they earned and ignited the golden economic age in which we live.
  One of the advantages of living a long time and serving in public 
office a long time is that you get an opportunity for a day such as 
this when, 20 years later, we are cutting taxes again. This is a great 
day for the people who do the work and pay the taxes and pull the wagon 
in America and who often get forgotten by their Government.
  It is obvious in listening to our colleagues that it is a sad day for 
those who desperately wanted to spend this money here in Washington, 
DC, but I hope my colleagues find some solace in the fact that working 
men and women sitting around their kitchen tables trying to make ends 
meet will use this money far more effectively to promote their 
interests and America's interests than we would use it spending it here 
in Washington, DC.
  I thank our distinguished chairman, Senator Grassley, for his 
leadership in making this day possible. I reserve the remainder of the 
time for Senator Grassley.
  Mr. GRASSLEY. Mr. President, we have now come to the end of our many 
days of deliberation over the tax cut bill. This will probably be my 
final bill during my brief tenure as chairman of the Finance Committee, 
and so, I want to make a few closing remarks about the bill before us 
this morning.
  This bill represents an enormous bipartisan effort. This bill has had 
bipartisan participation from its very creation, all the way through to 
its completion in conference with the House. The bill before us today 
was drafted in concert with Senators Baucus, Breaux, and many others on 
the Finance Committee from both sides of the aisle--all of whom I 
consulted with personally. I thank you all for your insights and 
guidance in designing this bill.
  I would also like to thank Chairman Bill Thomas of the House Ways and 
Means Committee. His responsiveness to the difficulties we face here in 
the Senate was refreshing and very constructive. But most of all, we 
should thank President Bush. It was his leadership and vision that led 
us to this historic moment--as we prepare to enact the largest 
individual income tax cut in 20 years.
  We took as a starting point President Bush's efforts to provide 
income tax relief to all Americans. This legislation includes the four 
main elements of President Bush's goals for providing tax relief to 
working families: the bill before us today provides an across the board 
tax cut and creates the new low 10 percent rate requested by the 
President; the bill reforms and repeals the death tax, which the 
President wanted; the bill provides marriage penalty relief, which the 
President and Congress have sought for a very long time; the bill also 
includes a $1,000 refundable child credit, which was specifically 
requested by the President. Sixteen million more children will be 
helped by our bill. In addition, the bill contains an extensive 
education incentives package, pension and IRA enhancements, and AMT 
relief.
  This tax bill is a victory for Republicans. It is a victory for 
Democrats. It's a victory for the President, but most importantly, it 
is a victory for the taxpayers of the United States.
  Now for some of the details. First, the conference bill reduces 
marginal rates across-the-board and applies the President's 10 percent 
rate retroactively to January 1st of this year. The Treasury Department 
will issue rebate checks to American taxpayers to remit any excess 
taxes that have been withheld on their 10 percent earnings earlier this 
year. The 28 percent, 31 percent and 36 percent rates will be reduced 
by 3 points over the next several years.
  The first one point rate reduction will take effect on July 1--just a 
month from now.
  The rebate checks and immediate rate reductions will provide a 
stimulus that our sluggish economy very much needs. In addition, the 
39.6 percent top marginal rate will drop to 35 percent. While we don't 
go as far as the President in reducing the top rates--and I would add 
we didn't go as far as I would like--we also address the hidden 
marginal rate increases caused by current law that denies deductions 
for personal exemptions and itemized deductions.
  Those laws will be repealed, thus eliminating these hidden marginal 
rate increases and removing another complexity from the Code. We 
provide marriage penalty relief for married families--for families 
where both spouses work and where only one spouse works.
  The President's desire to expand the child credit to $1000 is met in 
this bill. And in response to the concerns of Senators Snowe, Lincoln, 
Breaux, Jeffords, and Kerry the child credit was expanded to help 
millions of children whose working parents do not pay income tax.
  And lastly, we heard America's voices and have reformed and repealed 
the death tax. Starting January 1 of next year, the unified credit is 
increased to $1 million and the top rate is cut to 50 percent. The 
burden of the death tax is reduced and will be eliminated--as called 
for by President Bush. This effort is due to the work of many Senators 
but I would particularly note the efforts of Senator Kyl and Senator 
Lincoln.
  In addition, the bill contains many provisions targeted for 
education. Elements include expansion of prepaid tuition programs to 
help families pay for college--long advocated by Senators Collins, 
McConnell, and Sessions. In addition, we provide college tuition 
deduction thanks to Senators Torricelli, Snowe, and Jeffords, as well 
as an expansion of the education savings accounts--in honor of Senator 
Coverdell--thanks to the work of Senator Torricelli and the Majority 
Leader. In addition to President Bush's proposals for tax relief for 
working families, we also included the Grassley-Baucus pension reform 
legislation which probably would not have made it in the bill without 
the longtime support of Senators Hatch and Jeffords.
  In addition to maintaining the basic framework of the bipartisan 
agreement, we were able to retain some of the important amendments 
added to the RELIEF Act on the Senate floor. The key amendments we kept 
were keeping with the major focus of the bill--providing benefits for 
working families. First among these is that the adoption credit is 
extended and expanded effective 2003. I have been a long advocate on 
this matter, but I want to recognize the critical work of Senators 
Landrieu and Craig in this matter. Further, we were able to retain the 
goal of giving employers greater tax incentives to provide child care 
to their employees--long advocated by Senator Kohl.
  In addition, we kept the policy advocated by Senator Jeffords of 
expanding the dependent care tax credit--which assists families facing 
the difficulties of providing care for children and spouses with 
special needs. We include Senator Bingaman's amendment offered in 
committee that allows the IRS to provide greater relief to families who 
are in a disaster area.
  Finally, we retained the Senate amendment championed by Senator 
Fitzgerald that excludes from income payments made to survivors of the 
Holocaust. America is a society of opportunity. Over 60 percent of all 
families will at one time or another be in the top fifth of income in 
this country.
  This bill will provide the American taxpayer with the greatest amount 
of tax relief in a generation. And they deserve it. It is wrong that in 
a time of surpluses we are still imposing a record tax burden on 
workers. With passage of this bill, struggling families will have more 
money to make ends meet; parents and students will be able to more 
easily afford the costs of a college education.
  A successful business woman will be able to expand and hire more 
people; a father finally getting a good paycheck after years of work 
will be able to better provide for his aging mother; and, a farmer can 
pass on the family farm without his children having to sell half the 
land to pay estate taxes. The examples are endless of the great 
benefits that we realize when we give tax relief to working families. I 
would remind my colleagues again that the hallmark of this bill is that 
relief for low-income families comes first.
  The marginal rate drop to 10 percent is immediate, and the effects of 
that reduction will be placed in taxpayer's hands this year. The child 
credit expansion to low-income families is immediate. Over 16 million 
more children will be helped by the provisions of this

[[Page S5795]]

bill. In addition, the numbers show that once again, our bipartisan 
bill makes our tax system even more progressive. That is, at the end of 
the day upper income families would be paying a greater share of taxes 
than lower income taxpayers.
  I also have a message for those who claim this bill benefits the rich 
at the expense of the poor, and that it will jeopardize Medicare and 
Social Security. Those things just aren't true. This is a bipartisan 
bill. We'll spend at least $3.5 trillion on Medicare in the next 10 
years. That's more than 2.5 times the size of the tax cut. We wouldn't 
put forward bipartisan legislation that jeopardizes Medicare and Social 
Security. So I hope Americans will rest easy that this tax bill doesn't 
shortchange one group of Americans at the expense of others.

  My message to taxpayers is this: Substantial tax relief is on the 
way. The Government will ease its grip on your wallet. You deserve 
this. Now, the last time the Senate considered this bill, it turned the 
bill over and over and around and around. Some Members tried to huff 
and puff and blow this bill down. That didn't work. Like a house made 
of bricks, our bipartisan bill is standing strong. But apiece of 
legislation is only as good as the last vote it survives. Today, we are 
faced with a crucial vote. Let me say it again: This is a bipartisan 
bill.
  I have described this legislation to remind Senators of the balanced 
approach that took place in crafting this bill; to highlight the fact 
that it reflects the views and priorities of a wide range of members on 
both sides of the aisle. I can assure my colleagues on the other side 
of the aisle that if Senator Baucus had not been present at the 
creation of this bill--it would have been a very different piece of 
legislation.
  It is because of his efforts that there are many elements in this 
bill that members on the other side of the aisle can enthusiastically 
support. I am tired of reading in the press the constant carping of 
Senator Baucus' efforts to draft a bipartisan bill. It seems that while 
many are happy to talk about bipartisanship that can't stand to see 
bipartisanship practiced. We saw that happen the last time we brought 
this bill to the floor of the Senate.
  I urge my colleagues to stop the petty partisanship and put the 
American taxpayers first. Now it is time for the Senate to send this 
much needed tax relief to the President for signature. America is 
waiting, and America is watching. Let's send them this historic tax 
relief package today.
  Mr. President, I have 3 minutes, and I yield 1 minute to Senator 
Hatch.
  Mr. HATCH. Mr. President, I am grateful that I was a conferee in this 
monumental historic event. I personally congratulate Chairman Grassley 
and the ranking member, Senator Baucus. Both worked very well together. 
Of course, Chairman Thomas and House Leader Armey and Speaker Hastert 
did a terrific job, as did John Breaux, who has worked so magnificently 
through the years.
  Six months ago nobody thought the President would win on a $1.35 
trillion tax cut. It is amazing. He hung in there. He stood for what he 
believed, and I believe the American people are going to be the 
beneficiaries.
  I want to highlight one thing. There are 16 million additional 
children who directly benefit from the refundable child credit 
contained in this comprise. This is one of the best bills for children 
and families I have seen in years and I just wanted to make that clear 
to everybody. The rate reductions and every other provision will 
benefit America.
  This conference report is not perfect, just as no political 
compromise is perfect. I, like many of our colleagues, would have 
greatly preferred a larger tax cut of at least $1.6 trillion. Ideally, 
the top marginal rate should have come down to no more than 33 percent, 
with corresponding reductions in all the other brackets. The 
alternative minimum tax still will afflict millions of Americans. And, 
I greatly regret that the permanent extension of the research and 
experimentation credit was not accommodated in the final product.
  On the other hand, Mr. President, this conference report includes the 
necessary elements that will make it stand out as landmark legislation. 
It does so much for the people of Utah and for the people of America. 
It begins to reverse the flawed philosophy that says the government 
knows best how to spend the taxpayers' hard-earned money. It cuts taxes 
for every American who pays them. It will stimulate the economy and 
provide incentives to keep it strong in the future. It acknowledges the 
importance of families, as well as the need for providing a good 
education for our people. It also includes strong incentives for all 
Americans to increase their savings and prepare for their own 
retirements. It recognizes the gross unfairness of the confiscatory 
death tax and begins immediate relief with repeal within a decade. It 
makes great strides against the unfairness of the marriage tax penalty 
in a way that does not punish those families where one spouse chooses 
to stay at home. On the whole, it is a very good bill.
  Although this tax cut bill is the capstone of our budget agreement, I 
also look at it as just the beginning. The beginning of what I hope 
will be more bipartisan work this Congress to make the tax code even 
more fair and certainly more simple. And, what I hope will be 
continuing cooperation between the President and the Congress.
  I again want to extent my congratulations and gratitude to the 
chairman of the Finance Committee, Senator Grassley, for his 
extraordinary dedication to bipartisanship and his tireless dedication 
to accomplishing the triumph that is represented in the conference 
report that lies before the Senate today. Without his perseverance and 
persistence in sticking to the goal at hand despite many obstacles, 
this victory for the American taxpayer would not have been possible.
  Likewise, I thank Senator Baucus for the major role he played in 
getting us to this point today, and for his courage in the face of 
opposition of many in his own party. He, along with Senator Breaux, 
have shown all of us what it means to rise above partisanship and pure 
politics for the sake of what is good for the nation. They, together 
with the others in the soon-to-be majority party who supported this 
bipartisan tax cut, have my respect, my gratitude, and my promise that 
I will continue to reach across the aisle to work with them to further 
improve our tax system in the future.
  My fellow conferees deserve a lot of credit for accomplishing this 
difficult task. Congressman Thomas, the new chairman of the Ways and 
Means Committee, demonstrated toughness, dedication, knowledge, and 
compassion in representing the House position. I also want to commend 
Speaker Hastert and Leader Armey for their tireless support and 
contributions. On the Senate side, Senators Murkowski, Nickles, and 
Gramm put in many long, difficult, and late hours in helping us find 
our way through the differences in the House and Senate bills to reach 
the compromise.
  Mr. President, most of all, I want to extend my congratulations to 
President George W. Bush. The tax cut the Senate just passed is a 
testament to his vision and his willingness to carry out with single-
mindedness a campaign promise that many, frankly, took lightly and 
considered highly unlikely if not impossible. This is what real 
leadership is all about, and I commend him for it.
  This is a great day in the United States Congress. I am proud that I 
was able to be part of it.
  I thank my colleagues.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, there will be a lot of speeches about 
the substance of the legislation and, obviously, I think it is a good 
piece of legislation or I would not have negotiated the final product. 
I think it is good for the economy. It is surely good for working men 
and women of America to have tax relief. It is surely good for fiscal 
discipline within our Government as we make sure that the Government 
must squeeze every dollar of value out of every penny that we spend.
  I think leaving this money in the pockets of the taxpayers rather 
than sending it to Washington will help us with our fiscal discipline. 
Most importantly, I think the process by which this product is before 
us is much more significant than the product because the control of the 
Senate hangs in the balance--even over the next several years, it seems 
to me, regardless of the exact numbers.

[[Page S5796]]

  The Senate is known for its bipartisanship to pass legislation. I 
hope that the work Senator Baucus and I have done in a bipartisan way 
to bring this product of tax relief to the American taxpayers and to 
this body for it to become law serves as an example not only for the 
entire Senate but also will continue the tradition of bipartisanship 
that we have had in our committee.
  I hope that we do, in fact, look upon the Senate as being very 
closely divided for a long period of time, and for whoever is in 
control, it is very important that we continue this bipartisanship in 
the Senate.
  I yield the floor, and I yield back the remainder of my time.
  The PRESIDING OFFICER. The question is on agreeing to the conference 
report.
  Mr. CRAIG. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. BINGAMAN (after having voted in the negative). Mr. President, on 
this vote, I have a pair with the Senator from New Mexico (Mr. 
Domenici). If he were present and voting, he would vote ``yea.'' If I 
were permitted to vote, I would vote ``nay.'' I therefore withdraw my 
vote.
  Mr. AKAKA (after having voted in the negative). Mr. President, on 
this vote, I have a pair with the Senator from Wyoming (Mr. Enzi). If 
he were present and voting, he would vote ``yea.'' If I were permitted 
to vote, I would vote ``nay.'' I therefore withdraw my vote.
  Mr. NICKLES. I announce that the Senator from Wyoming (Mr. Enzi) and 
the Senator from New Mexico (Mr. Domenici) are necessarily absent.
  I further announce that if present and voting, the Senator from 
Wyoming (Mr. Enzi) and the Senator from New Mexico (Mr. Domenici) would 
each vote ``yea.''
  Mr. REID. I announce that the Senator from California (Mrs. Boxer), 
the Senator from Massachusetts (Mr. Kerry), the Senator from Washington 
(Mrs. Murray) are necessarily absent.
  I further announce that the Senator from Vermont (Mr. Leahy) is 
absent attending a funeral.
  I also announce that the Senator from Iowa (Mr. Harkin) is absent 
attending his daughter's wedding.
  I further announce that if present and voting, the Senator from 
California (Mrs. Boxer), the Senator from Iowa (Mr. Harkin), the 
Senator from Massachusetts (Mr. Kerry), and the Senator from Vermont 
(Mr. Leahy) would each vote ``nay.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 58, nays 33, as follows:

                      [Rollcall Vote No. 170 Leg.]

                                YEAS--58

     Allard
     Allen
     Baucus
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Carnahan
     Cleland
     Cochran
     Collins
     Craig
     Crapo
     DeWine
     Ensign
     Feinstein
     Fitzgerald
     Frist
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kohl
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner

                                NAYS--33

     Bayh
     Biden
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Graham
     Hollings
     Inouye
     Kennedy
     Levin
     Lieberman
     McCain
     Mikulski
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Wellstone
     Wyden

       PRESENT AND GIVING A LIVE PAIR, AS PREVIOUSLY RECORDED--2

     Akaka,
     against
     Bingaman, against
       

                             NOT VOTING--7

     Boxer
     Domenici
     Enzi
     Harkin
     Kerry
     Leahy
     Murray
  The conference report was agreed to.
  Mr. ENSIGN. I move to reconsider the vote by which the conference 
report was agreed to.
  Mr. BROWNBACK. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                          ____________________