[Congressional Record Volume 148, Number 7 (Tuesday, February 5, 2002)]
[Senate]
[Pages S322-S335]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HOPE FOR CHILDREN ACT--Resumed
The PRESIDING OFFICER. The clerk will report the bill.
The bill clerk read as follows:
A bill (H.R. 622) to amend the Internal Revenue Code of
1986 to expand the adoption credit, and for other purposes.
Pending:
Daschle/Baucus amendment No. 2698, in the nature of a
substitute.
Reid (for Baucus) amendment No. 2721 (to amendment No.
2698), to provide emergency agriculture assistance.
Bunning/Inhofe modified amendment No. 2699 (to the language
proposed to be stricken by amendment No. 2698), to provide
that the exclusion from gross income for foster care payments
shall also apply to payments by qualified placement agencies.
Hatch/Bennett amendment No. 2724 (to the language proposed
to be stricken by amendment No. 2698), to amend the Internal
Revenue Code of 1986 to allow the carryback of certain net
operating losses for 7 years.
Domenici amendment No. 2723 (to the language proposed to be
stricken by amendment No. 2698), to provide for a payroll tax
holiday.
Allard/Hatch/Allen amendment No. 2722 (to the language
proposed to be stricken by amendment No. 2698), to amend the
Internal Revenue Code of 1986 to permanently extend the
research credit and to increase the rates of the alternative
incremental credit.
Smith of New Hampshire amendment No. 2732 (to the language
proposed to be stricken by amendment No. 2698), to provide a
waiver of the early withdrawal penalty for distributions from
qualified retirement plans to individuals called to active
duty during the national emergency declared by the President
on September 14, 2001.
Smith of New Hampshire amendment No. 2733 (to the language
proposed to be stricken by amendment No. 2698), to prohibit a
State from imposing a discriminatory tax on income earned
within such State by nonresidents of such State.
Smith of New Hampshire amendment No. 2734 (to the language
proposed to be stricken by amendment No. 2698), to provide
that tips
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received for certain services shall not be subject to income
or employment taxes.
Smith of New Hampshire amendment No. 2735 (to the language
proposed to be stricken by amendment No. 2698), to allow a
deduction for real property taxes whether or not the taxpayer
itemizes other deductions.
Sessions amendment No. 2736 (to the language proposed to be
stricken by amendment No. 2698), to amend the Internal
Revenue Code of 1986 to provide tax incentives for economic
recovery and provide for the payment of emergency extended
unemployment compensation.
Grassley (for McCain) amendment No. 2700 (to the language
proposed to be stricken by amendment No. 2698), to amend the
Internal Revenue Code of 1986 to provide a special rule for
members of the uniformed services and Foreign Service in
determining the exclusion of gain from the sale of a
principal residence.
Kyl amendment No. 2758 (to the language proposed to be
stricken by amendment No. 2698), to remove the sunset on the
repeal of the estate tax.
Reid modified amendment No. 2764 (to amendment No. 2698),
to amend the Internal Revenue Code of 1986 to provide a
refundable credit for recreational travel, and to modify the
business expense limits.
Reid (for Durbin) amendment No. 2766 (to amendment No.
2698), to provide enhanced unemployment compensation
benefits.
Lincoln amendment No. 2767 (to amendment No. 2698), to
delay until at lease June 30, 2002, any changes in medicaid
regulations that modify the medicaid upper payment limit for
non-State Government-owned or operated hospitals.
Thomas amendment No. 2728 (to the language proposed to be
stricken by amendment No. 2698), to amend the Internal
Revenue Code of 1986 to modify the qualified small issue bond
provisions.
Craig amendment No. 2770 (to the language proposed to be
stricken by amendment No. 2698), to amend the Internal
Revenue Code of 1986 to expand the availability of Archer
medical savings accounts.
Grassley amendment No. 2773 (to the language proposed to be
stricken by amendment No. 2698), to provide tax incentives
for economic recovery and assistance to displaced workers.
amendment no. 2699, as modified
The PRESIDING OFFICER. The question is on agreeing to amendment No.
2699, as modified.
Mr. REID. Mr. President, I ask unanimous consent the yeas and nays on
the Bunning amendment, which have been previously ordered, be vitiated.
The PRESIDING OFFICER. Without objection, it is so ordered.
The question is on agreeing to amendment No. 2699, as modified.
The amendment (No. 2699), as modified, was agreed to.
Mr. REID. I move to reconsider the vote and move to lay that motion
on the table.
The motion to lay on the table was agreed to.
Amendment No. 2721
Mr. REID. Mr. President, it is my understanding we are now on the
Baucus amendment, which has been previously debated.
The PRESIDING OFFICER. The Senator is correct.
Mr. REID. It is my understanding there are others who wish to speak
on this amendment. I ask all those within the sound of my voice to come
over and renew the debate.
Amendment No. 2807 to Amendment No. 2721
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I believe we are on the Baucus
amendment. On behalf of Senator Kyl, I call up amendment No. 2758 as a
second-degree amendment.
Mr. REID. Mr. President, does it take unanimous consent to move off
the Baucus amendment to the Kyl amendment?
Mr. SESSIONS. I offer this as a second-degree amendment.
The PRESIDING OFFICER. Second-degree amendments are in order.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Alabama [Mr. Sessions], for Mr. Kyl,
proposes an amendment numbered 2807 to the amendment No.
2721.
Mr. SESSIONS. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To remove the sunset on the repeal of the estate tax)
At the end, add the following:
SEC. . PERMANENT REPEAL OF ESTATE TAXES.
Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended--
(1) by striking ``this Act'' and all that follows through
``2010'' in subsection (a) and inserting ``this Act (other
than title V) shall not apply to taxable, plan, or limitation
years beginning after December 31, 2010.'', and
(2) by striking ``, estates, gifts, and transfers'' in
subsection (b).
Mr. REID. Mr. President, will the Senator yield for the purpose of a
unanimous consent request? This will require no debate. There is an
amendment Senator Kyl and I filed on which Senator Dorgan wants to
offer a second-degree amendment. He says he does not need to debate it
at this time.
I ask unanimous consent that we be allowed to move off the pending
amendment temporarily so that Senator Dorgan can offer his amendment to
the Reid-Kyl amendment, and then we will be right back on the second-
degree amendment of the Senator from Arizona.
Mr. SESSIONS. Do we have a time agreement? How quickly will we be
back on the Kyl amendment?
Mr. REID. Two minutes?
Mr. DORGAN. Yes, Mr. President, that will be fine.
Mr. SESSIONS. Will the Senator from Nevada restate the unanimous
consent request?
Mr. REID. Mr. President, I ask unanimous consent that the Senate
proceed to the Reid-Kyl amendment, which is two amendments down the
line, and that Senator Dorgan offer a second-degree amendment, be
allowed to speak for 2 minutes, and then we immediately return to the
Kyl second-degree amendment to the underlying Baucus amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. Mr. President, I wish to offer a second-degree amendment.
I ask unanimous consent that we be on amendment No. 2764 which has been
proposed by Senator Reid and Senator Kyl.
Mr. KYL. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. KYL. The point of the unanimous consent request of the Senator
from Nevada was to allow the second-degree amendment to the Reid-Kyl
amendment and to allow the Senator from North Dakota to speak about
that amendment for 2 minutes and immediately return to the pending
business, which is the Baucus amendment with the second-degree
amendment, offered by the Senator from Alabama on behalf of myself,
pending; is that correct?
Mr. REID. The Senator from Arizona is correct.
The PRESIDING OFFICER. The last request of the Senator from North
Dakota is consistent with the order of the Senator from Arizona.
Mr. KYL. Mr. President, I ask the Senator from North Dakota to
restate his request. I obviously misunderstood.
Mr. DORGAN. Mr. President, I ask unanimous consent that the amendment
proposed by Senator Reid and Senator Kyl, amendment No. 2764, which had
previously been offered but set aside, be brought back so I can offer a
second-degree amendment to it. I ask that amendment No. 2764 be the
pending business.
Mr. SESSIONS. Reserving the right to object, my concern is that has
already been taken care of by Senator Reid. It might confuse matters. I
object.
The PRESIDING OFFICER. Objection is heard.
Amendment No. 2808 to Amendment No. 2764
Mr. DORGAN. Mr. President, I send an amendment to the desk. This is
an amendment I had filed. It is called the travel industry
stabilization amendment. I offer it as a second-degree amendment to the
Reid-Kyl amendment that was offered previously.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from North Dakota [Mr. Dorgan] proposes an
amendment numbered 2808 to amendment No. 2764.
Mr. DORGAN. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To preserve the continued viability of the United States
Travel industry)
At the end, add the following:
[[Page S324]]
TITLE ___--TRAVEL INDUSTRY STABILIZATION
SECTION _01. SHORT TITLE.
This title may be cited as the ``American Travel Industry
Stabilization Act''.
SEC. _02. TRAVEL INDUSTRY DISASTER RELIEF.
(a) In General.--Notwithstanding any other provision of
law, the President shall take the actions described in
subsection (b) to compensate eligible travel-related
businesses.
(b) Actions Described.--
(1) In general.--Subject to such terms and conditions as
the President deems necessary, and upon application, the
President is authorized to issue Federal credit instruments
to eligible travel-related businesses described in subsection
(c) that do not, in the aggregate, exceed $2,000,000,000 and
provide the subsidy amounts necessary for such instruments in
accordance with the provisions of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661 et seq.).
(2) Time for application.--An application for a Federal
credit instrument shall be filed by an eligible travel-
related business not later than 1 year after the promulgation
of regulations.
(3) Terms of credit instruments.--A loan guaranteed under
this title may be used exclusively for the purpose of meeting
obligations and expenses to the extent that an applicant
demonstrates--
(A) business operations were directly and adversely
affected by the events of September 11, 2001;
(B) the loan guarantee is necessary to meet such
obligations;
(C) the inability of the applicant to meet such obligations
or expenses is directly attributable to the impact of
September 11, 2001; and
(D) the applicant has the ability to repay the loan.
(c) Definitions.--In this title:
(1) Board.--The term ``Board'' means the Air Transportation
Stabilization Board established under the Air Transportation
Safety and System Stabilization Act (49 U.S.C. 40101 note;
P.L. 107-42).
(2) Eligible travel-related business.--The term ``eligible
travel-related business'' means a business that was injured
by the Government shutdown of the airline industry following
the terrorist attacks on the United States that occurred on
September 11, 2001, and that on such date--
(A) had a contractual arrangement with an air carrier to
provide goods or services, including those with a contractual
relationship with the Airline Reporting Corporation; or
(B) was a nonaeronautical for-profit business operating at
an airport engaged in the sale of consumer goods or services
to the public under an arrangement with the airport or the
airport's governing body.
(3) Federal credit instrument.--The term ``Federal credit
instrument'' means any guarantee or other pledge by the Board
issued under section _02(b) to pledge the full faith and
credit of the United States to pay all or part of any of the
principal of and interest on a loan or other debt obligation
issued by an obligor and funded by a lender.
(4) Financial obligation.--The term ``financial
obligation'' means any note, bond, debenture, or other debt
obligation issued by an obligor in connection with financing
under this section and section _02(b).
(5) Lender.--The term ``lender'' means any non-Federal
qualified institutional buyer (as defined by section
230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulatory) known as rule 144A(a) of the Securities
and Exchange Commission and issued under the Securities Act
of 1933), including--
(A) a qualified retirement plan (as defined in section
4974(c) of the Internal Revenue Code of 1986 (26 U.S.C.
4974(c))) that is a qualified institutional buyer; and
(B) a governmental plan (as defined in section 414(d) of
the Internal Revenue Code of 1986 (26 U.S.C. 414(d))) that is
a qualified institutional buyer.
(6) Obligor.--The term ``obligor'' means a party primarily
liable for payment of the principal of, or interest on, a
Federal credit instrument, which party may be a corporation,
partnership, joint venture, trust, or governmental entity,
agency, or instrumentality.
(d) Emergency Designation.--Congress designates the amount
of new budget authority and outlays in all fiscal years
resulting from this title as an emergency requirement
pursuant to section 252(e) of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such
amount shall be available only to the extent that a request,
that includes designation of such amount as an emergency
requirement as defined in such Act, is transmitted by the
President to Congress.
SEC. _03. ADDITIONAL FUNCTIONS FOR THE AIRLINE STABILIZATION
BOARD.
(a) Additional Functions To Stabilize the Travel
Industry.--The Board shall review and make recommendations to
the President with respect to applications for Federal credit
instruments submitted under section _02(b).
(b) Federal Credit Instruments.--
(1) In general.--The Board may enter into agreements with 1
or more obligors to issue Federal credit instruments under
section _02(b) if the Board determines, in its discretion,
that--
(A) the obligor is an entity in a travel-related business
for which credit is not reasonably available at the time of
the transaction;
(B) the intended obligation by the obligor is prudently
incurred; and
(C) such agreement is a necessary part of maintaining a
safe, efficient, and viable travel industry in the United
States.
(2) Terms and limitations.--
(A) Forms, terms, and conditions.--A Federal credit
instrument shall be issued under section _02(b) in such form
and such terms and conditions and contain such covenants,
representatives, warranties, and requirements (including
requirements for audits) as the Board determines appropriate,
provided that--
(i) a loan shall be repaid over a period not to exceed 5
years from the date that the loan is guaranteed under this
title;
(ii) the Government guarantee shall cover not less than 80
percent of the value of the loan;
(iii) loan guarantees under this title shall be extended
based upon the ability of the eligible travel-related
business to repay the loan without regard to collateral; and
(iv) any loan origination fee may not exceed 1 percent of
the loan value.
(B) Procedures.--Not later than 14 days after the date of
enactment of this title, the Director of the Office of
Management and Budget, in consultation with the Board, shall
issue regulations setting forth procedures for application
and minimum requirements.
(c) Financial Protection of Government.--
(1) In general.--To the extent feasible and practicable, as
provided in paragraphs (2) and (3), the Board shall ensure
that the Government is compensated for the risk assumed in
making guarantees under this title.
(2) Government participation in gains.--To the extent to
which any participating corporation accepts financial
assistance, in the form of accepting the proceeds of any
loans guaranteed by the Government under this title, the
Board is authorized to enter into contracts under which the
Government, contingent on the financial success of the
participating corporation, would participate in the gains of
the participating corporation or its security holders through
the use of such instruments as warrants, stock options,
common or preferred stock, or other appropriate equity
instruments.
(3) Deposit in treasury.--All amounts collected by the
Secretary of the Treasury under this subsection shall be
deposited in the Treasury as miscellaneous receipts.
(e) Authorization of Funds.--Congress authorizes and hereby
appropriates such sums as are necessary to carry out the
purposes of this title.
Mr. DORGAN. Mr. President, I will not take 2 minutes because I will
speak on this at another time. I indicated previously I support the
underlying Reid-Kyl amendment which deals with travel and tourism-
related issues. The amendment I have offered is an amendment that deals
with some loan guarantees to those businesses that have a connection to
the airports and the airlines that had been shut down by the Federal
Government post-September 11. Many of them remain in very difficult
straits. They face some very difficult financial troubles.
The Federal Government did provide loan guarantees and grants to the
airlines. I was supportive of that. But there were ancillary businesses
that are related to the airlines and related to the airports that
suffered substantial losses as a result of actions by the Federal
Government to shut down air service.
This is legislation I have written to address that situation in the
form of loan guarantees. I have spent time with my colleague from
Nevada, Senator Reid, and others of my colleagues who are supportive of
this approach.
I offer it as a second-degree amendment because I believe it is
appropriately something that should be attached to the Reid-Kyl
amendment which I intend to support as well.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. KYL. Mr. President, I appreciate the spirit in which the Senator
from North Dakota proposed the second-degree amendment. I am hopeful we
will be able to adopt the Reid-Kyl amendment at a later time.
Amendment No. 2807
Mr. KYL. Mr. President, what is pending before the Senate is my
second-degree amendment to the Baucus amendment, which for those who
are interpreting this means we are back on the question of whether we
can repeal permanently the estate tax or, as it is frequently called,
the death tax.
As we all will recall, last year when we passed the Tax Reform Act,
one of the provisions that was incorporated within that bill was a
gradual reduction of the estate tax rates and enlargement of the
exemption, and finally, in the ninth year, an actual repeal of the
existing death tax.
[[Page S325]]
We were joined in a bipartisan coalition to support that. There were
literally scores and scores of organizations--and I am going to ask
unanimous consent after a bit to print in the Record the list of
organizations that supported the repeal of the death tax--and we even
defeated an amendment of Senator Conrad of North Dakota that would have
put the Senate on record as saying we should not make it permanent.
Clearly, the intention was to make it permanent; the desire was to
make it permanent. I do not think anybody would have stood before the
Senate and said we wanted to repeal the estate tax for 1 year. They
would have been laughed out of the body. Yet that is precisely what the
effect of our action was.
There is a rule in the Senate that does not allow us to work in more
than a 10-year window without a 60-vote majority. There is a rule that
required us to change the procedure, and by making the procedure for 10
years, the effect is to sunset the repeal. That means we go right back
to where it was last year with a 60-percent rate of the death tax and
only a $675,000 exemption.
If one wants to see how this works, in the year 2010 you do not have
to pay any death tax if you die. It basically pays you to die in that
year, but do not try to live a day into the next year because you are
then going to have to pay the entire death tax as it existed in 2001.
We go way back, in other words, to a punitive, destructive death tax.
Clearly, we did not mean for this to be the way it was. Clearly, we
would like to make it permanent, and this is the time to do it because
there is significant evidence that making the death tax repeal
permanent will significantly stimulate the economy and create jobs.
That is the reason for bringing it up at this time.
We are talking about the stimulus package. The President is talking
about creating jobs, and by repealing the death tax permanently we can
achieve those objectives.
How is that so? In simple terms, people still have to plan for the
death tax. They still have to buy the insurance. They still have to pay
the lawyers. They still have to pay the estate tax planners, the
accountants, and all the rest of it unless they are absolutely sure
they are going to die during one of the 365 days of the 10th year. If
they cannot be sure they are going to die during that period of time,
then they need to plan because the tax is back in effect.
Who, after all, except someone who would be deliberately taking their
life, can predict when they are going to die? One sure does not want to
be lucky enough to live beyond the 10th year because then they are
going to get stuck with the death tax with its punitive rates, just as
it was last year. That is why there is a huge expense involved in the
existing law, and that expense every year, by farmers and small
businessmen and other people in this country, is money that is spent on
an unproductive enterprise that could be spent in creating jobs.
Let us get to a couple of specifics, and then I will ask some of my
colleagues to join in this debate. A December 1998 report by the Joint
Economic Committee concluded the existence of the death tax in this
century has reduced the stock of capital in the economy by nearly half
a trillion dollars. By repealing the death tax and putting those
resources to better use, i.e., investment, the Joint Committee
estimates as many as 240,000 jobs could be created over the next 7
years, and Americans would have an additional $24.4 billion in
disposable personal income. That is stimulus.
You want to stimulate the economy? You want to create jobs? You want
investment in capital and other businesses? Permanently repealing the
death tax will do that.
Last year, Dr. Wilbur Steger, a Ph.D. president of CONSAD Research
Corporation, and an adjunct professor of policy science at the Heinz
School of Carnegie Mellon University, testified before the Senate
Finance Committee and disputed the death tax supporters' arguments that
only 2 percent of Americans are affected by the tax. Rather than
affecting less than 500 family businesses in a typical year, he said
the total number of taxable estates that consist largely of family-
owned businesses likely exceeds 10,000 families annually. He went on to
state an immediate death tax repeal would provide a $40 billion
automatic stimulus to the economy.
So what we could do best to stimulate the economy and create jobs is
to ensure that the death tax repeal we voted for last year is in fact
made permanent.
I am going to provide some additional evidence that we can create
jobs and stimulate the economy with the permanent repeal of the death
tax, but at this time I yield to my colleague from Oklahoma, who I know
wanted to make a few remarks before he has to leave.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, I ask unanimous consent to be made a
cosponsor of Senator Kyl's amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NICKLES. Mr. President, this amendment is a very positive
amendment. The Senator from Montana, Mr. Baucus, introduced an
amendment that would add another $2.3 billion in emergency spending for
agriculture. We debated that last week. We defeated it. We defeated it
on a budget point of order. I made that motion because we have had a
lot of emergency spending for agriculture. As a matter of fact, the
last couple of years it has just ballooned. We averaged less than a
billion or two for decades, and then all of a sudden the last couple of
years we start doing $12 billion, $13 billion, $14 billion of emergency
spending.
The Senator from Montana said we have more problems; let's add
another $2 billion or $3 billion--not in the context of the farm bill
or the budget but just another couple billion dollars. Now that we are
in deficits, I question that. My colleague from Arizona offered an
amendment that my farmers have been talking to me about for the last
20-some years, and that is to repeal the death tax. Why in the world
should agriculture, or anybody who has a business, have to sell the
business because somebody happens to pass away? Somebody passes away
and all of a sudden the Government says it wants 55 percent of their
farm, 55 percent of their business. I happen to think that is wrong.
In the tax bill we passed last year, we reduced the estate tax and we
increased the exemptions. We increased the exemption from $675,000 to a
million dollars beginning January 1 of 2002. So that is a positive
thing, a good thing. Over the course of the tax bill, over the next 10
years, we eliminated the death tax, increased the exemption from $1
million to $2 million to $4 million, where in the year 2010 the death
tax is repealed. That entire bill was sunsetted. People who do not
follow the Senate and do not know our rules ask why did we sunset it?
We sunsetted it because of the reconciliation bill. The reconciliation
bill, by law, has to be within a 10-year timeframe. We could not make
permanent tax law changes. We could change the law in 10 years. So that
is exactly what we did.
The Senator from Arizona says in this particular case the sunset does
not work. When people are doing estate planning, they want to know what
their tax liability is when they die and, if they have an estate, they
can plan accordingly. Maybe they can give their property to a son or a
grandson, a grandchild, a granddaughter, or maybe they want to give it
to a trust or they want to give it to a charity or they want to break
it up. Whatever they want to do, they should have those options. They
should not be faced with the current situation of well, OK, we are
going to reduce the death tax for years, increase the exemption up to
$4 million, in effect reducing the death tax, but in the year 2011 it
reverts back and all of a sudden you are looking at an enormous tax
rate, a tax rate that would be as high as 50 percent. That is wrong.
So the Senator from Arizona says: Let us fix it. Let us make it
permanent. That was the intent of the bill that we passed last year. I
believe that is where the votes are in the Senate. If they believe in
free enterprise, if they believe in agriculture, if they believe in
family farms, if they do not want an enterprise, whether it be a farm
or a business, if they do not want somebody to have to sell it because
someone passes away, to give Government half
[[Page S326]]
of it, then support the amendment of Senator Kyl.
If my colleagues really want to do something, let us make this tax
change, which, because we were under reconciliation last year had to be
temporary, had to be sunsetted. We are not under reconciliation now so
we do not have those constrictions imposed upon us as Members of the
Senate. We are not under those rules, so I encourage my colleagues to
not say, oh, yes, they supported elimination of the death tax, and in
the year 2011 it is reinstated at the previously higher rates. That
would be grossly unfair and grossly inequitable.
For people who are trying to do estate planning and trying to
estimate what their tax liability would be for their kids or for their
grandkids, it is tremendously unfair. It might be great for the estate
lawyers, for estate planners and others because the more Congress
changes this, the more they get to do in writing wills and rewriting
estates and how planning should be done. So the way to solve this
problem is to pass the amendment of the Senator from Arizona. That is
the best thing we could do for agriculture, not another $2 billion, $3
billion in emergency assistance.
Every Congressman and every Senator knows if we could go back and
tell our agricultural community, the Farm Bureau, the farmers union,
the wheat growers, the cattlemen, and so on, that we repealed the death
tax, we know we would get a standing ovation because of the very fact
that many of those farms are second and third generation. They are
wealthy on paper but they are cash poor.
So if they pass away now, they know their survivors will have to sell
the operation to pay the death tax, to pay the tax that will be owed
the Federal Government. When the Government comes in and says they want
half, they will have to sell it; they will have to break it up. In the
process, it will cost a lot of jobs.
The amendment of Senator Kyl creates jobs. It will help maintain
small businesses so they do not have to break up. It will help maintain
farms and ranches so they will not have to break them up into smaller
units or sell them for the taxman.
So I again compliment my colleague from Arizona. I think he has an
excellent amendment. He has added it to the amendment of Senator
Baucus. I encourage people on both sides of the aisle to vote in favor
of the amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Mr. President, I ask unanimous consent that I be named
as a cosponsor of Senator Kyl's amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, when I first came to the Senate and I
met with farm people in my State, this was their No. 1 issue--to
eliminate the death tax. It is savaging closely held enterprises all
over America, particularly farms. It is something that touches people
in a very real way. The way this elimination has occurred as part of
the budget reconciliation, as Senator Nickles so ably described, we
will have elimination of the death tax 1 year, and a reimposition of it
the next year, leaving estate planning problems for people trying to
wrestle with that. It has human consequences.
I remember being on an airplane not too long ago with a professional
woman. She told me about her grandfather dying back in the 1980s. A tax
change in the death tax was passed during the Reagan years. It was to
take effect January 1. The family was home for Christmas. He was dying
of cancer. He had terminal cancer. Each morning he asked what day it
was. He died 11 a.m., January 1--his last contribution to his family.
This is personal. It is real. It savages businesses.
Let me try to explain why I believe we have a particularly pernicious
consequence as a result of the death tax that has not been sufficiently
discussed and is causing damages to our economy far greater than a lot
of people thought. This is the reason. I thought about farmers in
Alabama. Maybe they own a couple thousand acres, and maybe some of that
land is near an airport or town and the value on paper is high but they
don't want to sell it. Compare that to an international paper company
that may own 600,000 acres of land, 200,000 or 100,000 acres of land.
They compete against one another. If they are timber producing, and
both grow timber, they compete against one another.
The big multinational corporation that does business all over the
world is never impacted adversely by the estate tax. People who own
stock in it may be, but not that corporation. But the individual
competitor, the competitor of the big international corporations,
builds up a little capital, equity, and realizes some success, and they
can get savaged, each generation, by a 50-percent tax. This makes them
uncompetitive. Is there any doubt why farmers getting to the end of
their lives, small businessmen wanting to pass on their business to
their family, have to sit down and discuss what they are going to do?
They have to sit down and decide if they can pay that generational tax
and still operate the business. What if the business has a lot of
investment, a lot of capital, hiring a lot of people, but they do not
have a lot of cash? How can each generation pay this huge death tax to
the Government? Yet the big business competitor, a broadly held
international corporation, with which they compete, does not ever
become impacted by the death tax.
That is happening in America. We need to encourage locally owned
corporations. We need to nurture them, not oppress them. We need more
competition in the American economy.
It is troubling that virtually every bank in my home State of Alabama
has been sold and bought up by a bigger bank, and they get bought up by
bigger banks. Why? One reason is families who used to routinely own
banks, that were tied to the community, supporting Boy Scouts, schools
and the United Way, cannot compete. They are looking at the death tax
coming down on them. They figure they can protect themselves against it
more effectively by selling off their small business to a larger
corporation that does not have to pay that tax.
I thank Senator Kyl for his leadership. I believe we ought to
consider that the death tax is an anticompetitive activity that hurts
competition by damaging small businesses and farms in a way that does
not occur to larger, wealthier international enterprises.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. KYL. I ask unanimous consent to have printed for the Record a 3-
page listing of a variety of organizations, all of which support repeal
of the estate tax.
There being no objection, the list was ordered to be printed in the
Record, as follows:
The Family Business Estate Tax Coalition
Air Conditioning Contractors of America, American Business
Press, American Consulting Engineers Council, American
Council for Capital Formation, American Family Business
Institute, American Farm Bureau Federation, American Forest
and Paper Association, American Forest Resources Council,
American Hotel & Lodging Association, American International
Automobile Dealers Association, American Supply Association,
American Wholesale Marketers Association, American Vintners
Association, Americans for Fair Taxation, Associated Builders
& Contractors, Associated Equipment Distributors, Associated
General Contractors, Association for Manufacturing
Technology, Citizens Against Government Waste, and Citizens
for a Sound Economy.
Communicating For Agriculture, Construction Industry
Manufacturers Association, Farm Credit Council, Fierce and
Isakowitz, Food Distributors International, Food Marketing
Institute, Guest & Associates, Independent Community Bankers
of America, Independent Insurance Agents of America,
International Council of Shopping Centers, Kessler &
Associates, National Association of Beverage Retailers,
National Association of Convenience Stores, National
Association of Home Builders, National Association of
Manufacturers, National Association of Plumbing-Heating-
Cooling Contractors, National Association of Realtors,
National Association of Wholesaler-Distributors, National
Automobile Dealers Association, and National Beer Wholesalers
Association.
National Cattlemen's Beef Association, National Corn
Growers Association, National Cotton Council, National
Electrical Contractors Association, National Federation of
Independent Business, National Grocers Association,
National Licensed Beverage Association, National Lumber
and Building Material Dealers Association, National Marine
Manufacturers Association, National Newspaper Association,
National Restaurant Association, National Roofing
Contractors Association, National Small Business United,
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National Taxpayers Union, National Telephone Cooperative
Association, National Tooling & Machining Association,
National Utility Contractors Association, Newspaper
Association of America, Ocean Spray Cranberries, Inc, and
Organization for the Promotion & Advancement of Small
Telecommunications Companies (OPASTCO).
Painting & Decorating Contractors of America, Petroleum
Marketers Association of America, Printing Industries of
America, Rock Hill Telephone Company, Safeguard America's
Family Enterprises, Society of American Florists,
Southeastern Lumber Manufacturers, Texas and Southwestern
Cattle Raisers Association, Textile Rental Services
Association, Tire Association of North America, United States
Telecom Association, U.S. Business & Industry Council, U.S.
Chamber of Commerce, Wine and Spirits Wholesalers of America,
and Wine Institute.
Members of the Small Business Legislative Council (71)
Air Conditioning Contractors of America, Alliance of
Independent Store Owners and Professionals, Alliance of
Affordable Services, American Bus Association, American
Consulting Engineers Council, American Council of Independent
Laboratories, American Machine Tool Distributors Association,
American Moving and Storage Association, American Nursery and
Landscape Association, American Road & Transportation
Builders Association, American Society of Interior Designers,
American Society of Travel Agents, Inc., American
Subcontractors Association, Associated Landscape Contractors
of America, Association of Small Business Development
Centers, Association of Sales and Marketing Companies,
Automotive Recyclers Association, Bowling Proprietors
Association of America, Building Service Contractors
Association International, and Business Advertising Council.
CBA, Council of Fleet Specialists, Council of Growing
Companies, Cremation Association of North America, Direct
Selling Association, Electronics Representatives Association,
Health Industry Representatives Association, Helicopter
Association International, Independent Community Bankers of
America, Independent Electrical Contractors, Inc.,
Independent Medical Distributors Association, International
Association of Refrigerated Warehouses, International
Association of Used Equipment Dealers, International Business
Brokers Association, International Franchise Association,
Machinery Dealers National Association, Mail Advertising
Service Association, Manufacturers Agents for the Food
Service Industry, Manufacturers Agents National Association,
and Manufacturers Representatives of America, Inc.
National Association for the Self-Employed, National
Association of Plumbing-Heating-Cooling Contractors, National
Association of Realtors, National Association of RV Parks and
Campgrounds, National Association of Small Business
Investment Companies, National Community Pharmacists
Association, National Electrical Contractors Association,
National Electrical Manufacturers Representatives
Association, National Lumber & Building Material Dealers
Association, National Ornamental & Miscellaneous Metals
Association, National Paperbox Association, National Private
Truck Council, National Retail Hardware Association, National
Tooling and Machining Association, National Wood Flooring
Association, Painting and Decorating Contractors of America,
Petroleum Marketers Association of America, Printing
Industries of America, Inc., Professional Lawn Care
Association of America, and Promotional Products Association
International.
The Retailer's Bakery Association, Saturation Mailers
Coalition, Small Business Council of America, Inc., Small
Business Exporters Association, SMC Business Councils,
Society of American Florists, Specialty Equipment Market
Association, Tire Association of North America, Turfgrass
Producers International, United Motorcoach Association, and
Washington Area New Automobile Dealers Association.
Mr. KYL. Mr. President, let me give a sense of the businesses and
organizations involved--everything from the American Council for
Capital Formation, American Family Business Institute, Hotel & Lodging
Association, the National Automobile Dealers Association, Citizens
Against Government Waste, Citizens for a Sound Economy, a long list of
agricultural organizations, Independent Insurance Agents of America,
National Association of Home Builders, National Association of
Manufacturers, National Cattlemen's Beef Association, National Corn
Growers Association, National Taxpayers Union, Chamber of Commerce, and
on and on, a whole number of businesses and organizations. As we recall
from the debate we had last year, a group of environmental
organizations, as well, were involved because of the pro-environmental
ramifications of repealing the death tax permanently.
It is very important to focus for a moment on why we are proposing
this amendment on this bill at this time. President Bush's budget for
the next fiscal year incorporates a permanent repeal of the estate tax.
This is something the President knows will benefit our economy and
create jobs. That is why it is included within his fiscal year 2003
budget sent here yesterday. This is propitious timing. We have the
opportunity to act on this now.
Earlier I indicated the reason this has such a stimulative effect is
that there is such a large amount of money being spent on lawyers and
estate planning and insurance that could be more productively put into
investment in companies for the creation of jobs.
To give an idea of the magnitude of the money we are talking about, I
will cite a study done for last year. Alicia Munnell, a member of
President Clinton's Council of Economic Advisers, estimates the cost of
complying with death tax laws is roughly at the same magnitude as the
revenue raised by the tax itself.
In 1998, that was about $23 billion. In other words, for every dollar
the death tax raises for the Treasury, it almost costs Americans that
same amount of money to prepare to deal with the death tax when their
time comes. It is literally a double tax. Half of it is totally
unproductive.
I am a lawyer. I don't mean to suggest that paying money to lawyers
is a bad thing. But one can hardly argue that it creates new jobs.
Perhaps one could say we need to have more lawyers. As long as we keep
this law on the books and we do not permanently repeal the death tax,
we can put a few more lawyers to work. It is a stretch to argue that
justifies keeping this unfair law on the books.
No, the reality is that we can create a lot more jobs, 240,000 jobs
over the next 7 years, by a repeal of the estate tax. We can provide
another almost $25 billion in disposable personal income, according to
the Joint Economic Committee. These numbers do not lie. We have an
opportunity to do something positive for our economy, for job creation,
for investment. That is why the President has included this permanent
repeal in his budget for this year.
Let me show how this works and how unfair it is. Somebody dies in the
year 2009. None of us can predict when we will die. If you die in the
year 2009, those in your family who succeed you will be faced with a
potentially high 45-percent death tax rate. The good news is they have
a $3.5 million exemption because that is the way we structured it under
our tax bill last year. If you are lucky enough to die in the year
2010, assuming that dying is a good thing--when I say ``if you are
lucky enough,'' I don't mean it that way--if you can avoid dying in the
year 2009 and stretch your life into 2010, you will be able to have
your loved ones avoid the death tax entirely as a result of the bill we
passed last year. However, if you are able, through good medicine and
health care and the like, to extend your life to the following year,
the year 2011, your family is in a world of hurt. Because you lived a
little bit longer, they are going to go back to the days when we had a
60-percent death tax rate and an exemption of only $675,000.
What is a sensible small business person, farmer--whoever--going to
do, given the fact that it is pretty difficult to predict when you are
going to die? And you clearly do not want to take the chance that the
only year that you are likely to die in is 2010. What you are going to
do is pay lawyers and accountants and estate planners and buy the
insurance that needs to be purchased to reduce that death tax liability
to as little as possible. That is the expenditure we are talking about
that is unproductive. That is to say it does not create any new jobs,
it doesn't stimulate the economy; all it does is continue the status
quo of a death tax that is going to take effect when you die.
This is the reason it is not only unfair, but what we accomplished
last year is really, in some respects, a cruel hoax. I know a lot of
people I talk to back home believe we actually repealed the death tax.
There was some bragging about the tax bill last year. It was a great
bill. The problem with it is, as the Senator from Oklahoma said,
because it was done as part of a reconciliation package, it could not
exceed a 10-year time span.
I have tried to go back home and explain to people what we did was
really good. We established the principle that we did not want the
death tax anymore and we had a bipartisan coalition of
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Senators who voted overwhelmingly for that. But we now have to finish
the business we started. As the President is proposing in his budget,
we have to make that repeal permanent. Otherwise, we not only have a
very unfair situation, but we have a very inefficient and I would say
uneconomical situation here.
We have the opportunity to put that money to work that otherwise
would simply go--again, I don't mean to denigrate lawyers--to pay those
lawyers to figure out how to enable you to maximize the reduction in
your death tax when you die.
Mr. SESSIONS. Will the Senator yield for a question?
Mr. KYL. I am happy to yield.
Mr. SESSIONS. First I want to express my personal appreciation to
Senator Kyl for his leadership on this issue since I have been in the
Senate. There is no one here who understands it more than he, or has
fought more effectively to see it become more a reality, the
elimination of the tax.
But, I say to Senator Kyl, what I was thinking about was the
circumstance of a small business seeing a death on the horizon and a
death tax coming up. The fact that they know they have to make a
payment of significance to Uncle Sam--would that not perhaps cause them
to hesitate to invest in new equipment, to modernize or expand their
business, knowing that that might cause them to use up their cash or
even borrow money, and in fact make the economy less vibrant than it
otherwise would be?
Mr. KYL. Mr. President, I say to the Senator from Alabama, that is
another entirely separate argument for eliminating the tax and making
its repeal permanent. The Senator is absolutely correct.
In addition to the wasteful money we spend trying to avoid the
liability or reduce it as much as possible, rather than putting that
into productive assets, the Senator is pointing out that because of the
possibility--it is almost like a black cloud hanging over your head--if
you think you are going to die, you are not going to make that new
investment, you are not going to revitalize your plant and equipment or
hire that other team that is going to produce a new product, or maybe
go out of your way to market the product--all of those things that will
be an investment in our economy. You are going to defer that because
you know you are going to need it for something else; namely, to pay
the grim reaper, because you know you are going to pass away.
I think of an example back home of a company that became very
successful. One entrepreneur moved to our State and over time built up
a wonderful business employing over 200 people. He was a great
contributor to the charities in our community. He was one of those
pillars of the community that you just like to think of but he died.
His family had a terrible time. The tax liability there was so great
that they ended up having to sell this business.
The idea of a death tax is to prevent an accumulation of wealth. That
is the theory of it. What happened here? They had to sell to a big
company, the kind of big corporation the Senator from Alabama was just
talking about. Instead of this small--I would say, with 200 employees,
it is getting to be a medium-size business, but it was still a sole
proprietorship basically. But instead of having the business in our
town, employing all those people from town, contributing to the
charities and the local economy, and so on, this big corporation came
in. Are they still employing that number of people? No. Are they
contributing to the community as did our friend Jerry? No. These people
are not making the kind of investment--and I don't denigrate them at
all, but they are trying to run a business, and that is fine, but there
is a difference here.
The small businessman who built up his business continued to plow
everything he had back into the business, which is exactly the point
the Senator from Alabama is making here. You put it back into the
business so it can continue to grow because it is a family-owned
business. You do not have to take out all the money and send it
someplace else. Because they did that, they were asset rich and cash
poor. You do not want to find yourself in that position if you are
going to die, because you cannot pay the taxes. That is why his family
had to end up selling the business.
Mr. SESSIONS. I would like to follow up on that. The company that
bought them, bought your friend Jerry's business, presuming they were a
broadly held stock corporation, maybe of national size--that
corporation would never have to plan its economic future with the fear
of having to pay an estate tax because corporations do not pay death
taxes; is that correct? Isn't that a factor, an economic incentive we
have created for small businesses to sell out to big businesses when
really they ought to be competing against them and keeping them honest?
Mr. KYL. I say the Senator from Alabama is exactly correct. It is an
unfairness for the small business because the small businessmen are
taxed in this fashion. The big corporation--I am all for big
corporations, too, but they don't have to worry about this kind of
thing. So there is, in effect, a perverse incentive working here, but
it is one of the things that is not only bad for the economy but it
makes it unfair. It is not really an American way of looking at things,
to my way of thinking.
If the Senator from Nevada would like to speak, we have had our
chance here, so the Senator is welcome to the floor.
The PRESIDING OFFICER. The deputy majority leader.
Mr. REID. Mr. President, I hope people are beginning to see what
Senator Daschle has put up with now for months on the stimulus
package--months. It is never quite right. There is always something
just a little bit lacking.
Remember, there were rules set down for what a stimulus package
should be. I may not have it down exactly right, but it is supposed to
be fiscally responsible, supposed be short term, and would have no
effect on the deficit. That is what we were supposed to do to get a
stimulus package. And we have tried very hard.
But what are we working on today, now, to divert attention from what
the underlying Daschle bill does? We are now talking about something 10
years from now. I don't know if any of the unemployed are watching.
There are probably some watching TV because they are not working, so
maybe some of them slipped onto C-SPAN. I hope the unemployed
understand what is going on here. The minority is now focusing again on
the wealthy. We can have all the stories about the poor family farmers,
and I understand that. I think the estate tax needs some revision, and
we were willing to do that, to work with the minority to do that.
Say what you want to say. This affects the top one-half percent of
the people in America as it relates to income. We were willing to
change it from the standard before. But no matter how you twist and
turn it, this relates to people who have assets--a lot of assets.
How do the unemployed feel? We have given them nothing--zero. Since
September 11, we have taken care of the airlines. We have focused on
the insurance industry. We have done all kinds of things for corporate
America but very little for consuming America.
We talk about meeting the qualifications for having something
stimulative. Studies have shown that every dollar invested in
unemployment insurance produces $2.52 in gross domestic product. Those
unemployed out there should understand that we want to help. We have
tried to help.
Part of Senator Daschle's legislation deals with extended
unemployment benefits. During the previous Bush administration, we
extended unemployment benefits five times. We did it during the Reagan
years. But now we are not doing it. We are not messing around with
something to help the unemployed.
In Nevada, over 100,000 jobs have been lost because of September 11.
Indirectly, in the service industry--people who wait tables, waiters,
waitresses, park cars--over 30,000 jobs were lost. Those people are now
without unemployment benefits. Their time has run out.
I think we should extend it. They did not do anything wrong. We have
done it in the past. It is not as if they are not willing to work. They
are on the union lists. If something picks up, they will be rehired. In
the meantime, they need help.
I was a big supporter of Welfare to Work. I think we did good work
during
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the Clinton years to get Welfare to Work. As you recall, President
Clinton didn't accept proposals that were sent to him. He kept vetoing
them until he got it just right. He improved it by his veto.
There are people in Nevada who are working in the service industry.
Some of those 30,000 people are people who went into Welfare to Work.
These people may be dishwashers. They may be people who assist maids in
cleaning up the hotel rooms in Las Vegas and Reno. They may be someone
working in some other rather low-paying job, but they get paid
certainly a lot better than being on welfare. Those people are out of
work and haven't been on the job long enough to qualify for
unemployment benefits. We want to give them some help. But no, this
isn't quite the right time to do this.
There was the Department of Labor study done in 1999. This is not
some new study to justify an unemployment insurance extension. This was
done in 1999. Every dollar invested in unemployment insurance extension
generates $2.52 in gross domestic product.
Another study by the Department of Labor estimated that unemployment
insurance mitigates real loss in gross domestic product by 15 percent.
In the last five recessions, the average peak number of jobs saved was
131,000.
Joseph Stiglitz, co-winner of the Nobel Peace Prize in economics last
year, stated that we should extend the duration and magnitude of the
benefits we provide to our unemployed. This is not only the fairest
proposal but also the most effective. People who become unemployed cut
back their expenditures. Giving them more money directly would increase
expenditures.
But here we are not doing what is called for by the President of the
United States, saying that if we are going to do something on an
economic recovery plan, it should be short term, fiscally responsible,
and it should do anything for the deficit. This amendment fails on all
three.
The Congressional Research Service concurs with Joseph Stiglitz. They
say that extending unemployment compensation is in fact likely to be a
more successful policy for stimulating aggregate demand than any other
tax or transfer charge.
There is a time and place to debate whether or not the estate tax
repeal should be made permanent. I acknowledge that. There is a time
and place to do it. But it is not on this legislation. This is another
effort to allow the minority and the President of the United States and
the people around him to blame Senator Daschle and the Democrats, that
we didn't do anything to pass an economic stimulus package.
But the American people aren't that stupid. They know that we have
done it. It was laid out here yesterday in detail by Majority Leader
Daschle. He has tried to get an economic stimulus package passed.
What did he ask for? What does the underlying bill call for? It calls
for extended unemployment benefits. It calls for tax rebates for those
people who didn't get tax rebates during the first round. Remember, the
most successful part of President Bush's tax cut program was our
program that he stole from us. I was glad he did. But that was our
program. We called for rebates. That was us. We asked for that because
we knew those people would spend that money quickly. They have.
Also, part of Senator Daschle's legislation was bonus depreciation.
What is that? The bill would increase the bonus depreciation deduction
for the cost of any capital asset purchased between September 10, 2001,
and September 11, 2002, and it would be certified by the end of 2002.
One of the amendments offered by the chairman of the Finance
Committee, Senator Baucus, extended that. So Senator Daschle's 1-year
proposal has been extended. The bonus depreciation up to 30 percent of
the cost of the asset would be in addition to the normal first year
depreciation. Leaseholds would qualify for the bonus depreciation
deduction. This would really help small business. It would help big
business, but it would really help small business. That is why the
majority leader included this in his legislation.
Finally, a provision in his legislation would provide temporary
increases for a Federal Medicaid matching rate, called FMAP. The
Federal Government matches between 50 and 83 percent of the cost of
Medicaid in each State depending on the State's per capita income.
Medicaid matching rates for fiscal year 2002 are based on a State's per
capita income in 1997, 1998, and 1999, in which the economy was very
strong. The most recent economic trends do not reflect a new matching
rate. Senator Daschle wanted to adjust that.
Why did he pick these four things: Extended unemployment benefits,
tax rebates, bonus depreciation, and fiscal relief for the States? The
reason he did it is people believed these things would be stimulative
to the economy. But he narrowed it down to four things he had heard
speeches about given by the majority and the minority in the Senate
saying we think this should be done. There was general agreement on the
four things he put in this legislation. But, no, it is not quite the
right time. No matter what happens, it really is not quite the right
time to do it.
Now we are in a debate about making the estate tax repeal permanent.
Let us see. Does that stimulate the economy? No. Is it short term? No.
Is it fiscally responsible? No. But again it deals with the rich
people. I am all for helping rich people. I think it is something we
have an obligation to do. I think helping rich people helps everybody.
But there is a limit.
I say to those unemployed watching C-SPAN today, keep in mind that we
are trying to help. We have tried and tried and tried. This has been
going on for months now. On this particular legislation, we tried again
after the Christmas break, starting January 23. This is the third week
we have been on this. It is never quite right. There just isn't
anything we can quite do to get to finality.
Under the Senate rules, it is not like the House of Representatives.
If you have one more than a majority over there, you can ram anything
through. It is like the British Parliament. When you are in the
majority in the British Parliament, you march down the road and get
anything you want. But that is not the way it is in the Senate.
For 200-plus years, the Senate has had certain rules. They work well.
But it does not make things easy in passing legislation. And you
usually have to have 60 votes.
Senator Daschle thought he had 60 votes for everything that was done
here. But, no, it is not quite the right time to do an economic
stimulus package today. Maybe tomorrow. Maybe the next day.
But what we are faced with is a farm bill we would like to complete,
we have election reform we would like to complete, and we have energy
legislation we would like to work on prior to a week from this Friday.
It leaves the majority leader with very few alternatives because it is
obvious this is a slow walk--this has been a slow walk since January
23--because no matter what the leader does, it is not quite good
enough.
So I respect the feelings, the passion that my friend from Arizona,
Mr. Kyl, has. He is very good at expressing how strongly he feels about
that. I understand the strength of his feelings. My counterpart,
Senator Nickles, I understand the strength of his feelings in repealing
the death tax. The manager of the bill today, Senator Sessions from
Alabama, makes a very good point on why he feels as strongly as he
does. And I appreciate that.
But I say to my friends--and all three are my friends--it is so
obvious what is happening here. This stimulus bill, which we have been
trying to pass since January 23, is going no place. Everyone can see
that. We are going to have a cloture vote on it tomorrow to try to get
60 votes. It seems pretty clear to me the minority is not going to
allow debate to stop on this legislation. That being the case, it is up
to the majority leader how we will proceed. He is the only one who has
that decisionmaking power.
We have other things we have to get to, such as the farm bill. Nevada
is not really a State that depends heavily on agriculture. We grow
garlic. We are the largest producer of white onions in America. We grow
a few potatoes. We have many cows. We have some large dairies to supply
some very thirsty people in Las Vegas. We even supply Carolina some
milk. But we are not a State dependent on agriculture as are so many
States.
But the farm bill is very important to many Senators. Of course, that
is something we could not complete. We
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could not stop the filibuster on that at year's end.
We thought we had a bipartisan agreement on election reform, and I
think we do. There has been tremendous work done by Senator Dodd,
Senator Bond, and others--bipartisan legislation--so we don't have the
problems we had in the last Presidential election.
I am not necessarily picking on Florida. I think if a lot of States
had been looked at with a magnifying glass like Florida was looked at
in the last election, we would all have problems. But this is a
bipartisan effort to try to make that no longer the case--that we would
have certain standards for elections and that the Federal Government
would assist States in obtaining and then maintaining those standards.
So we need to do that.
Of course, energy legislation is something for which there has been a
hue and cry from the minority, and rightfully so. We need to get to
that legislation. Senator Daschle, last year, made a commitment that we
would get there before the Presidents' Day recess. The Presidents' Day
recess starts next Friday, so that leaves very little time.
With all due respect to the fervency of the feelings of those who
want to repeal and make permanent the death tax, keep in mind that at
this stage it is only an effort to divert attention from what we are
really trying to do; that is, pass a bill that will stimulate the
economy, will be short term, will have no effect on the deficit, and be
fiscally responsible--not legislation that, once again, has the
unemployed getting zilch, zero, nothing, and the wealthy, again,
getting the largest amount that we throw to them. And even though they
deserve attention--and we have given them plenty--I think the time has
come to help those people who need help: the unemployed, the
underemployed, small business people, and helping States that are
having difficult times because of the Medicaid matching funds.
Of course, as I have indicated earlier, we really need to do
something to help small business. And in the process, we would be
helping big business with this bonus depreciation.
The PRESIDING OFFICER. The Senator from Texas.
Mr. GRAMM. Mr. President, I thank my colleague for his speech. I
think we all share some frustration--obviously, from different
viewpoints--about the stimulus bill. I would just like to suggest there
is a solution to the problem; and that is, we could have a unanimous
consent agreement where we would let our Democrat colleagues put
together a stimulus package, we would put together a stimulus package,
we would have a unanimous consent agreement to vote on both of them,
and if they both got over 50 votes, then the one that got the highest
number of votes we would take to conference with the House. And we
would, therefore, be on our way to have a stimulus package.
Our Democrat colleagues are not going to accept that proposal because
the problem is, we have a majority vote for a bipartisan agreement that
was put together by Senator Snowe and Senator Breaux it has nice
rhythm: Snowe and Breaux and it is supported by moderates on both sides
of the aisle and has very strong support among Republicans in general.
I remind my colleagues the sad history of the stimulus package is
that the President met with Democrats and met with Republicans, took
some Democrat ideas, took some Republican ideas, and made a bipartisan
proposal, which I believe the President earnestly thought, in the
aftermath of September 11, we would adopt.
What happened--almost immediately--is that our Democrat colleagues
said: We will take the half of the bill that is ours, but not the half
of the bill that came from the White House and from Republicans.
We can go back and forth and make our arguments. We have clever
people on both sides of the aisle. We can argue we don't see any
stimulus in the Democrat package. Obviously, they can make the same
argument. I don't know who would be convinced on either side.
But when that effort failed, Democrats and Republicans in the Senate
got together and put forth the only bipartisan proposal for a stimulus
package that has been put forward in the Senate. At that point, we
clearly had more than 51 votes for a stimulus package. This was way
back before Congress adjourned in December.
In an extraordinary action, the President said: Take that bipartisan
compromise. Let's agree on it. I will sign it into law. He asked the
House of Representatives to take a bill written by the Senate, to
introduce the bill in the House, and pass it, and send it to the
Senate.
At that point, as the session drew to a close last year, the majority
leader, Senator Daschle, knew that the bill that had been passed by the
House, and had come over here, and was waiting at the desk, that there
were a majority of the Members of the Senate--Democrats and
Republicans--who would vote for that bipartisan proposal if it were
brought to the floor of the Senate.
No one can dispute those facts.
What did the majority leader do? He refused to bring it to the floor
of the Senate.
When we came back into session, the majority leader took three
provisions from the President's proposal--some in a slightly different
form than the President had put in his proposal--because Democrats had
proposed them, threw the rest of the package out, and then made up a
fourth proposal that no one had seen, and brought that forward as a
stimulus package.
He has every right to do that. He is the majority leader. But we have
a right to offer our amendments. We have offered amendments. Some have
been adopted. Some have been rejected. We have had an orderly debate.
We have been willing to set time limits on votes. And now the Democrat
floor leader says that we are getting nowhere and that this is not a
real effort.
We ought to have an opportunity to vote on a bipartisan proposal. I
believe it would pass. It looks as if we are not going to do that.
We want an opportunity to vote on some things we believe will
stimulate the economy. I will, before I address the amendment before
us, sum up the point I made earlier.
The majority leader has some choices. He can bring up his bill and
give us the right to try to improve it. That is what we are trying to
do. He says now he is going to pull down the bill because we are trying
to improve it. He has the right to do that.
A second alternative is to bring up the bipartisan bill and give
Senator Daschle a chance to amend it. I think we can work out an
agreement to do that, but I do not believe Senator Daschle is going to
do that because the bipartisan bill will pass.
A final proposal, which I repeat in case anybody is interested in a
compromise, is let the Democrats sit down and write the best bill they
can write. We are going to take the bipartisan bill. It is not the best
bill we can write, but it is a bill that has over 51 votes. It is not
wonderful, but it would help the economy both in the short term and in
the long term. We are going to take that bill. Let the Democrats bring
forward their proposal as to how we stimulate the economy, and let us
bring ours forward. We will vote on both of them, and the so-called
``king of the hill'' parliamentary procedure that we could put into
place by unanimous consent is the one that gets the most votes will be
deemed passed, and then we can go to conference with the House, and
perhaps we might get a stimulus bill.
I do not see how anybody can say that is unfair. Senator Daschle
could get a vote on his stimulus package. We could get a vote on the
bipartisan one, and majority would rule.
I do not think that is going to happen because the Daschle package
would get fewer votes. We all know it. The bipartisan bill would pass,
and I believe that would be objected to.
What does this all boil down to? The one bill that can pass the
Senate, the majority leader will not allow to be voted on.
You can say that is a good thing and you can say that is a bad thing,
but it is a fact, and that is the impasse in which we find ourselves.
We now have a bill that very few people are for, and we just want to
try to amend it.
We have an amendment before the Senate which is a very important
amendment. When we passed the tax cut last year, we faced a
parliamentary problem that most people do not understand; that is, we
were operating under a process called reconciliation. That is a budget
process. It means the things
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you do under that process can extend no longer than the budget unless
you can waive a point of order and get 60 votes.
Some will sadly remember that the tax cut received 58 votes in the
Senate. We did not have the votes to waive this process so the tax cut
could last only as long as the budget, and the budget was only 10 years
long.
It produced this incredible situation that stuns the American people
when we tell them. The tax cuts that we passed--eliminating the
marriage penalty, eliminating the death tax, reducing tax rates
dramatically--all of those provisions go away in 10 years.
Nothing is more destabilizing to the economy than having a temporary
tax system. There is no doubt that we affect behavior when people do
not know what the system is going to be in the future. This is
especially true with regard to the so-called death tax.
As our dear colleague from Arizona has pointed out very clearly, we
have this incredible anomaly that if you die, depending on in what year
you die, between now and the 10th year of the tax cut, the taxes you
pay will vary. If you die in the 10th year, your family will inherit
your business or your farm or your assets tax free. If you die in the
11th year, they are going to have to sell your business or sell your
farm, sell or mortgage your life's work to give the Government 55
percent of every dollar you accumulated worth of value on your farm,
your business, your assets in your lifetime.
Needless to say, that is an absurd circumstance. I, quite frankly, am
concerned that people who have some kind of serious illness might
actually choose to end their lives in the 10th year. That is not beyond
my imagination.
We had a strong consensus on repealing the death tax. I know our dear
colleague talked about rich people, but, we had a consensus that if
somebody works their whole life, they pay taxes on every penny they
earn and they skimp, they save, and they sacrifice and they build up a
family farm, it is not right that their children have to sell the
family farm to give Government a double taxation by paying 55 cents out
of every dollar they accumulate in their life back to the Government.
The same is true for small business. The National Federation of
Independent Businesses, in surveying companies, found that the No. 1
reason small businesses do not survive into the second and third
generation is death taxes.
I rejoice. I know some of my colleagues view the whole world as a
class struggle. They believe all of existence is a conflict between the
rich and the poor. I always get confused about who is who because it
changes so often.
I liken the stimulus package to the coldest week of the year, it is
snowing, it is sleeting, it is freezing, and a breeze comes along and
blows a roof off an apartment building. Logical people say: Why don't
we rebuild this roof?
We have colleagues who say: Wait, won't people make money rebuilding
this roof? There will be a profit, and don't rich people tend to live
on the higher floors of this apartment building? Won't they benefit
more by having a roof than the poor people who live in the basement and
on the first and second floors?
Really, wasn't that what the stimulus debate was all about? Honest to
God, what we do, remarkable as it sounds, is we end up buying a bunch
of blankets, stockpiling penicillin, we hire a bunch of doctors and
nurses, and we spend a whole winter treating people for exposure rather
than rebuilding the roof on the apartment building.
On the death tax--and I am sure my colleague from Arizona will
concur--I have never spoken on this subject in my State to any audience
no matter what their background, what their education, no matter what
their income, no matter what their wealth that did not believe that it
was fundamentally wrong to force a family to destroy their life's work
in a business or a farm to pay taxes when somebody died. People
fundamentally think it is wrong to tax death. You have to die anyway.
That is never a happy event. Why should we compound it by rushing in
and collecting a tax at that moment?
I have found in watching audiences, when I have spoken on this
subject, it does not seem to matter whether it is a local banker or
whether it is a guy who works at the filling station. Nobody believes,
at least in my State, that it is right when somebody has paid taxes
their whole lives, has built up a farm or a business, to take it away
from their children when they die.
We reached a bipartisan consensus on that principle, but because of
this fluke in the budget process the death tax comes back in 10 years.
So we have 1 year where it is repealed. The Senator from Arizona, in an
amendment I am proud to support, has proposed we make the repeal of the
death tax permanent.
My guess is we are not going to get to vote on that this evening. I
assume the Senator from Arizona would love to vote on it today. Our
Democrat leader, our dear friend, has said there is a stall underway.
We would like to vote on this amendment now. At some point, the
Senator from Arizona might ask unanimous consent that we have an
opportunity to vote on this amendment this afternoon. What I am fearful
is going to happen is we are going to have a vote on cloture--and
nobody knows what that means except people in the Senate, but that
means no more amendments can be voted on, the Daschle proposal has to
be voted on by a yes or no. If that is defeated, as I believe, A, it
should be and, B, it will be, then in listening to Senator Reid it
sounds to me as if the majority leader is saying he will pull down the
bill and we will never get a chance on this bill to vote on making the
death tax repeal permanent.
I think this is an important issue. I would like to vote on it.
Perhaps if people want to get on with writing the bill, if we could
make the death tax repeal permanent, as bad as I believe the Daschle
proposal is, I believe it does absolutely nothing for the economy, I
would have a hard time not voting for it if we were making the death
tax repeal permanent.
Quite frankly, if Senator Daschle wanted to pass his bill he could
probably pick up at least two votes by supporting our amendment. So, A,
I hope we can vote on this today. B, I hope we can vote on it someday.
C, I believe when the American people understand we did not really
repeal the death tax unless you die 10 years from now and if you do not
die in that year it comes back, I think they are going to demand it be
repealed, and I believe it will be repealed. I do not have any doubt in
my mind we will repeal the death tax.
I thank the Senator from Arizona. I urge him to talk to the majority
leader about having a vote this afternoon. We would like to vote. Every
Senator in the Chamber right now, except Senator Reid, is convinced,
and the Presiding Officer, and we are ready to vote. We would like to
have a vote on this issue. Perhaps if we could adopt this amendment, we
might be moving toward a stimulus package that would be truly
bipartisan.
I thank my colleague for his leadership, and I yield the floor.
The PRESIDING OFFICER (Mr. DAYTON). The Senator from Arizona.
Mr. KYL. I thank the Senator from Texas very much for his great set
of comments, and also for what he said personally. I agree, when the
assistant majority leader says there is an attempt to slow walk this
bill, that is simply not the case. In fact, I will not do it right now
because he is preoccupied, but at some time when we have the Senator's
full attention--he has had a chance perhaps to talk with others on his
side--I will propound a unanimous consent to vote as soon as we can, to
vote this hour, to vote next hour, to vote sometime this evening, to
vote sometime before the cloture vote, on this amendment. If we could
vote before 4:30, we would be prepared to do that. Or if there is an
effort to get a little bit more debate before the vote, that is fine,
too, but there is no effort to draw this out. I am ready to vote right
now on this amendment and move on.
The Senator from Nevada made the point that this amendment offered by
the Senator from Arizona shows how hard it has been for the majority
leader, what he has had to put up with for many months; that it does
not matter quite what he does, the bill is never quite right and
amendments are offered.
There are three responses to that. First, there have not been that
many amendments offered to this bill, certainly not that many which
have been debated and voted on, only a handful.
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Secondly, I think the Senator from Nevada must concur the bill is not
quite right because he and I have an amendment which we both think is a
pretty darn good amendment that would make the underlying bill a lot
better. Senator Reid himself proposed that amendment on our behalf. I
believe it was yesterday. So, no, we do not think the bill is quite
right either.
Of course, when Senators do not think it is quite right, then we have
an opportunity to offer an amendment. Frankly, there are a lot of
things I do not like about it. I would love to propose a lot of
amendments, but I selected only two: this very important death tax
repeal because of the effect it will have in stimulating the economy,
and the other is the amendment that Senator Reid and I sponsored, which
also would have a direct stimulative effect on the economy because it
helps the precise industry that was most dramatically affected, the air
travel industry. We can relate it to the travel industry generally
after September 11.
So, no, there is no effort to slow walk this bill or to prevent it
from ever being considered or voted on. We are simply trying to do what
Senator Reid himself has tried to do, and that is make it better.
I dare say the amendment I have offered would make the bill a whole
lot better. As the Senator from Texas said, even though I am not much
in favor of the underlying bill, if we were able to adopt this death
tax repeal and make that permanent, I would be sorely tempted to vote
for the majority leader's bill.
The other point I wanted to make with respect to this business of
slow walking is exactly what the Senator from Texas said. We could vote
on the Centrist Coalition proposal right now. I think everybody
recognizes that would pass. We could be out of here by 5 tonight by
allowing the bipartisan Centrist Coalition bill, which President Bush
has endorsed, to come to the floor. It is, in fact, the only bill that
can pass this body.
So if we are talking about getting something passed and getting it to
conference so we can actually have a stimulus package bill, we all know
the formula for that. It does not have to take but another few minutes
and we could be done with it. We offered to do that. I offered to be
sorely tempted to vote for the underlying bill if my death tax
amendment is adopted, and I probably would. We can get all this done
very quickly.
One other thing I wanted to respond to that my friend from Nevada
argued, and it is the same old argument that was made when we
considered the death tax repeal the first time around--it was wrong
then and it is wrong now--is that the death tax only applies to the top
1 deg. percent and therefore it is a tax on the rich, and who would
care about the rich?
Well, there are really three responses to that. The first is that it
is just not true. As I noted before in my earlier comments, Dr. Wilbur
Steger, who is a Ph.D. and president of CONSAD Research Corporation,
and a professor, has noted this argument that it only applies to the
top 1 deg. or 2 percent is wrong.
He says that, in fact, in a typical year, the total number of taxable
estates that consist largely of family owned businesses likely exceeds
10,000.
What does that number really mean? First of all, that is 10,000
businesses. Multiply by that the number of employees who work in each
business. Pick any number. One certainly has to say the people who work
for those businesses are directly affected. If the business goes out of
business because the death tax has to be paid, that directly affects
every employee in that business, times the number of family members
with each one of those employees, times the number of stores that they
buy things from and all the rest of it.
A lot more people are affected by the death tax than just the number
of people who happen to die each year who end up paying the tax, in
addition to which everybody who might have to pay the tax has to be
worried every year about the estate planning. They, too, are directly
affected.
As I pointed out before, they end up paying at least $23 billion a
year, and the lawyers, accountants, estate planners, insurance, and
other expenses of estate planning that enable them to deal with this
future contingency. They may not die this year, but they are having to
shell out a lot of money this year in order to deal with their
potential future estate liability.
It turns out a lot of people are affected by the existence of the
death tax. What the Senator from Texas pointed out a while ago is the
clincher. There is nothing more destabilizing to an economy than having
a temporary tax, especially one which no one can predict with any
degree of certainty is going to apply in the future. I refer
specifically to the estate tax. We phase it down a little bit over the
next 8 years. Then we repeal it altogether. Then it goes right back
into existence as it was last year with a 60-percent rate. How can I
plan against that if I don't know when I am going to die? Do I plan for
it in the eighth year, in the seventh year, or maybe in the year that
it is repealed altogether? That would be great if I died that year; at
least my heirs would not be burdened. But if I live an extra year, they
have big problems. What about beyond that? Nobody knows.
As the Senator from Alabama argued earlier, you do not know whether
to invest in the plant equipment or put the money away because you have
to pay the estate tax with it. It is very destabilizing. In the
meantime, you keep shelling out that money to the estate planning folks
rather than investing it in your business. That is why it belongs on
this bill.
We know it will create jobs, 240,000 jobs in 7 years. Americans would
have $25 billion in additional disposable personal income. This is from
a report of the Joint Economic Committee, not my numbers. We have other
estimates that back up this point. As a matter of fact, Dr. Steger, who
I quoted earlier, indicates an immediate death tax repeal would provide
a $40 billion automatic stimulus to the economy. That is because of the
pent-up capital that citizens do not deal with because of the potential
tax liability that exists; a $40 billion automatic stimulus to the
economy at virtually no cost to the Treasury. Talk about getting the
bang for the buck, I don't think there is anything we can do that would
have a greater immediate impact on our economy than the repeal of the
death tax.
We talk about extending unemployment benefits for 13 weeks. Does that
stimulate the economy in any way? No. Does that create any jobs? No.
But it is a central feature of the stimulus bill that is before the
Senate.
We may want to extend unemployment benefits for the people currently
out of work. But I don't think anyone can argue that stimulates the
economy. To anyone who says, Senator Kyl, how come you are offering the
death tax repeal on the stimulus bill? I say, how come you are offering
or supporting the unemployment extension? That does not create a single
job. I know people would rather have a paycheck than an unemployment
check. Let's do something that would stimulate the economy, create
jobs, provide that investment, take the $40 billion in pent-up capital,
and get it into our economy, create the 240,000 jobs.
I have heard the arguments in response. I cannot imagine the Senate,
which passed the death tax repeal before, would not want to finish the
job of making that permanent, given the fact that it does not do a
whole lot of good, except if you die in the 10th year, to do the
partial repeal, the temporary repeal, the confusing and destabilizing
repeal that we effected last year, without going into the final step
and making it permanent. It seems to me to make so much sense.
The Senator from Texas made a comment; he thought maybe the effort
would be to deny a vote. I certainly hope that is not the case. I think
the American public deserves to know where their Senators stand on this
issue. Do you believe in making the death tax repeal permanent or not?
Do you believe it can help stimulate the economy and create jobs or
not?
There are those who are going to differ on this. That is what the
Senate is all about. That is fine. Take the vote. Stand where you want
to stand on the issue. But we can do that quickly. We can move on to
the next amendment. We can consider a whole number of amendments before
we have the vote on cloture sometime tomorrow. That would be my
proposal.
As Senator Gramm said, perhaps what we should do, and I will wait
until the assistant majority leader is
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on the floor, perhaps we should ask unanimous consent, and I will
indicate at the appropriate time when someone from the other side is
here to respond other than the Senator from Minnesota, who just walked
on the floor, we will ask unanimous consent to be able to vote for this
at a time of their choosing prior to the cloture vote.
The Senator from Minnesota has arrived. If he wishes to speak to
this, I am happy to defer to him.
Mr. WELLSTONE. I thank my colleague. I say to the Senator from
Arizona, I thank him for his graciousness.
I do not know what the dynamic is here. I know there is an amendment
I want to do again with Senator Durbin and Senator Dayton. My
understanding is we may not be able to do that so there may be some
problems in terms of what amendments we are able to vote on before
cloture tomorrow.
However, I want to make it clear, and I assume this would make the
Senator from Arizona feel better, I do want to go on record as to where
I stand whether there is a vote or not. I am in very strong opposition
to the amendment of the Senator from Arizona.
The good news is that in the short run, just a complete repeal of the
estate tax would be over the first 10 years about $55 billion. The bad
news is, over the second 10 years, when many will be 65 years of age
and over, and we will all be looking to see what is in the Social
Security trust fund and what is in Medicare, this amendment will cost
$800 billion.
I say to the presiding Chair, I had interesting discussions with
business people in Minnesota who say I am wrong. They need some help
for when we pass our business to our children. I said: How about up to
$5 million? And they say that would be reasonable.
But that is not what we are talking about. We are talking about an
amendment that does away with all of the estate tax. I have a figure
that actually 636 Minnesotans paid the estate tax in 1999.
When we hear about small farmers and small businesspeople, we are
talking about the top, of the top, of the top, of the top of the
population. For example, I don't pick on Bill Gates. I think he just
did a good thing, talking about where is the United States and other
countries in terms of our commitment to developing nations. But I don't
think the Gates family really needs any help. And I think it is a
little outrageous to take $800 billion out of the Social Security trust
fund at the very time that many of the baby boom generation are going
to be turning 65 years of age and over. That is exactly what we got in
the President's budget.
I say to my colleague from Arizona, whether there is a vote or not, I
am on record opposed to this, and pleased to be opposed to it. I find
absolutely incredible the situation now. We have a budget that comes
out from the President. We find we are going to eliminate the
empowerment zones in our city. In Minneapolis, they are extremely
important. The budget will actually eliminate the grants to the
empowerment zones. What is supposed to be for additional child care or
affordable housing will not be there, and the budget will cut the 7(a)
program in the State of Minnesota. Since 1996, we leveraged $1 billion
to small businesses in the State of Minnesota. We will cut the 7(a)
program in half. That is $1 billion of capital we have been able to
leverage to small business. It will cut the 7(a) program by 50 percent.
I hear Secretary Paige say in order to figure out how to make up for
potential cuts in the Pell Program, because we keep the maximum at
$4,000 a year, we will take away from true north in Minnesota. It also
affects telework, people trying to find jobs and develop businesses at
a time when our steelworkers are losing their jobs. Then we will go
after child care. Then we go after homeless votes. Then we will cut
counselors and there is no additional money for affordable child care,
no additional money for Head Start. My gosh.
I hear this administration; they love the children. They are all for
the small children. I am sorry to be cynical, but in the words of
Fannie Lou Hamer, who once said, ``I am sick and tired of being sick
and tired,'' I am sick and tired of this symbolism.
Then, I say to the Presiding Officer, we are still waiting. The
Senate did a good job; Republicans did a good job--bipartisan. We were
going to make the program for children, for special education,
mandatory over 6 years, full funding. It would have helped our State
$45 million this year, $2 billion, I say to Senator Dayton, over the
next 10 years. None of that is in the budget. But now what we have is a
proposal that over the next 10 years--I mean the first 10 years, $55
billion--is bad enough. The next 10 years, when we are not going to
have money because the administration has taken the money out of the
Social Security and Medicare trust funds, put us into deficit, and then
by the Kyl amendment, over the second 10 years, it is $800 billion.
This is simply unacceptable, and I want to make clear how strongly I am
in opposition.
Mr. REID. Will the Senator yield for a question?
Mr. WELLSTONE. I am pleased to.
Mr. REID. My good friend from the State of Arizona, Senator Kyl, said
that unemployment insurance extension does not create a single job to
stimulate the economy.
Does the Senator from Minnesota, who has spent a lifetime dealing
with those who are not privileged, including the unemployed--would the
Senator agree with that statement? Or would the Senator agree with the
statement from Joseph Stiglitz, Nobel Prize winner in economics, who
says:
. . . we should extend the duration and magnitude of the
benefits we provide to our unemployed. This is not only the
fairest proposal, but also the most effective. People who
become unemployed cut back on their expenditures. Giving them
money will directly increase expenditures.
Would the Senator agree with that statement or the one from our
friend from Arizona, Senator Kyl, who said unemployment extension does
not create a single job to stimulate the economy?
Mr. WELLSTONE. Mr. President, I say to my colleague from Nevada, the
truth is--first of all, even if I did think extending unemployment
insurance was not a stimulus to the economy, I would be for it because
we ought to help people who are flat on their backs through no fault of
their own.
Second of all, Joseph Stiglitz, who was with the World Bank, a fine
economist, is exactly right. It is not just him, it is just about every
economist you talk with, much less people back in Minnesota, talking to
people in their homes and coffee shops, who all know, by definition, if
you are going to extend unemployment insurance to people and put some
additional dollars in their pockets, they have to go out and buy
necessities for their families. They are living month to month trying
to pay their bills, so of course they are going to use that money to
consume, and of course it is going to stimulate the economy as opposed
to--here is the interesting question, I say to my colleague--ending all
of the estate tax, which, by the way, again, 636 Minnesotans pay; you
have to be super, super wealthy, rich. What we are going to do instead
is end that for everyone--not target it, not $5 million or $6 million,
just end it for Bill Gates, who is doing good work right now, again
dealing with the developing world. We are going to give it to him, and
that is somehow going to stimulate the economy. But extending
unemployment insurance for people who are out of work, that is not
going to stimulate the economy? I think that argument is profoundly
mistaken.
Mr. REID. Will the Senator respond to one more question? The minority
all afternoon has said they want to vote on the package that came from
the House. They said it can get more than 50 votes.
Is the Senator from Minnesota aware that just in recent days we, over
here, many times have gotten more than 50 votes? On the farm bill, 53
to 45, 54 to 43, 54 to 43; unemployment insurance, we got 56 votes on
that; on the Social Security lockbox, we got 53; on the Durbin
unemployment insurance amendment, we got 56 or 57 votes; on the Baucus
farm amendment, 57 votes.
The Senator from Minnesota and I have been in the Senate a number of
years. It is very frustrating to recognize you need 60 votes to pass
things here, but that is how much it takes, doesn't it, generally
speaking?
Mr. WELLSTONE. That is correct.
Mr. REID. If we used the logic of the minority, we would have passed
several Democratic amendments by this point
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because they received 50 plus votes. I ask my friend, is the minority's
argument sound, when we have had a tradition of more than 200 years
that you need more than 50 votes; in fact, you need 60 to get things
going--is that a fair statement?
Mr. WELLSTONE. There are two points I would like to make for my
colleague. I don't know if he would agree with the second point, but we
could have a good colloquy about this.
First of all, the Senate is designed as a deliberative body. There is
going to be debate. That is part of what makes the Senate unique.
Sometimes it can drive you crazy, but what makes the Senate unique is
the unlimited amendments and unlimited debate. So you have the 60-vote
requirement, quite often, on all pieces of legislation. That is the
Senate. That is the way the Senate operates.
But my second point is a little bit different, which is, frankly, I
hate to say this, however many votes you get in the Senate, sometimes
there is a disconnect between the Senate votes and the people we
represent.
I have to tell you this. The House proposal that comes over here,
that House proposal is a proposal that repeals the alternative minimum
tax. That House proposal is a proposal that gives away money, gives tax
breaks to companies such as Enron. It gives $1 billion General
Electric, for this multinational corporation. By the way, that is in
the President's budget proposal: $13 billion of tax breaks for the
Enrons of this world, yet we don't have the money for children in
education; we are cutting the Low Income Energy Assistance Program; we
don't have the money for affordable housing.
I say to my colleague again, if you talked to the vast majority of
people in the country, they would say: What in the world are you doing?
If you are going to have an economic recovery package, at least extend
unemployment insurance, at least help the people who need the help, at
least get the money in the hands of people who will consume.
Yes, there is a 60-vote requirement, and then there is the substance.
I am sorry to say this. I am well aware that up until very recently the
Enrons of this world have had way too much influence here, and I am
well aware of the fact that some of these other big multinationals are
big givers, heavy hitters, investors, and have a lot of clout. But the
truth is, the vast majority of people in Minnesota and the rest of the
country cannot understand this at all. They don't know what in the
world giving tax breaks and tax loopholes for these big multinational
corporations has to do with fairness, or has to do with economic
recovery, or has to do with helping people who are unemployed, or
underemployed, or subemployed, or among the ranks of the working poor.
Mr. REID. Will the Senator indicate how many millions of people live
in the State of Minnesota?
Mr. WELLSTONE. Close to 5.
Mr. REID. The Senator from Minnesota said that last year
approximately 650 people paid estate tax?
Mr. WELLSTONE. It was 636.
Mr. REID. So 636 people paid estate tax. How many people would you
estimate are now unemployed in the State of Minnesota?
Mr. WELLSTONE. We are up to about--the percentage is about 4.5 or 5
percent, I think, unemployment in Minnesota right now.
Mr. REID. So it is tens of thousands of people?
Mr. WELLSTONE. Oh, yes.
I think it is about 5-percent unemployment, which is quite high for
our State. That is the official definition of unemployment. That
doesn't include the people who quit looking for work because they are
discouraged, or people who are working part time because they cannot
find a full-time job, or people working way under the wages they would
normally make in a better economy, or people who work but still have
poverty wages.
There was a report last week indicating that almost a third of adult
Minnesotans are working jobs at under $10 an hour.
Mr. REID. The last question I ask my friend is this: Doesn't it seem
we should be spending time on the tens of thousands of people in
Minnesota who are out of work, or are no longer looking for work, or
those people who are underemployed? Wouldn't it be better if we were
spending some time dealing with them rather than something that is
going to happen 10 years from now for the wealthiest people in America?
Mr. WELLSTONE. Of course. The Senator's words are near and dear to my
heart. The answer is yes. That is why I decided to come out on the
floor. I was thinking to myself: We are trying to have a simple
extension of unemployment insurance; are we not down to 13 additional
weeks?
In my State of Minnesota, we are focused on what is going on with
education, what is happening to our children, what is happening to our
schools, and where the resources are. Why can't we get the money for
special education? Why can't we do better making sure the kids come to
kindergarten ready to learn? Why can't we do more with afterschool
programs?
Look at this budget from the administration. What you find from what
the President is proposing is all of these discussions about priorities
and values. But we are not going to have the money for prescription
drug benefits. We are going to say in Minnesota if you are an
individual with an income of $13,000 or under, or a couple with an
income of $17,000 or under, you are eligible, but the rest of you
aren't. We have about over 600,000, and closer to 700,000, Medicare
recipients. The income profile is not high. Many of them have incomes
over this, but they cannot afford prescription drug benefits. They are
out.
The small business 7(a) program is cut in half. They are out. One
would eliminate homeless programs for veterans. That is out. One would
eliminate true north economic development work on the Iron Range in
Minnesota. That is out. One would eliminate help in funding for
childcare in Minneapolis. That is out. They want to go after
empowerment zones and enterprise zones in Minneapolis. That is now out.
They want to go after affordable housing. That is out. Help for school
counselors is out. Rural education is out--all for the sake of Robin-
Hood-in-reverse tax cuts giving away money to the wealthiest citizens
in the country.
These are distorted priorities. This is a no-brainer. I think I am
going to make this point over and over again. Let me frame the issue
differently.
What we have out here is an amendment that says eliminate the estate
tax for the wealthiest citizens in the country--I mean the very
wealthy. It is not targeted. I would be for actually targeting this. I
wouldn't mind at all doing something that would help our family farms
and small businesses. We should do that. That is not what this
amendment does.
We have an amendment targeted to the wealthiest citizens in the
United States of America which will deplete this economy over the next
10 years at the very time baby boomers are 65 years of age and over. I
am one of them. This amendment further depletes the Social Security
trust fund.
That is one of the issues that people have to understand. With the
President's budget proposal, we are talking about over the next 10
years taking close to $1 trillion out of the Social Security trust
fund, and now another $855 billion over the next 20 years, all for the
sake of tax breaks for the very wealthy, the very powerful, and the
very well connected.
My colleagues on the other side of the aisle don't want to move
forward with--I don't even know what you call it anymore--lifeline
legislation, some help for people who are out of work, some extension
of unemployment benefits. They don't want to do that.
I would like to have included coverage for the working poor and part-
time workers. I would like to have increased benefits. I would
certainly like to have included some help for COBRA and health care
coverage. Most of that is not in here. It is just a simple extension of
unemployment insurance. It is hardly anything else.
They oppose that but instead come out here with a $855 billion
program over the next 20 years with all of it going to the wealthiest
of Americans. That is basically the choice we have.
I would love to do a poll in coffee shops in Minnesota and across the
country as to what people think about these choices.
Judge me by what I do. Judge me by my budget--not by my words.
When you start to look at the details of this budget, it is
breathtaking. I am
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for homeland defense. I think we need to do a lot better. We need to do
a lot better with our northern border control. We need to get the
public health infrastructure out there. God forbid there is a terrorist
attack. We need to be prepared. First of all, we need to try to prevent
it. If it happens, we need to be prepared. I am for strong defense.
I hope Senators will carefully scrutinize this budget. We have before
us--between the dramatic increase in the Pentagon budget and all of
these tax cuts with about 40 or 50 percent going to the top 1 percent
of the population--I am now talking about tax cuts that have already
passed. Now we have this estate tax. With this House proposal, they
want to repeal the alternative minimum tax. I don't think they want to
reach back to the mid-1980s. That is too embarrassing. Ronald Reagan
was for it. The whole idea in 1986 was not to make these multinational
corporations pay any taxes when all the other people in the country
were.
You have $13 billion in tax breaks for multinational corporations.
You have Robin-Hood-in-reverse tax cuts with about 40 or 50 percent
going to the top 1 percent of the population.
You have a $855 billion reckless proposal to do away with the estate
tax for the richest and wealthiest Americans in the country while at
the same time cutting homeless vets programs; cuts in small business
programs; cuts in childcare; cuts in empowerment zone; cuts in economic
development programs for the Iron Range; cuts in counselor programs;
not live up to your commitment and promise on special education,
helping our kids, helping our school districts, and helping our
children; don't live up to your commitment on the Pell grant program;
cuts in job training during a recession and during hard economic times
when people in northeast Minnesota, or in greater Minnesota, or in
metro Minnesota, many of them are going back to school, or trying to go
into a job training program for skills development. They have been spit
out of the economy. They are looking for training so they can get back
to work--cut those programs.
My party needs to find its voice. Majority Leader Daschle has been
out there and he has been vilified. I smile. I think sometimes it is an
effort to make him out to be a Newt Gingrich of the left. It is
outrageous. But this party, my party, the Democratic Party, is supposed
to be the party of the people. If there ever were a time for us to find
our voice and for us to speak out and for our country to have a real
debate about these values, it is now. In the words of Rabbi Hillel: If
not now, when?
Personally, I think the thing I feel worse about is the children in
relation to the education piece. I am going to be one of these people,
in not too many years, who is going to be over 65 years old. Lord, we
have six grandchildren. I just took our granddaughter Cari to see
``Fiddler on the Roof.'' There is that song: ``Sunrise, Sunset.'' I
don't know what has happened to the time.
I believe that ultimately the way we are judged is in relation to
what we have done for our children, what we have done for our
grandchildren. Have we made this country better and this world better
for them? I think that is how we are judged. I think that is how we are
judged as parents and I think that is how we are judged as adults. I
think that is how we are judged as Senators. I think that is how we are
judged as Representatives. I think that is how we are judged as a
nation.
How have we done for our children? We are not doing very well. In
this budget, we flat-lined affordable child care. I think only about 10
percent of low-income families are able to participate in affordable
child care right now because that is all the funding there is.
We say we love the little children and are concerned about the
development of the brain and that we want children to read better, but
we have funded Early Head Start at about the 3- or 4-percent level.
We could be a real player for children prekindergarten. We could make
a real difference. We could do so much more for our schools. We could
live up to our commitment on special education. For title I--I am
sorry, I have indignation--they make the claim we have added $1 billion
and that this is great. In real dollar terms, there is no additional
money because there are more children who are eligible for title I.
We are going to test these children, all in the name of rigor. So you
go to a Bancroft Elementary School and, big surprise, 80, 90 percent of
them are on a free or reduced school lunch program; 60 percent of them
are in homes where English is the second language; and 20, 25 percent
of them move several times during the year for lack of affordable
housing. There is a key education program, and there is no more funding
for that. In fact, they are cutting funding for affordable housing, and
we are surprised these children do not do as well? And we do not give
them any more help to do better.
I think this is a debate about values. Everybody wants to talk about
family values. This is a family value. How are we doing for our
children? How are we doing for our grandchildren? Are we making life
better for them? Are we going to make it possible for them to be good
leaders in the future?
I think we have some seriously distorted priorities out there. I hope
my party will directly challenge them.
A reporter said to me: The President is very popular. Does that make
it hard for Democrats to be critical?
I said: Look, it is good for people to do well. The President is
doing well in terms of the polls. Fine. But the real issue is whether
or not we are willing to speak up for what we think is right, for what
we believe in, for what we think is best for States and best for the
country.
That is what people want us to do. It is important, as Democrats,
that we find our voice.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Carolina.
Mr. HELMS. Mr. President, what is the pending business?
The PRESIDING OFFICER. The pending business is the Kyl second-degree
amendment.
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