[Congressional Record Volume 149, Number 90 (Wednesday, June 18, 2003)]
[House]
[Pages H5492-H5514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1215
                DEATH TAX REPEAL PERMANENCY ACT OF 2003

  Ms. DUNN. Mr. Speaker, pursuant to House Resolution 281, I call up 
the bill (H.R. 8) to make the repeal of the estate tax permanent, and 
ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Hastings of Washington). Pursuant to 
House Resolution 281, the bill is considered read for amendment.
  The text of H.R. 8 is as follows:

                                 H.R. 8

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Death Tax Repeal Permanency 
     Act of 2003''.

     SEC. 2. ESTATE TAX REPEAL MADE PERMANENT.

       Section 901 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 shall not apply to title V of such 
     Act.

  The SPEAKER pro tempore. After 1 hour of debate on the bill, it shall 
be in order to consider the amendment printed in House Report 108-157, 
if offered by the gentleman from North Dakota (Mr. Pomeroy) or his 
designee, which shall be considered read and shall be debatable for 1 
hour, equally divided and controlled by a proponent and an opponent.
  The gentlewoman from Washington (Ms. Dunn) and the gentleman from 
California (Mr. Stark) each will control 30 minutes of debate on the 
bill.
  The Chair recognizes the gentlewoman from Washington (Ms. Dunn).
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 8, the Death Tax Repeal Permanency Act of 
2003.
  The bill before us has been cosponsored by over 200 Members of the 
House from both sides of the aisle. This approach is simple. It makes 
elimination of the death tax permanent. Although the bill is only one 
short sentence, it will have a powerful impact on the millions of 
people we represent.
  Two years ago, Congress voted to phase out and repeal the death tax. 
Due to the Byrd rule, however, the tax will come back in full force 
January 1, 2011, imposing a maximum tax of 55 percent on estates. In 
the last Congress, a majority of the House voted on three occasions to 
remove this sunset in the law and make repeal permanent. We are here 
today to complete this unfinished business.
  I have no doubt we will hear a great deal of rhetoric from those who 
want to keep the death tax alive. Repeal only helps the wealthy, they 
will say. It will reduce charitable giving; it will increase the 
deficit; it will jeopardize Social Security. Time and again these 
arguments have been raised. The simple truth is none of them holds 
water.
  Does repeal of the death tax help only the wealthy? The Joint 
Economic Committee in 1998 underscored how repeal of the death tax will 
help minority-owned businesses. Both the National Black Chamber of 
Commerce and the United States Hispanic Chamber of Commerce support 
repeal of the death tax.
  Robert Johnson, the founder of Black Entertainment Television, said 
in 2001 that ``elimination of the estate tax will help close the wealth 
gap in this Nation between African American families and white 
families.''
  Supporters of the estate tax say that it does not really affect rural 
communities or farmers. Mr. Speaker, I represent rural communities and 
timber landowners. Earlier this year experts at the United States 
Forest Service published findings on just how devastating the tax 
affected rural communities.

[[Page H5493]]

  Over a 10-year period, 36 percent of forest estates owed the Federal 
estate tax. In 40 percent of the cases where a Federal estate tax was 
due, timber or land had to bo sold to pay part or all of that tax. The 
amount of forest land harvested to pay the Federal estate tax was 
approximately 2.6 million acres every year. Forest land sold was nearly 
1.3 million acres per year; and roughly 29 percent of the land sold was 
developed, or it was turned into subdivisions or converted to other 
uses.
  Supporters of the tax say just lift the exemption amount, but that 
does not solve the problem. As inflation erodes the value of the 
exemption level, it will just mean more acres will be sold or harvested 
or developed. This is not the answer.
  They say repeal of the estate tax will reduce charitable giving. In 
``The CPA Journal'' of August 2001, Arthur Schmidt said, ``Philanthropy 
will likely increase as a result of the repeal of the estate tax, both 
at death because of the greater net resources available, or during the 
lifetime of the taxpayer as a result of the remaining tax efficiency of 
the charitable income tax deduction. In either case, the net present 
value of philanthropy will likely increase.''
  Does the estate tax really promote charitable giving? IRS statistics 
show that in four out of five cases of taxable estates no bequest is 
made. No bequest is made in four out of five cases.
  Would estate tax repeal jeopardize Social Security benefits? Federal 
receipts as a result of the death tax represent less than 1.5 of all 
total revenues. None of that money goes to Social Security for the 
trust funds, and eliminating the tax will in no way affect Social 
Security benefits, not one bit.
  The death tax does not prevent accumulation of wealth. It does not 
promote charitable giving. It does not lead to increased economic 
growth. It is not a tax on sin. It is a tax on virtuous activities like 
savings and investment, activities we should be encouraging.
  It increases the cost of capital for small businesses. It affects 
rural communities. It imposes financial burdens on minority businessmen 
and -women. In sum, the case for the death tax has been made, and it 
has been over and over again in this House thoroughly rejected.
  Woodrow Wilson signed the death tax into law in 1916, and the time 
has come to get rid of it for once and for all. I urge my colleagues to 
join me in supporting H.R. 8 and opposing the substitute amendment and 
providing small businessmen and -women, family farmers and minorities 
with the capital they will need to expand, to create jobs and grow the 
economy.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STARK. Mr. Speaker, I yield myself 6 minutes.
  I rise today to oppose this repeal of the estate tax. In the very 
same week that the Republicans are willing, as they did last night, to 
shortchange seniors on a Medicare prescription drug benefit, they are 
willing to go out and spend $60 billion a year on a tax cut for the 
richest 1 percent. Kind of a new form of shock and awe, along with the 
same kind of truth that they use in weapons of mass destruction.
  This bill before us cost $163 billion. It occurs only in the last 3 
years of the 10-year budget window, and it is on top of the $1.3 
trillion tax cuts signed into law in 2001 and the recent $350 billion, 
or trillion bucks when we strip away all the accounting gimmicks.
  The gentlewoman from Washington misspoke. Only 642 or 1.4 percent of 
taxable estates had farm assets making up half or more of the gross 
estate in the last reported statistics; 776 or 1.6 percent of taxable 
estates had business or partnership assets comprising half or more of 
their gross estate. One percent of small businesses and farms, one 
percent, of those estates would have been forced to liquidate any 
assets at all to pay the current level of estate tax.
  So here they are responding, as the Republicans will, to the Mars 
family who spent $1 million lobbying already to get this through and 
the Connell Company and the Koch Industries, Incorporated, Hallmark 
Cards. So they have got a few very, very rich people who would like to 
get away without paying their fair share of what it keeps to make 
America great.
  I suspect that what is really troubling the Republicans is they are 
worried about the efficacy and ability of their children to succeed. 
That is understandable. If one is raised and coddled by rich parents 
and never have to work, they probably need some protection. Most of the 
money that they are sucking out of our Federal revenues is money that 
we are taking out of programs like Head Start, Leave No Child Behind, 
Medicare, health insurance for children, things that will make healthy 
and strong families.
  Warren Buffett who earned some money on his own, something that my 
Republicans do not seem to understand, most of the people opposing this 
bill worked at the public trough all their lives, never had a job in 
free enterprise or else they inherited their money. So if they listen 
to somebody like Warren Buffett who said we come closer to a true 
meritocracy than anywhere else around the world, we have mobility so 
people with talents can be put to the best use. Without the estate tax, 
we in effect will have an aristocracy of wealth which means we pass 
down the ability to command the resources of the Nation based on 
heredity rather than merit. I suppose that is something the Republicans 
need to keep themselves in office.
  He likened the tax repeal to choosing the 2020 Olympic team by 
picking the eldest son of gold medal winners in the 2000 Olympics. We 
would regard that as absolute folly in athletic competition. Yet my 
colleagues on the other side of the aisle, having been seduced by, I 
guess, they had 1,200 folks last night raise 3 or $4 million for the 
President, but they are worried about every one of them, but not about 
the 40 million seniors who they denied decent Medicare prescription 
drug benefits last night because they felt they did not have the money.
  The reason they do not have the money is they are giving it away to 
less than 10,000 people a year. So as they help 10,000 people, who I 
might add, make that the kids who are going to inherit this, that is, 
40,000 a year, so they are going to give away $60 billion to 40,000 
rich kids every year, and they are going to deny 40 million senior 
citizens the health care they deserve in their old age; and some of my 
colleagues may snicker about that, but those are mostly you do not have 
anything left to leave and so I say that it is the same old same old: 
Republicans pandering to the rich to entrench themselves here and 
people whose children cannot make it on their own trying to figure out 
how to support them in an era where they should be learning to make it 
on their own if they had the right kind of education, which again the 
Republicans are denying us.
  So it is very clear, it is the same old message over and over. 
Billions of dollars to a few very rich people, turn your back on those 
who need the help they should be getting from society.
  Mr. Speaker, I reserve the balance of my time.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  I want to remind the gentleman from California, whose State is in 
very financial straits, that in the year 2002 his State and estates in 
that State sent to the Federal Government $4,201,408. Actually that is 
$4,201,408,000 to the Federal Government, which I am sure his State 
could have made use of.
  Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sam 
Johnson), a great member of the Committee on Ways and Means and very 
much in touch with his constituents on repealing the death tax.
  (Mr. SAM JOHNSON of Texas asked and was given permission to revise 
and extend his remarks.)

                              {time}  1230

  Mr. SAM JOHNSON of Texas. Mr. Speaker, I thank the gentlewoman from 
Washington (Ms. Dunn) for yielding me this time.
  I think sometimes the Members on the other side forget that this is a 
Nation built on free enterprise. Free enterprise means you start with 
nothing and you make something out of it. And guess what? It's great 
that you can turn it over to your kids when you die.
  A great bill this is for America. I strongly support the bill to 
permanently repeal the death tax. Members of this House have 
overwhelmingly voted to repeal these destructive taxes that can wipe 
out a lifetime of work. For many businesses, small businesses

[[Page H5494]]

especially, death taxes loom over their very future existence. These 
taxes have driven far too many business decisions for far too long. 
Whether it is purchasing extra life insurance that benefits only the 
tax man or structuring the form of a company ownership so that a small 
business is not wiped out on the death of a key employee, the death tax 
has been in the driver's seat of too many small business decisions.
  Two years ago, we voted to repeal this tax and let the small business 
owners get on with making their businesses successful instead of 
planning for their own demise. But like the arcade game ``Whack a 
Mole,'' this tax keeps popping up and rearing its ugly head. Many of 
our Democrat colleagues are arguing for something less than full repeal 
of the death tax. Class warfare does not work on this issue.
  Americans strive to be successful and then share the fruits of their 
labor with their children. Americans support full repeal of the death 
tax. They do not want a toll booth on the road to after life. Mr. 
Speaker, just as you cannot be a little bit dead, this tax cannot be a 
little bit repealed. Imposing taxes on the value of a lifetime of work 
is just wrong and we must end this tax permanently.
  Mr. STARK. Mr. Speaker, I am happy to yield 4 minutes to the 
gentleman from Michigan (Mr. Levin), a senior member of the Committee 
on Ways and Means, who, with his brother, understands that hard work 
and education can lead to a successful career without inheriting a lot 
of money.
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Well, so let us look at the facts, Mr. Speaker. The latest 
year for which we have exact data shows this: Of all of the taxable 
estates, only 1 percent would be considered family farms, not the 
millions that the gentlewoman from Washington (Ms. Dunn) mentioned, but 
hundreds. That amounts to about 400 people in the entire United States.
  As to family-owned businesses in that year for which we have exact 
data, of the 2.3 million deaths, only 776 decedents had taxable 
estates. So when you add up the small businesses and family farms, 1.6 
of all the estates paid the estate tax.
  So what is going on here? We are talking about, at the most, 
thousands. A few thousand. The Pomeroy substitute would increase the 
exclusion and, as a result, 99.65 percent of all estates would not be 
subject to an estate tax. So that means two-fifths of 1 percent would 
be subject to the estate tax.
  So why, in view of that, take away $162 billion the last 3 years of 
this 10-year cycle and $800 billion out of Federal revenues the next 10 
years? Eight hundred billion dollars. Well, the main reason is cited 
today in an article by David Broder based on an article, an op-ed, a 
week before by Grover Norquist, where he said the Republicans can't do 
this all at once. They are now doing it step by step. This is David 
Broder's analysis, and it is so correct: ``The consequence of this is a 
massive rollback in Federal revenue,'' ``and what he (Grover Norquist) 
regards as a desirable shrinkage of Federal services and benefits. In 
short, the goal is a system of government wiped clean, on both the 
revenue and spending side, of almost a century's accumulation of social 
programs designed to provide a safety net beneath the private 
economy.''
  That is what is at stake here. There is class warfare against 
everybody except, in this case, one-quarter of 1 percent of the 
population. And when you take into account all the other tax cuts, it 
is a class warfare against all but the very, very wealthy.
  Last night we tried to add to the Medicare benefit $400 billion to 
$500 billion and the Republicans said no. They traded $400 billion to 
$500 billion in Medicare benefits that we wanted to add that would make 
it real for the seniors of this country, for a tax cut for a few 
hundred, maybe a few thousand people. Not millions. Not hundreds of 
thousands. Not even tens of thousands. But a few hundred, or several 
hundreds of people. That is the Republican value system. That is their 
option.
  So I wish they would not bring up this smoke screen of family farms 
and small businesses. What they are trying to do is to end this effort 
to provide a safety net and a step up, a hand up. Not a hand out, but a 
hand up the ladder for people in the middle-income and low-income 
groups of America.
  That is where my Republican colleagues stand. Let us today show where 
we stand and vote for the Pomeroy amendment and against this 
unfortunate and not at all defensible repeal.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  I think the gentleman has created not just a near miss, but a big, 
big miss when we speaks about family farms. Families own 99 percent of 
the Nation's farms and ranches, and they are capital intensive 
businesses. Their assets are not liquid, and so for that reason they 
are very much at risk at having to pay very large estate taxes. Nearly 
20 percent of farmers have paid Federal estate taxes in the previous 5 
years. Seventy-seven percent of farmers report that they spent money 
each year on estate planning.
  Not only are we hitting the family farms and the people who are 
employed by them, but we are also wasting dollars that go into this 
economy not for the purpose of stimulating this economy, but to pay for 
life insurance policies, estate planning, and everything else that is 
there when there is unpredictability and they need to provide for the 
future of their business and the business that employs so many people 
throughout the United States.
  Mr. Speaker, I yield 3 minutes to the gentleman from Arizona (Mr. 
Hayworth), a very strong member of the Committee on Ways and Means who 
has been close to his folks at home on this issue and who has done a 
great job for us on codifying the issue in the State of Arizona.
  Mr. HAYWORTH. Mr. Speaker, I thank my colleague from Washington State 
for yielding me this time and for the recognition.
  It is interesting to hear the rhetoric so far and the lectures that 
come from the left and the far left on this matter. They seek to find 
logic in their illogic. On one hand they tell us that this only affects 
a very few people. Glaringly omitted from their diatribe against 
accomplishment is the fact that those very few people, when we take 
this tax in totality and look at it, account for a little more than 1 
percent of total revenues to the Federal Government in any given year.
  So understand that the impact here would not tear asunder the safety 
net as merchants of fear would have us believe. Quite the contrary. 
Indeed, rather than resorting to the politics of fear, why not embrace 
the initiatives of opportunity. Stop and think about the small 
businesses across America that are family owned, the people they 
employ. Indeed, we know in rural communities that rural areas are 
affected disproportionately by this.
  And though my friend talks about a small percentage of family farms, 
I think it is safe to say that those family farms impact other 
businesses, such as farm machinery businesses in their town, grocery 
stores in their town, and other opportunities for economic advancement. 
There is a multiplier effect.
  Indeed, as we take a look at this, the real life experiences of two 
Arizonans come to mind: One, a lady living down in Tucson who stopped 
me and said, you know, my dad had a job, and it was not that of a high-
falutin tycoon. He was a milkman in Southern California. After his days 
in World War II he came home. She said her mom passed away, and her dad 
made some wise investments. He was thrifty. Then her dad found out he 
had a terminal illness. He had not spent years in estate planning. He 
was just the kind of guy for whom thrift and initiative was a byword, 
and his estate had accumulated to over $6 million. And now, as he had 
passed away from this terminal illness, this lady and her siblings were 
confronted with giving over half of her father's estate to the 
government.
  Or take the example of the 1994 Democratic nominee for Governor in 
the State of Arizona, Eddie Basha, a proponent of eliminating the death 
tax. Why? Because he is in the grocery business. The grocery business 
is capital intensive. He wants to pass the business on to his children. 
Small wonder that my friend Eddie has left the Democratic party and now 
is a registered Independent.

[[Page H5495]]

  But, friends, whether you are a Republican, Democrat, Independent, 
Libertarian, or Vegetarian, you understand this: There should be no 
taxation without respiration. The fact is, those who work hard and save 
and pass their businesses down, whether in the minority community, the 
Hispanic community, the African American community, those respective of 
Chambers of Commerce embrace this idea. Because by getting the wealth 
down intergenerationally, we can, in fact, encourage jobs and 
investments. Vote ``yes'' on this measure. Put the death tax to death.
  Mr. STARK. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from Washington (Mr. McDermott).
  Mr. McDERMOTT. Mr. Speaker, I guess we are all in touch with our 
constituents. Mine was quoted today. Bill Gates, Sr. lives in my 
district, and he said the principal issue is the growing budget 
deficit. You cannot run a $400 billion deficit year after year and go 
around repealing taxes at the same time.
  Now, I learned in Sunday school, and it may surprise some of you, but 
I went to Sunday school, and I learned that you cannot take anything 
with you when you die. But it is not fair to heap $800 billion of 
additional debt on your kids as you go out of sight.
  This argument we are having here today is an old one in this society. 
We made the decision between John Adams and Thomas Jefferson that we 
were not going to have primogeniture in this country; that you could 
not pass everything on to your eldest son and that was it. We said 
everybody ought to start with an even shot, men and women. We have come 
a long way using that. But now we are saying that somebody who 
inherited from his father or his mother, millions and millions and 
millions of dollars, should get it just because he was born lucky.
  Now, I have read the Bible and I have looked around and I do not find 
that anywhere, that if you are born lucky, as they say, some guys were 
born on third base and they think they hit a triple, but this is not 
something where you have a God-given right to that. You have a God-
given right in this country to have an equal shot.
  As for the farmers, I listened to my colleague from Washington go on 
and on and on about the farmers. I have a letter here from the National 
Farmers Union dated 16 June. ``I write on behalf of 300,000 farmers 
with the National Farmers Union. There is no evidence that the estate 
tax has forced the liquidation of any farms, and existing estate tax 
provisions already exempt 98 percent of all farms and ranches.'' By 
increasing the level of the estate tax, as we will get an opportunity 
with the Pomeroy substitute, to $4 million per individual, 99.5 percent 
of America's agricultural producers would be exempt from any State 
liability.
  Now, if the farmers are who we are arguing about here, 300,000 of 
them just spoke, and they say this is baloney. In fact, the letter goes 
on to say that, ``we need that money for crop supports and conservation 
and all the other things that government provides.'' So they understand 
that having a government that can provide services is important.

                              {time}  1245

  Mr. Speaker, if we give away all of the money, we are going to come 
back here next year and say we cannot do conservation, we cannot do 
crop subsidies, we cannot do anything because we do not have the money. 
These farmers are not stupid. They understand. I think we ought to vote 
for the Pomeroy amendment.
  Ms. DUNN. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Manzullo), the chairman of the Committee on Small 
Business.
  Mr. MANZULLO. Mr. Speaker, the death tax falls most heavily on small 
businesses because they are asset rich but cash poor. This bill allows 
small businesses to be passed from one generation to the next without 
having to sell assets to pay the punitive tax. This bill is not about 
Bill Gates. It is not about Warren Buffett. If they have problems with 
repealing the death tax, let them write a check to the government.
  This bill is about the Beuth family of Winnebago, Illinois, and the 
Hall family of Ogle County, Illinois, who live in my congressional 
district. Richard and Judy Beuth of Seward almost lost the family farm 
several years ago when Richard's father died and the IRS hit them with 
a $185,000 death tax bill. Factual, not philosophical, factual. Not 
Warren Buffett, not Bill Gates, but Richard and Judy Beuth of Seward, 
Illinois. Gary Hall and his four sisters of Lindenwood had to sell 
equipment, had to sell part of their land, and take out huge loans to 
pay a $2.7 million death tax bill they received shortly after their 
father died in 1996. Real live people, real live farmers, my 
constituents, forced to go out of business because of the capital-
intensive farming operations that they have to make their living.
  This tax is immoral. It has devastated too many family farms and mom 
and pop businesses. These families worked hard all their lives to put 
food on the dinner tables, and this is about giving that family farm, 
that family business on to succeeding generations. Of all of the small 
businesses in this country, fewer than 30 percent are passed on to 
succeeding generations and fewer than 13 percent make it to the third 
generation. I urge that this bill to repeal the death tax be made 
permanent.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would inquire of the gentleman from Illinois (Mr. 
Manzullo) if he would be willing to engage with me for a moment. The 
two constituents mentioned, would they not have been covered under the 
Pomeroy amendment?
  Mr. MANZULLO. Mr. Speaker, will the gentleman yield?
  Mr. STARK. I yield to the gentleman from Illinois.
  Mr. MANZULLO. No, because the estates would have been more than that.
  Mr. STARK. The estate on which they paid $185,000 in tax, how much 
was the farm worth?
  Mr. MANZULLO. It was probably worth more than the $3 million.
  Mr. STARK. Reclaiming my time, so it would be covered by the Pomeroy 
amendment. I just suggest that many of these horror stories of people 
who are quite fortunate would be covered under the Pomeroy amendment.
  Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. 
Kleczka).
  (Mr. KLECZKA asked and was given permission to revise and extend his 
remarks, and include extraneous material.)
  Mr. KLECZKA. Mr. Speaker, the previous gentleman who spoke indicated 
that the estate tax is immoral. Do Members know what is more immoral? 
Giving this tax relief to the wealthiest individuals in this country 
and passing it on through national debt to our children and our 
grandchildren.
  The action we take today, which will cost over $800 billion in the 
next 10 years after fully effective, will be put on the national debt 
of the country to be paid back by our kids and grandkids. Boy, are we 
generous. Mr. Speaker, the only good thing about today's bill to repeal 
the estate tax for the billionaires of this country is that it is dead 
in the Senate, so all of the talk and debate today and the vote we will 
have later is for naught because the Senate is going to kill it. That 
is the good news. But let us see what we have done in this House and 
Congress over the last couple of years.
  Last week we provided a tax cut of some $82 billion. The country is 
broke. We have a $400 billion deficit this year. The kids are going to 
pay that because that is part of the debt now. A month before that we 
passed another tax bill. This one totaled $350 billion, of which the 
wealthiest Americans would get about $92,000. The average taxpayer in 
my district would get about $400. We had no money for that one either. 
The real problem with that bill is once we total it up, that costs $1 
trillion but that is a secret, so do not say anything. Quiet.
  Now 2001 we passed another tax bill. How much did that one cost? That 
one cost $1.3 trillion. Again, the surplus is gone. The country is 
broke. We have a deficit. What the heck are we doing around here? When 
is this idiocy going to stop?
  Today the estate tax has an exemption of $2 million. It covers 
everyone in my district. Well, we are going to have an option later 
today which would raise that to $7 million and that would take care of 
99 percent of all small businesses and farmers in this country. But 
that is not good enough. That is

[[Page H5496]]

not good enough for the Republicans because that is not who they are 
trying to help. The people they are trying to help are the Hallmark 
Card people and the Mars candy bar people, who over the last couple of 
years have spent millions of dollars hiring lobbyists in D.C. and 
giving campaign contributions, and today they want their due.
  Mr. Speaker, I include for the Record a Washington Post article of 
this morning by Jonathan Weisman entitled, ``Estate Tax Compromise 
Sought.'' What we are doing today is sheer nonsense.
  Let me say to my Republican colleagues, we have already voted on this 
proposition three times; and under the campaign finance law if we vote 
for an item three times and it does not pass, you are still entitled to 
the campaign contribution, okay. So Members are still going to get the 
money from Hallmark and the campaign contributions from the Mars candy 
bar people; but for God's sake, save the taxpayers of this country.

               [From the Washington Post, June 18, 2003]

                      Estate Tax Compromise Sought


House Set to Pass Repeal, but Supporters Know Senate Votes Aren't There

                         (By Jonathan Weisman)

       When a coalition of wealthy families, small-business groups 
     and farm interests won temporary repeal of the estate tax two 
     years ago, they immediately resumed their campaign for 
     permanent repeal. Now, even as the House is expected to vote 
     today for just that, some in the alliance have second 
     thoughts.
       It's not that they have backed off their vehement 
     opposition to the tax on large inheritances. Rather, as the 
     Federal budget deficit grows and their patriarchs and 
     matriarchs age, they are losing faith that permanent repeal 
     will ever happen and are considering compromises that were 
     unthinkable two years ago.
       The House is expected to vote today to permanently repeal 
     the estate tax after 2010, when it is set to expire after 
     being in effect for only one year. But no one expects the 
     Senate to pass the bill, leading some proponents to believe 
     that the vote and the distant temporary repeal date are more 
     political gamesmanship than a serious legislative attack on 
     the tax.
       So some of the affluent families who have bankrolled the 
     repeal movement are exploring estate tax changes short of 
     repeal that could be implemented sooner.
       ``There is some real concern that 2010 is not soon 
     enough,'' said a lobbyist working on the issue, referring to 
     the deficit and the uncomfortable fact that some affluent 
     benefactors may not live until 2010. Grover Connell of 
     privately held Connell Co., for example, is 85. The 
     matriarchs and patriarch of the Hallmark greeting-card 
     fortune are in their seventies.
       For more than a decade, the coalition has rejected 
     overtures for compromise and declared it will accept nothing 
     short of ``death tax'' repeal.
       The simplicity of their demand, the strength of the small-
     business coalition and the money of the families financing 
     the effort combined to turn an obscure tax affecting very few 
     Americans into a powerful rallying point, especially for 
     Republicans.
       The movement culminated in 2001 with the 10-year, $1.35 
     trillion tax cut, which repeals the estate tax in 2010. But 
     the tax is to return in 2011 when the entire tax cut expires.
       For the past two years, the repeal coalition has tried, and 
     failed, to gather the 60 Senate votes needed to make the 
     repeal permanent. One lobbyist working on the estate tax said 
     the appeal of the issue may have ``plateaued.''
       And just as the surging Federal budget deficit is beginning 
     to shake up the Bush administration's plans for more tax 
     cuts, it is starting to change the politics of estate tax 
     repeal. Repeal supporters worry that the growing deficit will 
     make it more difficult to eliminate the tax, particularly by 
     2010, when the vanguard of the baby boom will retire.
       The Treasury Department said repeal of the estate tax in 
     2011 through 2013 would cost the government $115 billion in 
     revenue. In 2014 through 2023, repeal would cost about $820 
     billion, according to the Center on Budget and Policy 
     Priorities.
       ``The principal issue is the growing federal budget 
     deficit,'' said William Gates Sr., father of the Microsoft 
     Corp. founder, who opposes repeal of the estate tax. ``You 
     can't run a $400 billion deficit year after year and go 
     around repealing taxes at the same time.''
       Even if Bush is reelected in 2004, a new president, who 
     could be far less friendly to repeal, will be elected in 
     2008. And the broad appeal of the anti-estate-tax movement 
     that caught fire in the 1990s may be dissipating simply 
     because people are not feeling so rich anymore, one lobbyist 
     said.
       Even at the height of the stock market boom, the estate tax 
     affected very few families because estates worth up to a 
     certain amount are exempt. That amount is currently $1 
     million for a single person or as much as $2 million for a 
     couple. In 2000, the most recent year for which statistics 
     are available, more than 2.4 million adults died in the 
     United States, but only about 52,000 left taxable estates.
       The strength of the repeal movement always came from 
     people's fear that their estates would be hit with a huge tax 
     bill. If that fear dissipates in a sluggish economy, so will 
     the movement, lobbyists said.
       ``I think some of [coalition members] are coming around to 
     `Let's get a common-sense solution that can work now instead 
     of just talking about this for eons,' '' said Sen. Blanche 
     Lincoln (D-Ark.), a past repeal supporter who is floating a 
     less expensive alternative.
       With all those factors in mind, some of the biggest names 
     in the estate tax coalition are looking to compromise. The 
     candy-making Mars family of McLean gave more than $1 million 
     to lobbying powerhouse Patton Boggs LLP last year, in part to 
     explore ``estate and gift tax reform,'' according to lobbying 
     disclosure forms.
       Koch Industries Inc., a family-run energy, ranching and 
     finance conglomerate, paid Hogan & Hartson LLP $40,000 last 
     year, while spending $500.000 on in-house lobbying on the 
     estate tax. The Connell Co. hired Washington Council Ernst & 
     Young for $120,000 to lobby for ``estate and income tax 
     relief,'' while Hallmark Cards Inc. spent $60,000 to hire 
     Capitol Tax Partners LLP.
       Stephen Moore, a conservative tax-cutting activist with the 
     Club for Growth, and Mark A. Bloomfield, president of the 
     business-backed American Council for Capital Formation, 
     proposed taxing estates at the current capital gains rate of 
     15 percent. Taxable estates are subject to a 49 percent tax.
       ``There are Republicans who want this debate to last 
     forever, keep the [campaign] money flowing in, keep the 
     Democrats off guard,'' Moore said. ``Mark Bloomfield and I 
     have been on crusade to get this done, to break the logjam.''
       If that proposal cannot be passed, another lobbyist 
     suggested taxing inheritances at income tax rates, which are 
     at most 35 percent. A stream of lobbyists has passed through 
     Lincoln's office to discuss her proposal to immediately 
     repeal the estate tax for family-owned businesses and farms.
       The public faces of the repeal movement remain resolute. 
     ``We are 100 percent united behind permanent repeal in 
     2010,'' said Patricia Soldano, a Southern California 
     financial planner who, in 1992, helped launch the repeal 
     movement with funding from the Mars family and the Gallo wine 
     heirs, among others.
       Dena Battle, the National Federation of Independent 
     Business's lobbyist on the issue, conceded that the budget 
     deficit ``certainly changes the dynamics of the debate.''
       ``But,'' she said, ``you're talking about something that 
     takes place 10 years from now. There's no way we can know 
     what the economy is going to look like then. That's not an 
     excuse to vote against this.''
       There is little doubt that the House will vote today to 
     repeal the tax, but lobbyists said they will look closely at 
     the tally. If past repeal supporters--especially Democrats--
     vote against it this time, the fledgling movement toward 
     compromise will pick up steam quickly, a lobbyist for one of 
     the rich families predicted.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Aderholt). The Chair must remind Members 
to avoid improper references to the Senate. Remarks in debate may not 
characterize, nor urge, nor predict actions of the Senate.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would just remind the gentleman from Wisconsin that we 
did vote three times on this legislation last year in different forms; 
and, in fact, the legislation passed each of the times by a bipartisan 
majority. It also passed in the other body by a bipartisan majority. 
But, unfortunately, because of their strange rule system, it required a 
60-vote margin to pass in that body.
  Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. 
Putnam), a very prominent member of our sophomore class.
  Mr. PUTNAM. Mr. Speaker, I thank the gentlewoman for her leadership 
on this issue.
  I am from a farm family in a rapidly growing part of the State of 
Florida. I have seen what the death tax does to destroy families and 
destroy pieces of property that have been in the same family's hands 
for generations, that have cared for that land and have been steward of 
that land, and the environmental benefits that come from that. When the 
death of the grandfather or the great grandfather or the father comes 
along, it is busted up into half-acre ranchettes, and the environmental 
and agricultural benefits are lost. The food security issues are lost 
forever. We cannot unpave a parking lot, we cannot bring those families 
back together again, you cannot put agriculture back into practice. It 
is lost forever because of a quirk in our tax law which is purely 
redistribution of wealth.
  Now the Johnny-come-lately deficit hawks on the other side would have 
us believe that we cannot afford to do this

[[Page H5497]]

in this particular economic environment. But they did not believe we 
should do it when we were projecting trillion-dollar surpluses either. 
The bottom line is that they do not support the repeal of this immoral 
tax. They continue to support the redistribution of wealth, the penalty 
on ambition, the penalty on thrift, the penalty on holding those family 
operations together again. Despite their best planning efforts, 70 
percent of small and family-owned businesses do not survive the second 
generation and 87 percent do not survive the third.
  Mr. Speaker, 90 percent of those failed owners say the death tax was 
a contributing factor to the loss of that business. It is time for the 
death tax to die. It is an immoral tax. It sends the wrong 
philosophical message to the next generation of Americans who are 
looking for incentives to work hard and create wealth and jobs and 
build businesses and farms. I urge support of H.R. 8.
  Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Becerra).
  Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, anecdotes are indispensable when the facts speak to the 
contrary, and perhaps we have to remind Members what the facts are once 
again. These are not our figures, these are not made-up figures, these 
are figures provided by the Federal Government, the Bush 
administration.
  In 1999, roughly 2.3 million Americans died. Of those 2.3 million 
Americans who died, less than 1.3 percent, some 33,000 Americans, paid 
estate taxes. That is the 1.3 wealthiest Americans in our country who 
paid estate taxes. So 98.7 percent of the rest of Americans who passed 
away in 1999 paid zero estate taxes. So when we talk about repealing 
the estate tax, eliminating the estate tax, we are giving a tax break 
not for Americans but the 1.3 percent richest Americans in this 
country.
  It is easy with anecdotes to hide behind family farms and family 
businesses which constitute less than 1 percent of the estates that are 
paying estate taxes. And it is real easy to hide behind the fact that 
in legislation like this we are back-loading the costs. We are phasing 
in the repeal so slowly, so gradually that when we start to add up the 
real cost of the repeal of the estate tax to the wealthiest 1.3 percent 
of Americans, when we fully phase it in when it is gone completely, it 
totals about $80 billion a year starting in 2014 when this takes full 
effect. $80 billion a year in revenues will be lost to the Federal 
Treasury, more than $800 billion over the decade from 2014 to 2023.
  Now, perhaps it would not be so bad to give the wealthiest 1 percent 
of Americans a tax cut that 99 percent of Americans would not get at a 
cost of $800 billion over the next 10 years from 2014 to 2023 if not 
for the fact that today every Member knows that we have a budget 
deficit for the year of over $400 billion, the largest deficit this 
country has ever faced in any year; and we are told that it is probably 
going to rise to half a trillion dollars, $500 billion next year. And 
that is after 2 years ago when the President took office and he said we 
are going to have for the next 10 years surpluses totaling over $5.6 
trillion.

                              {time}  1300

  We have seen a reversal from surpluses of $5.6 trillion to now 
projections of a $3.6 trillion debt over the next 10 years. How can we 
talk about giving $800 billion to the 1.3 percent wealthiest Americans? 
We spend more in tax cuts than we spend in all our educational programs 
that the Federal Government spends on all our schools combined.
  Let us defeat this. Vote for the Pomeroy substitute.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  I want to remind the gentleman from California that his State, in the 
year 2002, sent $4,201,408,000 to the Federal Government. And you can 
about double that for the cost of complying with the death tax. That is 
what comes out of the economy. And so his figure of $80 billion, just 
take that and double it and that is what has been taken out of the 
economy.
  Mr. Speaker, I yield 2 minutes to the gentleman from Nebraska (Mr. 
Osborne), a wonderful contributing sophomore Member.
  Mr. OSBORNE. Mr. Speaker, I rise in support of H.R. 2143. Mr. 
Speaker, I do come from a rural area. We have 52,000 farmers and 
ranchers in Nebraska. I heard some figures that were unbelievable to 
me, that maybe only 400 farmers in this country would benefit from the 
repeal of the death tax. I would say out of 52,000 farmers in Nebraska, 
that we would look at probably somewhere between 15 and 20,000 that 
would benefit tremendously and will probably not be able to pass their 
farm on without some repeal of the death tax.
  Let me give Members an example. A small ranch in Nebraska is 12,000 
acres. That will support about 300 cows and that will support one 
family. That probably started out at $25 an acre, it is now worth $300 
an acre, so it was maybe worth $100,000 when the farmer started out 
roughly 30 years ago. So it has increased in value. If they have two 
children and the last surviving parent dies in 2010, that ranch, which 
is worth $5 million today, would go on to those two children and they 
would pay no tax. But in 2011, their tax bill would be $2 million. They 
cannot pay that tax. They have to sell the ranch. That is an actual 
example of an average to small-sized ranch in Nebraska.
  The Coble family in Mullen, Nebraska, had that happen to them. And 
who bought the ranch? Ted Turner bought the ranch. Ted Turner owns 
several hundred thousand acres in Nebraska today, most of which has 
been bought because people could not afford to keep the ranch because 
of the inheritance tax. And so that drives hundreds if not thousands of 
young people off the land. They cannot afford to ranch or farm. Of 
course, the same thing is true with small businesses. The only way to 
preserve family ownership is through insurance. And so maybe only 1 
percent of inheritance taxes is the issue, but lots of people have to 
pay insurance in order to hang on.
  I urge the support of this bill.
  Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from New 
Jersey (Mr. Pascrell).
  Mr. PASCRELL. Mr. Speaker, we ought to tell to all of America as well 
as those people assembled in this room, what are we going to benefit 
from this legislation? They have attempted, the other side, from the 
very beginning of this debate, to say that they are for something and 
we are against. The Democratic amendment this afternoon covers most of 
the people, 99.3 percent of everybody on both amendments. You are 
talking about the exclusiveness of that very, very small percentage of 
people.
  Who are those people? Those are the people that are 
multimillionaires. Those are people who do not need us. The gentlewoman 
from Washington has suggested that this is what this State could send 
back, this is what that State could send back. Does she know they would 
put a $100 billion hole in the Federal budget? What are they going to 
cut? Where is that money going to come from? It is wonderful to say we 
are going to send all of these inheritance taxes back to the people. 
How are they going to fill that hole? They must tell the American 
people where they are going to come up with that money so that they can 
get this money back in their pockets.
  Ms. DUNN. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Cox), the chairman of the Policy Committee, a cosponsor 
of this bill, and a longtime supporter and leader on this bill.
  Mr. COX. I thank the gentlewoman for yielding me this time.
  Mr. Speaker, I will just make a few observations about the death tax. 
First, notwithstanding much of what is in the air here, it does not 
raise any material amount of money for the Federal Government. 
Nominally, about 1 percent. But, in fact, when we take into account the 
65 cents on the dollar in compliance costs and the nearly $10 billion a 
year that is sucked out of the economy paid to lawyers and accountants 
and life insurance experts for compliance, it is a wash. Some estimates 
say it actually costs more than it raises. Second, it is not an income 
tax. You do not have to have any income to pay it, even though it is 
part of the Income Tax Code, 88 pages of it. Instead, it is a property 
tax and is meant to be confiscatory. These are confiscatory rates, well 
over half, and the purpose is

[[Page H5498]]

to break up large concentrations of wealth. But the tax does not do 
that, either. In fact, it concentrates wealth because family farms, 
ranches and small businesses that are liquidated to pay the tax man are 
absorbed by larger conglomerates. We have seen farmland turned into 
condos all over America for this reason. The rich do not pay it. They 
hire expensive lawyers and accountants to design trusts and foundations 
to avoid the tax so that only small business, family farms and people 
without cash who have to liquidate assets to pay the tax man pay it.
  Lastly, if you work in a small business, this is all about you, 
because the biggest burden of this tax is borne by those who are laid 
off. The tax rate on you, the guy who sweeps up the floor after your 
small business contracts when the founder dies, is 100 percent. When 
you lose your job, that is the toughest tax that you can pay. That is 
why making this death tax repeal permanent is so important for everyone 
in this country.
  It is time for the death tax to die, and today we are going to drive 
a stake through its heart.
  Mr. STARK. Mr. Speaker, I am delighted to yield 1 minute to the 
gentleman from Washington (Mr. Baird).
  Mr. BAIRD. Mr. Speaker, I want to begin by commending my colleague 
from California. I think he raised a number of good points, which is 
why I strongly have supported reform of the estate tax. We need to do 
it to support small farms and small business. The question is, how do 
we go about it? My belief is that the majority party proposal here will 
benefit the extremely wealthy but will not necessarily help the small 
businesses and farmers who would benefit more, quite frankly, from the 
Pomeroy substitute. We need to remember, and it is caveat emptor here, 
that the Republican bill does not allow for a step-up in basis and 
there will be many people who think this is a great thing when it 
passes today, but who will suffer.
  Secondly, the gentlewoman from Washington has repeatedly reminded us 
how much money has left various States. I would remind her with great 
courtesy that $500 million a year leaves her own State because 
Washington State, like six others, is not allowed to deduct the sales 
tax. She has focused on a tax reform that will benefit 2 percent of the 
population or less, neglecting a reform that will benefit 47 percent of 
the population. $500 million leaves Washington State every single year. 
We should reform that first and establish justice through that 
mechanism.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  I remind the gentlewoman from Washington State that his State in the 
year 2001 sent back $578 million to Washington, D.C., with about an 
equal amount for compliance with that law. Also as a representative of 
a forested district, 36 percent of forest estates owe the Federal 
estate tax, 29 percent of the land was sold or developed or converted 
to subdivisions, and 1.3 million acres per year of forestland in this 
Nation were sold. The amount harvested to pay the estate tax was about 
2.6 million acres every single year. I respect his point of view on 
this particular bill, but I think that there are many people who will 
be affected if he does not vote for this bill.
  Mr. BAIRD. Mr. Speaker, will the gentlewoman yield?
  Ms. DUNN. I yield to the gentleman from Washington.
  Mr. BAIRD. Mr. Speaker, the gentlewoman raises a perfectly legitimate 
point about the family foresters. The bulk of the family foresters in 
my district would be perfectly well covered under the $6 million 
exemption. I have met with them. I meet with their association. They 
would be covered under the Pomeroy exemption. What they would not be 
covered under is any relief from sales tax which is unjust. And the 
gentlewoman ought to join me in that effort and fix that.
  Ms. DUNN. As the gentleman knows, retaking my time, I have already 
cosponsored that measure and supported it in the committee. We have 
worked very hard on that and will continue to do so. It affects a 
number of States. It is important to get rid of it.
  Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. 
Harris), a very active member of the freshman class.
  Ms. HARRIS. Mr. Speaker, I rise in support of H.R. 8, which will 
finally free America's hardworking farmers, small business owners and 
their families from the specter of the death tax. Benjamin Franklin 
said, ``In this world nothing is certain but death and taxes.'' This 
observation notwithstanding, I doubt that even the imaginative Mr. 
Franklin foresaw the taxation of death itself.
  Americans are taxed when they earn money. They are taxed once again 
when they spend what is left. And at last, not even the cold head of 
death can stay the grasping hands of the tax collector. By pursuing 
taxpayers beyond the grave, government visits devastating consequences 
upon their grieving relatives, forcing some to sell the family business 
or the family farm just to pay the taxes. The National Federation of 
Independent Businesses has estimated that the death tax will compel 
one-third of small business owners today to sell some or all of their 
business. Moreover, according to the Family Business Estate Tax 
Coalition, simply planning for the death tax costs small businesses an 
average of $125,000 over 5 years. Worse yet, mainstream economists of 
all political stripes have concluded that the death tax stifles the 
creation of jobs and opportunity.
  Economist Allen Sinai, a consultant for presidential administrations 
of both parties, has concluded that the permanent repeal of the death 
tax could create 160,000 new jobs and an increase in GDP of over $10 
billion.
  Mr. Speaker, the opponents of H.R. 8 cannot provide any economic 
justification for the continued existence of this useless relic. It may 
even cost more in compliance and to collect this onerous tax than it 
generates in revenue while it punishes thrift, deters investment and 
diverts capital to unproductive activities such as tax avoidance.
  Mr. STARK. Mr. Speaker, I am delighted to yield 3 minutes to the 
gentleman from Maryland (Mr. Hoyer), the distinguished minority whip.
  Mr. HOYER. Beware, working men and women of America. The Republicans 
from Washington are in town and they are here to help you. Beware.
  Mr. Speaker, our Republican friends may think they are burying the 
estate tax today but they actually are burying our children under a 
mountain of debt. They see a problem. We Democrats see a problem. We 
solve a problem without burying our children under a mountain of debt. 
The GOP bill would create a fiscal Frankenstein that would haunt this 
Nation for decades to come. The Joint Committee on Taxation estimates 
this bill will cost $162 billion. The young people of America are going 
to pick up that bill. The Center for Budget and Policy Priorities 
projects that its costs will explode to more than $800 billion in the 
decade after that. So if you are about 15, watch out.
  Our Nation will run a record budget deficit of more than $400 billion 
this year. At the same time the Republican majority has acceded to the 
largest increase in the debt limit in American history, $950 billion-
plus in 1 year, which was what the deficit was in its entirety in 1980.
  So what does the GOP propose today? Legislation that would drive us 
even deeper into debt. For whom? For three-tenths of 1 percent of the 
decedents in America. 99.7 percent of the decedents in America who owe 
estate tax would be exempted under our option without blowing a hole in 
the deficit. The fact is repealing the estate tax would only benefit 
the wealthiest three-tenths of 1 percent of the estates in America. 
Think of that. For three-tenths we are going to blow a continuing hole 
in the deficit.
  Let us remember, it was Republican President Theodore Roosevelt who 
called for an inheritance tax in 1906 saying, and I want to quote this 
Republican President.

                              {time}  1315

  ``There is every reason why . . . the national government should 
impose a graduated inheritance tax.'' Teddy Roosevelt himself, a man of 
great means, explained: ``The prime object should be to put a 
constantly increasing burden on the inheritance of those swollen 
fortunes which it is certainly of no benefit to this country to 
perpetuate.'' Warren Buffett, one of the wealthiest people in the 
world, agrees

[[Page H5499]]

totally with that. The bill has nothing to do with tax fairness or 
stimulating the economy. It has everything to do with paying homage to 
the GOP's reckless tax cut theology and misplaced priorities.
  Today, the GOP genuflects at the tax cut alter, but the rest of us 
ought to be the ones saying a prayer. I urge my colleagues to vote for 
the Democratic alternative. We talk about personal responsibility. Be 
personally responsible today.
  Ms. DUNN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
New York (Mr. Houghton), a great member of our committee.
  Mr. HOUGHTON. Mr. Speaker, in reply to my friend on the Democratic 
side, I am a Republican and I am aware and I am old, but I do not quite 
remember Teddy Roosevelt.
  What I would like to do is just to talk a little bit about this whole 
issue of eliminating the death tax. I do not know where this is going. 
I do not know whether it has got momentum, but I assume it has.
  It sounds appealing. One pays taxes all their life and then why when 
one should be honored in more does the IRS is swoop in and take another 
bite of out of their estate? But if we look at the great estate taxes 
from a different angle, I have a sense of what this country is all 
about, that democracies are not where one gets a free ride and stand on 
another's shoulders forever.
  I have two specific worries. One, the corrosive effect this tax would 
have an a subsequent generation who no longer has to work or earn. That 
has all been taken care of, and I have seen this effect on other 
countries where there is an establishment of a landed gentry, a 
privileged entitled class, and that is not good, and that is not what 
has made the United States what it is today.
  The second issue I have is the first question one asks in planning an 
estate is what flexibility do I have? What should I protect so the bulk 
of what I have earned will not be siphoned off by the Government? It is 
at this great point that the great philanthropic gifts are considered. 
So, believe me, absent a death tax, the question would not even be 
raised. So I can see nothing bad from this bill. The assets we have, 
the ability we have, the motivation to give less, anyway, I do not 
think it is a great bill, and I hope people vote against it.
  Assets we have--the ability, the motivation, to give to those less 
fortunate than we. This is not a good bill. It should be defeated.
  Increase the exclusion dramatically. Protect the family farm or 
business. But do not wipe out and make permanent the repeal of the 
estate taxes.
  Mr. STARK. Mr. Speaker, I reserve the balance of my time until just 
before the gentlewoman closes.
  Ms. DUNN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Texas (Mr. Hensarling), freshman member of our class who has been one 
of the most active on the repeal of the death taxes.
  Mr. HENSARLING. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  Mr. Speaker, I believe, as do most Americans, that it is simply 
unconscionable that anybody would have to visit the undertaker and the 
IRS agent on the same day. It is unconscionable; it ought to be 
illegal.
  The death tax is nothing more than a tax on the American dream. 
Americans work hard all their lives to build farms and small businesses 
in hopes that maybe one day they can pass them along to their families, 
but after payroll taxes and income taxes and sales taxes and property 
taxes, all of which the left is so fond, many family businesses do not 
make it, and those that do, the Government can step in and take over 
half of what someone worked their entire life to build.
  A while back I heard from a rancher in my district who spent 30 years 
building a cattle ranch, almost lost it once or twice to drought. His 
hope was to leave that ranch to his family. It was his greatest dream, 
but with sadness in his voice, he told me when the Government takes 
their share, there is just not enough to go around.
  People on the other side of the aisle want to talk about fairness. 
Where is the fairness in taking this ranch away? Where is the fairness 
in taxing Americans twice on the same income? Where is the fairness in 
having Uncle Sam have an inheritance of 55 percent of a family farm, 
business, or nest egg?
  Mr. Speaker, it is time to reject the politics of class warfare and 
envy and support the permanent repeal of the death tax. And by ending 
the death tax, we can help resurrect the American dream.
  Mr. STARK. Mr. Speaker, I yield myself the balance of my time.
  There are two issues with this bill. One is fairness. And the other 
is lost opportunity. Let me give the Members a hypothetical. Let us 
take a young man, young woman, who started out after school and never 
worked anyplace but for the Government, and suddenly early in their 
youth in their career as a Government worker, they are going to inherit 
$40 million. They never had a job outside of public service in their 
lives. And they might pay $20 million in tax, be left with $20 million, 
to which they contributed nothing but it is nice to get.
  The question of fairness is why should my children, who went to 
school and worked hard to become lawyers and teachers and contribute to 
society, why should they have to pay the $20 million for this kid who 
is going to inherit the $40 million? That is not fair. They are not 
asking for a handout. They are probably grumping at their father for 
fighting against this bill, but they are content. They have got a leg 
up. They got to go to school, and now they are making their own way. 
And if, when I pass away, they have to pay some tax, they are going to 
be proud to do it, and they are proud of me for suggesting that they 
pay their fair share instead of asking me to give them a free ride. 
That is the fairness issue.
  The lost opportunity is this: For those of us who are wealthy enough 
to pay the tax, my good friend from New York I think senses this. This 
bill is going to cost 60 billion bucks a year. We just got a release 
from the Institute of Medicine that shows that with the 41 million 
uninsured in this country, for about $69 billion a year we could 
provide them with health services. Do my colleagues know what? That 
would save us another $130 billion a year that we are paying in lost 
costs by having them go to hospitals without insurance. What is more 
important? To give a few thousand rich kids an exemption from paying 
their fair share and denying 40 million people health care in this 
country? That is the issue. Yes, it is divisive. Yes, we are talking 
about separating the rich and the poor. But I think those of us who are 
fortunate enough to be successful in this country ought to give 
something back and ought to help those who are less fortunate, and I 
just think it is crummy, it is anti-Christian, it is cheap, it is 
obscene to sit and say we have got ours, we are going to give tax 
breaks to our wealthiest contributors and to hell with the people who 
do not have health insurance. That is what the Republicans are saying 
with this bill, and I urge them late in life to come to do what is 
fair, to help 40 million Americans get health insurance rather than 
4,000 get a tax break that will do none of us any good.
  Mr. Speaker, I yield back the balance of my time.
  Ms. DUNN. Mr. Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Foley), who has been with us from the beginning, who is a 
strong advocate and a member of the Committee on Ways and Means.
  Mr. FOLEY. Mr. Speaker, let me commend the gentlewoman from 
Washington (Ms. Dunn) for her excellent work on this important bill.
  It is a little disingenuous to use the deficit as a reason not to 
pass this bill. When we inherited this Congress in 1994, they had 
racked up $5.7 trillion worth of debt. So let us not start blaming the 
national debt on this bill or the Republicans. Now they are holding up 
the Gates family as a paragon of virtue on this issue; yet 2 years ago 
the Clinton Administration was pursuing the same Gates family for 
monopolistic practices. Now they use Warren Buffett. Now Warren 
Buffett, of all people, has billions of dollars. He can step up to the 
voluntary tax payment window if he so chooses.
  The people we are talking about today have paid excise taxes, 
property taxes, capital gains taxes, income taxes. It is being 
described here as they are getting an unfair or free ride. These are 
the hard-working Americans. We learned in our youth to strive to 
struggle and make something of our life and maybe we could pass on 
those virtues and values to the next generation.

[[Page H5500]]

  The rich know how to shelter their income. They are very good at 
creating trust and remainderman trust. In fact, one of the premier 
families in America, the Kennedy family, has 40 or 60 or 80 trusts that 
were established to pass the money into different hands to avoid, I am 
sure, the estate tax liability. These are families that have properly 
prepared, but it has been expensive. It has been time consuming, and it 
is complicated.
  We can have a debate and pick sides. The Democrats are obviously 
offering a $7 million package in a minute; so I do not know the 
difference between a $7 million estate or a $10 million estate, but 
somehow they reconciled that $7 million may not be rich. They keep 
claiming today in this debate they are for the little guy. If they are 
little and have worked hard and have earned some money, there is a 
penalty box for them under their plan. They take away what they have 
earned. They give it and redistribute it to someone else.
  This is about fairness. This is about family farms. This is about a 
lot of people. But to sit here and speculate somehow we are going to 
implode or explode the deficit is simply wrong.
  Mr. FARR. Mr. Speaker, I have long been a strong advocate that tax 
policy ought to be consistent with good land use policy. Inheritance 
tax is neither. California has seen the break-up of agricultural real 
estate holdings, and the dissolution of small businesses to pay 
inheritance taxes. Although repeal of the tax at this time is not good 
fiscal policy, we have no choice with this up or down vote but to 
support good land policy. Agricultural land should not be subdivided 
merely for tax purposes.
  It has been argued that the repeal of the estate tax will only 
benefit a few Americans. This is certainly not the case for 
Californians. The estate tax affects the lives of many of my 
constituents, whether they are families trying to hold onto their 
farms, small businesses working to keep their doors open, or children 
protecting the legacy of their parents.
  Having said this, I regret that the repeal of the estate tax comes at 
a time when the Republican-led Congress is driving this country further 
and further into debt. Republicans in Washington have turned a $5.6 
trillion surplus, left by the Clinton administration, into a $3.6 
trillion deficit, a total loss of $9 trillion for Americans and their 
families.
  I also regret that the Republican-dominated House does not allow 
Democrats to offer sensible, bi-partisan alternatives. I, like other 
Democratic Californians, support an alternative where family farms and 
businesses would be subject to capital gains tax if they decided to 
sell their farm or business. I am confident that we could have agreed 
on a sensible compromise, such as this one, if the Republican 
leadership had allowed members a full and open debate.
  In the final analysis, however, repealing the estate tax will help 
family farms stay in the family. It will help California maintain a 
policy of sensible growth and curb the sprawl that comes with 
subdivision of property. It will help small businesses stay afloat and 
survive the passing of generations. Nevertheless, we should all keep in 
mind that if we are concerned for future generations, we should be very 
wary about increasing the public debt. We need to act in a fiscally 
responsible way if we want to leave a prosperous future for our 
children.
  Mr. WELDON of Florida. Mr. Speaker, I rise in strong support of H.R. 
8, the Death Tax Repeal Permanency Act of 2003. I am a proud cosponsor 
of this bill. I am pleased that the House approved my bill last year to 
accomplish this very same goal. Unfortunately, we were unable to garner 
the votes in the Senate to enact this into law.
  The Death Tax Needs to Die. Along with the marriage penalty, the 
death tax is perhaps the most disgraceful tax levied by the Federal 
Government and it should be repealed. The death tax is double taxation. 
Small business owners and family farmers pay taxes throughout their 
lifetime, then at the time of death they are assessed another tax on 
the value of the property on which they have already paid taxes.
  Critics claim that we can't afford to eliminate the death tax. They 
are wrong. We can't afford not to permanently repeal the death tax. 
Family businesses spend nearly $14.2 billion a year on estate planning 
and insurance costs largely to avoid the death tax. Studies indicate 
the cost of compliance with the death tax equals the amount of death 
taxes received. Thus, the ``real'' cost of the death tax to business is 
double the tax burden.
  During the debate last year on my bill to permanently repeal the 
death tax, I asked a constituent of mine. Danny Sexton of Kissimmee, FL 
and owner of Kissimmee Florist, to come to Washington and share his 
``death tax'' experience.
  Mr. Sexton, who comes from a family of florists, inherited his 
uncle's flower shop and was faced with paying almost $160,000 in estate 
taxes. This forced him to have to liquidate all of the assets, lay off 
staff, but salaries, and take out a loan just to pay the death tax. He 
also had to establish a line of credit just to keep the operation 
running.
  Danny Sexton is the face of the death tax. The death tax isn't a tax 
for the rich, it is a tax that hurts family owned businesses--family 
owned businesses that are the back-bone of this great Nation. The folks 
that worked in Danny's florist were not rich, but they lost their jobs 
because of the death tax.
  According to the National Federation of Independent Business more 
than 70 percent of family businesses do not survive the second 
generation and 87 percent of family businesses do not make it to the 
third generation. Sixty percent of small business owners report that 
they would create new jobs over the coming year if death taxes were 
eliminated.
  For the sake of future generations, Congress must take 
responsibility, do the right thing, and permanently repeal the estate 
tax. I urge my colleagues to vote for H.R. 8, the Death Tax Repeal 
Permanency Act of 2003.
  Mr. UDALL of Colorado. Mr. Speaker, I support reform of the estate 
tax--that is why I voted for the substitute. But I do not support 
repeal of the estate tax--and so I cannot vote for this bill as it 
stands. For me, this is not a partisan issue. Instead, it is an issue 
of reasonableness, fairness, and fiscal responsibility.
  In 2001, I did not vote for the bill that included changes in the 
estate tax. However, there were parts of that bill that I think should 
be made permanent, including the elimination of the ``marriage 
penalty'' and the provisions related to the adoption credit and the 
exclusion from tax of restitution to Holocaust survivors. And, as I 
said, I support reform of the estate tax. I definitely think we should 
act to make it easier for people to pass their estates--including lands 
and businesses--on to future generations. This is important for the 
whole country, of course, but it is particularly important for 
Coloradans who want to help keep ranch lands in open, undeveloped 
condition by reducing the pressure to sell them to pay estate taxes.
  Since I have been in Congress, I have been working toward that goal. 
I am convinced that it is something that can be achieved--but it should 
be done in a reasonable, fiscally responsible way in a way that 
deserves broad bipartisan support. That means it should be done in a 
better way than by enacting this bill, and the substitute would have 
done that. That alternative would have provided real, effective relief 
without the excesses of the Republican bill. It would have raised the 
estate tax's special exclusion to $3 million for each and every 
person's estate--meaning to $6 million for a couple--and would have 
done so immediately. So, under that alternative, a married couple--
including but not limited to the owners of a ranch or small business--
with an estate worth up to $6 million could pass it on intact with no 
estate tax whatsoever. And since, under the alternative that permanent 
change would take effect on January 1st of next year--not in 2011, like 
the bill before us--it clearly would be much more helpful to everyone 
who might be affected by the estate tax. At the same time, the 
alternative was much more fiscally responsible. It would not run the 
same risks of weakening our ability to do what is needed to maintain 
and strengthen Social Security and Medicare, provide a prescription 
drug benefit for seniors, invest in our schools and communities, and 
pay down the public debt.
  The 2001 tax cut bill included complete repeal of the estate tax for 
only one year, 2010, but contained language that sunsets all of the tax 
cuts, including changes in the estate tax after 2001. This bill would 
exempt repeal of the estate tax from the general sunset provisions. 
Between now and 2013 it would reduce the Federal revenue available to 
meet necessary expenses by $162 billion. I think this is simply 
irresponsible as we face the decade between 2013 and 2022--the time 
when the baby boomers will be retiring.
  Also, we all know, the budget outlook has changed dramatically since 
2001. Trillions of dollars of budget surpluses that were projected have 
disappeared--because of the combination of the recession, the costs of 
fighting terrorism and paying for homeland defense, and the enactment 
of tax legislation. And now the proposal is to make the budgetary 
outlook even more difficult, making it that much harder to meet our 
national commitments--all in order to provide a tax break for less than 
0.4 percent of all estates. I do not think this is responsible, and I 
cannot support it.
  And, as if that were not bad enough, this bill does nothing to 
correct one of the worst aspects of the estate-tax provisions in the 
2001 bill--the hidden tax increase on estates whose value has increased 
by more than $1.3 million, beginning in 2010, due to the capital gains 
tax. Currently, once an asset, such as a farm or business, has gone 
through an estate, whether any estate tax is paid or not, the

[[Page H5501]]

value to the heirs is ``stepped up'' for future capital gains tax 
calculations. However, last year's bill--now enacted into law--provides 
for replacing this with a ``carryover basis'' system in which the 
original value is the basis when heirs dispose of inherited assets. 
That means they will have to comply with new recordkeeping 
requirements, and most small business will end up paying more in taxes. 
That cries out for reform, but this bill does not provide it.
  Mr. Speaker, I am very disappointed with the evident determination of 
the Republican leadership to insist on bringing this bill forward. Just 
as they have done in the past, they have rejected any attempt to shape 
a bill that could be supported by all Members. Since I was first 
elected, I have sought to work with our colleagues on both sides of the 
aisle on this issue to achieve realistic and responsible reform of the 
estate tax. But this bill does not meet that test, and I cannot support 
it.
  Mr. LANGEVIN. Mr. Speaker, I rise in support of the Pomeroy 
substitute to H.R. 8, the Estate Tax Repeal Permanency Act, and in 
opposition to the underlying bill. As the son of a small business 
owner, I know firsthand the tax burden placed on entrepreneurs and 
working families, and I support efforts to responsibly protect small 
business owners.
  The Pomeroy substitute provides needed relief by eliminating estate 
taxes for assets totaling $3 million per individual or $6 million per 
married couple. Increasing the exemption to this level means that 99.65 
percent of all estates will not pay a single penny of the estate tax 
beginning in 2004. The substitute provides relief sooner than the 
Republican bill, which does not take full effect until 2011 and has an 
exemption of only $1.5 million for 2004. Small businesses and farm 
owners should not be penalized for their success, nor should they need 
to worry about their ability to pass the family business on to future 
generations, and the substitute addresses these concerns.
  H.R. 8 goes far beyond providing fair tax relief to small businesses 
and family farms that are in greatest need of assistance. Besides 
benefiting just a few thousand American families per year, H.R. 8 would 
also have a devastating impact on charities, foundations, universities 
and other philanthropic organizations because the estate tax provides a 
powerful tax incentive to donate money to these groups. The Department 
of Treasury estimates a decrease of up to 12 percent per year in 
charitable giving, or more than $1 billion annually, should full repeal 
occur.
  The Republicans' call for repealing the estate tax comes at a time 
when our Government is already in fiscal crisis. The 2001 estate tax 
provision will reduce revenues by more than $192 billion over ten 
years, and over the second decade, the costs will be a whopping $820 
billion. With a $400 billion deficit for fiscal year 2003, now is not 
the time to add $1 trillion in debt to the tab that future generations 
must pay. These added costs also come as Congress prepares to pass a 
prescription drug program and baby boomers near retirement. We must 
work to meet our obligation to our Nation's seniors rather than cutting 
taxes for the wealthiest families in America.
  Based on Internal Revenue Service data for 2002, out of approximately 
10,000 deaths in my home State, only 426 Rhode Island decedents filed 
estate tax returns. This number would be much lower with the $3 million 
exemption under the Pomeroy substitute. Under our Democratic 
alternative, those eligible middle-income families, small business 
owners and family farmers truly in need would receive estate tax 
relief.
  I urge my colleagues to join me in supporting permanent reform of the 
estate tax, but not irresponsibly repealing it. Our small business 
owners are in need of relief, and we must provide it without leaving 
future generations to pay the bill.
  Mr. BEREUTER. Mr. Speaker, as stated on the record many times, this 
Member continues his strong opposition to the permanent, total 
elimination of the estate tax on the super-rich. The reasons for this 
Member's opposition to this perfectly terrible idea have been publicly 
explained on numerous occasions, including past statements in the 
Congressional Record.
  It must also be noted, however, that this Member is strongly in favor 
of substantially raising the estate tax exemption level and reducing 
the rate of taxation on all levels of taxable estates, and that today 
he has re-introduced legislation to this effect. This same bill, H.R. 
42 was introduced in the previous 107th Congress by this Member--the 
only change in the bill introduced today is that the highest individual 
income tax is now 35 percent.
  This Member believes that the only way to ensure that his Nebraska 
and all American small business, farm and ranch families and 
individuals benefit from estate tax reform is to dramatically and 
immediately increase the Federal inheritance tax exemption level, such 
as provided in this Member's newly re-introduced measure.
  This Member's bill would provide immediate, essential Federal estate 
tax relief by immediately increasing the Federal estate tax exclusion 
to $10 million effective upon enactment. With some estate planning, a 
married couple could double the value of this exclusion to $20 million. 
As a comparison, for tax year 2002, the estate tax exclusion was only 
$675,000. In addition, this Member's re-introduced bill would adjust 
this $10 million exclusion for inflation thereafter. The legislation 
also would decrease the highest Federal estate tax rate from 55 percent 
to the ``highest individual income tax rate'' that corresponds to that 
specific tax year--the highest individual income tax rate will be going 
down to 35 percent in stages.
  Finally, this Member's re-introduced bill would continue to apply the 
stepped-up capital gains basis to the estate, which is provided in 
current law. In fact, this Member has said on many occasions that he 
would be willing to raise the estate tax exclusion level to $15 
million.
  Since this Member believes that his bill or similar legislation is 
the only responsible way to provide true estate tax reduction for our 
Nation's small business, farm and ranch families, this Member must use 
this opportunity to reiterate the following reasons for his opposition 
to the total elimination of the Federal estate tax.

  First, to totally eliminate the estate tax on billionaires and mega-
millionaires would be very much contrary to the national interest. It 
is not in America's interest that absolutely huge estates should be 
passed from generations to generations--getting ever larger. The 
establishment of a permanent privileged class, re-enforced every 
generation, is too much like the situation in many European countries 
from which immigrants fled from hopelessness from the total domination 
of a small feudal class.
  Second, the elimination of the estate tax also would have a very 
negative impact upon the continuance of very large charitable 
contributions for colleges and universities and other worthy 
institutions in our country.
  Finally, and fortunately, this Member believes that actually the 
Federal estate tax will never be eliminated in the year 2010. Reason 
will ultimately prevail and this effort to totally eliminate the estate 
tax on the super-rich will be seen as the very counterproductive step 
that it would be.
  At this point, this Member notes that under the previously enacted 
estate tax legislation (e.g., the Economic Growth and Tax Relief 
Reconciliation Act), beginning in 2011, the ``stepped-up basis'' is 
eliminated, with two exceptions, such that the value of inherited 
assets would be ``carried-over'' from the deceased. Therefore, as noted 
previously by this Member, the Economic Growth and Tax Relief 
Reconciliation Act could result in unfortunate tax consequences for 
some heirs as the heirs would have to pay capital gains taxes on any 
increase in the value of the property from the time the asset was 
acquired by the deceased until it was sold by the heirs--resulting in a 
higher capital gain and larger tax liability for the heirs than under 
the current ``stepped-up'' basis law.
  In closing, Mr. Speaker, while this Member is strongly supportive of 
legislation to substantially raise the estate tax exemption level and 
to reduce the rate of taxation on all levels of taxable estates, and as 
such today re-introduced his legislation to this effect, this Member 
cannot in good conscience support the permanent total elimination of 
the inheritance tax on the super-rich.
  Mr. KNOLLENBERG. Mr. Speaker, today we have a key vote in front of 
this House on one of the most unfair and unjustifiable taxes in our 
Nation today.
  Today we can permanently repeal the estate tax otherwise known as the 
death tax, to save millions of hard-working Americans from the ordeal 
of losing a family business at the same time as a family member. 
Unfortunately this is a prospect that is all too real for many small 
businesses.
  Americans for Tax Reform says that 70 percent of small businesses do 
not survive the second generation as a result of the death tax. With 
our current economic uncertainty, we need to make it easier for our 
small businesses to survive, not harder. We can take a big step toward 
that end here today by passing a permanent repeal of the death tax.
  I urge the House to vote this most unfair and unreasonable of taxes 
out of existence permanently.
  Ms. MAJETTE. Mr. Speaker, as I have said many times in the past: I 
support tax relief, and I support repeal of the estate and gift tax. 
But, I also support tax relief that is fair and responsible. House 
Resolution 8, the Estate Tax Repeal Permanency Act is neither at this 
time.
  That's why I today I voted for the Pomeroy substitute, which would 
exclude estates worth $3 million--$6 million per couple--from the 
estate tax beginning in 2004. This provides relief sooner than under 
current law, and sooner than under H.R. 8. The Pomeroy substitute would 
repeal permanently the estate tax for 99.65 percent of all taxable 
estates.

[[Page H5502]]

  The Democratic alternative is effective and would provide immediate 
relief. Small and family businesses, which are the backbone of our 
economy, would be protected.
  Most important, it is the fiscally responsible thing to do.
  This vote comes against the backdrop of huge surpluses that have 
turned into record-breaking deficits. This year alone, our Nation will 
incur a record budget deficit of more than $400 billion. This Congress, 
the House has already passed over $425 billion in tax cuts, including 
the Republican tax cuts, the increased child tax credit action of last 
week, and the cuts provided for in the Energy bill from earlier in the 
spring.
  It has been estimated that the Republican estate tax repeal bill 
would cost $162 billion through 2013, and the Center for Budget and 
Policy Priorities projects that its costs would explode to more than 
$800 billion in the decade after that. Add this bill to the $425 
billion in tax cuts already passed and it will take the total to at 
least $1.387 trillion of revenues lost over the next 20 years. That's 
$1.387 trillion in debt reduction that could have been achieved.
  The revenue decrease from the estate tax repeal would come just when 
baby-boomers are beginning to retire and will bring increased demands 
on Social Security and Medicare programs, not to mention the cost of 
the war in Iraq and our continued involvement overseas.
  I am in favor of reducing the tax burden in ways that will stimulate 
the economy and put money into the hands of those who need it most, but 
not at the expense of the long term health of this Nation, and not in a 
way that will burden our children and grandchildren for the rest of 
their lives.
  Our economy is still sputtering. We cannot continue to cut revenues 
when it does nothing to stimulate the economy. We are already making 
severe cuts in much needed services, and not expanding programs that 
are proven investments in our future and our children's future.
  As an example of the flawed priorities of this Congress, this week in 
committee the Republicans voted not to spend $12 billion to fully fund 
Head Start, yet a few short weeks ago they voted to give relief to 
people who do not need it in the form of huge tax cuts. Adding to our 
national deficit again today will continue to make it more difficult 
for the Federal Government to address other pressing social needs, 
including education, health care, and home land security.
  Long-term success in this country depends on high-quality education, 
stable and high-paying jobs and access to quality health care, and we 
must invest in these things to secure our children's future.
  What we need today is a renewed commitment to fiscal responsibility. 
What we need today is a new direction and an emphasis on the future, 
not on the past.
  I support repealing the estate tax, and have voted to do so today in 
a responsible manner, by supporting the Pomeroy substitute.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in opposition to H.R. 
8, the ``Death Tax Repeal Permanency Act of 2003,'' and in support of 
the substitute amendment proposed by my colleague from North Dakota, 
the Honorable Mr. Pomeroy.
  I support granting relief to the many Americans in our farming 
community and small business community through the repeal of the death 
tax. Presently, only 2 percent of the estates of persons who die each 
year are taxed, and this number will fall in coming years as the 
exemption level for the estate tax rises. Of the estates that are 
subject to the estate tax, very few include family-owned businesses or 
farms. For example, in 1998, family-owned businesses or farms comprised 
the majority of the taxable estates in just 1,418 of the approximately 
2.3 million people who died that year--or 6 out of every 10,000 people 
who died. Taken together, all farms and family businesses account for 
less than 3 percent of the assets in taxable estates valued at less 
than $5 million.
  Family farms and businesses are already recipients of special 
treatment under existing law. For instances, estates that contain 
family farms and businesses may use special valuation significantly 
reduce or eliminate estate tax liability. In addition, when the 
enterprise accounts for at least one-third of an estate, tax payment 
can be deferred for up to 14 years. Furthermore, relief for family 
farms and businesses can be provided without repealing the estate tax.
  If, hypothetically, the estate tax were extended at its 2009 level 
with a $3.5 million exemption and an upper echelon of 45 percent only 
10,000 estates nationwide would be subject to taxation in the year 
2010. That amounts to less than one half of one percent of the 
projected 2.6 million deaths for that year. For every 1,000 deaths, 995 
people would be completely exempt from estate taxes. The remaining five 
individuals would pay significantly less in tax because of higher 
exemption and lower rate.
  The United States Treasury Department analyzed the estate tax and 
found that raising the estate tax exemption level for family-owned 
farms and businesses to $4 million for individuals and $8 million for 
married couples, as proposed in 2000, would have exempted practically 
all of the family-owned farms and reduced the already small number of 
family businesses subject to the tax by nearly three-quarters.
  The estate tax is also beneficial for charitable giving efforts. The 
very existence of the estate tax creates a powerful incentive for 
charitable giving. A recent study found that if the estate tax were 
eliminated charitable giving would have been reduced by approximately 
$10 billion in 2001. This amount is equal to the total grants currently 
made by the largest 100 foundations in the United States.
  The estate tax increases the amount of charitable contributions among 
the largest estates by making these contributions tax deductible and 
thus act to reduce estate taxes. In 2001, for example, the latest year 
for which these IRS data are available, estates contributed $16.2 
billion to charities. Taxable estates of more than $20 million gave 
$6.8 billion of this total, averaging $23 million in donations per 
estate.
  Giving the trying economic times America is facing, this Chamber 
cannot afford to pass another financially imprudent bill. Beneficial 
programs like Head Start are being altered and Leave No Child Behind is 
being restricted. Medicare is under attack. The war in Iraq cost 
Americans billions of dollars, and the deficit is ballooning out of 
control. The repeal of the estate tax is a step in the wrong direction.
  Mr. Speaker, the death tax should be repealed. I support the Pomeroy 
substitute that features offsets that close the corporate tax loophole 
to pay for the estate tax repeal proposal.
  The SPEAKER pro tempore (Mr. Putnam). All time for debate on the bill 
has expired.


     Amendment in the Nature of a Substitute Offered by Mr. Pomeroy

  Mr. POMEROY. Mr. Speaker, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute offered by Mr. 
     Pomeroy:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. RESTORATION OF ESTATE TAX; REPEAL OF CARRYOVER 
                   BASIS.

       (a) In General.--Subtitles A and E of title V of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001, 
     and the amendments made by such subtitles, are hereby 
     repealed; and the Internal Revenue Code of 1986 shall be 
     applied as if such subtitles, and amendments, had never been 
     enacted.
       (b) Sunset Not To Apply.--
       (1) Subsection (a) of section 901 of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 is amended by 
     striking ``this Act'' and all that follows and inserting 
     ``this Act (other than title V) shall not apply to taxable, 
     plan, or limitation years beginning after December 31, 
     2010.''.
       (2) Subsection (b) of such section 901 is amended by 
     striking ``, estates, gifts, and transfers''.
       (c) Conforming Amendments.--Subsections (d) and (e) of 
     section 511 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001, and the amendments made by such 
     subsections, are hereby repealed; and the Internal Revenue 
     Code of 1986 shall be applied as if such subsections, and 
     amendments, had never been enacted.

     SEC. 2. MODIFICATIONS TO ESTATE TAX.

       (a) Increase in Exclusion Equivalent of Unified Credit to 
     $3,000,000.--Subsection (c) of section 2010 of the Internal 
     Revenue Code of 1986 (relating to applicable credit amount) 
     is amended by striking all that follows ``the applicable 
     exclusion amount'' and inserting ``. For purposes of the 
     preceding sentence, the applicable exclusion amount is 
     $3,000,000.''.
       (b) Maximum Estate Tax Rate To Remain at 49 Percent; 
     Restoration of Phaseout of Graduated Rates and Unified 
     Credit.--
       (1) Paragraph (1) of section 2001(c) of such Code is 
     amended by striking the last 2 items in the table and 
     inserting the following new item:

$780,800, plus 49% of the excess over $2,000,000.''....................

       (2) Paragraph (2) of section 2001(c) of such Code is 
     amended to read as follows:
       ``(2) Phaseout of graduated rates and unified credit.--The 
     tentative tax determined under paragraph (1) shall be 
     increased by an amount equal to 5 percent of so much of the 
     amount (with respect to which the tentative tax is to be 
     computed) as exceeds $10,000,000. The amount of the increase 
     under the preceding sentence shall not exceed the sum of the 
     applicable credit amount under section 2010(c) and 
     $199,200.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, and gifts made, 
     after December 31, 2003.

[[Page H5503]]

     SEC. 3. VALUATION RULES FOR CERTAIN TRANSFERS OF NONBUSINESS 
                   ASSETS; LIMITATION ON MINORITY DISCOUNTS.

       (a) In General.--Section 2031 of the Internal Revenue Code 
     of 1986 (relating to definition of gross estate) is amended 
     by redesignating subsection (d) as subsection (f) and by 
     inserting after subsection (c) the following new subsections:
       ``(d) Valuation Rules for Certain Transfers of Nonbusiness 
     Assets.--For purposes of this chapter and chapter 12--
       ``(1) In general.--In the case of the transfer of any 
     interest in an entity other than an interest which is 
     actively traded (within the meaning of section 1092)--
       ``(A) the value of any nonbusiness assets held by the 
     entity shall be determined as if the transferor had 
     transferred such assets directly to the transferee (and no 
     valuation discount shall be allowed with respect to such 
     nonbusiness assets), and
       ``(B) the nonbusiness assets shall not be taken into 
     account in determining the value of the interest in the 
     entity.
       ``(2) Nonbusiness assets.--For purposes of this 
     subsection--
       ``(A) In general.--The term `nonbusiness asset' means any 
     asset which is not used in the active conduct of 1 or more 
     trades or businesses.
       ``(B) Exception for certain passive assets.--Except as 
     provided in subparagraph (C), a passive asset shall not be 
     treated for purposes of subparagraph (A) as used in the 
     active conduct of a trade or business unless--
       ``(i) the asset is property described in paragraph (1) or 
     (4) of section 1221(a) or is a hedge with respect to such 
     property, or
       ``(ii) the asset is real property used in the active 
     conduct of 1 or more real property trades or businesses 
     (within the meaning of section 469(c)(7)(C)) in which the 
     transferor materially participates and with respect to which 
     the transferor meets the requirements of section 
     469(c)(7)(B)(ii).

     For purposes of clause (ii), material participation shall be 
     determined under the rules of section 469(h), except that 
     section 469(h)(3) shall be applied without regard to the 
     limitation to farming activity.
       ``(C) Exception for working capital.--Any asset (including 
     a passive asset) which is held as a part of the reasonably 
     required working capital needs of a trade or business shall 
     be treated as used in the active conduct of a trade or 
     business.
       ``(3) Passive asset.--For purposes of this subsection, the 
     term `passive asset' means any--
       ``(A) cash or cash equivalents,
       ``(B) except to the extent provided by the Secretary, stock 
     in a corporation or any other equity, profits, or capital 
     interest in any entity,
       ``(C) evidence of indebtedness, option, forward or futures 
     contract, notional principal contract, or derivative,
       ``(D) asset described in clause (iii), (iv), or (v) of 
     section 351(e)(1)(B),
       ``(E) annuity,
       ``(F) real property used in 1 or more real property trades 
     or businesses (as defined in section 469(c)(7)(C)),
       ``(G) asset (other than a patent, trademark, or copyright) 
     which produces royalty income,
       ``(H) commodity,
       ``(I) collectible (within the meaning of section 401(m)), 
     or
       ``(J) any other asset specified in regulations prescribed 
     by the Secretary.
       ``(4) Look-thru rules.--
       ``(A) In general.--If a nonbusiness asset of an entity 
     consists of a 10-percent interest in any other entity, this 
     subsection shall be applied by disregarding the 10-percent 
     interest and by treating the entity as holding directly its 
     ratable share of the assets of the other entity. This 
     subparagraph shall be applied successively to any 10-percent 
     interest of such other entity in any other entity.
       ``(B) 10-percent interest.--The term `10-percent interest' 
     means--
       ``(i) in the case of an interest in a corporation, 
     ownership of at least 10 percent (by vote or value) of the 
     stock in such corporation,
       ``(ii) in the case of an interest in a partnership, 
     ownership of at least 10 percent of the capital or profits 
     interest in the partnership, and
       ``(iii) in any other case, ownership of at least 10 percent 
     of the beneficial interests in the entity.
       ``(5) Coordination with subsection (b).--Subsection (b) 
     shall apply after the application of this subsection.
       ``(e) Limitation on Minority Discounts.--For purposes of 
     this chapter and chapter 12, in the case of the transfer of 
     any interest in an entity other than an interest which is 
     actively traded (within the meaning of section 1092), no 
     discount shall be allowed by reason of the fact that the 
     transferee does not have control of such entity if the 
     transferee and members of the family (as defined in section 
     2032A(e)(2)) of the transferee have control of such entity.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to transfers after the date of the enactment of 
     this Act.
       Amend the title so as to read: ``A bill to amend the 
     Internal Revenue Code of 1986 to restore the estate tax, to 
     limit its applicability to estates of over $3,000,000, and 
     for other purposes.''

  The SPEAKER pro tempore. Pursuant to House Resolution 281, the 
gentleman from North Dakota (Mr. Pomeroy) and the gentlewoman from 
Washington (Ms. Dunn) each will control 30 minutes.
  The Chair recognizes the gentleman from North Dakota (Mr. Pomeroy).
  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as we begin consideration of the substitute, I would 
like us to focus on something pretty central to the fundamentals of 
legislating. We ought to do as a Congress that which we can do. The 
substitute I bring forward will take effect during the tenure of this 
Congress. It is effective January 1, 2004. The majority proposal before 
us does nothing during the sitting of this Congress, nothing during the 
sitting of the next Congress, the Congress after that, the Congress 
after that, the Congress after that, or the Congress after that. 
Nothing until January 1, 2011.
  We have heard so much from the other side. We have heard so much 
about how they care about all the problems, how mean of us to oppose 
their addressing the problems. And yet now when it comes to the 
substitute, this is where the rubber meets the road because we want to 
do something now and something meaningful and they do nothing. Nothing 
about their bill.

                              {time}  1330

  Not one whit of their bill applies during the sitting of this 
Congress or until the year 2011.
  Again, I referenced earlier the heart-wrenching examples we have 
heard from the majority about family farmers. Let us talk for a minute 
about family farmers. I know something about family farmers. In 
representing the State of North Dakota, I probably represent more 
production acreage than any other Members of this House. The family 
farmers who have estate tax problems, and I am happy to tell my 
colleagues most of them do not, but of those that do, let us get after 
it. Let us get them relief and get them relief now.
  The substitute I have advanced would give family farm couples $6 
million in exclusion from estate tax. Any farmer in operation up to $6 
million, no estate taxes. One hundred percent repeal, effective January 
1. That is very meaningful relief and it is going to go right to the 
heart of the farm families that they are talking about.
  Now, what do they offer by way of an alternative, this Congress, for 
dealing with these farm families? Absolutely nothing. In 2004, under 
their proposal, family farm estates over $3 million will be subject to 
estate tax; over $3 million. Family farm estates per couple in our 
situation: $6 million. We provide double the relief immediately. And so 
really, what they are offering these people is a total sham, because 
under their proposal, nobody gets anything until the very wealthiest, a 
tiny number of estates in this country, are taken care of.
  Mr. Speaker, where I come from, a bird in the hand is worth two in 
the bush, and that is especially true when we consider prospects that 
this year 2011 will actually offer the kind of relief that they 
proclaim so loudly. Five Congresses from now are going to be looking at 
a very different budget situation, because the cost of their proposal 
absolutely explodes in the very decade baby boomers retire.
  Consider the chart here. Mr. Speaker, $162 billion of revenue loss in 
the first 10 years. It ramps up slowly, and then really clobbers you: A 
$500 million loss in '04; a $31 billion loss in the year 2011; $57 
billion loss in 2012; $63 billion loss in 2013. You catch my drift. 
This thing explodes in its consequence in the budget. Mr. Speaker, $840 
billion worth of revenue loss in the next decade, just as baby boomers 
retire and want their Medicare and want their Social Security.
  Now, what do my colleagues think is likely? We are going to say, no, 
baby boomers, we have this estate tax we repealed some time ago, and we 
are going to stick with it. I do not think so. I think the prospects 
are overwhelming that this distant repeal will never arrive.
  Finally, I think that it just makes it very, very clear what this is 
all about. To look at the relief we offer in each of the next 5 years 
being vastly superior to theirs, because they do not want, in any way, 
to lose some of the momentum behind total repeal. So they will leave 
family farmers in the lurch through the year 2011; they will leave the 
small businesses they talk about in

[[Page H5504]]

the lurch in the year 2011. Again, look at this: estates $6 million and 
under; no tax under our proposal in 2004; $3 million and under taxed 
under their proposal. In 2005, the same situation. Again, we are 
superior in 2006, 2007 and 2008.
  Now, if this Congress has before it the opportunity to give over each 
of the next 5 years meaningful relief to people that need it, why in 
the world do we not do it? That is exactly what this substitute is all 
about.
  There is one final feature that I would discuss briefly; it is a 
feature that I was surprised to hear my friend, the gentlewoman from 
Washington, tout before the Committee on Rules yesterday, and that is, 
this notion of who is going to have capital gains tax on inherited 
property? Because under our proposal, when you inherit the property, 
the only capital gains tax on the appreciated value of that property 
you are going to have is between the time you inherited it and the time 
you sell it. Under their proposal, you are going to face capital gains 
taxes from the time it was purchased originally, whoever purchased it 
that ultimately bequeathed it to you in the inheritance.
  And so in the family farm context, you have an awful lot of farmland 
coming into families in the 1930s, in the 1940s at just nominal value, 
which now has significant value. And when the heir goes to sell it, you 
are going to have capital gains on all capital appreciation over $1.3 
million. We are going to have an awful lot of the family farmers that 
they are touting so much on this debate that right now do not have 
estate tax problems, and surely would not have estate tax problems 
under our bill, that are going to find themselves with walloping 
capital gains taxes, because they take this stepped up in basis and 
throw it out for carry-over so that they can help the wealthiest tiny 
few in this country.
  Mr. Speaker, we have a proposal in my substitute to take care of 
99.65 percent of the estates in this country. My gosh, that is pretty 
darn close to perfect, 99.7. But they do not want that relief to move 
forward, because it is the three-tenths of 1 percent of their 
wealthiest benefactors that they are most worried about. Well, I say 
let us deal with this straight up, take what we can get now, provide 
meaningful relief effective in 2004, pass the Pomeroy substitute, and 
get this on the road toward exactly what we need: estate tax relief now 
for America's families.
  Mr. Speaker, I ask unanimous consent to have my friend and colleague, 
the gentleman from Maryland (Mr. Cardin), assist in the management of 
the time.
  The SPEAKER pro tempore (Mr. Putnam). Is there objection to the 
request of the gentleman from North Dakota?
  There was no objection.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am strongly opposed to this amendment, and I want my 
colleagues to look at it very closely and be very clear about what this 
amendment would do. It establishes a permanent death tax. It is a huge 
tax increase on small business and family farms.
  This amendment would increase taxes on farmers, on timber growers, on 
small businessmen and small business women, and it would not only take 
money from their pockets and send it to Washington, D.C.; it would 
practically force them to take more money from their pockets to pay 
lawyers, insurance salesmen, and estate planners. And why? So they will 
not have to send their money to Washington, D.C. to comply with this 
permanent death tax.
  There are people who think this is a good thing. I do not understand 
it; I do not question their intent, I simply acknowledge that that is 
the case.
  We have already debated the issue surrounding the death tax, but let 
us look closely at the impact of this amendment, because I think it 
puts on display the philosophy of those who want to keep the death tax.
  Under current law, the tax rate for estates is due to fall in 2004, 
in 2005, 2006, and 2007. For 2 years, the rate would remain at 45 
percent and then be totally repealed in 2010. This amendment 
eviscerates that tax relief.
  Some estates may benefit under this amendment. If you are unlucky 
enough that your business is not doing well and you fall below the $3 
million threshold that is in this amendment, you benefit. But what this 
amendment tells you is this: do not be successful. Do not save your 
money. Do not invest your money. Do not grow your business.
  Instead, it encourages you to spend it now, sit back, consume that 
estate, because the government is going to take half of that estate 
anyway, and everybody knows how wisely the government spends our money. 
Because the more successful you are and the harder and the more you 
work, the more expensive it will be for you to hand that business on to 
your children.
  Does the amendment promote charitable giving? No, it does not. Does 
it redistribute the money it raises to those who are less wealthy? No, 
it does not. Does it equalize income among different layers of society? 
No, it does not do that. Does it help pay Social Security benefits? No.
  Opponents of death tax repeal make all of those charges, but when 
they bring forth their own proposal, we can see it for what it really 
is: a tax increase, pure and simple. A way to put money in the pockets 
of the Federal Government. And because the exemption level is not 
indexed, there will be free money to the Treasury. Inflation grows, but 
the exemption stays just the same. As the economy improves, as 
businesses grow, as people invest and work hard, they will be 
penalized, because someone in Washington, D.C. said you can only be so 
successful, an arbitrary limit, and then you pay.
  That is what this amendment is about and that is why it ought to be 
voted down.
  Mr. Speaker, we hear time and again the arguments of those who want 
to keep the death tax. We hear about equality, about Social Security, 
about charitable giving, about enormous concentrations of wealth. But 
when it comes right down to it, it is about money.
  Mr. Speaker, this approach is the wrong approach. This policy has 
outlived its day. This philosophy is not what made our Nation great, 
and I urge a ``no'' vote on this substitute.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CARDIN. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
distinguished democratic whip, the gentleman from Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Speaker, I say to my friend from Washington State, 
what we hear over here is enmity, enmity towards the common wheel. I do 
not mean towards government, I mean towards us coming together as a 
people to invest in America, to invest in our children, to leave no 
child behind, to make sure our environment is clean, to make sure that 
we have the resources to invest in national defense.
  Now, those of you who go to work every day and work for a living and 
get a salary check and have deductions from that salary check, to help 
your government have a national defense, have the programs for 
education and health care and NIH research to make our society better, 
hear me now. Those of you who work every day, let me tell you what the 
objective of this provision is.
  First, we are going to exempt three-tenths of a percent; not exempt 
99.7 which the Pomeroy bill does, and it speaks to those small farmers 
and those small business people who have grown America, who we want to 
exempt. We are for that. But what it does not do is add gargantuan 
amounts to the debt and then, let me tell my colleagues what this does. 
I have $100 million that I inherited from my dad, hooray for me. I will 
never, ever pay taxes again under the Republican program.
  Never, unless it happens to be a sales tax or an excise tax. I will 
not pay income tax, because this is inherited dollars, and I will have 
it invested in corporate or savings accounts, and the Republicans want 
to exempt both dividends from taxation and interest on savings from 
taxation. So I will never pay taxes again. And, by the way, they also 
want to exempt capital gains.
  Now, if you get most of your income from capital gains, or you get 
most of your income from dividends, or you get most of your income from 
interest, you may be for this. But if, however, you are like the 
overwhelming majority of Americans who get up every day, play

[[Page H5505]]

by the rules, work hard, and get a salary check, this undermines you, 
your children, and your families.
  Vote for the Pomeroy substitute.
  Ms. DUNN. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from 
Missouri (Mr. Hulshof), a very valuable member of the Committee on Ways 
and Means, a gentleman who knows what he is talking about because he 
has been through it personally.
  Mr. HULSHOF. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  Mr. Speaker, I have been listening to the discussion and the debate 
and the rhetoric, and I have been a bit disappointed by some of the 
arguments that have been made; not surprised by the arguments, but 
nonetheless disappointed. There have been some of my colleagues on the 
other side who have talked about hypotheticals. Let me allow my 
colleagues a little glimpse into a very personal story.
  On November 22 of last year, my father collapsed and died at our 
family's home in Southeast Missouri. He was 68. On his first trip to 
Washington, D.C., he sat right up there in the gallery to watch his son 
take the first oath of office. He died without an estate plan. In fact, 
I wish my colleagues could have met my dad, because if they had shaken 
his hand, they would have immediately noticed the callouses from 4 
decades of working our family's farm down in the district of the 
gentlewoman from Missouri (Mrs. Emerson).
  One of the necessities, of course, of having that painful experience 
is that my mom and I, as the surviving members of the family, had to 
conduct an inventory. And I do not mind telling my colleagues, a 493-
acre farm, a number of irrigation systems, farm equipment, grain 
trucks, the modest home where I grew up, modest savings and, 
thankfully, because of Congress's actions a number of years ago, my mom 
was not required to pay the tax. Yet, she has vowed to put together an 
estate plan in order to pass on the legacy that my father built.

                              {time}  1345

  So she has been forced to spend thousands of dollars to accountants, 
to lawyers to create these legal contortions that are required by the 
very existence of the estate tax. Can anybody give me a compelling 
reason why she should have to spend her limited resources in order to 
preserve my father's legacy? Can anyone?
  As long as the estate tax laws remain on the books, surviving family 
members across this country will have to shell out hard-earned dollars 
to ensure that the long reach of the death tax does not force them to 
sell off assets in the family business.
  The gentleman from North Dakota is my friend. I applaud his intent. 
One of the charts that he mentioned, at the bottom, it says only 400 
farms would actually be subject to the estate tax. I think that is what 
it says on the bottom of it, and I will let my colleagues look at the 
exhibit; and yet what the chart does not say is that every farm or 
every family business has to file an estate tax form and a return, 
perhaps a simple exercise, but in every instance where a family 
business has been accumulating assets, a return has to be filed, which 
means again hours of meetings with accountants and lawyers and, again, 
a cost of compliance.
  So it is not just the number of estates that would be subject to the 
tax. It is this huge cost that as long as the estate tax, the 
inheritance tax remains on the laws of our books there will be this 
cost of compliance to all family businesses across the country.
  Simply, the death of a family member should never be a taxable event.
  Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
  Let me say to my friend we all, of course, offer our deepest 
condolences as we did to his family. I am afraid, though, that the bill 
without the Pomeroy substitute is going to offer no help whatsoever for 
a decade to people who may find themselves in this same position.
  One of the principal advantages of the substitute is that not only 
does it provide immediate help starting in 2004, exempting those 
estates $3 million, $6 million on a couple, and by the way, those gross 
estates would not have to file forms. They do not even have to file an 
information form if their gross value is below $3 million. So I think 
we would provide immediate help to a significant number, to the 
overwhelming majority of people who would find themselves in the same 
position that my colleague's family found itself in.
  But there is a second reason that I think family farms, which go 
through a similar situation, would benefit much more from the 
substitute than the underlying bill, and this is predictability. I dare 
say that if the bill that the Republicans are bringing forward were to 
pass, very few individuals who had estates of 3, 4, 5, 6, $7 million 
would change their estate plan based upon the predictability of 
Congress to keep this policy in effect for the next decade, so that the 
relief would eventually come.
  Predictability is very important in estate planning. The Pomeroy 
substitute gives us that predictability, a policy that will stand, a 
policy that exempts 99.6 percent of the estates in our country today. 
Those individuals would be able to make estate changes in order to deal 
with the new realities of a law that makes sense.
  There is a third reason in addition to the fact that we provide 
immediate relief and it is predictable. The third reason we have heard 
over and over again, and it is an important reason, and this is 
affordability, what we can afford as a Nation.
  Next week we are going to be debating whether we can afford a 
prescription drug plan for our seniors. We make choices. We set 
priorities by what we think is important. The Joint Economic Committee 
on Taxation, not this Member but our objective professionals, tell us 
that this bill will lose, when fully implemented in the next decade, 
$850 billion. Our prescription drug plan that will be on the floor next 
week is $400 billion. Those of us who say can we not find a little bit 
more money for the millions of seniors who do not have health 
insurance, can we not throw a few more dollars in that program, we are 
told we do not have the money.
  Yet we have the money for relief that affects only a few thousand 
estates in this country, and that is all it is. It is not the wholesale 
farm. It is the farms of a very few. In fact, they are wealthy farms 
that are going to be affected, estates of a very few, very wealthy 
people in this Nation that are impacted by maintaining an estate tax 
for the very, very wealthy individuals. And as my friend, the gentleman 
from Maryland (Mr. Hoyer), pointed out, the reason why the underlying 
bill will never become law and if it becomes law it will never be 
sustained is that Americans would not tolerate multibillionaires 
passing their estates tax free and their income not being taxed. It 
will not be sustained.
  Vote for the underlying substitute. It will affect policy today. It 
will take care of the problems we have heard before.
  Mr. Speaker, I reserve the balance of my time.
  Ms. DUNN. Mr. Speaker, I yield 12 minutes to the gentleman from 
Georgia (Mr. Burns) for the purposes of control, a gentleman who has 
been very involved in the development of our legislation and very much 
a supporter of it as he has come to Congress as a freshman Member. He 
will present differing points of views from people who come from all 
over the country who are members of the freshman class.
  The SPEAKER pro tempore (Mr. Putnam). Is there objection to the 
request of the gentlewoman from Washington?
  There was no objection.
  Mr. BURNS. Mr. Speaker, I yield myself such time as I may consume.
  I thank the gentlewoman from Washington for yielding me the time; and 
Mr. Speaker, I rise today in support of H.R. 8, as introduced by the 
gentlewoman from Washington (Ms. Dunn) and in opposition to the Pomeroy 
substitute amendment.
  In 2001, Congress repealed the death tax temporarily. It is scheduled 
to resurface and haunt farmers and small business owners again in 2011. 
My constituents in the 12th district of Georgia are not rich; but they 
own farms, they own small businesses, where family ownership still 
means a great deal.
  H.R. 8 helps to ensure their survival. The underlying bill that I am 
proud to cosponsor is good for small businesses. It is good for family 
ownership. It is good for family farms.

[[Page H5506]]

  The amendment crafted by the opponents of H.R. 8 would gut the bill 
and would reinstitute the double taxation of a person's earnings over a 
lifetime. This is a veiled attempt to increase the taxation burden on 
our small businesses and family farms. Do not be deceived.
  The death tax stifles economic growth. It is counterproductive to the 
American Dream, and it is an unfair and immoral tax on our small and 
minority business owners.
  The substitute amendment reinstates the death tax and ensures its 
hindrance on the family businesses and the farmers. We must vote ``no'' 
on the substitute.
  H.R. 8 does just the opposite. It kills the death tax permanently. I 
encourage my colleagues to vote against the substitute amendment and to 
vote for the underlying bill that ensures the viability of our small 
businesses and our family farms.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CARDIN. Mr. Speaker, it is now my pleasure to yield 2 minutes to 
the gentleman from Illinois (Mr. Emanuel).
  (Mr. EMANUEL asked and was given permission to revise and extend his 
remarks.)
  Mr. EMANUEL. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  I was moved by my colleague's story who remembers his father here 
when he got sworn in. Just 5 months ago, my father sat up there and 
watched me get sworn in, and he came to this country in 1959. So 
whatever happens in his life and my life, I will always have that time 
that he was able to see, having coming to this country, his son get 
sworn in.
  Now that I am a father of three children, I am reminded of what Mark 
Twain once said: ``At 12 I concluded my father was a fool. By 16 I was 
shocked what he could learn in only 4 years.'' I say that because I am 
going to provide for my children the same values that my father taught 
me and my mother. They are going to get love, education and a good kick 
out the front door so they can earn their way around this world the way 
I have.
  The truth is, what we should be doing instead of helping wealthy 
people protect their wealth, we should help people build wealth. I had 
an amendment that is not allowed today on the floor that would support 
the Pomeroy substitute and give us estate tax relief where it should be 
provided for our farm and small business owners, but also provide a 
deduction for college tuition education for all families who are trying 
to send their children to college: $4,000 they are allowed to deduct 
for college education; families, up to $100,000. That deduction ends in 
2005.
  College costs have gone up by 20, 30 percent over the last couple of 
years. It is continuing to go up. Yet in 2005 that deduction for a 
middle-class family to send their kids to college is eliminated. It 
ends. That is about creating wealth. That is about our common shared 
values. So we can have an estate tax and help create wealth by making 
sure everybody gets access to that ticket to the middle-class dream, a 
college education.
  That deduction is eliminated in 2005. I offered an amendment to 
extend it to 2013 so we can have estate tax reform and college 
education. What we should do is be in the position of not having an 
either/or policy, a tax reform on the estate tax and provide middle-
class families the opportunity to give their children a college 
education, not go broke doing it, and make sure that the American Dream 
stays alive for generations to come.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Georgia (Mr. Gingrey).
  Mr. GINGREY. Mr. Speaker, I thank the gentleman from Georgia (Mr. 
Burns) for yielding me the time.
  Mr. Speaker, as I listen to this debate, of course I stand here fully 
in favor of H.R. 8 and against the Pomeroy amendment because it is 
really not about who has received and who has not this double taxation, 
this so-called death tax.
  The other side says that there is a $3 million exemption under the 
Pomeroy substitute, that 99.6 percent of estates would be exempted from 
the death tax. I personally do not need that $3 million exemption or 
even the $600,000 exemption. I would probably be fine with a $300,000 
exemption; but the point is, it is a double taxation and it is wrong. 
It is wrong to tax anybody twice on the same income.
  These people, no matter what their net worth, they have paid taxes. 
They have paid at the highest marginal tax rate; and it is totally 
wrong, as the gentleman from Missouri (Mr. Hulshof) said, to have to 
worry about paying taxes after death.
  Mr. CARDIN. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Speaker, in the Oregon legislature some years 
ago, I actually led, as Chair of a tax committee, a reform of the 
estate tax. I thought I understood some of the principles; but after 
listening to the rhetoric regarding this issue, looking at the facts 
since I have been a Member of Congress, I thought maybe I would go back 
and check to see if there was something I was missing.
  I invited a number of tax professionals in my community, CPAs, tax 
attorneys, financial planners, to come down and talk to me about how 
the effect of this proposal actually works. It was fascinating, giving 
these people a grant of immunity, and I urge any of my colleagues to do 
the same with tax professionals in their community.
  They said, number one, under existing law anybody who could not 
shield at least $5 million of an estate was really guilty of 
malpractice.
  Number two, they said it was not the estate tax that broke up small 
business. It was idiot sons, and they said in their experience when 
they watch great inherited wealth after three generations, it looks 
like it becomes a genetic defect. It was fascinating what they told me, 
people who in the main were Republicans who work in this every day.
  They pointed out that huge wealth, which would be tax free under the 
Republican proposal today, huge wealth often was not even taxed once. 
One does not become a billionaire based on their W-2s.

                              {time}  1400

  It is capital appreciation. And the clever approach of eliminating 
the inheritance tax, eliminating dividends from taxation means that you 
will be able to manipulate it, while people with great means will not 
be paying any tax at all if they do not want to.
  If my colleagues truly wanted to help protect the family farm and 
small business, they would join together with the vast bipartisan 
consensus in this Chamber to index the inheritance tax to be able to 
deal with the Pomeroy amendment, which actually would help the mother 
of the gentleman from Missouri (Mr. Hulshof), not the proposal that he 
is going to vote for.
  Mr. Speaker, I strongly urge that we approve the Pomeroy amendment.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Florida (Mr. Feeney).
  Mr. FEENEY. Mr. Speaker, I thank the gentleman from Georgia for 
yielding me this time.
  I am not surprised that some tax planners oppose this act, because 
what this does is to simplify the Tax Code. What the substitute 
amendment does is to make a 40,000-plus page Tax Code longer and more 
complicated. It is understandable that a few tax planners do not like 
this.
  But there is something inherently unfair about taxing people when 
they die. My motto is: No taxation without respiration. When a person 
quits breathing, we ought to leave them alone. And the notion we are 
going to make a complicated Tax Code even more complicated with this 
ceiling under the Pomeroy amendment, this creates a ceiling on growth 
and prosperity and success. This is a ceiling on the future.
  The bottom line is that we have more people in America engaged in the 
preparation and collection of taxes than we do in the growing of food 
and agriculture. That is wrong. We need actually to have fewer tax 
planners and estate planners. We need to let family farmers, we need to 
let small businesses, automobile dealers and other businesses in our 
communities plan for their future without the need of expensive lawyers 
and tax planners.
  Again, my colleagues, let us abolish the death tax. No taxation 
without respiration.
  Mr. CARDIN. Mr. Speaker, could I inquire as to the amount of time 
that remains on both sides?

[[Page H5507]]

  The SPEAKER pro tempore (Mr. Putnam). The gentleman from Maryland 
(Mr. Cardin) has 13 minutes remaining, the gentlewoman from Washington 
(Ms. Dunn) has 11 minutes remaining, and the gentleman from Georgia 
(Mr. Burns) has 8\1/2\ minutes remaining.
  Mr. CARDIN. Mr. Speaker, I ask unanimous consent that the rightful 
sponsor of the substitute, the gentleman from North Dakota (Mr. 
Pomeroy), be allowed to control the remaining time on this side.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Maryland?
  There was no objection.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Texas (Mr. Carter).
  Mr. CARTER. Mr. Speaker, I thank the gentleman from Georgia for 
yielding me this time.
  Mr. Speaker, I stand in support of H.R. 8 and totally opposed to the 
substitute. It is time we kill the death tax once and for all and 
forever. This is critical. Across the street from my church is a 400-
acre farm. The second generation of farmers are farming that farm. But 
because of the growth in our county, the value of that farm, which 
these people intend to farm, is now over $2.50 a square foot because of 
development growth. Those people will be killed by this tax. We have 
got to eliminate it so that those people, their children, can continue 
to farm.
  I ran into a good friend of mine in New Mexico. After years in 
college, I just assumed he would be continuing to ranch in Clayton, New 
Mexico. But, no, he is not in the ranching business. Why? Because the 
inheritance tax wiped out a ranch that they fought for and died for in 
Northern New Mexico. And now he is not there anymore. We have to 
protect those people and kill this tax.
  Mr. POMEROY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Levin).
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Mr. Speaker, the Pomeroy amendment would exclude 99.65 
percent of all estates from estate tax. So what is going on here? Why 
would the Republicans want to abolish the estate tax on this two-fifths 
of 1 percent? And, by the way, almost none of the 99.65 have to file a 
return. I think the answer is pretty clear: It is not only that my 
Republican colleagues are trying to protect the very, very, very 
wealthiest. That they are doing. And maybe that is their instinct. But 
what is really happening is my colleagues are taking $50 billion a year 
out of the Treasury of the United States. That is the difference 
between the Pomeroy bill and the total repeal.
  That $50 billion a year would make up about one-third of the 
shortfall of Social Security. It would also provide other programs, 
like education, that are not only a safety net but are a rung up the 
ladder for middle- and lower-income families, and, yes, a lot of 
higher-income families. So that is what the Republicans are trying to 
do. They say it is only 1 percent of the totals revenues of this 
country. But they chipping away, chip by chip, block by block at the 
revenue in-flow into the Treasury of the U.S. and starving the programs 
that are needed for the vast majority.
  What the Republicans are doing is to help a teeny tiny minority, a 
small number, hundreds, only hundreds of farmers and small business. 
The rest do not pay any estate tax. What the Republicans are trying to 
do is to help that small, small minority, and they are hurting 99 
percent of the American people.
  Vote for Pomeroy and vote against the basic bill.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Minnesota (Mr. Kline).
  Mr. KLINE. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise today in strong support of H.R. 8, a measure that 
frees men and women from being penalized for their hard work and their 
success. The Death Repeal Permanency Act of 2003 would eliminate the 
death tax, eliminate it, and that is the key, once and for all.
  Mr. Speaker, Congress has already voted to get rid of the tax. We 
should never ever let it come back. The estate tax discourages the very 
values we prize most highly in our Nation. It is a tax on hard work and 
savings, on sacrifice, and on success.
  In Minnesota, the family farm is an important part of our commerce, 
an important part of our industry. It is part of the fabric of 
Minnesota. The family farm epitomizes the values that we hold most 
dear. We should never ever let this tax creep back in and put those 
farms in jeopardy.
  We cannot allow this unjust penalty to harm any of our family 
farmers, whether they are a small farm, like my wife's family farm, or 
a big farm. The estate tax is immoral. The death of an individual's 
father, mother, father-in-law or mother-in-law should not be a taxable 
event. Not now, not ever.
  Let us support H.R. 8 and not the Pomeroy substitute.
  Mr. POMEROY. Mr. Speaker, I yield 1 minute to the gentleman from 
Vermont (Mr. Sanders).
  Mr. SANDERS. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Let us be clear what this is about. This is not about saving the 
family farm. This is not about protecting small business. This is about 
over a 10-year period giving $160 billion in tax relief to the richest 
2 percent of the population. Ninety-eight percent of the people get 
nothing.
  What these folks are trying to do by running up huge deficits and a 
huge national debt is to end up cutting back disastrously on Medicare, 
Medicaid, education, and veterans' protection. No money to ease the 
waiting lines at VA hospitals all over America, but $180 billion for 
the richest 2 percent of the population.
  This is an insult to the middle class and to the working families of 
this country. It should be defeated.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Indiana (Mr. Chocola).
  Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise in support of H.R. 8 and opposed to the amendment.
  The bottom line, although we hear a lot of discussion, the bottom 
line is anybody who spends their whole life building a business or 
growing a farm should never have to sell that business or that farm to 
pay death taxes. The American dream is based on the principles of hard 
work and the celebration of self-reliance and individual 
responsibility.
  People can reap the rewards of their own success, and they should be 
encouraged to share that success with others. The death tax and this 
amendment violates every single one of those principles of the American 
Dream. Mr. Speaker, it is not only the heirs that are punished by this 
unfair tax, it is the employees of those companies and those farms, and 
it is the customers, and it is most of all the communities that those 
farms and those businesses operate in.
  Mr. Speaker, it is past time for Congress to repeal the death tax 
permanently, and I encourage all of my colleagues to support H.R. 8 and 
vote against this amendment.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Pennsylvania (Mr. Gerlach).
  Mr. GERLACH. Mr. Speaker, I thank the gentleman for yielding me this 
time. I appreciate the opportunity to speak on this matter. I rise 
today to oppose the substitute amendment and to support the underlying 
bill. The initial repeal of the death tax was designed to benefit an 
important sector in our economy: Family-owned and small businesses.
  Many of these businesses hold nonliquid assets and, thus, upon the 
passing of an elder, many families finds they must liquidate a portion 
or all of their family business in order to pay the obligations imposed 
upon them by the estate tax. Often these businesses are generations 
old, and when they liquidate not only does the family suffer but the 
economy and the community suffers as well.
  Small businesses are among the strongest participants in our economy, 
yet their continued viability is the most vulnerable to unfair and 
excessive taxes, such as the death tax, which may tax up to 55 percent 
of a business' full value. Permanently repealing the death tax will not 
only provide much-needed tax relief to personal estates passed to 
individuals, but will also insulate this business sector so vital to 
our fledgling economic recovery.

[[Page H5508]]

  Additionally, if we do not address this issue by a permanent repeal 
of the estate tax, it will automatically be reinstated in 2011. 
Individuals and small businesses would again face the looming specter 
of the return of the death tax. I urge opposition to the substitute 
amendment and for support of the underlying bill.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Texas (Mr. Burgess).
  (Mr. BURGESS asked and was given permission to revise and extend his 
remarks.)
  Mr. BURGESS. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise today in strong support of H.R. 8, against the 
substitute amendment, and in favor of the repeal of the death tax.
  Hardworking men and women toil every day to provide for their 
families and make their children's lives better. That is the American 
dream. Today that dream is being threatened by the death tax. Upon 
death, heirs are often forced to sell the family farm or small business 
to pay the Federal estate tax because a large share of their wealth is 
held in assets such as lands, buildings, plant and equipment. That is 
not right, that is not fair, and that is not the American way.
  It is not fair because that property has already been taxed once, and 
in some cases twice. Two weeks ago, we passed the President's economic 
stimulus plan, which puts tax dollars back in the hands of people who 
make our economy go. We cannot continue to punish those who work hard, 
take risks, and are successful. We need their success. We need their 
success for the economy to recover. We need their success to create 
jobs.
  The next step towards getting our economy moving is to repeal the 
unfair and unjust death tax. It is for that reason I am a strong 
supporter of permanently abolishing the death tax.
  Mr. BURNS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Alabama (Mr. Bonner).
  (Mr. BONNER asked and was given permission to revise and extend his 
remarks.)
  Mr. BONNER. Mr. Speaker, I rise in strong support of H.R. 8 and in 
opposition to this substitute. I firmly believe that this is every bit 
as important a piece of legislation as the President's tax cut was just 
a few weeks ago, and I am very proud to be a cosponsor.
  The death tax is fundamentally un-American. We should all aspire to 
be successful. And if we are fortunate enough to accumulate a little 
wealth, we should be able to leave that to our children, to our 
grandchildren, to our universities, our churches, our synagogues, or 
whomever we choose, not whom the government chooses. This unfair and 
punitive tax is killing America's small businessmen and women and our 
family farmers.
  Congress understood this in 2001 and acted to gradually repeal the 
estate tax. But the repeal will sunset in 2010. It simply makes no 
sense whatsoever to expect taxpayers to time their deaths so as to 
qualify for more favorable tax treatment. The House recognized this 
problem, and we have twice voted to make this repeal permanent.
  My district in Alabama is largely rural, with small landowners. 
Estate planning is extremely difficult and expensive. This is just 
wrong to make these people not only be doubly taxed but triple taxed. I 
again urge my colleagues to oppose the substitute and support the 
underlying bill.

                              {time}  1415

  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I find it curious that the preceding speakers each 
making their eloquent speeches on behalf of their family farm 
constituents, their small business constituents, will oppose the 
amendment that I have offered that will bring them meaningful relief 
right now, January 1, 2004.
  Mr. Speaker, let me just go through the comparison. If a couple's 
estate is worth $6 million or less on January 1, 2004, no estate tax 
under our proposal. Under their proposal, these farms and small 
businesses with valuations in excess of over $3 million, they are going 
to have tax under their proposal in 2004, 2005, 2006, 2007, and 2008. 
There is more relief under our proposal than their proposal.
  If they want to protect these estates, they should pass the 
substitute today; and next year if they want to go ahead and try to 
pass the repeal, they can go ahead and try. There is no harm in that, 
take what you can get now and come back and take some more later. That 
is how we function in this Congress a lot. But they have done something 
quite different. They say nobody gets any relief until 2011 because at 
that time the wealthiest three-tenths of 1 percent get to participate 
fully in the relief as well.
  If that is what this is about, let us talk about the three-tenths of 
1 percent. But do not put this on family farms or small businesses; or 
as an earlier speaker said, this estate tax repeal is really about the 
guy pushing the broom. I do not know too many guys pushing brooms that 
have estate tax problems. It goes to show really the overblown rhetoric 
on the other side of the aisle unmatched by any reasonable effort to 
help now address the estate tax problems they speak so compellingly 
about.
  Mr. Speaker, I yield 3 minutes to the gentleman from Seattle, 
Washington (Mr. McDermott).
  (Mr. McDERMOTT asked and was given permission to revise and extend 
his remarks, and include extraneous material.)
  Mr. McDERMOTT. Mr. Speaker, I think the gentleman from North Dakota, 
who comes from a big farming district, has a great amendment here.
  Mr. Speaker, I will include for the Record a letter from the National 
Farmers Union dated June 16, 2003. The letter says there is no evidence 
that the estate tax has forced the liquidation of any farms, and 
existing estate tax provisions already exempt 98 percent of all farmers 
and ranchers. This is a letter on behalf of 300,000 farmers and 
ranchers. By increasing the level of estate exemption to $4 million per 
individual, which is what the Pomeroy amendment does, 99.5 percent of 
American agricultural producers would be exempted from any estate tax 
liability. It goes on to say the 20-year Federal cost of Federal estate 
tax repeal is estimated to be nearly $1 trillion. For farmers and 
ranchers, such a loss in Federal revenues will reduce our ability to 
fund a wide range of commodity, conservation, rural development, 
research and trade programs important to family farms.
  Why are we doing this? Well, we are in the rubber-stamp Congress. We 
have an amendment out here that makes sense, but the Republicans will 
not consider it because ``I approve of everything George Bush does,'' 
and they are out here to rubber stamp another amendment.
  In spite of the fact that last night we created a bill in the 
Committee on Ways and Means to deal with pharmaceutical benefits, we 
said to people, we are going to cover you from zero up to $2,000 and 
then there is going to be this big gap up to $4,900 people do not get a 
thing. They have to keep paying their premium, but they are not going 
to get anything out of it. From $2,000 to $4,900 in your bill is not a 
tax benefit that covers the pharmaceutical needs of people.
  Now we could fix that simply with the money we have here today that 
we are passing out the back door, not to farmers; this is not a farmer 
issue. This is a bunch of very, very rich people hiding behind farmers. 
They are sort of sneaking behind the combine waiting until this bill 
gets through, and then they are going to stand up and take all their 
money. This is not for farmers. The farmers say that.
  So who is it for? It is the President of the United States who had a 
fund-raiser last night, and he said give me $2,000 a plate, sit down; 
and I am going to rubber-stamp another bill.
  Mr. Speaker, we have rubber-stamped one bill after another. A Member 
on the other side of the aisle said this is equally important with the 
other tax bill we did. Hey, there is $900 billion still laying in the 
Committee on Ways and Means. It is going to be brought out here, and we 
will rubber-stamp it. How big is the debt? Nobody cares. Our kids can 
pay for that, except for the kids of rich people; they do not pay 
taxes.

                                       National Farmers Union,

                                                    June 16, 2003.
     House of Representatives,
     Washington, DC.
       Dear Member of Congress: I write on behalf of the 300,000 
     farmer and rancher members of the National Farmers Union to 
     urge you to vote against H.R. 8, legislation that

[[Page H5509]]

     would repeal the federal estate tax when it comes to the 
     floor of the U.S. House of Representatives.
       Repeal proponents have characterized this issue as critical 
     to the future sustainability of America's family farms and 
     ranches because it is a primary cause of farm liquidations. 
     This argument is without merit. There is no evidence that the 
     estate tax has forced the liquidation of any farms, and 
     existing estate tax provisions already exempt 98 percent of 
     all farms and ranches. By increasing the level of the estate 
     tax exemption to $4 million per individual, 99.5 percent of 
     America's agricultural producers would be exempt from any 
     estate tax liability.
       We believe estate tax laws should be reformed, not 
     repealed. An immediate increase in the level of the exemption 
     utilized to calculate estate tax liability, and 
     simplification of the rules and procedures governing the 
     filing and payment of estate taxes, represents a more 
     rational and beneficial approach for farmers, ranchers and 
     small business owners than full repeal.
       The tax reform approach will minimize the loss of revenue 
     for both the federal and state governments that will result 
     from full repeal at a time when budget deficits and declining 
     public revenues are severely stressing our capacity to 
     maintain and expand priority programs important to the 
     American people. The twenty-year federal cost of full estate 
     tax repeal is estimated to be nearly $1 trillion. For farmers 
     and ranchers, such a loss in federal revenues will reduce our 
     ability to fund a wide range of commodity, conservation, 
     rural development, research and trade programs important to 
     the farm economy. These programs are much more critical to 
     retaining a family farm oriented production agriculture 
     system than the limited savings resulting from estate tax 
     repeal that will only accrue to the nation's wealthiest 
     individuals.
       Estate tax reform will provide much needed certainty to 
     those engaged in planning for the future while ensuring that 
     individuals are not subjecting their heirs to a capital gains 
     tax liability resulting from the potential loss of the 
     stepped-up basis provisions contained in current law. If this 
     occurs, the result will amount to a substantial tax increase 
     for those of more modest means and smaller accumulations of 
     wealth.
       We look forward to working with you to develop and adopt an 
     estate tax reform proposal that is both fair and fiscally 
     responsible. Thank you for your consideration of these issues 
     and for your vote against repeal of the federal estate tax.
           Sincerely,
                                            David J. Frederickson,
                                                        President.

  Mr. BURNS. Mr. Speaker, I yield 1 minute to the gentleman from 
Pennsylvania (Mr. Murphy).
  Mr. MURPHY. Mr. Speaker, I would like to add one other thing to this 
discussion, that is, many a small business owner has a lot of money 
tied up in assets, but very little in cash by comparisons. They will 
spend perhaps hundreds of thousands a year paying for insurance, 
lawyers' fees and accountants to make sure that upon their death, the 
insurance picks up the tab.
  This money that they spend each year could be spent on employees' 
wages and benefits and expanding their businesses. Some of the smaller 
farmers do not have the money to pay for this. I just want to make sure 
that we keep that in perspective, that there is a lot of money that is 
spent every year by small businesses that otherwise could be going to 
help employees. Insurance is what pays it anyway, and that is not the 
way we should be thinking about it. They should be thinking about ways 
to keep the money in their business now and after their death so they 
can continue to have people employed.
  Mr. BURNS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to summarize what we have heard from the 
new Members of Congress. The death tax as we know it is wrong. It is 
immoral. It is something that we must repeal permanently. My colleagues 
on the other side of the aisle would like to suggest that the 
substitute is the better approach, but it establishes a permanent death 
tax. The farmers and ranchers and the small business people of America 
are opposed to any death tax. I would remind Members that the American 
Farm Bureau is supportive of the repeal of the death tax permanently, 
as are numerous other organizations that recognize how onerous this 
burden is to America.
  I would like to add my support to the underlying bill, H.R. 8. Let us 
kill the death tax today. Let us make it permanent. Let us ensure the 
future of our children and grandchildren.
  Mr. Speaker, I ask unanimous consent to yield the balance of my time 
to the gentlewoman from Washington (Ms. Dunn) and that she may control 
that time.
  The SPEAKER pro tempore (Mr. Simpson). Is there objection to the 
request of the gentleman from Georgia?
  There was no objection.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I want to make a couple of points in response to things 
I heard during the debate, and I appreciate the participation of the 
freshmen Members of Congress. Their viewpoint is very energetic and 
fresh. It is very valuable to hear what they have to say.
  There has been mention in the past of the National Farmers Union, and 
I want to assure people listening to this debate that the American Farm 
Bureau, which has 5 million members, supports permanent repeal of the 
death tax, as do the Agricultural Retailers Association, the Alabama 
Farmers Federation, the American Society of Farm Managers, the Rural 
Appraisers, the American Soybean Association, the American Nursery and 
Landscape Association, the Farm Credit Bureau. I could go on and on. 
There is a list of 25 organizations here that support the permanent 
repeal of the death tax.
  Why is that? The reason is they want predictability. One of the 
previous speakers talked about unpredictability because the act will 
not go into effect until 2010, 7 years from now. These farmers support 
permanent repeal because they do not want to have to bet on the fact 
that their farm will be within $3 million, which is the limit in the 
Pomeroy amendment. We hear talk about $6 million, and that is for two 
members of a family. They do not want to put those dollars into 
providing for estate planning and purchasing life insurance policies so 
liquidity will be there when the time comes that they are taken from 
this vale of tears and their children have to pay for the inheritance 
of their estate. They want to use those dollars and put that capital 
into their businesses and farms and into their equipment and land and 
into the employment of many, many people who will lose their jobs once 
farms close down.
  Mr. Speaker, we have another speaker who would like to speak about 
the death tax. He is a long-time Member and very active in this debate 
through the years.
  Mr. Speaker, I yield 2 minutes to the gentleman from North Carolina 
(Mr. Coble).
  Mr. COBLE. Mr. Speaker, I am pleased to cosponsor H.R. 8, and I 
commend the gentlewoman from Washington (Ms. Dunn) for the diligent 
work that she has performed regarding this issue.
  I was proud to support the Economic Growth and Tax Relief 
Reconciliation Act of 2001, which included a permanent repeal of the 
death tax. Unfortunately, due to arcane rules of the other body, this 
much-needed relief for working Americans is scheduled to sunset at the 
conclusion of 2010. Since then my colleagues, many of my colleagues, 
and I have voted twice to make this repeal permanent. I am hopeful that 
this Congress, both the House and the other body, will finally agree to 
permanently repeal the death tax and send it to the President for his 
signature.
  Unless we pass H.R. 8, it is my belief that some of my constituents 
in the Sixth Congressional District of North Carolina will once again 
be subject to the death tax in 2011. Further, the sunsetting of this 
tax makes it difficult for business owners to make strategic planning 
and investment decisions which could have a major impact on the future 
of their business and loved ones.
  Finally, I do not believe we should punish American families who have 
worked diligently to provide for themselves and their families and want 
to pass along the fruits of this success to their children and 
grandchildren. The death tax is a threat to the American Dream as we 
know it. It is my belief that this tax is the most onerous in the code. 
Conceptually and in practice, it reduces personal incentive to remain 
industrious, a disincentive to save, to invest.
  Eliminating the death tax, coupled with the recent Jobs and Growth 
Relief and Reconciliation Act, will greatly assist in restoring 
consumer confidence, spurring capital investment, and creating new jobs 
which are critical components of economic viability and growth, 
particularly in the small business community. I urge passage of H.R. 8.

[[Page H5510]]

  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  I want to speak for a moment on the question of where rural America 
is on my amendment. I believe if we ask the farmers of this country 
today, and I represent a whole lot of farmers in North Dakota, if they 
would take a proposition where they get $6 million per farm couple 
estate tax relief, no estate tax if their farm is $6 million or under, 
or no relief at all until 2011 under the majority proposal, leaving 
them with exposure over $3 million under their proposal as opposed to 
$6 million with our proposal, I would be interested in a show of hands 
on that one.
  I have a strong feeling that most would support relief now. In 
addition to that, we are not used to the notion of capital gains on 
inherited estates, but I heard the gentlewoman from Washington (Ms. 
Dunn) talk about the new capital gains feature that is part of their 
proposal and that it is going to be a good thing because it means you 
are going to have to keep farming or running that small business 
because if you sell it, you are going to have capital gains exposure. I 
do not think that it is a good thing that we suddenly impose capital 
gains exposure on inherited assets. That is why the stepped-up basis 
feature of our bill is so important.

                              {time}  1430

  Mr. Speaker, I yield 1 minute to the distinguished gentlewoman from 
California (Ms. Pelosi), our leader. I am so proud of her and so proud 
she joins the debate on my amendment.
  Ms. PELOSI. Mr. Speaker, I thank the distinguished gentleman for 
yielding me this time and I thank him for his very great leadership in 
shaping and bringing this alternative to the floor. It simply makes 
sense. It recognizes that family farmers, small businesses, hardworking 
Americans would like some relief from estate taxes so they can pass on 
the fruit of their labor to the next generation. What his substitute 
will do will cover 99.6 percent of all estates in America. It is 
reasonable. He would like to have paid for it, but we were told that it 
was against the rules of the House to pay for it by closing corporate 
tax shelters. It is against the rules of the House to eliminate 
corporate tax shelters. But his proposal as he presented it was 
fiscally sound and paid for, reasonable, and covered the estates of 
99.6 percent of America's estates. I thank and congratulation the 
gentleman from North Dakota for his leadership.
  Mr. Speaker, every one of us in this body, and we know this and are 
reminded of it on a daily basis, takes an oath to protect and defend 
the Constitution of the United States every time we are sworn in to a 
new term. In the Preamble to the Constitution, it says our first 
responsibilities are to provide for the common defense, to promote the 
general welfare and to provide the blessings of liberty for ourselves 
and our posterity. Let us look at that in light of what is happening on 
the floor today. The Republicans are bringing a continuation of their 
reckless tax-cutting binge that they are on to undermine the fiscal 
soundness of our country. They do it on a weekly basis, without any 
sense of what it does to plunge our children into indebtedness rather 
than investing in our future, and here they are again today.
  Provide for the common defense. Those men and women in uniform who 
provide for the common defense deserve for us to make a future worthy 
of their potential sacrifice. That future must be one that is better 
for everyone in America. Those who have provided for our common 
defense, some of whom of an earlier generation, have been called the 
greatest generation. Yet a tax cut of this nature that is on the floor 
today will benefit fewer than 10,000 estates in our country and for 
that cost we could give 100 percent of Americans a prescription drug 
benefit. Those members of the greatest generation would benefit from 
that. Instead, we have again another piece to the reckless binge that 
the Republicans are on. Pretty soon the country will tilt from the 
imbalance of all of this recklessness.
  And provide the blessings of liberty for our and our posterity. Every 
child in America is an heir to that legacy, is part of that posterity. 
Instead of investing in their future, and in fact, what we could have 
done earlier this week and we could do any minute here, to give them an 
expansion of a tax credit, instead we are plunging them into debt again 
rather than investing in their future. We have to see this goodie that 
is on the floor today, not only for itself, but what it is part of and 
how dangerous that is to our posterity and to our children's future, if 
that is the way you want to describe that.
  The Republicans' intentions are clear. They want to unravel the 
social compact that we have with the American people. The role of 
government, to educate the public, to invest in our infrastructure, to 
protect the American people, to reward our senior citizens who have 
built our country. Instead, and they speak of it with great arrogance 
now, they are proud of the shrinking of government that they have that 
is part of their design, and critical to it is to reduce the tax base; 
to reduce the tax base. Some of these people that have talked about 
previous tax cuts will be paying, those who have unearned income, whose 
income is dividend income, will not pay any taxes on the dividend and 
now they will not pay any taxes on the estate. I am talking about all 
of those people above a $6 million for a couple, $3 million for an 
individual estate.
  One of the values that the American people hold dear is the value of 
fairness. We are a country of fairness. How could it be fair to say we 
are going to give the wealthiest 10,000 families in America a bonanza 
instead of giving every senior citizen in America a prescription drug 
benefit? How could it be a sense of fairness to say to the children of 
the wealthiest families in America, we're concerned about your 
posterity, you are heirs and heiresses, but ignore the fact that every 
child in America, as I said before, is an heir and heiress to the great 
legacy that is our great country, a country of opportunity, opportunity 
that will be diminished by these tax cuts, opportunity that is 
diminished by the cutting back and investments in our children's health 
and their education and the economic security of their families by 
creating jobs instead of indebting us into the future with an impact of 
the deficits on long-term interest rates to be a drag on investment in 
our economy to create jobs.
  We have to look at all of this as one. In the same week, within a 
matter of days that we have deprived the children of minimum-wage 
earners of the expansion of the tax credit, which they could have in a 
matter of weeks if the Republicans in the House would act responsibly, 
in the same week that we, over and over, again honor our men and women 
in uniform, which they deserve, we bring dishonor to them by saying 
their children, 250,000 of them, are not worthy of the expansion of the 
tax credit. At the same time, as we do all of this, we are not building 
a future worthy of the sacrifice of our men and women in uniform. We 
are not honoring our oath of office to provide the blessings of liberty 
for ourselves and our posterity, our children, to promote the general 
welfare. Where is that in the vision of this bill except that it is 
another part of the reckless binge that the Republicans are on, a 
fiscal unsoundness that has been a failure for the first 2\1/2\ years, 
losing 3.1 million jobs, and now they want to heap more on to it.
  That is why I am so pleased that the gentleman from North Dakota took 
the lead on this. His standing on issues relating to America's family 
farmers is impeccable. He has been their champion in issues relating to 
economic security, education, rural education, rural health, rural 
housing, rural transportation in every possible way. He brings great 
credibility to this debate for his concern for the people that he 
represents with such dignity. And he gives this body an opportunity to 
immediately give tax relief to estates of $3 million for an individual 
or $6 million for a couple instead of squandering our children's future 
for the top 10,000 or fewer estates in our country at the expense of so 
much else.
  The trade-offs are appalling. We have a responsibility in this body. 
We are elected for a reason. We are not here just to give tax cuts that 
do not create jobs, that do not grow the economy and are not fair and 
plunge us into debt. I urge my colleagues to honor your

[[Page H5511]]

oaths of office. I urge you to do the responsible thing. I urge you to 
vote ``yes'' on the Pomeroy substitute.
  Ms. DUNN. Mr. Speaker, I yield 30 seconds to the gentleman from 
Michigan (Mr. Smith).
  (Mr. SMITH of Michigan asked and was given permission to revise and 
extend his remarks.)
  Mr. SMITH of Michigan. Mr. Speaker, let me just say that as a farmer, 
the value of farmland has increased dramatically. That means an average 
500-acre farm in many of the Midwest areas is now worth more than the 
$3 million allowed in this substitute. That means that a farm family 
has to sell off part of the farm to pay off the death tax debt to the 
Federal Government. $3 million is too low and means losing the farm for 
many farmers.
  Ms. DUNN. Mr. Speaker, I yield myself such time as I may consume.
  I think Members have a good idea of what we are going through here 
today. We have been through this issue before. Each time I am very 
happy to say that the House of Representatives has stood up to get rid 
of the death tax repeal permanently. Three times in the last Congress 
the House voted to repeal the death tax. We are here today only for one 
reason and that is that the rules of the other body have stymied this 
tax relief for small business people and for family farms.
  Some of my colleagues would say we should throw in the towel. They 
say the Senate will never pass this legislation, so why not compromise? 
Why even take up the permanent repeal piece of legislation? That is the 
statement made by the Pomeroy substitute. We faced similar arguments 
not very long ago when we considered an economic growth package, but 
the House did not throw in the towel and the legislation that is now 
law reflects to a very deep degree the policy decisions that were 
written right here on the floor of this House of Representatives. 
Thanks to the tenacity and the leadership of the chairman of the 
Committee on Ways and Means, the will of the House prevailed. Frankly, 
I am very optimistic that we will ultimately prevail on permanently 
repealing the death tax.
  I hope Members will not be swayed by the rhetoric and the hyperbole 
on the other side because we have heard lots of it today. On this 
issue, the opposition rhetoric and reality have very little in common. 
Why should Members vote against this amendment? Let me tell you why. 
Number one, it will be a retreat from the tax relief this body voted 2 
years ago. In fact, it would reinstate a permanent death tax. Number 
two, we need to permanently repeal the death tax so that small 
businesses and family farmers can plan their future and invest in their 
businesses. We do not need to make them spend the fruits of their labor 
on estate lawyers and accountants and insurance policies. Number three, 
this is a direct vote against the President's proposal to repeal this 
tax permanently and that is based on 80 percent of the American people 
who think that the death tax is an unfair tax.
  We need to inject greater fairness into the Tax Code. Do not be 
swayed by the arguments of those who say this is about a tax break for 
the wealthy. This is a relief from a burden that takes money from 
middle-income people who run their small businesses and their family 
farms. The wealthy people can afford to hire lawyers and accountants to 
avoid the burden of the estate tax. This is not about charitable giving 
and it is not about the wealthy. It is about people who are trying to 
raise money for the Federal Treasury and using an abhorrently unfair, 
misguided tax to do that. When people argue in favor of keeping the 
death tax, I am reminded of a story about Samuel Johnson, the English 
literary critic. An acquaintance of Johnson's had been unhappily 
married for a long time, and when the man's wife died he almost 
immediately remarried. Dr. Johnson said, ``That's an example of the 
triumph of hope over experience.'' That is what this is about, Mr. 
Speaker. It is about people who are wedded to misguided hope over 
experience.
  Mr. Speaker, I think we have had enough experience with the death 
tax, nearly 90 years worth since 1916, and that is why we should reject 
this amendment. I urge my colleagues to vote ``no.''
  Mr. Speaker, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, I yield myself the balance of my time.
  The SPEAKER pro tempore (Mr. Simpson). The gentleman from North 
Dakota is recognized for 2\1/2\ minutes.
  Mr. POMEROY. Mr. Speaker, I am very pleased that our leader was able 
to participate in the debate, and am pleased to have the participation 
of the Speaker of the House in closing for the majority, because I 
think the issue is of that importance.
  The esteemed Speaker of the House, a gentleman I admire greatly, 
representing the State of Illinois, I reckon is going to tell us 
something about how we have to do this for family farmers and the small 
businesses of this country. I think that it is time that family farmers 
and small businesses have estate tax relief and that is why I have put 
forward this amendment which brings them estate tax relief effective 
January 1 of 2004. Again, let us put the rhetoric aside and just look 
at the facts.

                              {time}  1445

  In 2004, these families that they have been talking about, 3 million 
and over, estate tax liability attaches. A couple, in our side, 6 
million liability of taxes. Meaningful relief now, 2004, 2005, 2006, 
2007, 2008. We provide meaningful relief in each of those years beyond 
what the majority proposes.
  I also expect that the Speaker of the House is going to talk a little 
bit about how we need to do this to get the economy moving again. Let 
us consider that one because something that takes effect in 2004 is 
much more related to getting the economy moving again than something 
that has no effect whatsoever until the year 2011. Consider this date, 
2011, which, again, is the first time the majority proposal has any 
effect. That is five Congresses from now and into the third 
Presidential term from now. There is nothing we can do to bind action 
at that time, nothing in the world. We might kid ourselves about it, 
but what this Congress can do is attend to that in the here and now. 
That is why I believe it is time we move estate tax relief forward, do 
it in a meaningful way, do it in a way to provide couples 6 million and 
under complete freedom from ever having to worry about estate tax 
again, and if we attach at that number, we will address completely the 
estate tax concerns of 99.65 percent of the people in this country.
  I do not know the definition of universal, but that is getting mighty 
darn close; and it beats by a mile, in my opinion, leaving people with 
the estate tax exposure they have until the year 2011.
  Here is the danger that we will never get to 2011. This is the cost 
of the proposal the first 10 years; this is the cost in the next 10 
years. I believe there is significant risk 2011 will never be allowed 
to occur under the majority bill. Let us get relief now. Please vote 
for my amendment.
  Ms. DUNN. Mr. Speaker, I yield the remainder of my time to the 
gentleman from Illinois (Mr. Hastert), the Speaker of the House.
  Mr. HASTERT. Mr. Speaker, I thank the gentlewoman from the State of 
Washington for yielding me this time. I thank her for her leadership on 
this issue.
  We have been talking about this for a long, long time. I am somewhat 
amused in hearing some of the rhetoric here on the floor this 
afternoon. I hear words like ``reckless'' and ``abominable'' and big 
words; but when we talk about this, I do not hear the word ``fairness'' 
very often. We got into a long discussion about other tax bills. And 
child tax credits, that we should vote for them. We did vote for them. 
Not only did we extend them just a little bit just like our other 
friends on the other side of the aisle wanted to extend them, to the 
year 2005, but we extended them clear out to the year 2010. On top of 
that we said that those folks who may be a fireman or may be a teacher 
and earn over $110,000 a year maybe ought to get some of this tax break 
as well, and we have added that on. So that issue is off the table. 
That is not an argument that we talk about this afternoon.
  And when we talk about other tax bills out there, our veterans and 
other issues, we had that in that bill as well, so veterans can get a 
tax break and families that lose their loved ones can

[[Page H5512]]

get a tax break. But we have passed it. Let us just get it done.
  What we are talking about here is fairness to families. We have 
talked over and over again about small businesses, the family farm, the 
orchard, the little ranch, some folks who have pulled together all 
their resources for a little business, a small manufacturing, might 
have been a real estate firm. But I grew up in one of those small 
businesses. My family owned a retail store. We were a farm service 
business; and in the 1950's the stockyards moved away from Chicago, and 
we lost that business. The feeders moved away. But families learn how 
to start over again. So we went from the feed business to the food 
business, started a restaurant business. But I will tell the Members 
all my life and my family's in those businesses, we did not take 
vacations. The kids stayed and worked in that business. We did not know 
what a paycheck was until we were 18 or 19 years old. We were paid $5 
at a time, put a little gas in the car, go buy lunch, and that was how 
we got paid.
  Families sacrifice to make small businesses work. Families sacrifice 
to make small farms better. They pay taxes all the time. People say 
this is a big tax break for people who made these businesses, but they 
paid the income taxes. They pay them every year. They pay real estate 
taxes. They pay sales taxes. They have been taxed to death; but yet 
they have made that sacrifice to make that business work, and now we 
are simply saying that as the years of those people who found those 
businesses are ending, they ought to have the comfort and relief to 
pass that business on to the next generation, to their children and to 
their grandchildren. And this is not just for rich people. This is for 
everybody who shares in the American Dream.
  The largest beginning group of people who start small businesses in 
my district are Hispanics. They are minorities. Do the Members not 
think they ought to have the same break for themselves and their 
children if they want to pass it on to the next generation? Sure, they 
should. So why are we denying it?
  We need to pass this piece of legislation so that we can keep this 
American heritage of families working, of families creating wealth, of 
families owning businesses because when they sell their business, who 
buys it? Some foreign company maybe, maybe a Fortune 500. That family 
loses that grasp in being able to carry that business forward.
  This is a plain and simple bill. We have had it on the floor under 
the leadership of the gentlewoman from Washington three times before. 
It is time that we pass it. It is time that we make it law. It is time 
that the other body understands what we are trying to do and to come 
along and make it law with us. The American people deserve this 
legislation. Let us move forward and pass it today.
  Mr. NEAL of Massachusetts. Mr. Speaker, I rise in opposition to yet 
another budget-busting bill. The Republican estate tax repeal that we 
are considering today will cost $1 trillion over the next two decades, 
and will kick into high gear just at the time the baby boomers retire.
  The Democratic substitute, however, provides immediate and greater 
estate tax relief to more families this decade than the Republican 
bill. And, the Democratic substitute would have no effect on the 
Federal budget, had the Republican leadership not refused the revenue 
offsets in the substitute.
  Our Republican colleagues say this substitute doesn't do enough, but 
the substitute would provide that 99.65 percent of decedents would not 
have to pay estate taxes. Who is in this less-than-one-percent group 
that the Republican majority is so intent on protecting?
  Well, the Washington Post today reports about some of these wealthy 
patrons in the shadows: ``So some of the affluent families who have 
bankrolled the repeal movement,'' including the heirs of the Hallmark 
greeting card company and the candy-making Mars family, ``are exploring 
estate tax changes short of repeal that could be implemented sooner.'' 
In fact, the Post reports, the heirs of Hallmark spent $60,000 while 
the Mars' heirs spent $1 million on professional Washington lobbyists 
to push their views on estate tax relief. That may be money well spent, 
considering the reckless drive to repeal in the face of exploding 
deficits.
  But, as one of the lobbyists in Washington argues to the Post, don't 
let exploding deficits dissuade you. It is not certain to happen, she 
argues, so feel free voting for $1 trillion in estate tax relief to 
that half-of-one-percent group. While the heirs are ready to cut a 
deal, the lobbyists hold strong.
  Mr. Speaker, I urge my colleagues to vote down this irresponsible 
Republican bill.
  Mr. KIND. Mr. Speaker, I rise today in strong support for making 
estate tax relief permanent so that family-owned farms and businesses 
can be passed down from generation to generation. The estate tax should 
be updated and modernized to reflect both the economic growth so many 
Americans have experienced in recent years, and the hard work of 
millions of entrepreneurs and those just trying to make a living. These 
businesses should not be punished for being successful or for simply 
having their owners pass away.
  The United States is the land of opportunity, encouraging free 
enterprise and rewarding entrepreneurs. The estate tax should be 
modified to protect family-owned small businesses and family farms from 
the threat of having to be sold just to pay the tax.
  But, Mr. Speaker, H.R. 8 would fully repeal the estate tax for all 
Americans at a time when the administration is running record deficits 
that threaten the futures of our children's children. As we all know, 
the estate tax applies to fewer than 2 percent of all estates, about 
50,000 a year. This bill would initially cost the Nation's treasury 
$161 billion over 11 years, and $840 billion over the following 10 
years.
  Mr. Speaker, the majority's policies have turned a projected $5.3 
trillion surplus into an estimated $3 trillion deficit over 10 years. 
This year alone, our budget deficit will reach a record $400 billion 
and will likely exceed $500 billion next year. However, even with these 
record deficits, we are debating yet another tax cut on top of the 
fiscally irresponsible $350 billion tax cut package this House recently 
passed.
  With the majority's policies leading our Nation toward a fiscal train 
wreck, we should not be talking about totally repealing the death tax 
and instead talk about doing something about the debt tax, which falls 
upon all Americans. The growing amount of taxes needed to pay interest 
on the national debt will double under the Republican budget, costing 
the average family of four $8,453 in 2013. That is $8,000 a year that 
the average family will have to pay in taxes that will not go to 
provide better schools, national defense, or other government services. 
With the staggering budget shortfalls facing our country, Mr. Speaker, 
complete repeal of the estate tax is simply not an option I can 
support.
  Therefore, I am supporting the substitute being offered by my good 
friend Mr. Pomeroy. His legislation will immediately help the small 
businesses and family farms by increasing the estate tax exemption to 
$3 million for individuals and $6 million for couples. This meaningful, 
commensense bill will exempt 99.65 percent of all estates from the 
estate tax.
  Mr. Speaker, it is our responsibility to avoid towering deficits and 
reduce the debt future generations will inherit. We must give them the 
capability and flexibility to meet whatever problems or needs they 
face. I cannot, in good faith, support legislation that will put our 
country further into deficit spending with a tax cut that will hurt 
future generations for the unforeseeable future.
  The SPEAKER pro tempore (Mr. Simpson). All time for debate on the 
amendment in the nature of a substitute has expired.
  Pursuant to House Resolution 281, the previous question is ordered on 
the bill and on the amendment in the nature of a substitute offered by 
the gentleman from North Dakota (Mr. Pomeroy).
  The question is on the amendment in the nature of a substitute 
offered by the gentleman from North Dakota (Mr. Pomeroy).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. POMEROY. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 188, 
nays 239, not voting 8, as follows:

                             [Roll No. 287]

                               YEAS--188

     Ackerman
     Alexander
     Allen
     Baca
     Baird
     Baldwin
     Ballance
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Case
     Castle
     Clay
     Clyburn
     Cooper
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge

[[Page H5513]]


     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Leach
     Lee
     Levin
     Lewis (GA)
     Lowey
     Lucas (KY)
     Lynch
     Majette
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NAYS--239

     Abercrombie
     Aderholt
     Akin
     Andrews
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Becerra
     Bell
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Cardoza
     Carson (OK)
     Carter
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doggett
     Dooley (CA)
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (OK)
     Manzullo
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Rangel
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--8

     Carson (IN)
     Conyers
     Gephardt
     Hulshof
     Lofgren
     Nadler
     Smith (WA)
     Taylor (MS)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are 
reminded there are 2 minutes remaining on this vote.

                              {time}  1514

  Messrs. TERRY, RANGEL, and HALL changed their vote from ``yea'' to 
``nay.''
  Mr. HILL, Mr. STARK, Mrs. CAPPS and Ms. SOLIS changed their vote from 
``nay'' to ``yea.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. HULSHOF. Mr. Speaker, on rollcall No. 287 I was inadvertently 
detained. Had I been present, I would have voted ``nay.''
  The SPEAKER pro tempore (Mr. LaTourette). The question is on the 
engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Ms. DUNN. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 15-minute vote.
  The vote was taken by electronic device, and there were--ayes 264, 
noes 163, not voting 8, as follows:

                             [Roll No. 288]

                               AYES--264

     Abercrombie
     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bell
     Berkley
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (UT)
     Blackburn
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                               NOES--163

     Ackerman
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     Emanuel
     Engel

[[Page H5514]]


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                             NOT VOTING--8

     Carson (IN)
     Conyers
     Gephardt
     Lofgren
     Nadler
     Radanovich
     Smith (WA)
     Tiberi


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaTourette) (during the vote). Members 
are advised 2 minutes are remaining in this vote.

                              {time}  1531

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. TIBERI. Mr. Speaker, on rollcall 288, The Death Tax Repeal 
Permanency Act, I was detained in the U.S. Capitol and unable to cast 
my vote. Had I been able, I would have voted ``aye'' on H.R. 8, The 
Death Tax Repeal Permanency Act.
  Mr. RADANOVICH. Mr. Speaker, I missed the vote on passage of H.R. 8, 
but would like to state that I would have voted ``aye'' on final 
passage.

                          ____________________