[Congressional Record Volume 151, Number 43 (Wednesday, April 13, 2005)]
[House]
[Pages H1910-H1919]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




PROVIDING FOR CONSIDERATION OF H.R. 8, DEATH TAX REPEAL PERMANENCY ACT 
                                OF 2005

  Mr. HASTINGS of Washington. Mr. Speaker, by direction of the 
Committee on Rules, I call up House Resolution 202 and ask for its 
immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 202

       Resolved, That upon the adoption of this resolution it 
     shall be in order to consider in the House the bill (H.R. 8) 
     to make the repeal of the estate tax permanent. The bill 
     shall be considered as read. The previous question shall be 
     considered as ordered on the bill and on any amendment 
     thereto to final passage without intervening motion except: 
     (1) one hour of debate on the bill equally divided and 
     controlled by the chairman and ranking minority member of the 
     Committee on Ways and Means; (2) the amendment in the nature 
     of a substitute printed in the report of the Committee on 
     Rules accompanying this resolution, if offered by 
     Representative Pomeroy of North Dakota or his designee, which 
     shall be in order without intervention of any point of order, 
     shall be considered as read, and shall be separately 
     debatable for one hour equally divided and controlled by the 
     proponent and an opponent; and (3) one motion to recommit 
     with or without instructions.

  The SPEAKER pro tempore. The gentleman from Washington (Mr. Hastings) 
is recognized for 1 hour.
  Mr. HASTINGS of Washington. Mr. Speaker, for the purpose of debate 
only, I yield the customary 30 minutes to the gentleman from 
Massachusetts (Mr. McGovern), pending which I yield myself such time as 
I may consume. During consideration of this resolution, all time 
yielded is for the purpose of debate only.
  (Mr. HASTINGS of Washington asked and was given permission to revise 
and extend his remarks.)
  Mr. HASTINGS of Washington. Mr. Speaker, House Resolution 202 is a 
structured rule providing for 1 hour of general debate on H.R. 8, a 
bill to make the repeal of the estate tax permanent, to be equally 
divided and controlled by the chairman and ranking minority member of 
the Committee on Ways and Means. The rule provides for consideration of 
the amendment in the nature of a substitute printed in the Committee on 
Rules report accompanying the resolution, if offered, by the gentleman 
from North Dakota (Mr. Pomeroy) or his designee, which shall be 
considered as read and shall be separately debatable for 1 hour equally 
divided and controlled by the proponent and an opponent.
  Finally, Mr. Speaker, the rule waives all points of order against the 
amendment printed in the report and provides one motion to recommit 
with or without instructions.
  Mr. Speaker, H.R. 8, a bill introduced by the gentleman from Missouri 
(Mr. Hulshof), permanently repeals the death tax. I commend the 
gentleman from Missouri (Mr. Hulshof) for championing an end to the 
death tax, as my former friend and colleague, Jennifer Dunn, did while 
serving in Congress. Through Jennifer's tireless efforts, in 2001 
Congress acted in a bipartisan fashion to gradually phase out the death 
tax and fully eliminate it in 2010.
  However, if Congress does not extend the death tax repeal beyond 
2010, in 2011 small business owners and family farmers will once again 
be assessed the full death tax at the maximum 2001

[[Page H1911]]

rate. The death tax is a form of double taxation and is simply unfair.
  The last thing families in central Washington and across the Nation 
should have to worry about when a loved one dies is losing the family 
farm or business in order to pay the Internal Revenue Service. But, 
sadly, that is the situation many hard-working families would face if 
the death tax is not permanently abolished.
  With permanent elimination of this tax, farmers and business owners 
will have the sense of security they need to plan for the financial 
future of their businesses, farms, or families. Death taxes are an 
unfair assault on every American's potential life savings. Today, we 
have the opportunity to bury the death tax for good.
  The Committee on Rules reported House Resolution 202 by a voice vote. 
Accordingly, I encourage my colleagues to support both the rule and the 
underlying bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. McGOVERN asked and was given permission to revise and extend his 
remarks.)
  Mr. McGOVERN. Mr. Speaker, for years the Republican leadership has 
misled the American public about the estate tax. Today, because of that 
deceptive campaign, millions of Americans seem to believe they will be 
subject to the so-called death tax. They have been lied to.
  Facts are stubborn things, and the facts prove that the Republican 
leadership is once again trying to pass a bill that helps the very 
wealthy few at the expense of everyone else.
  The truth is that the overwhelming majority of American families, 
99.7 percent, are not subject to estate taxes. Let me repeat: 99.7 
percent of American families are not subject to estate taxes.
  The truth is that this is the wrong bill at the wrong time that helps 
the wrong people, and it should be defeated. This permanent repeal of 
the estate tax does not help the average American. Instead, it benefits 
the heirs of the wealthy. Paris Hilton is doing just fine. She does not 
need another tax cut by the Republicans.
  My colleague, the gentleman from Washington (Mr. Hastings), will 
claim that this bill will help family farmers and small business owners 
pass their assets, their farms and businesses, on to their children. 
The reality is that most of these family farmers and small business 
owners are already exempt from the estate tax.
  Further, as The Washington Post pointed out today, permanently 
repealing the estate tax may actually hurt more family farmers and 
small businesses than it would help because of the cumbersome new 
reporting requirements and changes in how assets are valued.
  Let us look at the facts. Exempting estates up to $1 million, the 
original level before the 2001 Bush tax cut, leaves only the top 2 
percent of the estates in the country. But current law goes well beyond 
the $1 million exemption; and to hide the real cost of their bad 
economic policies, the Republican leadership included a provision that 
sunsets the 2001 tax cut in 2011.
  Mr. Speaker, for most of the 20th century, this country operated on a 
progressive taxation system. Those who could afford it paid their fair 
share. We looked out for each other. We provided food to the hungry, 
shelter to the homeless, assistance to the unemployed, and health care 
to the sick.
  But the Republican leadership wants to turn that system upside down. 
They believe the wealthy should be exempt from paying taxes and the 
poor should fend for themselves. It is wrong, and we have to stop it.
  Let me connect the dots for my Republican friends. They say there is 
a deficit and we need to tighten our belts to pay down the debt. Of 
course this debt is of their creation. President Bush came into his 
first term with a surplus and ended his second term with the largest 
deficit in the history of the United States of America, and now they 
bring forward another tax cut that costs $290 billion according to the 
Joint Committee on Taxation.

                              {time}  1130

  Some private groups estimate that this bill will ultimately cost 
closer to $1 trillion.
  Where is that money going to come from? It is a credit card bill that 
they are passing on to our children and our grandchildren. That is the 
actual estate tax. That is the real legacy they are leaving to future 
generations.
  Mr. Speaker, we are at war, but the only people being asked to 
sacrifice are those who can least afford it. The wealthiest of the 
wealthy are getting a free ride at this very difficult time in our 
history.
  Look at the budget resolution. The Republican leadership pushed the 
budget resolution through earlier this month. What do they do? They cut 
food stamps. They cut Medicaid. They cut education programs. They cut 
environmental protection. They cut community development block grants. 
They cut school breakfasts and school lunches. Why? All so a few people 
can inherit a few more billion dollars tax free from their relatives.
  Our colleague from North Dakota (Mr. Pomeroy) will offer an amendment 
that will set the exemption for estates at $3 million for individuals 
and $7 million for couples. This would cost dramatically less than the 
Republican bill, $72 billion compared to $290 billion, and it would 
exempt 99.7 percent of all estates from ever facing the estate tax. 
This is a commonsense compromise that should receive near unanimous 
support.
  Mr. Speaker, the truth is out there, but the Republican leadership is 
too stubborn and too arrogant to face it. We are at war. Health care 
costs are spiraling out of control. Poverty in America is increasing. 
More Americans go to bed hungry at night. Our children are falling 
behind in math and science. I, for one, do not believe the answer to 
these challenges is a permanent repeal of the estate tax.
  I urge my colleagues to do the right thing and defeat this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 3 
minutes to the gentlewoman from West Virginia (Mrs. Capito), a valuable 
member of the Committee on Rules.
  Mrs. CAPITO. I thank the gentleman from Washington for yielding me 
this time.
  Mr. Speaker, I rise today in strong support of the rule and the 
underlying legislation. I am proud to be a cosponsor of H.R. 8 and 
thank the gentleman from Missouri for his leadership in offering this 
bill.
  I was proud to be in this Chamber 4 years ago on the day Congress 
began phasing out the death tax. As a result, thousands of jobs were 
saved and second and third generations were able to take charge of 
their family's business. We knew when we passed that law the phaseout 
was not a permanent fix. Today we have the opportunity to complete 
unfinished business. If we do not act now to permanently eliminate the 
death tax, it will be revived at the stroke of midnight on January 1, 
2011. Bringing back the death tax will drive the final nail in the 
coffin for America's next generation of small business owners.
  The Death Tax Repeal Permanency Act represents the changes to our Tax 
Code called for by our Nation's farmers and small business owners who 
want to pass their family business on to the next generation. Small 
business owners and farmers devote their time, energy and money into 
building a business so it can be passed on to their sons or daughters. 
In the absence of the death tax, these small businesses become a legacy 
for one generation to pass on to the next. With the death tax, families 
face a whopping tax bill on the property and assets even though taxes 
have already been paid annually by the owners.
  The death tax is an overwhelming burden, forcing many families to 
sell their businesses just to pay the 37 to 55 percent tax. As a 
result, jobs are lost and generations of family toil are plundered by 
the government.
  Permanently repealing the death tax will help small businesses create 
new jobs. A 2002 study showed that an extra 100,000 jobs a year would 
be created if the death tax were permanently repealed. The Wall Street 
Journal wrote in 1999 that 60 percent of small businesses would add 
jobs if death taxes were not on the books.
  The very threat of a revived death tax has a negative impact on small 
business. Even with the temporary

[[Page H1912]]

phaseout, business owners must continue to plan for paying that tax. To 
help owners hire new workers and continue to invest in their business, 
they need to know that the death tax is gone for good.
  We must not allow this small business killer to rise from the dead. 
The House today has an opportunity to rid the Nation of this tax that 
kicks families when they are down, takes away a lifetime of hard work, 
and stifles job growth. I hope that my colleagues will join me today in 
supporting the rule and the underlying legislation.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  We hear the phrase ``death tax,'' which really is kind of a misnomer. 
There is no such thing. When I am dead, I am dead. You cannot collect 
any taxes from me. The issue is whether or not estates in the billions 
of dollars should be subject to any taxation. We are not talking about 
small family farms or small businesses. That is not what this is about. 
If you read the Washington Post today, it is very clear what this is 
about. It is about the most extremely wealthy companies, the most 
extremely wealthy people in this country.
  The gentleman from North Dakota has a substitute that would basically 
exempt 99.7 percent of all estates from any estate tax. So let us be 
clear about what is going on, and let us also be clear about the cost 
to our kids. The Joint Committee on Taxation says that this is going to 
cost up to $290 billion. There seems to be no concern on the other side 
of the aisle about what this does to our deficit or our debt. This is 
not paid for. They make no attempt to pay for it.
  Let me just remind my colleagues that the debt that we are faced with 
right now is close to $8 trillion, and the interest on that debt is 
astonishingly high. That is the legacy that they are passing on to our 
kids.
  Our good colleague from Tennessee (Mr. Tanner) in a presentation, I 
thought, said it best. He said, so people can understand what the debt 
means, if you stack up one thousand dollar bills, a million dollars 
would be about a foot high; a billion dollars would be about the size 
of the Empire State Building; a trillion dollars would be 1,000 Empire 
State Buildings. Our debt is close to $8 trillion, and there is no 
outrage on the other side, there is no concern about what we are doing 
and what it means to our economy by making these tax cuts permanent.
  I think that people need to understand what is going on here. This is 
not about small family farms. It is not about small businesses. This is 
about helping the wealthiest of the wealthy.
  Mr. Speaker, I yield 6 minutes to the gentleman from North Dakota 
(Mr. Pomeroy).
  Mr. POMEROY. I thank the gentleman for yielding me this time.
  Mr. Speaker, this rule brings an important debate to the floor. Let 
me tell you what is not on the floor. What is not being debated is 
whether there should be additional estate tax relief. We agree there 
should be. Much has been accomplished over the last few years in that 
regard. The estate tax level attached at $600,000 per individual at the 
beginning of this decade. So that, as my colleague from West Virginia 
talks about the concern of estate tax on small businesses and farms, 
that may have been more the case at that time. Certainly it is less the 
case now. The estate tax level attaches at $1.5 million per individual, 
$3 million per couple, and obviously the number of estates that would 
have tax consequences has fallen significantly.
  Is it enough? No. Let us do something quite dramatic. The proposal 
that I am offering as a substitute would double from where we are today 
and in a very certain and immediate way bring to $6 million the estate 
tax exclusion for couples. Couples across this country possessing less 
than $6 million in assets, no estate tax. Nothing. Gone. Immediately 
and certainly. By the end of the decade, it moves to $7 million. By 
2009, there could be $7 million in a couple's estate.
  Is this meaningful? You bet it is meaningful. You look at the 
numbers, and it will tell you that we all but make this problem go 
away. Looking across this country, 99.7 percent of estates in this 
country no longer have estate tax issues under the substitute that I am 
advancing. That is 997 out of 1,000. That is pretty significant.
  There are a couple of other differences. It is one-quarter of the 
cost of the majority proposal, $290 billion, that they are talking 
about. There are things they are saying that just are not so, that 
small businesses and family farms have major estate tax issues when the 
level is $6 million per couple. They do not.
  I represent family farms and small businesses all across the State of 
North Dakota. I am telling you, if we set this level at $6 million per 
couple, to move to $7 million by the end of the decade, we largely take 
care of the problem.
  But beyond that, going forward, there is yet another very important 
wrinkle in the majority proposal. This is the capital gains tax that 
their proposal would add. It is unlike a tax relief bill that I have 
seen before, because, for everyone it helps, it adds capital gains 
taxes for many more. Right now in the handling of an estate, there is 
no capital gains tax. Under their proposal, they establish something 
called the carryover basis. Not to get technical with you, but what 
that does is impose capital gains tax exposure on estates. The way the 
numbers work out, more estates are going to end up with capital gains 
consequences than get relief from estate taxes. So you help a few; you 
harm a lot. It does not make much sense to me. Again, at a total budget 
cost of $290 billion over the first 10 years and more than $800 billion 
over the second 10 years.
  This is a budget buster, my friends. At a time when we are talking 
about how we address the long-term solvency of Social Security, to 
just, without a concern, pass a $290 billion bill to help three-tenths 
of 1 percent of the most affluent in this country seems to be standing 
priorities directly on their head. The very people that favor 
privatizing Social Security, which is going to add risk in the Social 
Security benefit, which is going to reduce benefits sharply because 
they change the inflation index going forward, that is going to reduce 
the benefits on our children and grandchildren, want to now run up the 
debt on our children and grandchildren in order to help that three-
tenths of 1 percent, the very wealthiest among us. What kind of sense 
is that?
  So we have proposed something quite different, immediate and certain 
estate tax relief, $6 million per couple, $3 million per individual, 
right now, and in 2009, $7 million per couple, $3.5 million per 
individual. And, once more, a proposal that I think we would want to 
consider closely, we could take the difference between the majority 
bill and our bill and dedicate it to the Social Security trust fund.
  There is a lot of talk from the other side: Where's your plan? 
Where's your plan? How about this one? Let us start by addressing the 
problem and making a good deal of it go away.
  If we took the difference, the amount of estate tax revenue over the 
$7 million figure at the end of the decade, and dedicated it to the 
Social Security trust fund, we could fill 40 percent of the hole over 
75 years, almost make half the problem go away, while preserving 
benefits, while keeping the inflation adjustment that our grandchildren 
need.
  I think in the consequence of our floor discussions today it is 
important to talk about both concepts, the immediate and certain estate 
tax relief alternative that we are advancing and what we could do with 
the difference. They say this estate tax has to be repealed, that it is 
the most unfair thing in the world. I can think of something even more 
unfair, and that is cutting the benefits of Social Security to our 
children and grandchildren. That is more unfair in my opinion.
  We do not have to make that trade-off. We can make estate tax go away 
for 99.7 percent of the people in this country, take the balance 
between the bills, invest it in the Social Security trust fund and deal 
with almost half of the problem of the underfunding over the next 75 
years.
  That is what the minority is bringing forward today. It is a 
thoroughly considered and balanced alternative, I believe a reasonable 
and responsible alternative, and I urge the Members' consideration.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 3 
minutes to the gentleman from California (Mr. Cox).

[[Page H1913]]

  Mr. COX. Mr. Speaker, I rise in support of this rule and the bill 
authored by the gentleman from Missouri (Mr. Hulshof) and commend him 
for his great work on behalf of America's job creators.
  I just heard the Democratic Member say that only a tiny fraction of 
the people who die in America and their families have to pay this death 
tax. Apparently, the gentleman has never had to go through the dreaded 
form 706. How many of us right now are trying to deal with form 1040? 
Even though we deal with it year in and year out, we still cannot 
figure it out. What we are trying to get rid of is the complexity of 
the Tax Code and the $20 billion a year that the death tax consumes 
from the American economy that does not go to the Treasury but, rather, 
goes to tax lawyers and accountants and life insurance sales and keyman 
policies and so on, all of this estate planning which is economic 
waste. It is hurting our economy.
  Eighty-eight pages of the Internal Revenue Code, 88 pages of law, are 
devoted to trying to close the loopholes that have erupted over the 
20th century as our experiment with the death tax has shown that it 
actually costs the government and costs the American people money to 
maintain it. Much as we would like to be able to tax the super-rich, 
they get out of the tax with trusts and loopholes and so on, as will 
the rich after we do what the Democrats want, which is to create some 
complicated new definitions to try and cabin off this tax so it only 
affects a few people. The only people who will actually be hurt by the 
burden of these new complex rules and laws will be people who we do not 
want to pay the tax in the first place.

                              {time}  1145

  If at the time that one of one's loved ones dies, just to file the 
return, not pay the tax, they are going to have to plow through all of 
these helpful instructions that are in such small print that even a 
high school student might need reading glasses to get through some of 
these 40 pages. But here is the kind of helpful thing one will find 
when a loved one dies: ``Generally, you may list on Schedule M all 
property interests that pass from the decedent to the surviving spouse 
and are included in the gross estate. However, you should not list any 
`nondeductible terminable interests,' described below, on Schedule M 
unless you are making a QTIP election. The property for which you make 
this election must be included on Schedule M. See `qualified terminable 
interest property' on the following page.
  ``For the rules on common disaster and survival for a limited period, 
see section 2056(b)(3).''
  This is just one little paragraph out of 40 pages of this. They are 
going to have to hire a lawyer. They are going to have to hire an 
accountant to go through all this and list everything that their family 
member has accumulated throughout his or her entire life just to prove 
that they do not owe this tax. Anybody who is slogging through their 
form 1040 trying to file their income tax return now knows what I am 
talking about.
  We are trying to eliminate the complexity of this law which hurts 
every single person who works for a small business in America. When 
that small business is liquidated in order to pay the death tax because 
it is a tax on property of small businesses, people lose their jobs, 
and that is where the burden and the incidence of this tax falls.
  Repealing the death tax once and for all is the right thing to do, 
and I am very pleased that this rule will bring that to the floor.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Let me again remind people that we are talking about three-tenths of 
1 percent who actually pay an estate tax. In that category we are not 
talking about family farms or small businesses. We are talking about 
Paris Hilton, and I would say to my colleague from California that I 
think she has enough accountants and lawyers to be able to fill out 
form 706.
  Mr. Speaker, I yield 3 minutes to the gentleman from Vermont (Mr. 
Sanders).
  Mr. SANDERS. Mr. Speaker, this is actually one of the more absurd 
debates that I have ever heard in my life, and I think anybody who 
turns on the television and wonders what is going on here in Congress 
will then conclude that the reason that this institution is held in so 
low regard is because we have debates like this.
  Let us look at what is going on in America today. The middle class is 
shrinking. Study after study shows that real wages for American workers 
are going down; and in the last 4 years, 4 million more Americans have 
entered the ranks of poverty. While the middle class shrinks, poverty 
increases. The richest people in America have never had it so good. 
CEOs of large corporations now make 500 times what their workers make. 
In America today we have the most unfair distribution of wealth and 
income in the history of our country and of any major country on Earth.
  So what are we discussing here today? Are we going to raise the 
minimum wage to a living wage? Are we really going to protect family 
farmers from low prices? Are we going to stop the hemorrhaging of 
decent-paying jobs going to China? Do not be silly. We do not talk 
about that because corporate America does not fund those concerns.
  The richest people in America said several years ago, Hey, yes, we 
are worth billions of dollars. That is not enough. We are going to 
contribute money to our Republican friends, and do you know what they 
are going to do? They are going to lower our taxes even more.
  Mr. Speaker, we are here debating an issue that has zero impact on 98 
percent of the American people. Nobody in the middle class, nobody in 
the working class, no low-income person pays one penny in the estate 
tax. All of the estate tax is paid by the wealthiest 2 percent. If 
their proposal passes, half of the benefits go to the richest one-tenth 
of 1 percent.
  I want to ask my friends a question. This is a question. As my 
colleagues know, President Bush and the Republican leadership are 
supporting increased fees on our veterans. They are raising 
prescription drug fees for our veterans, and they want to charge a $250 
co-pay for veterans of wars who enter the VA hospital. I would like to 
ask my Republican friends do they think it is a good idea to give tax 
breaks today to billionaires and to charge veterans significantly 
increased fees for health care. That is my question.
  I am listening. I am listening. I do not hear an answer.
  That is the answer. They are substantially increasing health care 
costs for veterans who have put their lives on the line defending this 
country. They are increasing our deficit, increasing our national debt, 
all on behalf of the richest people in this country. This bill is 
bought and paid for by millionaires and billionaires, and anyone who 
votes for it should be ashamed of themselves.


                announcement by the speaker pro tempore

  The SPEAKER pro tempore (Mr. Simpson). The Chair would remind persons 
in the gallery that they are here as guests of the House and that any 
manifestaton of approval or disapproval of proceedings or other audible 
conversation is in violation of the rules of the House.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 5 minutes to the 
gentleman from Georgia (Mr. Westmoreland).
  Mr. WESTMORELAND. Mr. Speaker, I thank the gentleman from Washington 
(Mr. Hastings) for yielding me this time.
  Mr. Speaker, I rise today in support of this rule and H.R. 8. I 
applaud the efforts of the leadership and the gentleman from Missouri 
in bringing forward H.R. 8 to finally bury the death tax once and for 
all.
  One thing I have learned in the short time I have sat here is that 
the Democrats really look at the person whom this bill would affect, 
and, by the way, I do not think any of them are watching this on TV 
right now because they are all probably at work, but they are

[[Page H1914]]

looking at the person whom this bill would affect as someone who got up 
early, worked hard all his life, looked after his family, built 
infrastructure, saved money, put capital back into this system, 
provided jobs, benefits, health care for people, and the Democrats look 
at this individual as a gift who keeps on giving.
  One of the things our country needs is individuals who are willing to 
work hard and save their money. It is the basis of our economy and the 
American Dream. This country is a wonderful land of opportunity. Anyone 
can work hard and be whatever they want to be in this country. Yet our 
tax system directly discourages savings by limiting contributions to 
IRAs and taxing dividends. When one works hard and saves, they should 
be rewarded, not punished. The current death tax punishes people for 
saving their own money, for fulfilling the American Dream.
  Tax cuts do not cost the U.S. Government money. This is something 
that I think is misunderstood up here. Cutting taxes does not cost the 
government money. It allows people who earn that money to keep more of 
it in their pocket. This Congress must recognize that tax cuts spur 
economic growth. We have seen this in the Reagan tax cuts that led to 
the boom of the 1990s and in this President's tax cuts that have 
brought us out of the recession that this country experienced after 9/
11.
  As a small business owner, I know firsthand how hard one has to work 
to build a business. And most times the assets of a family business are 
not in cash, or easily so. When a family business is hit with an estate 
tax, it often requires the selling of a large amount of inventory or 
other assets in order to pay the debt. That is not right. That hurts 
families who want to continue the legacy of their loved ones who have 
passed away. Why do we want to harm or punish or exploit those who work 
their hardest to create an inheritance for their loved ones?
  The death tax has made crooks out of honest people because they have 
to search for all kinds of ways to avoid paying the tax. And the reason 
they do not want to pay this tax is because they hate to see everything 
that someone that they loved and deeply cared about who spent their 
whole life building is taken away by the government.
  Small businesses should not be run while looking over one's shoulder 
to make sure the tax man is not about to get them. Small business 
owners must be able to focus on their business. More than 70 percent of 
small family businesses do not last beyond the second generation, and 
the estate tax plays a large part in that. Having someone pay half of 
their assets to the government is absolutely wrong no matter what is 
being paid. We all know that people can manage their own money much 
better than the government.
  One of the things I hate more than anything is a double tax. When the 
government takes its bite out of the apple, it should not get a second 
bite. Yet the death tax takes an even bigger bite out of the money that 
has already been taxed. Economic studies have shown that the cost of 
trying to comply or avoid the death tax consumes as much out of the 
economy as is generated by the death tax itself.
  The death tax also hits those who cannot afford a lawyer or a CPA to 
help them. If their assets are not in cash, as in most family 
businesses they are not, they have to make a huge burden and sacrifice 
that they are not ready for by having to get somebody else to advise 
them about how to take care of their families and their children. And 
in spite of all this, the death tax does not even generate that much 
revenue or ``windfall profit'' for the government, yes, a ``windfall 
profit'' for the government, while placing this huge burden on the 
families of this country. It is not right.
  The idea of the tax coming back in 2011 is amazing. It just does not 
make sense, and people cannot make any long-term financial plans. 
Getting rid of the death tax will simplify our Nation's laws and ease 
the burden on our country. If it takes a CPA or a lawyer to figure out 
what one is trying to do and what burdens the government has put on 
them, then it is too much of a burden. We need to do everything we can 
to lessen that burden. Repealing the death tax is the right thing to 
do.
  Although I was not in Congress when the phase-out of the death tax 
began, I am thrilled to be here today to cosponsor and vote for it to 
be completely eliminated. And I urge all of my colleagues to do the 
same.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Let me just make a couple of points here. This is not about 
protecting small businesses or family farms. I mean, I think that is 
clear to everybody here. This is about protecting the three-tenths of 
the 1 percent wealthiest people in this country.
  I enter into the Record an article that appeared in today's 
Washington Post that really kind of explains what this debate is all 
about, about how Mars candy, Gallo wine, and Campbell soup fortunes 
have been lobbying for the complete repeal of the estate tax for some 
time so they can end all taxation on their inheritance. That is what 
this is about. This is not about working families. This is not small 
family farms or small businesses. This is about protecting the richest 
of the rich.

               [From the Washington Post, April 13, 2005]

             Erosion of Estate Tax Is a Session in Politics

                         (By Jonathan Weisman)

       In 1992, when heirs to the Mars Inc. fortune joined a few 
     other wealthy families to hire the law firm Patton Boggs LLP 
     to lobby for estate tax repeal, the joke on K Street was that 
     few Washington sightseers had paid so much for a fruitless 
     tour of the Capitol.
       Today, the House is expected to vote to permanently repeal 
     the estate tax, moving the Mars candy, Gallo wine and 
     Campbell soup fortunes one step closer to a goal that once 
     seemed quixotic at best: ending all taxation on inheritances.
       ``I think this train has an awful lot of momentum,'' said 
     Yale University law professor Michael J. Graetz, a former 
     senior official in the Treasury Department of President 
     George H.W. Bush.
       Last month, Graetz and Yale political scientist Ian Shapiro 
     published ``Death By A Thousand Cuts,'' chronicling the 
     estate tax repeal movement as ``a mystery about politics and 
     persuasion.''
       ``For almost a century, the estate tax affected only the 
     richest 1 or 2 percent of citizens, encouraged charity, and 
     placed no burden on the vast majority of Americans,'' they 
     wrote. ``A law that constituted the blandest kind of common 
     sense for most of the twentieth century was transformed, in 
     the space of little more than a decade, into the supposed 
     enemy of hardworking citizens all over this country.''
       The secret of the repeal movement's success has been its 
     appeal to principle over economics. While repeal opponents 
     bellowed that only the richest of the rich would ever pay the 
     estate tax, proponents appealed to Americans' sense of 
     fairness, that individuals have the natural right to pass on 
     their wealth to their children.
       The most recent Internal Revenue Service data back 
     opponents' claims. In 2001, out of 2,363,100 total adult 
     deaths, only 49,911--2.1 percent--had estates large enough to 
     be hit by the estate tax. That was down from 2.3 percent in 
     1999. The value of the taxed estates in 2001 averaged nearly 
     $2.7 million.
       Congressional action since 2001 will likely bring down the 
     number of taxable estates still further. President Bush's 10-
     year, $1.35 trillion tax cut in 2001 began a decade-long 
     phase-out of the estate tax. The portion of an estate 
     exempted from taxation was raised from $675,000 in 2001 to 
     $1.5 million in 2004. Next year, the exemption will rise to 
     $2 million for individuals and $4 million for couples.
       The impact has been clear, tax policy analysts say. The 
     number of estates filing tax return is falling sharply, from 
     123,600 in 2000 to an expected 63,800 this year. And only a 
     small fraction of those will actually be taxed.
       Under the 2001 legislation, however, all of the tax cuts, 
     including the estate tax's repeal, would be rescinded in 
     2011. The vote today is the first to address the sunset 
     provisions.
       House Democrats, led by Rep. Earl Pomeroy (D-N.D.), today 
     will propose permanently raising the exclusion to $3.5 
     million--$7 million for couples. That would be enough to 
     exempt 99.7 percent of all estates. The Pomeroy bill would 
     cost the Treasury $72 billion over 10 years, compared with 
     the $290 billion price tag of a full repeal through 2015, 
     according to the Joint Committee on Taxation.
       ``The ideological fervor that is admittedly still pretty 
     strong in some quarters is now being tempered by the runaway 
     debt that is weighing down this country,'' said Pomeroy, who 
     thinks voters are ready for a compromise.
       Indeed, Senate Majority Leader Bill Frist (R-Tenn.) has 
     asked Sen. Jon Kyl (R-Ariz.), a repeal proponent, to find a 
     compromise that could win a filibuster-proof 60 votes in the 
     Senate this year, even if it falls short of full repeal.
       A compromise that includes any estate tax, no matter how 
     small, may fail if the fervent repeal coalition holds firm, 
     Graetz said. Repeal opponents have been unable to whip up big 
     support, he said, because they never made the emotional case 
     that the American

[[Page H1915]]

     belief in equal opportunity runs counter to the existence of 
     an aristocracy born to inherited riches. Paris Hilton, who 
     inherited her wealth. and now famously enjoys spending it, 
     could have been their counter to the small-business owners 
     and family farmers whom repeal proponents held up as the 
     victims of the tax.
       ``The public doesn't believe people should be taxed at the 
     time of death, whether they are paupers or billionaires,'' 
     said Frank Luntz, a Republican pollster who has been working 
     on estate tax repeal for a decade. ``Compromise is very 
     difficult because the public doesn't want it to exist.''
       It is that sentiment that the fledgling repeal forces 
     tapped into when they mobilized more than a decade ago. A 
     little-known Southern California estate planner named 
     Patricia Soldano launched her repeal effort with the backing 
     of about 50 wealthy clients, with the Gallo and Mars families 
     leading the way. Other contributors included the heirs of the 
     Campbell soup and Krystal hamburger fortunes. Frank Blethen, 
     whose family controls the Seattle Times Co., was also 
     pivotal.
       The effort caught fire when small-business groups such as 
     the National Federation of Independent Business and 
     agriculture groups led by the National Cattlemen's Beef 
     Association joined in.
       By 1994, Newt Gingrich's Republican insurgents had latched 
     onto the estate tax issue, but the Contract With America 
     called for an estate tax reduction, not repeal. In 1995, 
     Luntz poll-tested the term ``death tax'' and advised the new 
     GOP majority to never use the terms ``inheritance'' or 
     ``estate tax'' again.
       By then, Soldano's Policy and Taxation Group was spending 
     more than $250,000 a year on lobbying. A parade of small-
     business owners and family farmers appealed to their 
     congressmen, worried that they could not pass on their 
     enterprises to their children, even though most of them would 
     not be affected by the tax.
       ``There's been a sustained, determined campaign of 
     misinformation that in the end has left the American people 
     with a very different notion of what the estate tax is and 
     does than actually exists,'' Pomeroy said.
       But ultimately, whether people believe the estate tax will 
     affect them has little bearing on support for repeal. Early 
     this year, with Soldano's money, Luntz again began polling, 
     this time in the face of record budget deficits and lingering 
     economic unease. More than 80 percent called the taxation of 
     inheritances ``extreme.'' About 64 percent said they favored 
     ``death tax'' repeal. Support fell to a still-strong 56 
     percent when asked whether they favored repeal, even if it 
     temporarily boosted the budget deficit.
       Democrats ``still don't get it,'' Graetz said. ``The 
     politics are still very powerful.''

  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 3 minutes to the 
gentleman from Florida (Mr. Putnam), a powerful member of the Committee 
on Rules.
  Mr. PUTNAM. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I am proud to be a part of the Committee on Rules, which reported out 
a very balanced rule that allows both sides to be heard on this issue.
  The interesting thing about this issue is that there is agreement 
that the death tax should go away. There is disagreement about the 
numbers and the number of people for whom it should go away, our side 
believing that it should be totally repealed, the other side believing 
that there are a certain number of people who should be exempt from 
paying this. It is good to see that we have finally come together to 
recognize that the death tax is a killer for small businesses and 
family farms and ranches. I am glad that that is a bipartisan 
agreement, and I am glad that this rule reflects that.
  A wise man once joked that there is always death and taxes, but death 
does not get worse every year.
  With the death tax in place, that is not true. Each year that passes, 
many family-owned farms and businesses are subject to this tax. It is 
fundamentally unfair that death is a taxable event. Taxes have already 
been paid on the assets subject to the taxation under the death tax 
during the lifetime of the owners. It amounts to a second bite of the 
apple for the government.
  With the repeal of the tax, more small businesses and farms will stay 
in the hands of those families. Currently, the death tax is a leading 
cause of dissolution. And we see this all the time in agriculture, that 
when the grandparents die they have to sell off a portion of the land 
so that the government gets their share so that they break up the very 
asset that made that farm what it was. They eliminate the opportunity 
for that next generation to participate even though they worked on it 
themselves, growing up, paying their way through school, helping to 
support all of the family efforts. That is a great cause of the loss of 
rural communities and small-time agriculture in this country, and I 
think that we can all agree that that is a shameful loss to our Nation. 
They form the backbone of our rural heritage.
  The death tax is a virtue tax in the sense that it penalizes work, 
penalizes savings and thrift in favor of large-scale consumption.

                              {time}  1200

  In other words, if those same families had sold off everything and 
spent it, then they would not be subject to the death tax. But the fact 
that they made a decision to hold something, to build it, to grow it so 
that their children and grandchildren might have a farm to continue to 
cultivate the bread basket for the world in, then they are taxed. Where 
is the fairness in that?
  Mr. Speaker, 87 percent of family businesses do not make it to the 
third generation. Unquestionably, the death tax plays a tremendous part 
in that statistic. This is especially true of businesses that are land-
rich and cash-poor. That is what we call it in the South, Mr. Speaker, 
where you have all of your assets tied up in things. You cannot afford 
a brand-new car, you cannot afford a brand-new tractor, you cannot 
afford all the nicer things; but yet on paper you are quite wealthy, 
because you purchased land, you gave value to that land as time passes.
  Mr. Speaker, I urge that we adopt the rule and continue forward with 
the repeal of this scurrilous tax on death.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  I appreciate the words from my colleague on the Committee on Rules, 
the gentleman from Florida; but quite frankly, I do not know what he is 
talking about. The small businesses and the family farms, we are all in 
agreement that they need to be protected. That is not what the debate 
is about here today.
  The debate is about whether three-tenths of 1 percent of higher 
income-earners in this country deserve additional tax relief at a time 
when they are cutting Medicaid, veterans benefits, when they are 
dipping into the Social Security trust fund.
  This is not a death tax. What they are talking about is a debt tax,
D-E-B-T, adding to the deficits and the debt of this country. Right 
now, this year, we are paying $177 billion this year in interest on the 
debt. Next year it will be $213 billion. It is ridiculous. We need to 
rein in some of these extravagant tax cuts for the wealthy so that we 
can get our fiscal house in order here in this country, so we can start 
taking care of Social Security in the long term, so we do not have to 
cut veterans benefits or educational benefits or environmental 
protection.
  Mr. Speaker, I at this time I will enter into the Record an article 
by E.J. Dionne entitled ``The Paris Hilton Tax Cut.''

               [From the Washington Post, Apr. 12, 2005]

                        The Paris Hilton Tax Cut

                         (By E. J. Dionne Jr.)

       The same people who insist that critics of Social Security 
     privatization should offer reform proposals of their own are 
     working feverishly to eliminate alternatives that might 
     reduce the need for benefit cuts or payroll tax increases.
       I refer to the fact that House Republican leaders have 
     scheduled a vote this week to abolish the estate tax 
     permanently. Under a wacky provision of the 2001 tax cut 
     designed to disguise the law's full cost, Congress voted to 
     make the estate tax go away in 2010, but come back in full 
     force in 2011.
       With so many other taxes around, it's hard to understand 
     why this is the one Congress would repeal. It falls, in 
     effect, on the heirs to the wealthiest Americans. Fewer than 
     1 percent of the people who died in 2004 paid an estate tax, 
     and half the revenue from the tax came from estates valued at 
     $10 million or more.
       Yet, because the wealthy have gotten wealthier over the 
     past three decades or so, the estate tax produces a lot of 
     money. Counting both revenue losses and added interest costs, 
     complete repeal of the estate tax would cost the government 
     close to $1 trillion between 2012 and 2021, according to the 
     Center on Budget and Policy Priorities.
       And that is where Social Security comes in. You can reject 
     outlandish claims that Social Security faces some sort of 
     ``crisis'' and still acknowledge that it faces a gap in 
     funding for the long haul. The estate tax should be part of 
     the solution.
       In a little-noticed estimate confirmed by his office 
     yesterday, Stephen Goss, the highly respected Social Security 
     actuary, has studied how much of the Social Security 
     financing gap could be filled by a reformed estate tax. What 
     would happen if, instead of repealing the tax, Congress left 
     it in place at a

[[Page H1916]]

     45 percent rate, and only on fortunes that exceeded $3.5 
     million--which would be $7 million for couples? That, by the 
     way, is well below where the estate tax stood when President 
     Bush took office and would eliminate more than 99 percent of 
     estates from the tax. It reflects the substantial reduction 
     that would take effect in 2009 under Bush's tax plan.
       According to Goss, a tax at that level would cover one-
     quarter of the 75-year Social Security shortfall. The 
     Congressional Budget Office has a more modest estimate of the 
     shortfall. Applying Goss's numbers means that if CBO is 
     right, the reformed estate tax would cover one-half of the 
     Social Security shortfall.
       This is big news for the Social Security debate. Michael J. 
     Graetz and Ian Shapiro, authors of a new book on the estate 
     tax, ``Death by a Thousand Cuts,'' have referred to its 
     repeal as the ``Paris Hilton Benefit Act.'' To pick up on the 
     metaphor, why should Congress be more concerned about 
     protecting Paris Hilton's inheritance than grandma's Social 
     Security check? How can a member of Congress even think about 
     raising payroll taxes while throwing away so much other 
     revenue?
       This also means that Democrats now talking about reaching a 
     ``compromise'' with the Republicans on the estate tax should 
     put the discussions on hold until the Social Security debate 
     plays itself out. Most of the ``compromises'' being discussed 
     would repeal 80 to 90 percent of the estate tax. At some 
     point, it might be reasonable to agree to make the 2009 
     estate tax levels permanent. But if they agree to any steps 
     beyond that, Democrats will, once again, be placing the 
     concerns of wealthy donors over the interests of the people 
     who actually vote for them.
       The Friends of Paris Hilton realize that as federal 
     deficits mount and rising Medicare costs loom, the case for 
     the total repeal of the estate tax grows steadily weaker. 
     That's why they're hoping they can sucker defenders of estate 
     taxes into a so-called compromise that gives away the store--
     the store, in this case, going to Neiman-Marcus shoppers, not 
     to those who rely on Target.
       This is an instructive moment. What we are having is not a 
     real debate on the future of Social Security but a sham 
     discussion in which the one issue that matters to the 
     governing majority is how to keep cutting taxes on the 
     wealthiest people in our country.
       Those who vote to repeal the estate tax this week will be 
     sending a clear message: They see the ``crisis'' in Social 
     Security as serious enough to justify benefit cuts and 
     private accounts. But it's not serious enough to warrant a 
     minor inconvenience to those who plan to live on their 
     parents' wealth.

  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 2 
minutes to the gentlewoman from Tennessee (Mrs. Blackburn).
  Mrs. BLACKBURN. Mr. Speaker, I want to rise in support of the rule 
that will allow us to consider the permanent repeal of the death tax.
  Mr. Speaker, I think it is so appropriate, so very appropriate that 
this week, as millions of American taxpayers are finalizing their 
Federal income tax filings that we are looking at what is one of the 
most egregious taxes and most unfair taxes to our small business 
community. I am one of those that fully believes that the death tax is 
the triple tax, because Americans pay tax when they earn their income. 
Then they turn around, they buy an asset, and they spend their money, 
and they are paying a tax on every bit of that. And then, when an 
American dies, they have to pay the tax again.
  This tax affects every American, especially our small business 
owners. I have found it very curious that some of my colleagues across 
the aisle continue to say it only affects the rich. Well, in my 
district, do my colleagues know that it affects thousands of farmers, 
thousands of small business owners who are very upset about the death 
tax?
  Families everywhere would benefit from the repeal of this tax. When 
70 percent of family businesses do not make it to the second 
generation, there is a problem; and we know we can fix part of that 
problem, because it is the death tax. For too long the death tax has 
been a major factor in the failure of family businesses. The tax not 
only forces American families to hand over their hard work to the 
government; family businesses spend millions of dollars every year 
trying to comply with these regulations. In addition, it discourages 
savings and investment, and it is costing our economy hundreds of 
thousands of new jobs.
  Mr. Speaker, 89 percent of Americans want death taxes repealed. Small 
business owners get it, seniors get it, the farmers in my district get 
it.
  Mr. Speaker, I urge my colleagues to join the leadership and to 
support this rule in favor of H.R. 8.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Again, I am having trouble following this debate here. The 
gentlewoman from Tennessee talked about the thousands of people in her 
district that had to pay the estate tax last year. I am reading from a 
report here that said there were roughly 440 taxable estates, or about 
2 percent of all taxable estates were made up of farm and business 
assets in the year 2004.
  What we are talking about here, and again, if we agree to the Pomeroy 
substitute, is three-tenths of 1 percent of the wealthiest people in 
this country. That is what we are talking about. We are not talking 
about family farms. I mean, that is a red herring. We are not talking 
about small businesses. We are talking about the Campbell Soup 
fortunes, the Mars candy fortunes. We are talking about the richest of 
the rich. That is what this is about.
  What is unconscionable is that we are moving forward on this at a 
time when the majority of this House is proposing budgets that slash 
Medicaid, that cut community development block grants, that cut 
veterans health benefits, that cut education, that cut things that 
people rely on every single day. This is absurd that we are having this 
debate here today.
  Again, I would urge my colleagues to look at the facts. Please do not 
exaggerate the impact of the difference between what the gentleman from 
North Dakota (Mr. Pomeroy) has suggested and what you are proposing 
here. What you are doing here is trying to extend this to protect the 
richest of the rich, and that is just wrong.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield myself such time as 
I may consume to remind my colleagues that the rule that we are 
debating here to talk about the repeal of the death tax makes in order 
the substance of the subject that the gentleman from Massachusetts 
talked about, the Pomeroy substitute. We will have a vigorous debate on 
that. This is a very fair rule so that we can debate the difference 
between the two, and the body will work its will.
  Mr. Speaker, I yield 3 minutes to the gentleman from Indiana (Mr. 
Pence).
  (Mr. PENCE asked and was given permission to revise and extend his 
remarks.)
  Mr. PENCE. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise in strong support of the rule and the Death Tax Repeal 
Permanency Act of 2005. I do so, Mr. Speaker, really to just speak 
about small business America and about a small businessman who raised 
me.
  It was 17 years ago today at the too-young age of 58 that my father, 
Ed Pence, passed away. It happens to be an unfortunate anniversary in 
my family, but on April 13, 1988, we said goodbye to my father. He was 
a small business owner that many on the floor of the Congress today 
would classify as a rich American.
  Now, the rich American that I saw was a man who started out in a very 
small business in Columbus, Indiana, and worked tirelessly to raise his 
four sons and two daughters and build a business that employed several 
hundred local people in support of their families. It is really, with 
the memory of my father in mind, that I rise in vigorous support of the 
permanent repeal of the death tax. Because while my family was reeling 
from the grief of the loss of my father to a sudden heart attack 17 
years ago today, also we were settling into the reality that much of 
what he had built, all of which he had already paid taxes on, was now 
subject to as much as a 47 percent estate tax.
  My father's death and the business that he built and the resources 
that he had husbanded, after paying all of his debts and all of his 
taxes, should not have been subject to another tax. And we come into 
this well today on behalf of small business owners and family farmers 
just like my dad to put to an end permanently this truly immoral death 
tax in America.
  It is the reality out there, not the heated rhetoric of rich versus 
poor, that explains why 89 percent of small business owners favor 
permanent repeal. In fact, they know that more than 70 percent of 
family businesses do not survive to a second generation; 87 percent do 
not make it to a third generation. Much is made of middle America that 
I am proud to represent and

[[Page H1917]]

the fact that Main Streets and courthouse squares are largely boarded 
up. People want to blame the Internet. They want to blame mass 
retailers. Well, I put the majority of the blame in practical terms at 
the doorstep of the death tax. It has waged war on small business and 
family farmers all across America, and we will begin to reverse that in 
a permanent way today.
  So in the tender memory of my father, of his earnest labors, and with 
it in my mind the men and women who to this day labor to raise their 
families and build small businesses and family farms all across America 
that I extol the authors of this bill. I endorse the rule, and I 
vigorously support the permanent repeal of the death tax.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  I want to make it clear, as there is a lot of misinformation being 
promoted on the other side here: our side supports relief for family 
farmers and small businesses. That is not what we are talking about 
here today. The difference between our approach is the three-tenths of 
1 percent richest people in this country, the Paris Hiltons of the 
world, the executives at Campbell Soup, the heirs of Campbell Soup or 
Mars candy if you read The Washington Post today. That is what this is 
about. In a climate where the majority is cutting Medicaid, cutting 
veterans benefits, cutting programs that help feed the most vulnerable 
in our country, to go out and protect and to try to extend a special 
tax cut to those richest people in this country, I think, is 
unconscionable.
  Mr. Speaker, I yield 3 minutes to the gentleman from North Dakota 
(Mr. Pomeroy).
  Mr. POMEROY. Mr. Speaker, I thank my colleague, the gentleman from 
Massachusetts, for leading the debate on this important rule in this 
fashion. I will just respond to my friend, the gentleman from Indiana 
(Mr. Pence), the preceding speaker.
  It is important that we talk about real facts today and, honest to 
goodness, some of the language does not reflect what reality would be 
relative to the estate tax if you would pass the Pomeroy substitute and 
set it at $6 million per couple, taking care of, making estate tax 
completely go away for 99.7 percent of the people in this country. 
Language like ``waging war on small business'' and the majority reason 
for why small family farms do not pass on, 99.7 percent have no, 
absolutely no estate tax under the proposal that we are advancing. 
Clearly, that language does not match the facts of the proposal that we 
have advanced.
  We heard about the immorality of taxing for the wealthiest three out 
of the 1,000 estates in this country. I believe another immorality is 
on the floor today, and that is the immorality of privatizing Social 
Security and reducing the benefits of Social Security for our children 
and grandchildren. An essential part of the Social Security debate is 
changing the inflation index that would reduce the benefit for our 
subsequent generations. In my opinion, that is immoral.
  What I think we ought to have captured in this debate on estate tax 
is the trade-off, because they say it is just estate tax; believe me, 
it is also Social Security. If you take $290 billion out of the budget 
for the wealthiest three out of 1,000, you impact the ability to fix 
Social Security for everybody else. And the proposal I would like 
considered before the House is, let us give immediate and certain 
estate tax relief, 6 million per couple, and let us capture the amount 
over that dedicated to Social Security. That would fill 40 percent of 
the unfunded liabilities.
  In context, we are looking at a 75-year solvency figure that the 
President has found so troublesome he wants to privatize Social 
Security. Well, by dedicating the sums that we capture with this three-
tenths of 1 percent, we could fill 40 percent of the hole on Social 
Security. We would not have to cut benefits for our children. We would 
not have to cut benefits for our grandchildren.
  So what we have is a very reasonable proposal going forward. Let us 
make the estate tax go away for 99.7 percent of the estates in this 
country. Let us not impose new capital gains taxes at the time of 
estates, and let us dedicate the difference to addressing Social 
Security. It brings us almost halfway there in terms of keeping all of 
the guarantees, while meeting the funding challenge over the next 75 
years.
  That is what is advanced by the minority proposal in this debate, and 
I hope it will get my colleagues' close consideration.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 3 
minutes to the gentleman from Texas (Mr. Gohmert).
  Mr. GOHMERT. Mr. Speaker, we have heard a lot of rhetoric here today, 
and some of it a bit disingenuous. I think it is a bit disingenuous to 
say in a loud tone, demanding an answer to some rhetorical question, 
and then demand, well, I hear none, when all of us here are observing 
the rules and not interrupting. It is a bit interesting to hear people 
talk about red herrings, and I like hearing from people across the 
aisle that they want to talk about real facts. So let me talk about 
real facts.
  This, my friends, is a music box. It plays Amazing Grace. I would 
wind it up and play it now if the rules allowed that.

                              {time}  1215

  It belonged to my Great Aunt Lillie. She was land rich. Over a 
hundred years their family accumulated land, farm and ranch. I bought 
this music box at an IRS auction where the IRS forced the sale of 
everything she owned. They accumulated about 2,500 acres of farm and 
ranch land. She died in July of 1986, and shortly thereafter land was 
dumped on the market. Times were rough, and the value of the land that 
was around $2,000 an acre when she died went to $600 or $700 an acre.
  The IRS was actually very gracious. They gave a couple of extensions 
or so. They allowed another appraisal, but it was around $2,000 an acre 
when she died.
  The IRS required the sale of every acre of land that they owned. They 
sold every item out of her home. If anybody in the family wanted 
anything, we had to show up at the auction and buy it. I bought this 
keepsake to remember my Great Aunt Lillie, who had been so gracious and 
kind and a great farm woman and a great gentlewoman.
  So if you want to talk about the death tax in real facts, here it is. 
The death tax provides no grace, amazing or otherwise. It is a 
socialist notion, and it needs to go away.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Let me again, just for the record, point out that the Pomeroy 
substitute would provide $3 million in relief for individuals 
immediately, $3.5 million by 2009, and $7 million per couple. And, 
again, what we are talking about here is not what the gentleman just 
spoke of. What we are talking about here is the richest of the rich in 
this country.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 1\3/4\ minutes to 
the gentleman from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, I thank my friend from Washington 
for yielding this time.
  Mr. Speaker, in the last 2 years, the economy has created over 3 
million new jobs. The unemployment rate is down. Our Nation's total 
output, or Gross Domestic Product, is up. Home ownership is at a record 
high, and personal income has increased.
  Our economy is strong. To ensure that we continue to enjoy 
prosperity, Congress should support a pro-economic growth agenda that 
creates jobs and helps small businesses grow. This includes reducing 
taxes.
  Our families and our country are better off when they keep more of 
what they earn. One way to enable them to do that is to pass H.R. 8, 
which permanently repeals the punitive death tax.
  This tax often prevents parents from passing along their life's work 
and savings to their children. Family farms, ranches and small 
businesses are forced to be sold to satisfy the death tax rates which 
can reach 55 percent.
  No one should be taxed throughout their lifetime and then have their 
property retaxed at the time of their death. It is the wrong tax at the 
wrong time on the wrong people.
  Mr. McGOVERN. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I think this piece of legislation 
that the majority is clearly going to be able to pass today is one of 
the most outrageous tax cuts that we have brought

[[Page H1918]]

to the House floor. The Democrats are going to offer an alternative, 
and I appreciate the fact that it was allowed by the Rules Committee, 
but this alternative would exempt 99.7 percent of American families 
from having to pay inheritance taxes. So all we are really talking 
about is three-tenths of 1 percent, a relative handful, the people who 
clearly can most afford to pay taxes.
  This excessive, unnecessary cut will pass despite the fact that, 
within the last few legislative sessions, this Congress has voted to 
take 300,000 families off food stamps, to take 300,000 children off 
daycare, to run the risk, by taking $20 billion out of Medicaid, that 
as many as 7 million very poor elderly people dependent on government 
help in nursing homes will not get that assistance.
  Where are our priorities? Where is our source of fairness?
  You know, I think that we would all agree that we believe in equal 
opportunity. But in this country, unfortunately, when you see the 
effect of these tax cuts, that equal opportunity is really dependent 
upon the accident of birth. Millions of people in our country are 
suffering for the accident of birth, without health insurance, without 
any real prospect of getting decent schooling. And yet where are we 
putting our tax cuts? What excuse are we using for burdening the next 
generation with hundreds of billions of dollars of debt?
  We are taking hundreds of billions of dollars, borrowing it from the 
Social Security trust funds, just to give more help to the very 
children who, because of the accident of birth, have the very best 
education that this country can allow, have all the contacts 
imaginable, are virtually guaranteed economic success unless they 
choose to turn their backs on it.
  What we have done is to turn our backs on the vast majority of the 
American people, and to close our consciences to our children's 
generation, who are getting swamped with debt. This bill is going to 
cost $290 billion added on to a public debt that our children will 
never be able to recover from. And it is not necessary.
  I ask you to consider the fact that it takes away the stepped-up 
basis at the point of inheritance, insuring that there will be more 
small businesses, more family farms that are going to get hurt--over 70 
thousand--by this provision, by this legislation than are going to be 
helped, because they are going to have to pay capital gains at the 
point when they actually inherit calculated by going back to the 
original cost to the deceased. So it just does not make any sense, 
other than to people gripped by this ideological fervor to cut taxes 
irregardless of the rationale or the consequence. It is terrible 
legislation. It ought to be defeated.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 1\3/4\ minutes to 
the gentleman from Georgia (Mr. Gingrey).
  Mr. GINGREY. Mr. Speaker, I rise today as a proud cosponsor of H.R. 
8, the Death Tax Repeal Permanency Act of 2005.
  First, I would like to take this opportunity to thank the gentleman 
from Missouri (Mr. Hulshof) for his leadership on the bill.
  Mr. Speaker, I do not believe that there has ever been a more 
reprehensible tax on the face of the earth than the death tax. The 
death tax represents not only a tax on the deceased but also on their 
families. Husbands, wives and children and other relatives bear the 
burden of this tax while they are still struggling to cope with the 
loss of their loved one.
  Mr. Speaker, it is intolerable and absolutely unacceptable for the 
Federal Government to exact a tax on death and on the surviving 
families, causing them to lose their homes, their business, their farms 
and the lives they have struggled to build.
  After all, they have created and established these businesses with 
after-tax dollars. Taxes have already been paid, and every bit of 
profit that they might make in a year is taxed as well.
  Currently, the repeal of the death tax is set to expire in 2010; and, 
Mr. Speaker, I cannot understand how anyone would allow the Federal 
Government to hand a grieving family in 2011 a bill for the death of 
their loved one. Death's inevitability should not be a taxable event.
  Mr. Speaker, let us get the Federal Government off the backs of 
grieving families and pass this rule and this bill for the sake of 
fairness and decency.
  Mr. McGOVERN. Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 2 
minutes to the gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. Mr. Speaker, I rise today as a cosponsor of H.R. 8 
and in support of this rule. I believe, as most Americans do, that it 
is unacceptable for a grieving family who has recently lost a loved one 
to get a visit from the undertaker and the IRS on the very same day. It 
is unconscionable, and it ought to be illegal.
  The death tax is really a tax on the American dream. Americans work 
hard all their lives building up farms and ranches and small 
businesses, hoping that maybe one day they can pass this along to their 
families. But after years of payroll taxes and income taxes and sales 
taxes and property taxes, many businesses and farms just do not make 
it. And those that do, the government can step in and take over half of 
what they worked their entire life to build.
  Now, Mr. Speaker, I grew up working on a farm, and I represent a 
large portion of rural East Texas. East Texas is a great place to live, 
but sometimes it can be a challenging place to make a good living.
  Recently, I spoke to a rancher in my district who has worked hard 
nearly 30 years building up a cattle ranch operation. His greatest 
dream is one day to leave that ranch to his family. But with sadness in 
his voice he told me, you know what, Congressman? By the time the 
government takes its share, there is just not enough to go around.
  It is not fair to take that family's ranch. It is not fair that 
Americans are being taxed twice on the same income. And it is not fair 
that the Federal Government can step in and automatically inherit 55 
percent of the family farm, a family business or a family nest egg.
  Mr. Speaker, let us vote for this rule. Let us support H.R. 8. Let us 
kill the death tax and breathe new life into the American dream.
  Mr. McGOVERN. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, what the majority is doing today is wrong. We need to 
help family farmers and small businesses. We all agree on that, and the 
substitute that the gentleman from North Dakota (Mr. Pomeroy) puts 
forth does that, with very generous exemptions.
  But what the majority is suggesting is that somehow we need to do 
something to help the three-tenths of 1 percent of the richest people 
in this country at a time when they present budgets that cut Medicaid, 
that cut veterans benefits, that cut educational programs, that cut 
programs for the poor.
  I mean, what are you doing? How can you come here with a straight 
face and say that we need to help the three-tenths of 1 percent richest 
people in this country, when so many people who are struggling in the 
middle class, so many struggling to get in the middle class, are having 
such a difficult time?
  This is wrong what you are doing.
  Mr. Speaker, at the end of this debate, I will call for a vote on the 
previous question; and if the previous question is defeated I will 
offer an amendment to the rule.
  My amendment would take the cost difference between the Republicans' 
estate tax cut bill, which cost $290 billion, and the Pomeroy estate 
tax cut bill, which costs $72 billion, and shift that difference to the 
Social Security trust fund. We are talking about $218 billion that 
could go right into the Social Security trust fund.
  The Republican leadership and President Bush claim that there is a 
Social Security crisis. If they truly believe that there is a crisis, 
they should step up to the plate and support this effort to shore up 
the Social Security trust fund now.
  The Pomeroy substitute will exempt 99.7 percent of all estates. 99.7 
percent. With this amendment we can restore $218 billion back to the 
Social Security trust fund and help save Social Security for future 
generations.
  Mr. Speaker, there are a lot of people on the other side of the aisle 
who go back home and do town hall meetings and tell their constituents 
that they are for protecting Social Security. Well, this is a vote to 
show that you want to protect Social Security.
  Mr. Speaker, I ask unanimous consent to insert the text of the 
amendment immediately prior to the vote on the previous question.

[[Page H1919]]

  The SPEAKER pro tempore (Mr. LaHood). Is there objection to the 
request of the gentleman from Massachusetts?
  There was no objection.
  Mr. McGOVERN. Again, Mr. Speaker, I would urge that the people join 
with us on this vote.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield myself the balance 
of my time.
  Mr. Speaker, this is not the first time that this body has addressed 
the issue of repealing or making permanent the death tax. In the 106th 
Congress, on a bipartisan basis, with 279 votes in favor, this body 
voted in favor of permanently eliminating the death tax. And the other 
body, also on a bipartisan basis, they, too, voted to permanently 
eliminate the death tax, but President Clinton vetoed that bill.

                              {time}  1230

  In the 107th Congress, again on a bipartisan basis, the House voted 
to eliminate the death tax permanently. Unfortunately, in the 
reconciliation of trying to put the differences between the two Houses 
together, we put the date of the 2011 when that would expire.
  In the last Congress, once again the House addressed this issue and 
voted to permanently eliminate this death tax.
  The bill that we will address when we pass this rule is exactly the 
same as the bill that we passed on a bipartisan basis in the last 
Congress.
  Mr. Speaker, I urge my colleagues to vote for the rule and the 
underlying bill.
  The material previously referred to by Mr. McGovern is as follows:

           Amendment to H. Res. 202 offered by Rep. McGovern

       At the end of the resolution, add the following:
       Sec. 2. Notwithstanding any other provision of this 
     resolution, the amendment made in order under the first 
     section of this resolution shall be modified by adding at the 
     end the following new section:

     SECTION __. TRANSFERS TO SOCIAL SECURITY.

       (a) Findings.--Congress hereby finds that--
       (1) permanent repeal of the estate tax will cost $290 
     billion over the 10-year budget window,
       (2) this $290 billion understates the long-term cost of 
     repeal--in the last year of the budget window repeal of the 
     estate tax will cost $70 billion,
       (3) in the next decade, the cost of repealing the estate 
     tax together with the increased interest cost to the United 
     States would be substantially above $1 trillion,
       (4) the enormous cost of repealing the estate tax would 
     only benefit the wealthiest 0.3 percent of all families in 
     the United States,
       (5) permanent repeal of the estate tax would result in a 
     substantial reduction in income tax receipts, and could 
     result in lower receipts in the Social Security Trust Funds 
     because of that tax avoidance,
       (6) the provisions of this Act would prevent the reduction 
     in Social Security receipts that could result from permanent 
     repeal and it would preserve funds necessary to meet 
     commitments made to the Social Security system or other 
     programs,
       (7) the provisions of this Act provide immediate and 
     substantial estate tax relief, exempting 99.7 percent of all 
     estates from the estate tax,
       (8) the United States is faced with many other fiscal 
     challenges, including the requirement to meet the commitments 
     made through the Social Security system, and
       (9) the amounts saved by enacting this Act as compared to 
     permanent repeal--
       (A) in the long run on an annual basis would equal the 
     current costs of the operations in Iraq,
       (B) could be used for improvements in veterans benefits, 
     and
       (C) would close half of the shortfall faced by the Social 
     Security system.
       (b) Transfers to Social Security.--Section 201 of the 
     Social Security Act (42 U.S.C. 401) is amended by adding at 
     the end the following new subsection:
       ``(o) For purposes of ensuring that amounts are available 
     to meet the commitments of the Social Security system, the 
     Secretary of the Treasury shall, from time to time, transfer 
     from the general fund in the Treasury to the Federal Old-Age 
     and Survivors Insurance Trust Fund, the savings from the 
     enactment of the Certain and Immediate Estate Tax Relief Act 
     of 2005 as compared to the permanent repeal of the estate tax 
     by the bill H.R. 8 (as introduced in the 109th Congress) as 
     follows:
       ``(1) For fiscal years 2010-2015, the transfers in each 
     year shall total for each fiscal year specified in the 
     following table, the amount specified in connection with such 
     fiscal year, as follows:
                                                                 Amount
  ``Fiscal year:                                           Transferred:
2010.......................................................$6.1 billion
3011......................................................$35.4 billion
2012......................................................$39.4 billion
2013......................................................$42.7 billion
2014......................................................$47.9 billion
2015.....................................................$50.5 billion.
       ``(2) For fiscal years beginning after September 30, 2015, 
     the transfers in each year shall total the amount the 
     Secretary of the Treasury determines to be the savings from 
     the enactment of such Act as compared to such permanent 
     repeal of the estate tax.''.

  Mr. HASTINGS of Washington. Mr. Speaker, I yield back the balance of 
my time, and I move the previous question on the resolution.
  The SPEAKER pro tempore (Mr. LaHood). The question is on ordering the 
previous question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. McGOVERN. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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