[Congressional Record Volume 152, Number 82 (Thursday, June 22, 2006)]
[House]
[Pages H4444-H4467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                PERMANENT ESTATE TAX RELIEF ACT OF 2006

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 885, I call up 
the bill (H.R. 5638) to amend the Internal Revenue Code of 1986 to 
increase the unified credit against the estate tax to an exclusion 
equivalent of $5,000,000 and to repeal the sunset provision for the 
estate and generation-skipping taxes, and for other purposes, and ask 
for its immediate consideration.
  The Clerk read the title of the bill.
  Ms. PELOSI. Mr. Speaker, I rise on the question of consideration. It 
is inappropriate to consider this bill until the Republican leadership 
schedules a vote on an increase in the minimum wage, which they are now 
blocking. Therefore, under clause 3, rule XVI, I demand a vote on the 
question of consideration.
  The SPEAKER pro tempore. The gentlewoman from California demands the 
question of consideration.
  Under clause 3 of rule XVI, the question is, Will the House now 
consider the bill?
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Ms. PELOSI. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 238, 
noes 188, not voting 6, as follows:

                             [Roll No. 312]

                               AYES--238

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cramer
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Melancon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schmidt
     Schwarz (MI)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NOES--188

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (NY)
     Blumenauer
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--6

     Davis (FL)
     Evans
     Johnson, Sam
     Serrano
     Shays
     Waters


                Announcement by the Speaker Pro Tempore

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

                              {time}  1323

  Mr. SULLIVAN and Mr. MATHESON changed their vote from ``no'' to 
``aye.''
  So the question of consideration was decided in the affirmative.
  The result of the vote was announced as above recorded.

[[Page H4445]]

  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Pursuant to House Resolution 885, the bill 
is considered read.
  The text of the bill is as follows:

                               H.R. 5638

       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 ``Permanent Estate Tax Relief 
     Act of 2006''.

     SEC. 2. REFORM AND EXTENSION OF ESTATE TAX AFTER 2009.

       (a) Restoration of Unified Credit Against Gift Tax.--
     Paragraph (1) of section 2505(a) of the Internal Revenue Code 
     of 1986 (relating to general rule for unified credit against 
     gift tax), after the application of subsection (g), is 
     amended by striking ``(determined as if the applicable 
     exclusion amount were $1,000,000)''.
       (b) Exclusion Equivalent of Unified Credit Equal to 
     $5,000,000.--Subsection (c) of section 2010 of such Code 
     (relating to unified credit against estate tax) is amended to 
     read as follows:
       ``(c) Applicable Credit Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable credit amount is the amount of the tentative tax 
     which would be determined under the rate schedule set forth 
     in section 2001(c) if the amount with respect to which such 
     tentative tax is to be computed were the applicable exclusion 
     amount.
       ``(2) Applicable exclusion amount.--For purposes of this 
     subsection, the applicable exclusion amount is $5,000,000.''.
       (c) Rate Schedule.--
       (1) In general.--Subsection (c) of section 2001 of such 
     Code (relating to rate schedule) is amended to read as 
     follows:
       ``(c) Rate Schedule.--The tentative tax is equal to the sum 
     of--
       ``(1) the product of the rate specified in section 
     1(h)(1)(C) in effect on the date of the decedent's death 
     multiplied by so much of the sum described in subsection 
     (b)(1) as does not exceed $25,000,000, and
       ``(2) the product of twice the rate specified in section 
     1(h)(1)(C) in effect on the date of the decedent's death 
     multiplied by so much of the sum described in subsection 
     (b)(1) as equals or exceeds $25,000,000.''.
       (2) Conforming amendment.--Section 2502(a) of such Code 
     (relating computation of tax), after the application of 
     subsection (g), is amended by adding at the end the following 
     flush sentence:

     ``In computing the tentative tax under section 2001(c) for 
     purposes of this subsection, `the last day of the calendar 
     year in which the gift was made' shall be substituted for 
     `the date of the decedent's death' each place it appears in 
     such section.''.
       (d) Modifications of Estate and Gift Taxes to Reflect 
     Differences in Unified Credit Resulting From Different Tax 
     Rates.--
       (1) Estate tax.--
       (A) In general.--Section 2001(b)(2) of such Code (relating 
     to computation of tax) is amended by striking ``if the 
     provisions of subsection (c) (as in effect at the decedent's 
     death)'' and inserting ``if the modifications described in 
     subsection (g)''.
       (B) Modifications.--Section 2001 of such Code is amended by 
     adding at the end the following new subsection:
       ``(g) Modifications to Gift Tax Payable to Reflect 
     Different Tax Rates.--For purposes of applying subsection 
     (b)(2) with respect to 1 or more gifts, the rates of tax 
     under subsection (c) in effect at the decedent's death shall, 
     in lieu of the rates of tax in effect at the time of such 
     gifts, be used both to compute--
       ``(1) the tax imposed by chapter 12 with respect to such 
     gifts, and
       ``(2) the credit allowed against such tax under section 
     2505, including in computing--
       ``(A) the applicable credit amount under section 
     2505(a)(1), and
       ``(B) the sum of the amounts allowed as a credit for all 
     preceding periods under section 2505(a)(2).

     For purposes of paragraph (2)(A), the applicable credit 
     amount for any calendar year before 1998 is the amount which 
     would be determined under section 2010(c) if the applicable 
     exclusion amount were the dollar amount under section 
     6018(a)(1) for such year.''.
       (2) Gift tax.--Section 2505(a) of such Code (relating to 
     unified credit against gift tax), after the application of 
     subsection (g), is amended by adding at the end the following 
     new flush sentence:

     ``For purposes of applying paragraph (2) for any calendar 
     year, the rates of tax used in computing the tax under 
     section 2502(a)(2) for such calendar year shall, in lieu of 
     the rates of tax in effect for preceding calendar periods, be 
     used in determining the amounts allowable as a credit under 
     this section for all preceding calendar periods.''.
       (e) Repeal of Deduction for State Death Taxes.--
       (1) In general.--Section 2058 of such Code (relating to 
     State death taxes) is amended by adding at the end the 
     following:
       ``(c) Termination.--This section shall not apply to the 
     estates of decedents dying after December 31, 2009.''.
       (2) Conforming amendment.--Section 2106(a)(4) of such Code 
     is amended by adding at the end the following new sentence: 
     ``This paragraph shall not apply to the estates of decedents 
     dying after December 31, 2009.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.
       (g) Additional Modifications to Estate Tax.--
       (1) In general.--The following provisions of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001, and the 
     amendments made by such provisions, are hereby repealed:
       (A) Subtitles A and E of title V.
       (B) Subsection (d), and so much of subsection (f)(3) as 
     relates to subsection (d), of section 511.
       (C) Paragraph (2) of subsection (b), and paragraph (2) of 
     subsection (e), of section 521.
     The Internal Revenue Code of 1986 shall be applied as if such 
     provisions and amendments had never been enacted.
       (2) Sunset not to apply to title v of egtrra.--Section 901 
     of the Economic Growth and Tax Relief Reconciliation Act of 
     2001 shall not apply to title V of such Act.
       (3) Repeal of deadwood.--
       (A) Sections 2011, 2057, and 2604 of the Internal Revenue 
     Code of 1986 are hereby repealed.
       (B) The table of sections for part II of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2011.
       (C) The table of sections for part IV of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2057.
       (D) The table of sections for subchapter A of chapter 13 of 
     such Code is amended by striking the item relating to section 
     2604.

     SEC. 3. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED CREDIT OF 
                   DECEASED SPOUSE.

       (a) In General.--Subsection (c) of section 2010 of the 
     Internal Revenue Code of 1986 (defining applicable credit 
     amount), as amended by section 2(b), is amended by striking 
     paragraph (2) and inserting the following new paragraphs:
       ``(2) Applicable exclusion amount.--For purposes of this 
     subsection, the applicable exclusion amount is the sum of--
       ``(A) the basic exclusion amount, and
       ``(B) in the case of a surviving spouse, the aggregate 
     deceased spousal unused exclusion amount.
       ``(3) Basic exclusion amount.--For purposes of this 
     subsection, the basic exclusion amount is $5,000,000.
       ``(4) Aggregate deceased spousal unused exclusion amount.--
     For purposes of this subsection, the term `aggregate deceased 
     spousal unused exclusion amount' means the lesser of--
       ``(A) the basic exclusion amount, or
       ``(B) the sum of the deceased spousal unused exclusion 
     amounts of the surviving spouse.
       ``(5) Deceased spousal unused exclusion amount.--For 
     purposes of this subsection, the term `deceased spousal 
     unused exclusion amount' means, with respect to the surviving 
     spouse of any deceased spouse dying after December 31, 2009, 
     the excess (if any) of--
       ``(A) the applicable exclusion amount of the deceased 
     spouse, over
       ``(B) the amount with respect to which the tentative tax is 
     determined under section 2001(b)(1) on the estate of such 
     deceased spouse.
       ``(6) Special rules.--
       ``(A) Election required.--A deceased spousal unused 
     exclusion amount may not be taken into account by a surviving 
     spouse under paragraph (5) unless the executor of the estate 
     of the deceased spouse files an estate tax return on which 
     such amount is computed and makes an election on such return 
     that such amount may be so taken into account. Such election, 
     once made, shall be irrevocable. No election may be made 
     under this subparagraph if such return is filed after the 
     time prescribed by law (including extensions) for filing such 
     return.
       ``(B) Examination of prior returns after expiration of 
     period of limitations with respect to deceased spousal unused 
     exclusion amount.--Notwithstanding any period of limitation 
     in section 6501, after the time has expired under section 
     6501 within which a tax may be assessed under chapter 11 or 
     12 with respect to a deceased spousal unused exclusion 
     amount, the Secretary may examine a return of the deceased 
     spouse to make determinations with respect to such amount for 
     purposes of carrying out this subsection.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this subsection.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 2505(a) of such Code, as 
     amended by section 2, is amended to read as follows:
       ``(1) the applicable credit amount under section 2010(c) 
     which would apply if the donor died as of the end of the 
     calendar year, reduced by''.
       (2) Section 6018(a)(1) of such Code, after the application 
     of section 2(g), is amended by striking ``applicable 
     exclusion amount'' and inserting ``basic exclusion amount''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.

     SEC. 4. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       (a) In General.--Part I of subchapter P of chapter 1 of the 
     Internal Revenue Code of

[[Page H4446]]

     1986 is amended by adding at the end the following new 
     section:

     ``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       ``(a) In General.--In the case of a taxpayer which elects 
     the application of this section for a taxable year, there 
     shall be allowed a deduction against gross income equal to 60 
     percent of the lesser of--
       ``(1) the taxpayer's qualified timber gain for such year, 
     or
       ``(2) the taxpayer's net capital gain for such year.
       ``(b) Qualified Timber Gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(1) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(2) the sum of the taxpayer's losses described in such 
     subsections for such year.
       ``(c) Special Rules for Pass-Thru Entities.--In the case of 
     any qualified timber gain of a pass-thru entity (as defined 
     in section 1(h)(10))--
       ``(1) the election under this section shall be made 
     separately by each taxpayer subject to tax on such gain, and
       ``(2) the Secretary may prescribe such regulations as are 
     appropriate to apply this section to such gain.
       ``(d) Termination.--No disposition of timber after December 
     31, 2008, shall be taken into account under subsection 
     (b).''.
       (b) Coordination With Maximum Capital Gains Rates.--
       (1) Taxpayers other than corporations.--Paragraph (2) of 
     section 1(h) of such Code is amended to read as follows:
       ``(2) Reduction of net capital gain.--For purposes of this 
     subsection, the net capital gain for any taxable year shall 
     be reduced (but not below zero) by the sum of--
       ``(A) the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii), and
       ``(B) in the case of a taxable year with respect to which 
     an election is in effect under section 1203, the lesser of--
       ``(i) the amount described in paragraph (1) of section 
     1203(a), or
       ``(ii) the amount described in paragraph (2) of such 
     section.''.
       (2) Corporations.--Section 1201 of such Code is amended by 
     redesignating subsection (b) as subsection (c) and inserting 
     after subsection (a) the following new subsection:
       ``(b) Qualified Timber Gain not Taken Into Account.--For 
     purposes of this section, in the case of a corporation with 
     respect to which an election is in effect under section 1203, 
     the net capital gain for any taxable year shall be reduced 
     (but not below zero) by the corporation's qualified timber 
     gain (as defined in section 1203(b)).''.
       (c) Deduction Allowed Whether or not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62 of such Code 
     is amended by inserting before the last sentence the 
     following new paragraph:
       ``(21) Qualified timber gains.--The deduction allowed by 
     section 1203.''.
       (d) Deduction Allowed in Computing Adjusted Current 
     Earnings.--Subparagraph (C) of section 56(g)(4) of such Code 
     is amended by adding at the end the following new clause:
       ``(vii) Deduction for qualified timber gain.--Clause (i) 
     shall not apply to any deduction allowed under section 
     1203.''.
       (e) Deduction Allowed in Computing Taxable Income of 
     Electing Small Business Trusts.--Subparagraph (C) of section 
     641(c)(2) of such Code is amended by inserting after clause 
     (iii) the following new clause:
       ``(iv) The deduction allowed under section 1203.''.
       (f) Conforming Amendments.--
       (1) Subparagraph (B) of section 172(d)(2) of such Code is 
     amended to read as follows:
       ``(B) the exclusion under section 1202 and the deduction 
     under section 1203 shall not be allowed.''.
       (2) Paragraph (4) of section 642(c) of such Code is amended 
     by striking the first sentence and inserting the following: 
     ``To the extent that the amount otherwise allowable as a 
     deduction under this subsection consists of gain described in 
     section 1202(a) or qualified timber gain (as defined in 
     section 1203(b)), proper adjustment shall be made for any 
     exclusion allowable to the estate or trust under section 1202 
     and for any deduction allowable to the estate or trust under 
     section 1203.''.
       (3) Paragraph (3) of section 643(a) of such Code is amended 
     by striking the last sentence and inserting the following: 
     ``The exclusion under section 1202 and the deduction under 
     section 1203 shall not be taken into account.''.
       (4) Subparagraph (C) of section 643(a)(6) of such Code is 
     amended to read as follows:
       ``(C) Paragraph (3) shall not apply to a foreign trust. In 
     the case of such a trust--
       ``(i) there shall be included gains from the sale or 
     exchange of capital assets, reduced by losses from such sales 
     or exchanges to the extent such losses do not exceed gains 
     from such sales or exchanges, and
       ``(ii) the deduction under section 1203 shall not be taken 
     into account.''.
       (5) Paragraph (4) of section 691(c) of such Code is amended 
     by inserting ``1203,'' after ``1202,''.
       (6) Paragraph (2) of section 871(a) of such Code is amended 
     by striking ``section 1202'' and inserting ``sections 1202 
     and 1203''.
       (7) The table of sections for part I of subchapter P of 
     chapter 1 of such Code is amended by adding at the end the 
     following new item:

``Sec. 1203. Deduction for qualified timber gain.''.

       (g) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Taxable years which include date of enactment.--In the 
     case of any taxable year which includes the date of the 
     enactment of this Act, for purposes of the Internal Revenue 
     Code of 1986, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in section 1203(b) 
     of such Code, as added by this section, if only dispositions 
     of timber after such date were taken into account.

  The SPEAKER pro tempore. The amendment printed in House Report 109-
517 is adopted.
  The text of the bill, as amended, is as follows:

                               H.R. 5638

       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 ``Permanent Estate Tax Relief 
     Act of 2006''.

     SEC. 2. REFORM AND EXTENSION OF ESTATE TAX AFTER 2009.

       (a) Restoration of Unified Credit Against Gift Tax.--
     Paragraph (1) of section 2505(a) of the Internal Revenue Code 
     of 1986 (relating to general rule for unified credit against 
     gift tax), after the application of subsection (g), is 
     amended by striking ``(determined as if the applicable 
     exclusion amount were $1,000,000)''.
       (b) Exclusion Equivalent of Unified Credit Equal to 
     $5,000,000.--Subsection (c) of section 2010 of such Code 
     (relating to unified credit against estate tax) is amended to 
     read as follows:
       ``(c) Applicable Credit Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable credit amount is the amount of the tentative tax 
     which would be determined under the rate schedule set forth 
     in section 2001(c) if the amount with respect to which such 
     tentative tax is to be computed were the applicable exclusion 
     amount.
       ``(2) Applicable exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable exclusion amount is $5,000,000.''.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2010, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2009' for `calendar year 1992' in subparagraph 
     (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $100,000, such amount shall be rounded to the 
     nearest multiple of $100,000.''.
       (c) Rate Schedule.--
       (1) In general.--Subsection (c) of section 2001 of such 
     Code (relating to rate schedule) is amended to read as 
     follows:
       ``(c) Rate Schedule.--The tentative tax is equal to the sum 
     of--
       ``(1) the product of the rate specified in section 
     1(h)(1)(C) in effect on the date of the decedent's death 
     multiplied by so much of the sum described in subsection 
     (b)(1) as does not exceed $25,000,000, and
       ``(2) the product of twice the rate specified in section 
     1(h)(1)(C) in effect on the date of the decedent's death 
     multiplied by so much of the sum described in subsection 
     (b)(1) as equals or exceeds $25,000,000.''.
       (2) Conforming amendment.--Section 2502(a) of such Code 
     (relating computation of tax), after the application of 
     subsection (g), is amended by adding at the end the following 
     flush sentence:

     ``In computing the tentative tax under section 2001(c) for 
     purposes of this subsection, `the last day of the calendar 
     year in which the gift was made' shall be substituted for 
     `the date of the decedent's death' each place it appears in 
     such section.''.
       (d) Modifications of Estate and Gift Taxes to Reflect 
     Differences in Unified Credit Resulting From Different Tax 
     Rates.--
       (1) Estate tax.--
       (A) In general.--Section 2001(b)(2) of such Code (relating 
     to computation of tax) is amended by striking ``if the 
     provisions of subsection (c) (as in effect at the decedent's 
     death)'' and inserting ``if the modifications described in 
     subsection (g)''.
       (B) Modifications.--Section 2001 of such Code is amended by 
     adding at the end the following new subsection:
       ``(g) Modifications to Gift Tax Payable to Reflect 
     Different Tax Rates.--For purposes of applying subsection 
     (b)(2) with respect to 1 or more gifts, the rates of tax 
     under subsection (c) in effect at the decedent's death shall, 
     in lieu of the rates of tax in effect at the time of such 
     gifts, be used both to compute--
       ``(1) the tax imposed by chapter 12 with respect to such 
     gifts, and
       ``(2) the credit allowed against such tax under section 
     2505, including in computing--
       ``(A) the applicable credit amount under section 
     2505(a)(1), and
       ``(B) the sum of the amounts allowed as a credit for all 
     preceding periods under section 2505(a)(2).

[[Page H4447]]

     For purposes of paragraph (2)(A), the applicable credit 
     amount for any calendar year before 1998 is the amount which 
     would be determined under section 2010(c) if the applicable 
     exclusion amount were the dollar amount under section 
     6018(a)(1) for such year.''.
       (2) Gift tax.--Section 2505(a) of such Code (relating to 
     unified credit against gift tax), after the application of 
     subsection (g), is amended by adding at the end the following 
     new flush sentence:
     ``For purposes of applying paragraph (2) for any calendar 
     year, the rates of tax used in computing the tax under 
     section 2502(a)(2) for such calendar year shall, in lieu of 
     the rates of tax in effect for preceding calendar periods, be 
     used in determining the amounts allowable as a credit under 
     this section for all preceding calendar periods.''.
       (e) Repeal of Deduction for State Death Taxes.--
       (1) In general.--Section 2058 of such Code (relating to 
     State death taxes) is amended by adding at the end the 
     following:
       ``(c) Termination.--This section shall not apply to the 
     estates of decedents dying after December 31, 2009.''.
       (2) Conforming amendment.--Section 2106(a)(4) of such Code 
     is amended by adding at the end the following new sentence: 
     ``This paragraph shall not apply to the estates of decedents 
     dying after December 31, 2009.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.
       (g) Additional Modifications to Estate Tax.--
       (1) In general.--The following provisions of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001, and the 
     amendments made by such provisions, are hereby repealed:
       (A) Subtitles A and E of title V.
       (B) Subsection (d), and so much of subsection (f)(3) as 
     relates to subsection (d), of section 511.
       (C) Paragraph (2) of subsection (b), and paragraph (2) of 
     subsection (e), of section 521.
     The Internal Revenue Code of 1986 shall be applied as if such 
     provisions and amendments had never been enacted.
       (2) Sunset not to apply to title v of egtrra.--Section 901 
     of the Economic Growth and Tax Relief Reconciliation Act of 
     2001 shall not apply to title V of such Act.
       (3) Repeal of deadwood.--
       (A) Sections 2011, 2057, and 2604 of the Internal Revenue 
     Code of 1986 are hereby repealed.
       (B) The table of sections for part II of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2011.
       (C) The table of sections for part IV of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2057.
       (D) The table of sections for subchapter A of chapter 13 of 
     such Code is amended by striking the item relating to section 
     2604.

     SEC. 3. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED CREDIT OF 
                   DECEASED SPOUSE.

       (a) In General.--Subsection (c) of section 2010 of the 
     Internal Revenue Code of 1986 (defining applicable credit 
     amount), as amended by section 2(b), is amended by striking 
     paragraph (2) and inserting the following new paragraphs:
       ``(2) Applicable exclusion amount.--For purposes of this 
     subsection, the applicable exclusion amount is the sum of--
       ``(A) the basic exclusion amount, and
       ``(B) in the case of a surviving spouse, the aggregate 
     deceased spousal unused exclusion amount.
       ``(3) Basic exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     basic exclusion amount is $5,000,000.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2010, the dollar amount in 
     subparagraph (a) shall be increased by an amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2009' for `calendar year 1992' in subparagraph 
     (B) thereof.

       If any amount as adjusted under the preceding sentence is 
     not a multiple of $100,000, such amount shall be rounded to 
     the nearest multiple of $100,000.''.
       ``(4) Aggregate deceased spousal unused exclusion amount.--
     For purposes of this subsection, the term `aggregate deceased 
     spousal unused exclusion amount' means the lesser of--
       ``(A) the basic exclusion amount, or
       ``(B) the sum of the deceased spousal unused exclusion 
     amounts of the surviving spouse.
       ``(5) Deceased spousal unused exclusion amount.--For 
     purposes of this subsection, the term `deceased spousal 
     unused exclusion amount' means, with respect to the surviving 
     spouse of any deceased spouse dying after December 31, 2009, 
     the excess (if any) of--
       ``(A) the applicable exclusion amount of the deceased 
     spouse, over
       ``(B) the amount with respect to which the tentative tax is 
     determined under section 2001(b)(1) on the estate of such 
     deceased spouse.
       ``(6) Special rules.--
       ``(A) Election required.--A deceased spousal unused 
     exclusion amount may not be taken into account by a surviving 
     spouse under paragraph (5) unless the executor of the estate 
     of the deceased spouse files an estate tax return on which 
     such amount is computed and makes an election on such return 
     that such amount may be so taken into account. Such election, 
     once made, shall be irrevocable. No election may be made 
     under this subparagraph if such return is filed after the 
     time prescribed by law (including extensions) for filing such 
     return.
       ``(B) Examination of prior returns after expiration of 
     period of limitations with respect to deceased spousal unused 
     exclusion amount.--Notwithstanding any period of limitation 
     in section 6501, after the time has expired under section 
     6501 within which a tax may be assessed under chapter 11 or 
     12 with respect to a deceased spousal unused exclusion 
     amount, the Secretary may examine a return of the deceased 
     spouse to make determinations with respect to such amount for 
     purposes of carrying out this subsection.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this subsection.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 2505(a) of such Code, as 
     amended by section 2, is amended to read as follows:
       ``(1) the applicable credit amount under section 2010(c) 
     which would apply if the donor died as of the end of the 
     calendar year, reduced by''.
       (2) Section 2631(c) of such Code is amended by striking 
     ``the applicable exclusion amount'' and inserting ``the basic 
     exclusion amount''.
       (3) Section 6018(a)(1) of such Code, after the application 
     of section 2(g), is amended by striking ``applicable 
     exclusion amount'' and inserting ``basic exclusion amount''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.

     SEC. 4. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       (a) In General.--Part I of subchapter P of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new section:

     ``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       ``(a) In General.--In the case of a taxpayer which elects 
     the application of this section for a taxable year, there 
     shall be allowed a deduction against gross income equal to 60 
     percent of the lesser of--
       ``(1) the taxpayer's qualified timber gain for such year, 
     or
       ``(2) the taxpayer's net capital gain for such year.
       ``(b) Qualified Timber Gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(1) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(2) the sum of the taxpayer's losses described in such 
     subsections for such year.
       ``(c) Special Rules for Pass-Thru Entities.--In the case of 
     any qualified timber gain of a pass-thru entity (as defined 
     in section 1(h)(10))--
       ``(1) the election under this section shall be made 
     separately by each taxpayer subject to tax on such gain, and
       ``(2) the Secretary may prescribe such regulations as are 
     appropriate to apply this section to such gain.
       ``(d) Termination.--No disposition of timber after December 
     31, 2008, shall be taken into account under subsection 
     (b).''.
       (b) Coordination With Maximum Capital Gains Rates.--
       (1) Taxpayers other than corporations.--Paragraph (2) of 
     section 1(h) of such Code is amended to read as follows:
       ``(2) Reduction of net capital gain.--For purposes of this 
     subsection, the net capital gain for any taxable year shall 
     be reduced (but not below zero) by the sum of--
       ``(A) the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii), and
       ``(B) in the case of a taxable year with respect to which 
     an election is in effect under section 1203, the lesser of--
       ``(i) the amount described in paragraph (1) of section 
     1203(a), or
       ``(ii) the amount described in paragraph (2) of such 
     section.''.
       (2) Corporations.--Section 1201 of such Code is amended by 
     redesignating subsection (b) as subsection (c) and inserting 
     after subsection (a) the following new subsection:
       ``(b) Qualified Timber Gain not Taken Into Account.--For 
     purposes of this section, in the case of a corporation with 
     respect to which an election is in effect under section 1203, 
     the net capital gain for any taxable year shall be reduced 
     (but not below zero) by the corporation's qualified timber 
     gain (as defined in section 1203(b)).''.
       (c) Deduction Allowed Whether or not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62 of such Code 
     is amended by inserting before the last sentence the 
     following new paragraph:
       ``(21) Qualified timber gains.--The deduction allowed by 
     section 1203.''.
       (d) Deduction Allowed in Computing Adjusted Current 
     Earnings.--Subparagraph (C) of section 56(g)(4) of such Code 
     is amended by adding at the end the following new clause:
       ``(vii) Deduction for qualified timber gain.--Clause (i) 
     shall not apply to any deduction allowed under section 
     1203.''.

[[Page H4448]]

       (e) Deduction Allowed in Computing Taxable Income of 
     Electing Small Business Trusts.--Subparagraph (C) of section 
     641(c)(2) of such Code is amended by inserting after clause 
     (iii) the following new clause:
       ``(iv) The deduction allowed under section 1203.''.
       (f) Conforming Amendments.--
       (1) Subparagraph (B) of section 172(d)(2) of such Code is 
     amended to read as follows:
       ``(B) the exclusion under section 1202 and the deduction 
     under section 1203 shall not be allowed.''.
       (2) Paragraph (4) of section 642(c) of such Code is amended 
     by striking the first sentence and inserting the following: 
     ``To the extent that the amount otherwise allowable as a 
     deduction under this subsection consists of gain described in 
     section 1202(a) or qualified timber gain (as defined in 
     section 1203(b)), proper adjustment shall be made for any 
     exclusion allowable to the estate or trust under section 1202 
     and for any deduction allowable to the estate or trust under 
     section 1203.''.
       (3) Paragraph (3) of section 643(a) of such Code is amended 
     by striking the last sentence and inserting the following: 
     ``The exclusion under section 1202 and the deduction under 
     section 1203 shall not be taken into account.''.
       (4) Subparagraph (C) of section 643(a)(6) of such Code is 
     amended to read as follows:
       ``(C) Paragraph (3) shall not apply to a foreign trust. In 
     the case of such a trust--
       ``(i) there shall be included gains from the sale or 
     exchange of capital assets, reduced by losses from such sales 
     or exchanges to the extent such losses do not exceed gains 
     from such sales or exchanges, and
       ``(ii) the deduction under section 1203 shall not be taken 
     into account.''.
       (5) Paragraph (4) of section 691(c) of such Code is amended 
     by inserting ``1203,'' after ``1202,''.
       (6) Paragraph (2) of section 871(a) of such Code is amended 
     by striking ``section 1202'' and inserting ``sections 1202 
     and 1203''.
       (7) The table of sections for part I of subchapter P of 
     chapter 1 of such Code is amended by adding at the end the 
     following new item:

``Sec. 1203. Deduction for qualified timber gain.''.

       (g) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Taxable years which include date of enactment.--In the 
     case of any taxable year which includes the date of the 
     enactment of this Act, for purposes of the Internal Revenue 
     Code of 1986, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in section 1203(b) 
     of such Code, as added by this section, if only dispositions 
     of timber after such date were taken into account.

  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas) 
and the gentleman from New York, (Mr. Rangel) each will control 30 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, on June 16, the United States Senate majority leader put 
out the following statement asking for the House to send estate tax 
legislation to the Senate: ``I will ask the Speaker of the House to 
send a bill to us that would be a permanent solution to the death tax. 
I will encourage them to attach appropriate provisions to make it 
attractive and will hold a vote by July 4.'' This measure, H.R. 5638, 
is the response to the majority leader's request.
  This House is on record with a bipartisan vote in favor of repealing 
the estate, or death, tax. But we know that the Senate on a procedural 
or cloture vote rejected that offer from the House by 57 votes in favor 
of moving forward, short of the 60 necessary.
  I heard during the discussion on the rule the ranking minority member 
on Rules, Ms. Slaughter, say that this bill, H.R. 5638, will pass. I, 
too, in agreeing with her, believe that the bill will pass. It will be 
available to the Senate to take from the desk, and it will be then the 
Senate's decision to pass or defeat it.
  I want to underscore the point, this is a response to the majority 
leader's request. This is not a first offer; it is the only offer to 
the majority leader's request that the chairman intends to offer.
  This bill was crafted as a compromise. Compromises are supposed to be 
reasonable; but, most importantly, they are supposed to be doable. The 
goal of a compromise is to make law. H.R. 5638 is a compromise.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, some may ask, why now are we taking up this bill? Why 
have we decided, that is, the majority, that at a time that our Nation 
is at war, when our men and women are dying to bring democracy to Iraq, 
where there are problems getting the equipment they need to protect 
themselves, when we cannot provide even our veterans with adequate 
health care and education opportunities, why now, when we find 
ourselves with a historic $9 trillion indebtedness, when just the 
interest of this debt is going to prohibit the Congresses that follow 
us from doing the things that our great Nation would want to do, why 
now, when the people that have been hit by Rita and Katrina can't 
restore their lives, why now, when the poor are increasing in 
population, are we reaching out to the richest of the rich Americans? 
Why now would the Republican leadership make this a priority for three-
tenths of 1 percent of the American people?
  Who are these people? How do they have such a communication with the 
leadership?
  The Joint Economic Committee, which is not Republican and not 
Democrat, they are just fair, they say under existing law nobody except 
7,500 families would be liable for any taxes on an estate.
  They call it a ``death tax'' because they know how to play on words. 
Dead people don't pay taxes. But they can use what they want to get 
people emotionally involved.
  But if there is anyone that is concerned about this Republic and 
making certain that the economy is sound and that wars that we start 
are paid for and that old folks are able to be taken care of through a 
Social Security act, why now would they come with this repeal? Because 
it is a repeal. It is 80 percent a repeal. It is going to cost more 
than the original repeal. Why do they want these sound tracks to be 
able to say that they supported repeal of the death tax?

                              {time}  1330

  I am going to tell you why. Because they have a mission. They are so 
organized that they want to destroy everything that Franklin Delano 
Roosevelt started. And it is not me that is saying that. It is their 
voting record that says it. Things that Americans are so proud of.
  Social Security, a little cushion for people who worked every day in 
their lives and all they want is a little help with their security. 
Privatization, that is what we have to do. Medicare, this is something 
that we have come to depend on. They want it to implode, the things 
that they cannot deal with from a political point of view, the third 
rails, if they will.
  If they make certain that there are no resources left for Democrats 
to handle, they have won. And they don't care how many Republicans 
lose, because their mission is to destroy every bit of social services 
by saying how can we pay for it.
  So I submit to you that anytime a party is prepared to give $2 
trillion of tax cuts because it is going to present economic growth and 
then go to Communist China to borrow the money, there is something 
wrong with that picture.
  And I am suggesting, too, that these 7,500 beneficiaries, they are 
not begging for this money. They are not getting calls every day. We 
certainly don't get them. And they wish they were getting them, but 
they are not getting them, because most people God has blessed to get 
into this income status are so satisfied that they believe that they 
owe this Republic some indebtedness for the freedom and equality and 
opportunity that they receive.
  And so if you have any question about supporting the programs that 
you are proud of as Americans, not as Democrats, not as Republicans, 
remember one thing: if you get carried with the emotion, one day you 
will have to explain, why now? Why, when your great country was in so 
much debt, did you figure that you had to reward 7,500 people? Why now, 
when your Nation is at war and the GIs will be coming back, those that 
do, and they ask why can't we get a decent shake and you say because we 
didn't have the money, we had to give it to the 7,500? Why now, when 
you take a look at the budgets that we are going to have, either as 
Republican leadership or Democratic leadership, that we are going to 
say that the interest that we owe to

[[Page H4449]]

foreign countries prevent us from taking care of the things that we 
have here?
  This is not a scheme to reward 7,500 people. This is a scheme to take 
the resources away from this great Nation that has a commitment to our 
young and our old for health and education and the things that would 
really make us a strong Nation. And at the end of the day the fact that 
they are going to lose the majority won't mean anything because it 
would be a part of a plan not to perpetuate Republican or, for lack of 
a better word, leadership, but to destroy a system that Franklin 
Roosevelt had the hearts and the minds of this great country.
  So I submit to you, you can do what sounds like it is the right thing 
to do because they call it a death tax, but it will be the death of 
democracy and freedom and the ability to provide the services that are 
expected of us, not as politicians, but as Americans and Members of 
Congress. This is going to be a historic vote, and the question is 
going to be, Which side of this vote did you vote on?
  Mr. Speaker, I reserve the balance of my time.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Price of Georgia). The gallery is 
requested to refrain from showing either positive or negative response 
to proceedings on the floor.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as we might have expected, the gentleman from New York 
wheeled out all the usual arguments. I hope he didn't trip as he went 
back to his seat with the flag tightly wrapped around him in terms of 
his arguments of patriotism. The class warfare card was played; the 
rich card was played.
  ``This is for the richest of the rich,'' he said. I tell the 
gentleman from California, I will quote who know who the richest of the 
rich are. In today's Wall Street Journal editorial they said, ``But now 
comes Mr. Thomas, the chief tax writer, who has proposed a compromise 
that would be voted on as early as today but is hardly an improvement 
over current law.''
  I will tell you who the richest of the rich are. Dick Patton of the 
American Family Business Institute says, ``We flatly oppose the Thomas 
plan. The more our members hear about it, the angrier they get.'' Who 
are they? The real richest of the rich.
  So I find it rather ironic that they need to play those same old 
tired cards that this is the rich versus everyone else, when today the 
rich have spoken. They don't like the compromise. A compromise is a 
compromise.
  Now, let us turn to a paper, The Washington Post, which said 
yesterday: ``The search for a compromise has pitted affluent small 
business owners against the truly rich, families with estates valued at 
tens of millions of dollars.'' The paper says: ``Thomas came down in 
favor of the business owners.'' And we know the Wall Street Journal 
agrees I didn't come down on the side of the rich.
  This is a compromise. We will send it over to the Senate, and we will 
see if there are 60 Members of the Senate that want to remove once and 
for all the uncertainty in this very difficult area.
  The National Federation of Independent Business says this is a 
reasonable compromise and they will be watching everyone's vote. Who? 
For the very rich? No. For the small businessman that creates all the 
jobs. A few extra dollars and the ability to keep the business together 
after the principal owner has died will make sure that we can continue 
this economy in the robust way in which it has continued.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, if the rich don't want it and the middle 
class don't want it, why can't we get on with just the minimum-wage 
increase and put this behind us?
  Mr. Speaker, the gentleman from Michigan (Mr. Kildee) has a unanimous 
consent request.
  (Mr. KILDEE asked and was given permission to revise and extend his 
remarks.)
  Mr. KILDEE. Mr. Speaker, I rise in opposition to H.R. 5638.
  Mr. Speaker, in the past, I had considered supporting legislation 
that would exempt the first $5 million per individual and $10 million 
per couple from the Federal estate tax.
  I believed that to be a reasonable compromise to a complete repeal of 
the Estate Tax.
  But I supported that figure of $5 and $10 million exemption before 
other tax cuts had driven us into huge deficits.
  This Congress has already approved seven tax cuts.
  In addition, Mr. Speaker, our Nation is currently engaged in two 
wars, two very costly wars in terms of human lives and Federal tax 
dollars.
  Seven tax cuts and two wars make it difficult for me to support this 
reform of the Federal estate tax.
  I also wish the House Republican leadership had allowed us to offer 
the reasonable democratic substitute amendment.
  Our amendment would permanently raise the exemption on the estate tax 
to $3.5 million per person and $7 million per couple.
  An exemption at that level would protect over 99 percent of all 
Americans from ever having to worry about paying the estate tax.
  Mr. Speaker, I urge my colleagues to oppose H.R. 5638.
  Mr. RANGEL. Mr. Speaker, I would like our Democratic whip, the 
distinguished gentleman from Maryland (Mr. Hoyer), to be given 2\1/2\ 
minutes.
  Mr. HOYER. This has nothing to do with the economy and everything to 
do with fiscal responsibility.
  Mr. Speaker, over the last 5\1/2\ years, this Republican majority has 
repeatedly pushed tax legislation that is blatantly unfair, grossly 
irresponsible, and fiscally ruinous. Today, however, they outdo even 
themselves.
  Our Nation is at war, our brave troops are under fire, our Nation is 
facing record budget deficits. That is the legacy of this Republican 
leadership. And the national debt, which now stands at $8.4 trillion, 
is exploding under this Republican Congress and administration.
  Despite all the challenges facing the people of our Nation, today 
this Republican majority insists that we give a huge tax break to the 
heirs of the wealthiest people in America. I am for modification that 
is in process, not this bill.
  If there ever was a bill that demonstrated the Republican Party's 
misguided priorities and the deep differences between our parties, this 
is the one. Democrats are continuing to fight to raise the Federal 
minimum wage which has not been increased since 1997 and which is at 
its lowest level in half a century; 6.6 million workers would be 
affected, 7,500 people in this bill.
  As the majority leader told the press on Tuesday: ``I am opposed to 
it,'' meaning the increase in the minimum wage, ``and I think the vast 
majority of our conference is opposed to it.''
  But this bill comes to us, not been to committee, never marked up in 
committee, comes directly to the floor with no consideration.
  Let us be clear about the facts. Less than 1 percent of all estates 
in America will pay estate taxes in 2006 under this year's exemption 
before this bill. And when the exemption increases in 2009 to $3.5 
million, which I have supported, $7 million for couples, only 7,500 
estates in America will be subject to the estate tax. But that is not 
enough. Warren Buffet said they talk about class warfare and his class 
is winning. Amen, Mr. Buffet.
  Today, House Republicans are falling all over themselves to give the 
heirs of approximately 7,500 estates a tax cut. This bill is not only 
morally reprehensible but fiscally irresponsible. The Center for Budget 
and Policy Priorities estimates that this Republican bill will cost 
$762 billion over its first 10 years.
  You don't have $762 billion. We are all correct, you are going to 
borrow it for the Chinese, from the Saudis, from the Germans, from the 
Japanese, and others. And who is going to pay the bill? Our children 
are going to have to pay the bill, our grandchildren are going to have 
to pay that bill, because you don't have the money.
  The Wall Street Journal, which was quoted by Mr. Thomas, said the 
other day they didn't agree with PAYGO. Why don't they agree with 
PAYGO? Because it would undercut tax cuts. Why would it undercut tax 
cuts? Because you neither have the courage nor the ability to pay for 
your tax cuts.
  Vote against this bad bill.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. Once again, the Chair requests that visitors 
in the gallery refrain from showing either positive or negative 
response to proceedings on the floor.

[[Page H4450]]

  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  I am heartened by the gentleman from Maryland's statement that he is 
now in support of current law which will move to 3.5. Everyone just 
needs to remember he was opposed to the legislation that put it into 
effect. I expect 5 or 6 years from now he will be in favor of this 
particular measure when he speaks on the floor, although he will be 
opposed to putting it into law. I always appreciate those kinds of 
positions.
  The gentleman also quoted a very liberal think tank that dreams up 
numbers that allows them to make outlandish statements on the floor of 
the House. The Joint Committee on Taxation, the official scorekeeper, 
says that over a 10-year period this measure will not be $700-some 
billion; it is $283 billion.
  Again, you will hear extremely outrageous statements, as we heard on 
the underlying legislation in which, for example, the gentleman from 
Maryland opposed but now blithely says I support. The point is, why not 
be right the first time? Why not support the legislation when it is in 
front of you? Why not vote now for H.R. 5638 instead of waiting to say 
you are for what the bill did after it becomes law?
  Mr. Speaker, it is now my pleasure to yield 2 minutes to a member of 
the Ways and Means Committee, the gentleman from Arizona (Mr. 
Hayworth).
  (Mr. HAYWORTH asked and was given permission to revise and extend his 
remarks.)
  Mr. HAYWORTH. I thank the distinguished chairman of the Ways and 
Means Committee for this time as we again return to the well of the 
people's House; and how interesting it is, Mr. Speaker, that so many 
arguments are devoid of real facts and taken perhaps as articles of 
faith.
  I heard the minority whip come to the well and attempt to whip up 
partisan passions as if this bill had some grand nefarious design. No, 
Mr. Speaker, that is not the case. And I will avoid pointing out the 
obvious outlook of my friends on the left who basically take as an 
article of faith that people who succeed should be penalized.
  I rise in strong support of this commonsense compromise because, 
according to the Joint Committee on Taxation, this legislation would 
permanently protect more than 99.7 percent of all taxpayers from ever 
paying this egregious estate tax and would reduce the harmful economic 
distortions caused by the current law estate tax.
  And, again, this is not a partisan argument. The standard bearer of 
the Democratic Party in the State of Arizona, now a decade ago, has 
constantly contacted me as a Member of Congress saying: When are you 
going to take longlasting action on the estate tax? Because I cannot 
pass my business down to my children in the current conditions.

                              {time}  1345

  Why would we penalize those who succeed, and on top of that, by 
extension, penalize the very people my friends on the left purport to 
help? Because business owners create jobs. The government does not 
create the jobs.
  For increased economic activity, for a good, solid, consistent policy 
that helps the most people in the best ways, support this legislation.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Levin), an outstanding member of the Ways and Means 
Committee.
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Mr. Speaker, this bill is a test whose side are you on: 
The 300 million Americans who will be alive in the year 2009 or the 
7,500 families whose estates would be taxed according to 2009 law and 
figures. That is a Joint Tax Committee statement. It is 300 million 
versus 7,500 families.
  This is not a compromise. This is a sellout, a sellout of 300 million 
people.
  It is at a time that you will not even bring up a minimum-wage bill. 
At a time when middle-income families are under pressure. I read from 
The Economist, not a very liberal magazine: In the late 1990s everybody 
shared in this boom, but after 2000 something changed. After you adjust 
for inflation, the wages of the typical American worker have risen less 
than 1 percent since 2000. In the previous 5 years, they rose over 6 
percent.
  Yes, there is class warfare by you on 300 million Americans, not on 
the family farmer, the small business person. Under our approach, 99-
plus of people with estates would not be taxed at all.
  Essentially, you are saying to 300 million, you pay the $800 billion 
the cost of this bill in the full 10 years. That is the accurate 
figure.
  This bill is irresponsible fiscally, and it is immoral in terms of 
values.
  Let us have a resounding ``no'' vote on this irresponsible 
legislation.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Issa) on the compromise bill, H.R. 5638.
  (Mr. ISSA asked and was given permission to revise and extend his 
remarks.)
  Mr. ISSA. Mr. Speaker, I want to thank the chairman for bringing this 
important piece of legislation to the floor, not because it is good 
enough. It is not. Not because it pleases the Democrats. It does not. 
But because it is the best we can do.
  I just came from speaking with the very small business people that 
you just heard somehow they were going to protect in another way. I 
just finished hearing that 300 million people is what it was all about, 
which is a rounding error up, and 7,500 that would pay the tax that 
die, but, of course, we are using two different figures, as we often 
do.
  It is not about 300 million, because 300 million people will not die 
next year, but it is about the businesses that will die if we do not do 
something, and this is not good enough. It is a down payment.
  I rise in support of this bill, not because it is good enough. It is 
not. It does not keep the promise I made to the people of my district 
to end once and for all the double taxation of the dead, but I do rise 
in support of this because it is the best we can do. I promise today to 
vote for this bill, and then I promise to come back until, in fact, we 
once and for all eliminate the unreasonable and unfair double taxation.
  So please support this piece of important legislation.
  Mr. RANGEL. Mr. Speaker, and that is the best they can do.
  Mr. Speaker, I yield 2 minutes to the outstanding gentleman from 
Maryland (Mr. Cardin).
  Mr. CARDIN. Mr. Speaker, let me thank Mr. Rangel for yielding me this 
time.
  There is no question that we need to clean up our Tax Code. We need 
to make it predictable. We need to deal with expiring provisions. I 
would hope that we would deal with the savers' credit that is scheduled 
to expire because that helps low-wage workers, and we need to deal with 
that.
  I would hope that we would adjust the Federal estate tax and make the 
changes permanent, but I cannot support this bill.
  This bill is fiscally irresponsible. By the chairman's own account, 
the Joint Tax Committee estimates that it will cost us $283 billion 
that we do not have. That $283 billion is basically in the second 5 
years of the program because we already have a law in place now. So the 
annual loss of revenue is close to $60 billion a year. There is no 
offset to that loss.
  To the credit of a Marylander who contacted me and wants to see a 
permanent change in the estate tax, that person at least had enough 
courage to suggest offsets so that we would not be adding to the 
deficit of the country, but this legislation does not do that. It is 
fiscally irresponsible.
  Mr. Speaker, it speaks to our priorities. Yes, we have time to deal 
with estate taxes that will benefit basically people who have wealth in 
excess of millions of dollars, but we do not have enough time to deal 
with increasing the minimum wage that has been stagnant now for the 
last 10 years, people making $5.15 an hour. Where is the priority of 
this Congress?
  We have time to take up the reform of the estate tax, but we cannot 
deal with college education costs and a tuition tax credit that was 
allowed to expire. Where is our compassion for people who really do 
need our help? Two hundred eighty-three billion dollars for the 
wealthy, nothing to help people who are trying to struggle with a 
college education.
  How about the doughnut hole in Medicare? We know seniors cannot 
afford it. How about using some of that money to deal with the Medicare 
prescription drug bill, or how about paying down our deficit?

[[Page H4451]]

  I would hope that both Democrats and Republicans would agree that our 
first priority should be to pay down our deficit. The problem, Mr. 
Speaker, is that we are not dealing with the problems of typical 
families. Instead, we are dealing with those who do not need the help.
  I urge my colleagues to reject this legislation.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from California (Mr. Herger), a member of the Ways and Means 
Committee.
  Mr. HERGER. Mr. Speaker, all across America following the death of a 
loved one, people of modest means are all too often faced with the grim 
prospect of selling a family farm or small business just to pay the 
taxes that come due. Such was the case in my own family when my cousins 
had to sell the farm that had been in our family since the early 1900s 
just to pay the taxes. This is simply wrong.
  I rise in strong support of the Permanent Estate Tax Relief Act. Like 
many others in the House, I continue to strongly support permanent 
repeal of the death tax. Americans should not have to pay this onerous 
double tax on savings and capital.
  Currently, we are scheduled to have a 1-year full repeal of the death 
tax in 2010, but if Congress fails to act, the death tax will return 
full force in 2011, reducing exemption levels and restoring maximum tax 
rates of nearly 60 percent.
  Mr. Speaker, this bill before us institutes permanent relief for 
those subject to the death tax and restores predictability and 
certainty to small business owners and family farmers planning for the 
future. It boosts exemption levels and adjusts them for inflation, and 
with maximum rates tied to capital gains rates, those still subject to 
the tax will see their burden significantly reduced.
  Mr. Speaker, I urge passage of this legislation.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the outstanding 
gentleman from the State of Washington (Mr. McDermott).
  (Mr. McDERMOTT asked and was given permission to revise and extend 
his remarks.)
  Mr. McDERMOTT. Mr. Speaker, as I look around the House today, there 
is scarcely a dozen people on the floor, so they must be somewhere 
else, probably watching this on television.
  So those of you who have just tuned in on television, you are 
watching not the House of Representatives, but the theater of the 
absurd. What has gone on in this floor this morning and will continue 
in this afternoon is absolutely absurd.
  The first thing we did was we refused to consider a bill to raise the 
minimum wage. The minimum wage has been the same since 9 year ago, 
$5.15 an hour. This is what ordinary Americans consider a starting 
wage, and this House will not do it.
  Now, the second act of this theater of the absurd is let us get rid 
of the estate tax. It was put in by who? By a public-spirited 
Republican. Theodore Roosevelt, right. It was not some wild-eyed lefty. 
It was a guy who was a public-spirited Republican President of the 
United States, and it is used as a way to finance things that we think 
we ought to do.
  If you read last Sunday's New York Times, and you read the debt that 
this country is in, and just read the section on college debt, you can 
see what we could do if we would shift the cost of education back on to 
the State and off the back of our kids. The average debt coming out of 
college is $20,000. Why would you want to be a schoolteacher dragging 
that kind of debt or a doctor, $150,000? But, no, we have to pass a law 
to give an unending ability of people to get rich in this country and 
never give anything back.
  Now, when you talk about who calls you in your district, well, Mr. 
Gates called me and he said, do not vote for the repeal of the estate 
tax.
  Now, the third act to this thing, just so you understand how really 
crazy this is, the third act we are going to do before we leave here 
today is pass the line item veto to the President. It is a total 
capitulation by the right, by the House Republicans, saying, please 
save us from ourselves; we cannot stop giving money away.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  It is a pleasure to indicate that for the first time in my memory I 
completely agreed with the gentleman from Washington when he said, if 
you have just tuned in, and you are watching me, you are watching the 
theater of the absurd.
  We are not repealing the estate tax so Mr. Gates wasted a phone call. 
I hope he is a little more in tune with what is going on in the 
software world than he is what is going on in the floor of the House.
  We are not doing away with the estate tax. We are producing a 
compromise which will pass this House and go to the Senate in an 
attempt to make permanent law and remove uncertainty.
  Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from 
Texas (Mr. Brady), a member of the Ways and Means Committee.
  Mr. BRADY of Texas. Mr. Speaker, when I first came to Congress, I had 
a family-owned nursery come sit down with me and explain to me the 
effect of the death tax, and two of the three children still worked in 
the nursery. What they showed me on paper was that because the tax, 
when their parents died, if they could take out enough life insurance 
on their parents, and if they could go back to the bank and borrow 
enough money, which, by the way, they spent years getting out of debt, 
but if they could borrow enough money, they might be able to keep their 
family nursery. Think about that. They were telling me if they could 
make enough money off their parents' death and borrow enough money, 
they might be able to keep their family nursery, might.
  The death tax is the wrong tax. It hits the wrong people at exactly 
the wrong time. It is the number one reason small businesses do not get 
handed down to the next generation. It is the main reason more and more 
family farmers and ranches get sold off to pay Uncle Sam for all the 
big spending programs we have here today.
  Permanent repeal of the death tax remains everyone's goal, my belief, 
on the Republican side of this Chamber.

                              {time}  1400

  But any day I can free more family farms and ranches from the specter 
of the death tax, I am going to support it. Any day I can lower the 
death tax rate permanently on family groceries and family small 
businesses, I am strongly going to do that. Until full repeal occurs, I 
will strongly support lowering this tax. I support this bill.
  Mr. RANGEL. Mr. Speaker, I recognize the conscience of the Democratic 
Caucus, Mr. Lewis, the gentleman from Georgia, for 2 minutes.
  Mr. LEWIS of Georgia. Mr. Speaker, I want to thank my friend, Mr. 
Rangel, for yielding.
  Mr. Speaker, I come to the floor today because I am sick and tired of 
the greed that is prevailing in this House. The Republican majority 
today will help millionaires with their estate tax cut while forgetting 
hardworking Americans, millions of them, by refusing to increase the 
minimum wage. This is unbelievable. It is immoral and it is wrong.
  The majority must wake up and see the struggles of minimum-wage 
workers. They work hard every day to feed their families. People cannot 
afford health care. People are struggling to fill their cars with 
gasoline. Many people live in poverty. They live paycheck to paycheck, 
and they have not seen an increase in the minimum wage in 9 years.
  This Congress should be ashamed. Be ashamed. When will we stop 
helping the superrich? They do not need our help. They are not begging 
for our help. They are not calling us, they are not sending letters or 
e-mails, they are not petitioning us to help. When will we start to 
take care of the least among us?
  What would the great teacher say, what would the great teacher say 
when he comes into the Chamber and sweeps the money out of the Chamber?
  Franklin Delano Roosevelt says that ``the test of our progress is not 
whether we add more to the abundance of those who have much; it is 
whether we provide enough for those who have too little.'' We are 
failing this test and we are failing the American people. This is not 
progress. This is not helping the least among us. This is greed and it 
is disgraceful.

[[Page H4452]]

  I urge my colleagues to defeat this bill.
  Mr. THOMAS. Mr. Speaker, it is now my pleasure to yield 2 minutes to 
a member of the Ways and Means Committee, the gentlewoman from 
Pennsylvania (Ms. Hart).
  (Ms. HART asked and was given permission to revise and extend her 
remarks.)
  Ms. HART. Mr. Speaker, I thank the chairman for yielding me some time 
on this issue, one that I have worked on for quite a few years.
  When I was a State senator in Pennsylvania, we rolled back the death 
tax 1.5 percent. We immediately saw healthier small businesses, 
healthier family businesses, and healthier family bank accounts.
  I rise in support of this bill that further addresses a tax problem 
that the Federal Government has attempted to solve for a number of 
years. It is one of the main issues I hear about from my constituents 
when we talk about tax policy and what incentives we need in our Tax 
Code to promote entrepreneurship and to promote economic and job 
growth.
  The death tax is a clear example of tax law that deters this kind of 
growth. It deters an individual from starting a business. It deters a 
family from keeping a business going for generations. Worse than that, 
it deters the very people that the other side was referring to that 
this allegedly hurts, the middle class. These are our small business 
people.
  A report recently released by the Joint Economic Committee 
highlighted a number of disadvantages created by the death tax. First, 
it inhibits economic efficiency and it stifles innovation. One survey 
noted that two-thirds of the respondents stated that the death tax was 
the top reason why it was difficult for a small business to survive 
from one generation to the next.
  One of the biggest complaints I hear from these people, family 
business owners, small farmers in my district, is the immediate cost of 
complying with that tax. The majority of the assets held by a family 
business are farm property or business equipment or the business's 
building. They are invested in the business. This isn't cash. So they 
do not have the liquid assets to pay this tax.
  So what do they have to do? In order to find the capital to pay this 
death tax, we force these families to sell off a part of their business 
and to sell off parts of their family farm to pay the tax. How this 
helps them I am really baffled. I don't think it helps them. They tell 
me it doesn't help them, and they have asked us for relief. Today's 
bill puts us in the direction of further relief for these families, 
these family business people, these family farmers.
  I suggest my colleagues look at the facts. Look at how people respond 
to death tax cuts, with more job growth, and support this bill.
  Mr. RANGEL. Mr. Speaker, I would like to yield 2\1/4\ minutes to a 
leader in the United States Congress and a member of the Ways and Means 
Committee, the gentleman from California (Mr. Becerra).
  Mr. BECERRA. I thank the gentleman for yielding. Ladies and 
gentlemen, our government is in complete disarray. We have no policy in 
Iraq. We have seen the highest level of fiscal irresponsibility this 
government has ever propounded upon the American public. We have 
breathtaking record deficits in our budget. And our priorities, as 
articulated in this House, are upside down.
  We have soldiers today who are dying. We have millions of Americans 
working to feed their family on a minimum wage of $5.15 an hour. We 
have gasoline prices that are double what they were when President Bush 
first assumed office. But what do we have from our friends on the 
Republican side to deal with all of this? A tax cut that will go to the 
wealthiest families in America.
  I hope, ladies and gentlemen, that we will recognize that every time 
a Member who supports this tax cut for the wealthiest families in 
America comes up to talk, that we recognize that they are talking about 
helping 7,500 families, period. Of the millions of Americans and of 
those Americans who will die, this bill will help only around 7,500 of 
all of America's families. It is because it deals with only the very 
wealthiest.
  So everything they say, put it in context. It will help 7,500 
families. Or put another way: of a thousand people who will die in 
America, less than two will receive the hundreds of billions of dollars 
in tax cuts that will go to those who pay estate taxes; 7,500 families, 
less than two of every 1,000 Americans who will die.
  What could we, instead of giving money to the very wealthy in 
America, do? Well, we could have fully funded the Medicare part D 
prescription drug benefit that Republicans have failed to fund. We 
could have sent 40 million American children to a year of Head Start. 
We could have provided full health insurance for 174 million children 
for one additional year. We could have hired 5 million additional 
public school teachers for one year. We could have given 4-year 
scholarships to 14 million students to public universities. We could 
have provided worldwide AIDS programs for 29 years. And we could have 
provided for every child in the world basic immunization for the next 
96 years.
  Our priorities are upside down.
  Mr. THOMAS. Mr. Speaker, it is now my pleasure to provide 3 minutes 
in support of H.R. 5638, the compromise that is endorsed by the 
National Association of Home Builders, the National Association of 
Realtors, the United States Chamber of Commerce, the majority whip of 
the House of Representatives, to the gentleman from Missouri (Mr. 
Blunt).
  Mr. BLUNT. Mr. Speaker, I am pleased to be able to be on the floor in 
support of this important piece of legislation. I am also grateful to 
the chairman not only for this piece of legislation but for the 
significant legislation he has brought to the floor year after year 
that really has resulted in an economy that is growing, an economy that 
creates opportunity, an economy with the lowest unemployment rate, an 
unemployment rate below the average of the 1970s, the 1980s, or the 
1990s.
  As I listen to this debate, what we are really talking about today is 
do we want to let this inheritance tax go back to the level that it was 
in 2001, where every family farm, every small business that had 
accumulated value and assets of $600,000 would see 65 percent of the 
excess of that go to the Federal Government.
  Now, I will say first of all that I never thought a trip to the 
undertaker should also necessitate a trip to visit the IRS by somebody 
in your family. And while I would like to see the total elimination of 
the death tax, I think that the bill that the chairman has brought to 
the floor today solves the problem for millions of American families 
who have businesses and farms that are worth more than that old 
exemption; that this suddenly lets them put money that has been going 
into tax avoidance into continuing to grow their business, continuing 
to create jobs, continuing to create opportunity, and continuing to 
expand and build.
  Many of the family farmers and small business folks that I work with 
have built their business with their mom and dad right there at their 
side. And, frankly, at the time mom and dad passes away, it is really 
hard for them to know in their mind who helped create the wealth of 
this business, who helped grow this farm that they grew up on and who 
didn't. But they have to suddenly decide, as Ms. Hart pointed out, what 
do I sell, which piece of equipment do I sell, what part of the farm do 
I sell, do I have to sell the corner grocery store and service station 
just to pay the inheritance tax?
  This creates an opportunity for families working together to continue 
to grow their businesses, to invest their money in the future of their 
businesses, in the jobs of the people that they will hire, in the 
communities that they are a part of, and to give a greater level of 
assurance that their children can continue to do the same kind of job, 
in the same kind of place, with the same kind of opportunity that they 
had.
  There is nothing you have when you die that you haven't paid taxes on 
two and three and four times. This bill, for a significant number of 
Americans, says you don't have to pay taxes that last time after you 
die. It is the right step to take today. I am interested in taking more 
steps in the future to continue to work to eliminate this tax, but this 
is a critically important step

[[Page H4453]]

for us to take as we approach 2010 and to let money that has been going 
into tax avoidance go into growing this economy.
  Mr. RANGEL. Mr. Speaker, how much time is remaining on both sides?
  The SPEAKER pro tempore. The gentleman from New York has 10\1/4\ 
minutes, and the gentleman from California has 12\1/2\ minutes.
  Mr. RANGEL. Mr. Speaker, I yield to the gentleman from Massachusetts, 
an outstanding hardworking member of the Ways and Means Committee, Mr. 
Neal, 2 minutes.
  (Mr. NEAL of Massachusetts asked and was given permission to revise 
and extend his remarks.)
  Mr. NEAL of Massachusetts. Thank you, Mr. Rangel, very much.
  What the other side wants you to believe today is that this is tax 
relief for the average American. What the majority whip said a couple 
of moments ago was interesting. He said the economy is growing; we have 
to keep the economy growing. He cleverly neglected to mention the 
deficits are growing, the insurgency in Iraq and Afghanistan are 
growing. You need the money to pay for those things.
  You know what this is? This isn't for hardworking families. This is 
the Paris Hilton Tax Relief Act. That is who we take care of with this. 
Not Conrad Hilton, Paris Hilton. She will be in great spirits this 
evening when she finds out that the Republican Party has come to her 
assistance once again.
  $2 trillion worth of tax cuts already, $800 billion more worth of tax 
cuts today, and friends across America, how do you square that with two 
wars? Seven tax cuts and two wars with no exit strategy in front of us, 
and they continue to cut taxes.
  And the majority whip said, oh, he was cutting taxes for average 
Americans. We don't have time in this institution to raise the minimum 
wage. We don't have time for the people that clean the hotel rooms, 
make the beds, and shovel the streets. We don't have time for them. 
But, my God, today we have time for Paris Hilton. We will take care of 
her very well with this piece of legislation. The troops in Iraq? We 
will cut veterans benefits when they come home.
  Let us make all kinds of changes here. But, my goodness, true to 
form, they are rich and they are not going to take it any more.
  This Congress has bent over backwards to take care of the wealthy in 
America and the strong. And who do we neglect? People that do the 
menial jobs across this country that we depend upon every single day. 
Is there no end to this embarrassment of what we do on behalf of the 
powerful and the wealthy in America?
  That is how much of the American population is going to benefit from 
what they do. Less than 2 percent of the American people are about to 
benefit from what they are going to do today.
  I cannot believe the choice that this Congress is making today.
  During the last 10 days, committees within the House have turned back 
efforts to raise the minimum wage. We won't provide any help to people 
who earn $5.15 per hour, $10,700 a year. At that wage, people have to 
work an entire 8-hour day in order to pay for a single tank of gas.
  And after rejecting any relief for working poor families, what is the 
next order of business for the Republican Congress? Elimination of the 
inheritance tax--a tax that affects only the wealthiest 7,000 families 
in the United States.
  The proposal under consideration today would cost $762 billion over 
its first 10 years in effect, all to benefit the tiniest share of the 
wealthiest and most successful members of our society--people who want 
for nothing, and who have enjoyed the largest share of the rest of the 
tax cuts that we have passed since 2001.
  In this year's budget, the United States Congress cut funding for 
veterans. We cut funding for programs that helped the elderly and small 
children. We cut funding for student loans.
  We have taken the step--unprecedented in our Nation's history--of 
conducting two wars with six large tax cuts.
  And even after all of that, here we are today, contemplating a tax 
cut worth hundreds of billions of dollars that will go to the likes of 
Paris Hilton.
  Three estates in every 1,000 would benefit from this tax break. This 
is not widespread tax relief. This is not Main Street tax relief. This 
is Park Avenue tax relief that Main Street has to pay for.
  This bill costs almost as much as estate tax repeal, and the benefits 
accrue to the people in our society who need tax relief the least. We 
have a record deficit, we have a skyrocketing national debt, and we 
have two wars to pay for. This isn't fuzzy math, this is fantasy math.
  Mr. THOMAS. Mr. Speaker, it is now my pleasure to yield 2 minutes to 
a newer Member of the House of Representatives, the gentleman from 
California (Mr. Campbell).
  Mr. CAMPBELL of California. I thank my colleague from California, 
Chairman Thomas, for yielding me this time.
  Ladies and gentlemen, I, like the majority of this House, would 
support full repeal of the estate tax, but that, as Chairman Thomas 
explained, has not passed the Senate. So this is a compromise proposal, 
but one which I fully support, and for three reasons I will give today: 
one is facts, second is economics, and the third is equity.
  First of all, facts: people on the other side this afternoon have 
said that 7,500 people will benefit from this reduction in the death 
tax and that the tax they will not pay, I think it was $750 billion 
over 10 years. If you do the math on that, Mr. Speaker, you will find 
that that is $100 million per family.
  Now, that is very odd, since families with as small as $1 million of 
a total taxable estate will be relieved from tax under this bill.

                              {time}  1415

  So facts are not what they say. The facts are hundreds of thousands, 
hundreds of thousands of families over the next 10 years will be 
relieved from paying tax on death under this compromise proposal.
  Second, economics. We have seen that when we reduce the capital gains 
tax, the economy improved, and revenue to the government actually 
increased. The same thing will happen here. People are out there with 
lead trusts, with remainder trusts, with family limited partnerships 
and all kinds of things that do not generate benefit for this economy 
but are done simply so they can try to keep a house or a business or 
farm in their family, they won't have to do that. Mr. Speaker, 99.7 
percent of the families in America will not have to do that under this 
proposal.
  The third is equity. Right now under the death tax as it exists, some 
people can leave their house to their children; some people can't. Some 
people can leave their farm to their children; some others can't. Some 
people can leave their business to their children; and some other 
people can't.
  Mr. Speaker, we should not have a tax policy that says to some people 
what you have worked for and earned in your life you may leave to your 
children, and other people can't do that. I urge an ``aye'' vote on the 
bill.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Doggett), a member of the Ways and Means Committee.
  Mr. DOGGETT. For the wealthiest few, Republicans don't just aim to 
eliminate the misnamed ``death tax,'' they want the death of all taxes.
  They have got some exit strategy, not for our troops sacrificing 
their all and facing death in Iraq, it is an exit strategy for 
billionaires from the tax burden that they should share to support our 
Nation.
  For whom do they spell relief today?
  Minimum wage? Won't raise it.
  Gas prices? Won't cut them.
  Drug prices? Won't lower them.
  Veterans' health care? Can't cover them.
  Student loans, Medicare, Medicaid? Cut, cut, cut.
  This is truly a ``cut-and-run'' Congress: cutting relief for most 
Americans while running up a huge deficit to finance more billionaire 
tax breaks.
  Will you benefit from these new tax breaks today? Take this quiz:
  Do you play Yahtzee or maintain a fleet of yachts?
  Do you wear a hard hat or a silk top hat?
  Do you drive a pick-up or own a gallery of Picassos?
  Do you pump gas by the gallon or sell it by the barrel?
  Only if the answer is the latter for all of these questions are you 
likely to be among the handful of Americans who benefits from not 
having to pay a tax that Teddy Roosevelt, back when there were a few 
Teddy Roosevelt Republicans, called a key to not having us copy the 
landed aristocracy of the European continent.

[[Page H4454]]

  This bill today goes beyond fiscal irresponsibility, it is true 
fiscal insanity, piling burden upon burden on our children and 
grandchildren.
  Mr. Thomas is correct that it is a ``compromise,'' but only in the 
sense that it compromises our families and our Nation's future and 
strength.
  Mr. THOMAS. Mr. Speaker, it is with great pleasure that I yield 2 
minutes to a colleague, someone who understands the reason we are here 
today, a cosponsor of H.R. 5638, the gentleman from Alabama (Mr. 
Cramer).
  Mr. CRAMER. Mr. Speaker, I thank the chairman for yielding me this 
time. I do rise in support of the Permanent Estate Tax Relief Act of 
2006.
  I want to make a statement on behalf of the farm families of this 
country. When I came to Congress in the early 1990s, my farm families 
told me stories over and over again of their problems encouraging the 
next generation to farm the land that they farm. This is not a rich 
person's estate tax bill. This is a reasonable compromise.
  A lot of us on this side of the aisle have worked long and hard in a 
bipartisan effort to make sure we had an opportunity to bring that 
voice of those farmers, to bring the voice of small businesses in this 
country into alignment with the Federal Government so we could pass for 
them estate tax reform, estate tax relief that will give them some 
permanency.
  We made a step toward that, but that step has a huge gap in it. It is 
not permanent. So we have done something of a helping hand, but we have 
also made this a lawyer's mecca here. Estate tax planning is something 
they cannot do because they don't have the ability to know exactly what 
is going to happen.
  Is everything in this bill that I want in this bill? No. And there 
are a lot of Members who didn't get everything in this bill that they 
want, but this is a reasonable compromise.
  I have cochaired a coalition of folks who want to eliminate the death 
tax, but I am here to say this is a reasonable alternative, and Members 
should support it.
  Mr. RANGEL. Mr. Speaker, I would like to yield 2 minutes to the 
gentleman from North Dakota (Mr. Pomeroy), a Member who really 
understands this problem.
  Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding.
  To start out, let's have a little truth in labeling. The chairman of 
the Ways and Means Committee calls it a compromise bill. Compromise 
involves some give and take. This is a bill that he created, no 
consultation, no discussion with the Senate, no discussion with the 
Ways and Means Committee, no discussion with anybody. That is not 
negotiation, that is not a compromise.
  A compromise involves meeting people halfway. If you look at the 
revenue lost here, fully considering the lost revenue between 2010 and 
2020, it is virtual repeal. We have been able to calculate it is 
roughly 80 percent of the cost of full repeal. Again, no compromise.
  Let's put this in the context of the fiscal situation facing this 
country, because this House majority has voted to raise the debt limit 
of this country, voted to raise it in March, and because the deficits 
were so horrendous, they had to vote to raise it again in May. It now 
exceeds $9 trillion.
  With the revenue, the $800 billion revenue lost in the next decade, 
it will all have to be borrowed. Who are we borrowing from to help 
under their bill? The shocking fact is 43 percent of those who we are 
borrowing from to help are estates over $25 million, the richest few in 
this country.
  There is another way. We can take the 2009 of $7 million for joint 
estates. This is the compromise Democrats would be willing to go for. 
It takes care of 99.7 percent of the estates in this country. We will 
go one further. We will dedicate the estate tax revenue over that to 
the Social Security Trust Fund. Social Security actuaries tell us such 
a step would add 5 years to the life of the Social Security program.
  So you have a very stark choice here, the majority bill which is 
going to hurt Social Security, or our bill which would add 5 years.
  Mr. THOMAS. Mr. Speaker, it is a real pleasure to yield 4 minutes to 
a member of the Ways and Means Committee who has been a stalwart on 
this issue, who has been in the forefront and is one of those who not 
only knows this issue from an intellectual point of view, but who has 
lived it with his family, the gentleman from Missouri (Mr. Hulshof).
  (Mr. HULSHOF asked and was given permission to revise and extend his 
remarks.)
  Mr. HULSHOF. Mr. Speaker, one of the interesting things about sitting 
through the debate and hearing all of the various points and wanting 
desperately to respond to each and every one of them, and not having 
the time to, I would say to my colleague from the Ways and Means 
Committee from the State of Washington who mentioned that he had taken 
a phone call from Mr. Gates, I wish the same gentleman would actually 
take a phone call from the owner of the major metropolitan newspaper 
from Seattle, Washington, who actually supports permanent repeal of the 
death tax.
  Having said that, I listened to my friend from North Dakota who just 
spoke. I am mindful that I stood in this same spot on April 13, 2005, 
on rollcall vote 102 when we, Mr. Cramer and I as lead or chief 
sponsors of H.R. 8, which was permanent repeal. We had the rollcall 
vote, and we had an extraordinary bipartisan vote: 272 Members of this 
body said once and for all it is time to kill the death tax.
  There were 42, dare I say courageous, Democrats who voted for 
complete repeal. I hope my words get to those 42, and I urge that same 
steadfastness on this compromise. It is my understanding there has been 
some intense political pressure put on my colleagues across the aisle 
from their leadership, and I certainly hope they would look at this 
compromise.
  I would say to my friend from North Dakota, this is a compromise. As 
we debated this bill back in April 2005, he pointed out that H.R. 8, 
the complete repeal, did not include a step up in basis. This bill 
does, a complete step up in basis upon death.
  The gentleman from North Dakota, when we debated this a year and a 
half ago, talked about there was no indexing. We fixed that in this 
bill. There is indexing so that the passage of time and the 
acceleration or accumulation of assets as they appreciate in value will 
not suddenly look squarely down the barrel of the death tax bill. And 
so indexing is part of this.
  We heard from the philanthropic community as far as opposition to 
complete repeal of the death tax because there was a concern about 
charities and foundations not being fully funded. So this compromise 
accomplishes their goal to make sure that the philanthropic in this 
country can continue to provide for those churches, charities and 
synagogues.
  And yet from the other side of the aisle, I think some folks just 
dusted off the talking points from a year and a half ago, because this 
is not the bill we debated then.
  And my good friend from Georgia, and we are working together on a 
civil rights bill, to hear the word ``greed,'' or to hear from my 
friend from California say that only 7,500 families will pay the tax, 
what about the tens of thousands of American taxpayers, family-owned 
businesses, that had the same experience that I had of sitting across 
the mahogany table from their longtime family accountant when my mother 
passed in 2004?
  This 514-acre farm that she and my father had built, that my father 
had worked for nearly five decades, and I am sitting across the table 
from this family accountant, and he has an old adding machine with the 
tape on it, and he is punching in values for each of these assets. The 
acreage per value, the three tractors, the very used combined, the home 
that I grew up in, the modest life insurance policy, and suddenly as a 
Member on the Ways and Means Committee, I break out in a cold sweat 
because I know when he hits the total button, it is either going to be 
above an arbitrary line that Congress has set or below it. I know that 
if it is above that line, that I am probably going to have to sell off 
some of this family business, this farm I grew up on, just to pay the 
government.
  What is ironic is if my mother had passed away 4 months earlier, I 
would have had to have sold a significant part of that farm just to pay 
the tax.
  This is a very usable compromise, and I would say the fact we are 
here, of course, is that there is a determined

[[Page H4455]]

minority in the other body that has used the Senate's rules and 
procedures to deny that complete repeal that we have been working for. 
This is a compromise that deserves bipartisan support. I urge its 
passage.
  Mr. RANGEL. What is the time? I think I would want the majority to 
catch up in terms of the time gap.
  The SPEAKER pro tempore (Mr. Rehberg). The gentleman from New York 
(Mr. Rangel) has 4\1/4\ minutes. The gentleman from California (Mr. 
Thomas) has 4\1/2\ minutes.
  Mr. RANGEL. Mr. Speaker, I would like to yield for 2 minutes to the 
gentlewoman from Ohio (Mrs. Jones), a distinguished member of the Ways 
and Means Committee.

                              {time}  1430

  Mrs. JONES of Ohio. Mr. Speaker, I would like to thank the ranking 
member, Mr. Rangel, for yielding me this time. And I want to compliment 
my colleague, Kenny Hulshof, for those impassioned words about his 
family farms. But the good lawyer that I know Kenny Hulshof is, I know 
he has come up with some resolve for his family in addressing some of 
the estate tax issues, short of changing the estate tax, be it who 
holds the farm, how long they hold it, et cetera et cetera.
  But I rise this afternoon in opposition to this legislation. As we 
have all said earlier, those on this side of the aisle, this is no 
compromise. It will cost us so much money that many of us can't even 
count it. And most of the people who benefit from this estate tax have 
so much money, they far exceed the general everyday person who works 
hard making $5.25 an hour and can't even think about an estate because, 
by the time they pay their light bill and their water bill and buy 
their kids some clothes, pay the gas bill, the estate that they always 
hoped for could never come into play.
  Now, you are going to say, Stephanie, why are you comparing working 
making $5.25 hour to an estate over $5 or $100 million? I am doing it 
because most of the people in America are making $5.25 an hour at that 
other level.
  We only have a certain amount of money that we operate in the United 
States of America, and I say it is time for the people at the lower end 
of the spectrum to have a benefit from the taxing policy of this 
Nation. I say it is time for the people at the lower end of the 
spectrum to know that the kids, and the bulk of their kids go to fight 
in Iraq, have enough armor, et cetera, to be covered; that those 
families know that their children have the ability to go to college. It 
is connected because it comes out of the same pot.
  I, therefore, invite you, encourage you to vote against H.R. 5638.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentleman from 
Indiana (Mr. Chocola), a member of the Ways and Means Committee.
  Mr. CHOCOLA. Mr. Speaker, I thank the chairman for his hard work on 
this.
  Mr. Speaker, I just rise today to ask the question, Whose money is it 
anyway?
  I think it is important to recognize that the Federal Government has 
no assets that didn't derive from the hard work of the American 
taxpayer. And that is what we are talking about today.
  And it is not just the families that pay the tax that are impacted on 
this. I have worked in several family businesses, and every business 
that I have worked with is a family. Everyone that works there is a 
family. And when you put a business at risk by requiring it to be sold 
simply to pay taxes, you put every job in that company at risk. If you 
have 25, if you have 50 employees, you are putting every single one of 
those jobs at risk by selling the company to someone you don't know. 
They may live somewhere else and they may move the business or reduce 
it or do whatever when you lose control. If you really care about 
working families, you would not ever allow a business to be sold simply 
to pay the taxes.
  And like many of my colleagues, I support full and permanent repeal. 
This is a step in the right direction. I urge my colleagues to support 
it.
  Mr. RANGEL. Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, I believe I will be the last speaker.
  Mr. RANGEL. Mr. Speaker, I yield myself 1 minute. There seems to be 
some confusion as to who the beneficiary is of this special 
legislation. I suggest to you that if you belong to the one-third of 1 
percent of not working families, but families who have inherited an 
estate that is valued over $3.5 million, or $7 million if you are a 
couple, that in 2009 you will be the beneficiary.
  If there is some confusion about the hundreds of millions of people 
who work every day, and those six million of them that are at minimum 
wage, then I suggest to you that you will get nothing from this. But if 
you are in doubt as to whether one side is just making it up as they go 
along, and the other side has any question about it, I suggest that you 
go to the Internet, www.house.gov.jct. That is the Joint Committee on 
Taxation, and you will be able to decide whether you hit the lottery. 
If your name is not there with the 7,500 families, then you are a loser 
in this enormously expensive legislation.
  Mr. Speaker, I yield the remainder of my time to the outstanding 
leader of the Democratic Party and, indeed, our country, the Honorable 
Nancy Pelosi.
  Ms. PELOSI. Mr. Speaker, I thank the gentleman from New York for 
yielding. I congratulate him on his, as always, excellent leadership on 
behalf of the middle-class working families in America. I salute him 
for his excellent presentation today.
  Mr. Speaker, today the House is considering the ultimate values 
debate. The question before us today is, Do we want to cut taxes for 
the ultra-superrich, or, instead, do we first want to give hardworking 
Americans a raise?
  Do we want to live in an aristocracy, or do we want to live in a 
democracy?
  Do we want to perpetuate wealth or reward work?
  The estate tax is central to our democracy. It is rooted in our 
commitment to create a strong and vibrant middle class and to give 
every American the opportunity to achieve the American Dream.
  After the Gilded Age, in which the elites of the time held power and 
wealth that far, far, far outstripped what the average American had, 
America decided to go in a new direction.
  One of America's great Republican Presidents, Theodore Roosevelt, 
made the argument for an estate tax, saying that the ``really big 
fortune, the swollen fortune, by the mere fact of its size, acquires 
qualities which differentiate it in its kind, as well as its degree 
from what is possessed by men of relatively small means.'' Therefore, 
President Theodore Roosevelt said, ``I believe in a graduated tax on 
big fortunes properly safeguarded against evasion.''
  Democrats believe that we must create wealth. We recognize that, that 
we must reward entrepreneurship and risk, and we must encourage hard 
work. That is why Democrats supported a targeted estate tax relief for 
small businesses and farmers and families that would ensure 99.7 
percent of all Americans don't pay any estate tax. This is in the 
spirit of Theodore Roosevelt, targeting the vast fortunes that differ 
not only in the quantity of wealth, but in the kind.
  I salute Congressman Earl Pomeroy for his leadership in giving 
Congress an alternative that is morally and fiscally responsible. 
Unfortunately, once again, the Republican leadership, just as they have 
blocked a vote on the minimum wage, are blocking Mr. Pomeroy's option 
to bring his proposal to the floor, which is responsible, which is paid 
for, and which is fair to all Americans.
  Under Mr. Pomeroy's proposal, only the top .3 percent, that means 
99.7 percent of Americans, most people in America, would not pay any 
estate tax. But it would leave that .3 percent, the very, very, 
superwealthy, to pay their fair share. There are very few people 
involved, but a great deal of money. We will have a chance to vote on 
it in the motion to recommit. Unfortunately, we will not have the time 
to debate it as an alternative.
  We have these questions that have come before us when we are talking 
about this. We are talking about giving $800 billion to a few families 
in America. Democrats stand for fiscal responsibility, pay-as-you-go 
budgets, and no new deficit spending.
  Republicans, instead, have put forth the bill that will cost the 
American people, again, almost $800 billion; $800 billion that we don't 
have, that we are going to have to borrow.

[[Page H4456]]

  Our national debt is becoming a national security issue. Countries 
that now own our debt, it is over $1 trillion already, and this doesn't 
include this $800 billion, those countries that now own our debt will 
not only be making our toys, our clothes and our computers, they will 
be soon making our foreign policy. They have too much leverage over us.
  With this bill today, the Republicans are giving tax cuts to the 
wealthy and asking the middle class to pay for it by writing checks to 
China and Japan for the interest payments on the debt and, ultimately, 
the payment on principal. It is ridiculous. It is ridiculous.
  Let me get this straight. We are at war in Iraq. Many of the same 
people who wanted to support the stay-the-course that the President is 
on in Iraq, which has around a $400 billion price tag on it, that is 
off budget. They don't want to pay for that. And that is a huge figure. 
And now the Republicans are saying, not only that, not only are we not 
paying for the war, it is off budget. We will just heap that debt on to 
future generations. They are saying, we are going to give twice as much 
as that to a few families in America. It is so unfair, this same week 
that we are taking this up.
  As I said earlier, this is the ultimate values debate. How can a 
person of conscience say to the Congress, we do not support an increase 
in the minimum wage. Instead we are going to give $800 billion to the 
wealthiest people in America.
  The minimum wage is $5.15 an hour. It hasn't been raised in 9 years. 
This is a shame. It is a disgrace. It is unfair.
  And what does the leader on the Republican side say about the minimum 
wage? Mr. Boehner says, I have been in this business for 25 years and I 
have never voted for an increase in the minimum wage. I am opposed to 
it, and I think the vast majority of the Republican conference is 
opposed to it.
  So thank you, Mr. Boehner, for making a differentiation for us. You 
are for $800 billion for the wealthiest families in America, and not an 
increase of over $5.15 an hour for America's working families. So 
instead of giving 7 million Americans a raise by increasing the minimum 
wage, again, the Republicans are proposing $800 billion, that is nearly 
$1 trillion, as a gift to the wealthy. This is Robin Hood in reverse. 
We are stealing from the middle class to give to the wealthy.
  Pope Benedict just recently put out his new encyclical, ``God is 
Love.'' And in his encyclical, he quoted Saint Augustine when he wrote, 
this is in the Pope's encyclical. You can find it there. He talked 
about the role that politicians have and that a government should be 
just, and we should be promoting justice. And he goes on, Pope Benedict 
does, to quote Saint Augustine. He says: ``A state that is not governed 
according to justice would be just a bunch of thieves.'' This is the 
Pope saying this in an encyclical, quoting a saint. ``A state which is 
not governed according to justice would be just a bunch of thieves.''
  I ask this Congress, is it justice to steal from the middle class to 
give tax cuts to the ultra-superrich?
  It is not just. And it is an injustice we cannot afford. Americans 
can no longer afford President Bush and the Republicans. It is time for 
a new direction. We can begin by rejecting this estate tax giveaway to 
the wealthy and insist on a vote to increase the minimum wage. That 
would be a real values judgment.
  Mr. THOMAS. Mr. Speaker, I rise in support of democracy and in 
opposition to aristocracy, and simply and humbly request I have the 
same clock that was just used.
  How much time do I have remaining?
  The SPEAKER pro tempore. The gentleman from California is recognized 
for his remaining time, which is 3\1/2\ minutes.
  Mr. THOMAS. Mr. Speaker, I also want to be on record as being opposed 
to a theocracy. And I will tell you that today, shortly, democracy will 
be demonstrated when the House of Representatives determines whether or 
not it sends this compromise measure over to the Senate with a majority 
vote.
  I know it is a mystery to some people. And I found it most revealing 
in a poll when Americans were being polled as to whether or not you 
supported either repeal or making smaller the estate or death tax.

                              {time}  1445

  One gentleman responded to the poll that he was in favor of repeal, 
and if he couldn't get repeal, he wanted it smaller. And given the 
location in which the question was asked, in the home which the 
gentleman lived, the questioner said, ``But you aren't currently in a 
position to benefit from the estate tax, whether it's repealed or 
not.''
  And he said very simply, ``But I want to have the opportunity to be 
able to.''
  That is really the American dream. It really is what democracy is all 
about. It really is keeping more of your hard-earned efforts at the end 
of your life, or, if this bill becomes law, the amount that is legally 
appropriate, $5 million per individual, to be given while you are alive 
or after you pass or partially when you are alive or partially when you 
have passed. As one of my colleagues said, after all, it is your money.
  The estate tax does deal with progrowth or antigrowth because it is 
simply a tax on capital and savings. The lower the tax on capital and 
savings, the greater the opportunity for growth.
  We have heard the argument that this really is not a compromise. I 
believe it is a compromise. I said why. But I think the real test as to 
whether something is or is not a compromise is what I like to call the 
Goldilocks test. The Wall Street Journal thinks this is too cold. An 
individual representing the richest people in America, Dick Patten of 
the American Family Business Institute, says, ``We flatly oppose the 
Thomas plan. It just isn't good enough.'' The gentleman from North 
Dakota says, This is virtually repeal. It is just way too hot.
  Well, for some it is too hot; for some it is too cold. It sounds to 
me like that we have got a compromise that has a chance to pass the 
United States Senate. We know it will pass the House of 
Representatives.
  Mr. Majority Leader, you asked for a bill that should become law. Mr. 
Majority Leader, the House is sending you the bill you asked for.
  I urge support of H.R. 5638. I urge the Senate to take up the 
compromise as soon as possible. And when that bill is sent to the 
President, the American people, those who work hard and expect to 
retain or pass on at the end of their lives a portion of their earnings 
during that life, will have achieved a significant victory, not in a 
theocracy, not in an aristocracy, but in a democracy.
  Mr. DICKS. Mr. Speaker, the Chairman of the Ways and Means Committee 
has made a diligent and sincere effort to seek a compromise position on 
the estate tax issue, and he should be commended here in the House 
today. Many of the Members of the House have conceded that the 
threshold at which estates are subject to the tax is not realistic in 
today's economy, considering the assets many small businesses routinely 
accrue in this country. While I believe the full repeal of the tax is 
unjustifiable, because it would mean such a huge loss of revenue to 
benefit primarily the wealthiest portion of our population, I believe 
there is interest in making some adjustment, if the cost in terms of 
lost revenues is reasonable. So I applaud the effort that was made to 
seek this compromise, however I rise today Mr. Speaker to oppose the 
unfortunate result, H.R. 5638, because I believe it doesn't meet the 
test of being reasonable.
  At a time when the annual budget deficit is now approaching $400 
billion and when there are so many urgent issues in our society that we 
simply cannot afford to address, I believe the compromise that has been 
reached raises that threshold far higher than it should be and thus it 
relinquishes far too much revenue in order to assist a very high-income 
sector of our population. When fully implemented, and assuming that the 
current capital gains tax rates are extended permanently, this bill 
will reduce revenues by an average of $82 billion a year for the first 
ten years that it is fully implemented. To provide my colleagues with a 
frame of reference, $82 billion is well more than twice as much as we 
appropriated earlier this month for the entire Department of Homeland 
Security. It is nearly four times as much as the appropriation we will 
consider for the entire Department of Justice for the upcoming fiscal 
year.
  In addition, Mr. Speaker, the nation is now engaged in wars in Iraq 
and Afghanistan--for which too few Americans are being asked to 
sacrifice--and we face a compelling need for substantial federal 
investments that are required to secure our homeland from the threats 
of terrorist attacks. It seems to me, Mr. Speaker, that it is neither 
prudent nor fiscally

[[Page H4457]]

responsible to be adding such a large annual increase--another $82 
billion--to the national debt at this time. We are cutting back on 
programs that benefit seniors, poor and middle-class Americans, and we 
are reducing our investment in education, health care, infrastructure 
and the environment. At this time, Mr. Speaker, I cannot in good 
conscience support a bill that, by its very nature, provides such a 
large share of its tax benefits to the least-needy people here in the 
United States.
  I regret that we could not reach a compromise position that was more 
fiscally responsible, because the Chairman did accede to our request to 
accelerate the passage of another important piece of legislation, H.R. 
3883, by adding it to the compromise package. I appreciate the 
Chairman's personal interest in the passage of the Timber Tax bill, 
which I have cosponsored, in order to restore fairness to the tax code 
and allow regular corporations in the timber industry to compete on a 
level playing field with other ``pass-through'' entities that currently 
receive better tax treatment. Again, it is with great regret that I 
urge the House to defeat the entire estate tax bill, because I believe 
the Timber Tax language represents a modest and deserving provision 
that should be passed no matter what becomes of this legislation. We 
can defeat H.R. 5638 today and return to the attempt at reaching a 
reasonable, prudent and fiscally-responsible compromise that addresses 
the legitimate needs of small business owners and that includes that 
Timber Tax provision. I urge a ``no'' vote on H.R. 5638.
  Mr. SMITH of Washington. Mr. Speaker, today the House is taking up an 
important piece of tax legislation, the Timber Tax Act of 2005. 
Unfortunately it is attached to a fiscally irresponsible tax cut that I 
cannot support. However, I do support the Timber Tax Act and hope that 
the House will bring this legislation to the floor for a separate vote.
  In today's economy, the forest products industry is very important to 
Washington State with 8.5 million acres of privately owned forestland. 
There are more than two million people in the U.S. who make their 
living working for the forest products industry and more than 45,000 in 
Washington alone. This industry is the state's second largest 
manufacturing sector.
  Timber is a unique and risky investment compared to other long term 
investments. It can take between 20 to 70 years to grow timber that is 
ready for harvest, which means significant upfront investments in 
forestry are also subject to risks of nature, clearly demonstrated by 
last year's hurricanes and wildfires. If passed, the Timber Tax Act 
would encourage reinvestment in forestland, which supports an industry 
that provides important jobs to many Washington State residents.
  Mr. LARSON of Connecticut. Mr. Speaker, I am disappointed in the 
Republican leadership and their priorities in this House. Instead of 
moving forward with the minimum wage increase that was approved last 
week in the House Appropriations Committee, the Republican Majority 
places yet another irresponsible estate tax cut bill on the floor.
  Let me make my position clear, I support tax relief to help small 
businesses and family farms. I have voted 5 times in the past six years 
for balanced reforms to the estate tax that would have virtually 
exempted all estates. However, again and again the Republican Majority 
has pushed legislation through this House that helps only the few and 
costs much more than we can afford. The underlying bill, H.R. 5638, 
would give tax relief to estates worth more than $3.5 million, which 
will cost the American people $762 billion over 10 years. Only half of 
the 1% of Americans affected by the current estate tax would benefit 
from this bill.
  In comparison, the minimum wage increase opposed by the Republican 
Majority would help 7.5 million American workers earning between $5.15 
and $8 an hour. Since Congress has not raised the minimum wage since 
1997, its buying power is at its lowest level in 50 years. An increase 
from $5.15 to $7.25 over two years would help the workers most in-need 
in this country.
  Every day the American people are growing tired of the misguided 
priorities of this Republican Majority and Administration. In a time 
when the Nation is facing record deficits, a national debt of $8.4 
trillion, a gallon of gas is $2.87 and a gallon of milk is $3.23, the 
American people are looking for leadership in Congress. We need a new 
direction on economic policy in this country and not more of the same 
tired Republican proposals that explode the federal debt.
  This Congress should help more Americans help themselves. 
Unfortunately, this Republican Majority has different priorities. Since 
the Republican Majority blocked the balanced Democratic substitute that 
would exempt 99.7% of estates from estate tax liability, I urge my 
colleagues to do better for the American people and oppose the 
underlying bill.
  Mr. UDALL of Colorado. Mr. Speaker, I am disappointed with this bill 
and regret that I cannot support it.
  I do not support repeal of the estate tax, but I have long supported 
reforming it.
  So, I took hope when I heard that the Republican leadership had 
decided to abandon its misguided drive for its permanent repeal and to 
focus instead on its revision.
  I hoped that at last we would have a chance to vote on a measure that 
would strike the right balance, protecting family-owned ranches, farms, 
and other small businesses while recognizing the need for fiscal 
responsibility in a time of war. But when I reviewed the details of the 
bill now before us--even to the limited extent that was possible--I 
realized that once again I had hoped in vain.
  The bill would exempt the first $10 million of an estate for a couple 
($5 million for an individual) and would link the estate tax rate to 
the capital gains rate, which is currently 15 percent, but which is 
slated to return to 20 percent after 2010. Under the bill, the value of 
an estate under $25 million would be taxed at the capital gains rate, 
and the portion above $25 million would be taxed at two times the 
capital gains rate.
  While this is different in some ways from previous versions, it does 
not represent a true compromise. The Joint Committee on Taxation 
estimates the bill would reduce revenues by $280 billion between 2007 
and 2016, with a reduction of $61 billion, or 75 percent as much as 
full repeal, in 2016. In other words, the revenue reduction from this 
bill would be greater--65 percent greater--than simply making the 2009 
rates permanent.
  And to make matters worse, the bill includes some unrelated 
provisions that are even less fiscally responsible, most notably a 
special capital gains tax break for timber companies that well could 
result in profitable companies paying no tax at all.
  Under current law, if a tree-owning company cuts and sells some of 
its trees, the income is taxable as regular corporate income. But this 
bill would allow those companies to exclude 60 percent of that income 
from tax.
  The result would be to restore a loophole that was closed when 
President Reagan signed the landmark tax reform act of 1986. Before 
that, the largest paper and wood products corporations benefited from 
favorable treatment to a remarkable extent.
  For example, one of those companies told its shareholders that for 
the period of 1981 to 1983 it made $641 million in U.S. profits--but it 
not only paid no taxes but in fact had so many excess tax breaks it 
actually received $139 billion in tax rebates. Another company reported 
$167 million in pretax profits, yet instead of paying part of that in 
federal income tax, it got $8 million in tax rebates. And another 
reported $400 million in pretax profits, but instead of paying taxes, 
got $99 million in tax rebates.
  In 1986, recognizing the unfairness of this kind of legal tax 
avoidance, Congress closed the loophole. But this bill would undo that 
reform, bringing back an exclusion for timber income that strongly 
resembles the pre-1986 tax break.
  The bill says this change would be temporary, sun setting at the end 
of 2008, and the Joint Committee on Taxation estimates that during that 
two-plus year period it would reduce revenues by $940 million. But if 
this tax break is extended--and we can be sure its beneficiaries will 
lobby for its extension beyond 2008--the long-term cost to the Treasury 
will certainly be more.
  I oppose these provisions, which I think should not be part of this 
or any other legislation.
  My opposition to this bill does not mean I am opposed to reducing 
estate taxes.
  I supported an alternative that would have raised the amount of an 
estate excluded from taxes to $6 million per couple and increased this 
to $7 million by 2009. This not only would have provided relief for 
small businesses and family farmers, but it would have done so in a 
much more fiscally responsible way, because it would have reduced 
revenues by much less than this bill. It also would have simplified 
estate-tax planning for married couples, who could carry over any 
unused exemption to the surviving spouse and so assured that the full 
$7 million would be available.
  Furthermore, that alternative would have transferred the revenue from 
the estate tax to strengthen the Social Security trust fund, a change 
that, according to the Social Security Actuary, would solve one quarter 
of the trust fund's shortfall. But, unfortunately, the Republican 
leadership actively worked against that alternative and so my hopes for 
that true, reasonable compromise were thwarted.
  As a result, I have no responsible choice but to oppose this bill and 
to hope that as the legislative process continues it will be 
sufficiently revised that I can support it.
  Time will tell whether that hope, too, will be in vain.
  Mr. CANTOR. Mr. Speaker, today we are considering a bill that would 
move us a step closer to full repeal of the death tax, a goal which I 
fully support.

[[Page H4458]]

  The death tax is one of the most egregious taxes in our system today 
and should be fully repealed. This tax is a punishment for people who 
have worked hard all their lives, who have built successful small 
businesses and who have succeeded in living the American dream.
  It does not stand to reason that the United States, the most 
successful economy in the world, should punish its citizens with such a 
regressive tax. The United States has the second highest estate tax in 
the world at 46 percent, second only to Japan at 70 percent.
  This tax penalizes farmers, ranchers and small business owners. These 
are people who work hard day in and day out to keep their businesses 
running and meet payroll deadlines. These are the businesses that 
produce jobs and provide healthcare for many Americans. When we cripple 
small businesses with inheritance taxes that force them to close, we 
not only punish the owner for being successful, we punish their 
employees as well.
  Some of my colleagues on the other side of aisle don't want to pass 
this tax relief on to the American people. They would rather fund their 
special interest give aways than let Americans keep their own money. 
This is not the Government's money. Washington has already taxed these 
earnings once, twice even three times. Do we really need to go back for 
more when you die? Isn't death punishment enough?
  Mr. Speaker, this tax is shameful, it is greedy and it is offensive 
and I support the efforts we are making here today to move towards a 
full repeal of the death tax.
  Mr. MORAN of Virginia. Mr. Speaker, I rise today to oppose the 
Permanent Estate Tax Relief Act of 2006.
  This legislation will exempt estates up to $5 million for an 
individual and $10 million for a couple; will tax the next $20 million 
in assets at 15 percent and assets above $25 million at 30 percent. 
According to the Joint Tax Committee, this measure will cost $279.9 
billion in lost revenue between now and 2016, and at least $61 billion 
per year every year after.
  This is unacceptable and is fiscally unsound. Not only will this add 
to the enormous budget deficits we are now facing, but it will also 
contribute to the increasing concentration of the Nation's wealth among 
a very small number of Americans.
  Thirty years ago the richest one percent of our population owned less 
than a fifth of our wealth. According to a report by the Federal 
Reserve Board, that one percent now owns over a third of the Nation's 
wealth. Workers today are twenty four percent more productive than they 
were five years ago, but the median earnings of those workers have not 
risen in line with this, a distinct change from historical patterns. 
The average CEO pay is now 400 times that of a typical worker. Forty 
years ago it was 60 times that of an average worker. We are creating a 
new upper class, one that our country has not seen since the rise of 
the robber barons, and this legislation ensures that this gap will grow 
ever wider.
  Right now, a couple can pass on four million dollars to their 
children tax free. The New York Times attempted to find a farmer who 
had been affected by the estate tax. It was unable to do so, even with 
the assistance of the American Farm Bureau.
  I agree that we need to ensure that small businesses and family farms 
are able to be passed on to succeeding generations. This is why during 
debate on a permanent repeal of the estate tax I was supportive of 
keeping it at its 2009 level. Doing so would ensure that 997 out of 
every 1000 people can pass their assets on to their children and pay no 
estate tax. According to the Urban Institute-Brookings Tax Policy 
Center, if this level was in place in 2011, only fifty farms and small 
businesses would owe any estate tax.
  This legislation will not help the vast majority of our constituents. 
Instead it will help a small group of people maintain their enormous 
wealth and, in return, it will increase our country's deficit. As 
Members of Congress, part of our job is to ensure that the Nation's 
economy is strong for every person in the next generation. We don't do 
that when we give ourselves hundreds of billions of tax cuts and leave 
it to our children to find the tax money to pay for them.
  Mr. SHUSTER. Mr. Speaker, in a letter to a friend, Benjamin Franklin 
wrote that ``In this world, nothing is certain but death and taxes.'' 
The two will soon go hand in hand unless Congress acts to fully and 
permanently repeal the Death Tax. After a lifetime of paying taxes the 
Death Tax unfairly imposes a double tax on small, family-owned 
businesses and farms. Our family farmers appear rich on paper, but in 
reality are two poor growing seasons from bankruptcy. The Death Tax 
does not discriminate--it just forces the family to sell off the land 
to another larger farm in order to pay the tax. If Congress truly cares 
about the family farmer the best thing that can be done is to kill the 
Death Tax.
  Mr. Speaker, most small business owners have the entire value of 
their business in their estate. With the Death Tax, the government 
immediately ``inherits'' a 37 to 55 percent piece of the estate, a blow 
that many family businesses and farms cannot survive. Taxing small 
business owner's hard work in death punishes their families and 
threatens family businesses across the country. The mere threat of the 
tax forces business owners to spend thousands of dollars on 
accountants, lawyers, and financial planners so that they can attempt 
to ensure the survival of their business after their death.
  Mr. Speaker, I grew up on a family farm, and owned and operated a 
small business before serving in this House. The Death Tax is real and 
has tangible effects on real people. The Death Tax penalizes hard-
working family farmers and business owners hoping to pass on their land 
or shop--their legacy--onto their children. The Death Tax is an insult 
to all those who spend a lifetime of hard work to ensure that their 
children can continue the family business.
  Mr. CONYERS. Mr. Speaker, the House of Representatives is known as 
the ``People's House.'' Instead of taking up legislation that will 
improve the lives of a wide range of people, we are debating a tax 
break that will benefit a measly 7,500 Americans, or in other words, 
only the super-rich.
  This bill would increase the estate tax exemption to $5 million for 
an individual and $10 million for a couple. What is the cost of such a 
policy change? $823 billion over 9 years. It is shocking that the 
Congress refuses to give poor working Americans a 70 cent increase in 
the minimum wage, but have no hesitation in rewarding the very wealthy 
a $823 billion windfall.
  Today, I received a letter from the UAW, who plainly argues that if 
we pass this legislation, it will exacerbate our enormous federal 
deficits and place additional burdens on future generations. With a 
federal debt of over $8 trillion, a tax break for the wealthy is no way 
to bring our budget back into balance or to reduce the enormous deficit 
this Administration has presided over.
  I also received a letter from the National Education Association that 
persuasively argues how this legislation would seriously jeopardize the 
ability to invest in our children and public education in the future. 
By draining federal coffers of much-needed revenue, we will be forced 
to cut much more than education. Funding for health care, veterans 
benefits, environmental protections, affordable housing, student loans, 
and homeland security are all at risk if we pass this irresponsible 
legislation.
  With so many important issues facing our country--41.2 million 
Americans without health insurance, no minimum wage increases since 
1997, and billions of dollars squandered in Iraq, it is a shame that 
the People's House has been hijacked by the narrow interests of the 
super-rich. Today's vote is another in a long list of votes to benefit 
the special interests of a few. The time is long overdue for the 
Congress to deal with the myriad of critical issues facing Americans 
today.
  Mr. ENGEL. Mr. Speaker, as Ronald Reagan used to say--there you go 
again!
  Our Republican friends are again taking care of the wealthy and 
ignoring the needs of the middle class. If they cared about middle 
class Americans, their priority would be to permanently fix the AMT 
that affects millions of Americans, not the estate tax that affects 1 
percent of rich families. The Republicans in Congress are making sure 
the rich get richer instead of lifting all Americans up economically.
  The Republicans would like us to believe that they are fiscal 
conservatives, but they are borrowing and spending like drunken 
sailors, abandoning all fiscal discipline.
  As a result, we are leaving our children and grandchildren with 
mountains of debt for years to come. Of the millions of American 
families, this bill will allow 830 super rich families get a $16 
million tax break--what a disgrace!
  History will not refer to us as the baby boomer generation but as the 
credit card generation, and we can trace it all back to the Republican 
mantra of cut taxes, borrow and spend!
  Mr. GENE GREEN of Texas. Mr. Speaker, I rise in opposition to this 
legislation, which has been billed as a compromise proposal to 
legislation this chamber has passed to permanently repeal the estate 
tax. Instead of offering true compromise, this legislation simply 
muddies the water and would deal a devastating blow to our national 
debt.
  Make no mistake about it, I do not want to see the children of family 
farmers or small business owners have to pay dearly for the success of 
their hard-working parents. Democrats and Republicans alike want 
American families to be able to preserve their legacies and pass down 
their farms and small businesses to their heirs. A true compromise 
would balance the goal of protecting these estates and keeping our 
country's fiscal house in order. This bill is no such compromise.
  This bill would exempt the first $10 million of a couple's estate 
from the estate tax--an increase from the current $4 million exemption. 
For estates valued below $25 million, the bill

[[Page H4459]]

would impose the capital gains rate--currently 15 percent--and would 
tax values above $25 million at double the capital gains rate.
  Americans should not be fooled by the complexity of this tax 
structure, because the result is still the same. This bill is a benefit 
to the wealthiest Americans and will give estates valued at more than 
$20 million a $5.6 million tax cut, on average. Unfortunately, tax cuts 
are not free. And this legislation would have all American taxpayers 
pay the $762 billion ten-year pricetag that will result from lost 
revenue and interest on our national debt.
  Estate tax reform is not a new issue for Congress. For years now, 
I've supported a sensible compromise that would protect families who 
have put their blood, sweat and tears into their businesses. 
Specifically, this proposal would exempt the first $7 million of a 
couple's estate--an exemption level that would shield 99.7 percent of 
all Americans from the estate tax.
  Faced with a federal budget swimming in a sea of red ink, we should 
be making the fiscal compromises necessary to shore up Medicare and 
Social Security and ensure the continued solvency of federal programs 
that the most vulnerable Americans depend on for their own shot at the 
American Dream. Americans shouldn't fall for our majority's latest 
attempt to give millions to the Americans least in need, while leaving 
those most in need high and dry.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in opposition to the 
bill, H.R. 5638, the ``Permanent Estate Tax Relief Act of 2006.''
  Mr. Speaker, I have voted for estate tax relief before but I oppose 
this bill because it is irresponsible to cut taxes for the wealthy when 
the Nation is at war and the national debt is over $8 trillion dollars.
  The Joint Committee on Taxation estimates that Thomas's estate tax 
proposal will cost the Federal Government $602 billion, plus an extra 
$160 billion when interest is accounted for. Only 0.5 percent of the 
richest families in America currently pay estate taxes. Moreover, under 
current law in 2009, only 3 out of every 1,000 estates will pay a penny 
in estate taxes--all couples with estates up to $7 million--99.7 
percent--will pass on their entire estates tax-free. Any compromise 
proposal which deviates from 2009 current law--such as Thomas' bill and 
Kyl's older proposal--is therefore crafted entirely to benefit this 
tiny sliver of the richest estates.
  American voters stand strongly against drastic estate tax 
legislation. According to recent polling data, nearly 60 percent of 
voters hold the initial, unaided view that estate tax should be left as 
is or reformed, and only 23 percent support repeal. When asked about 
the estate tax in the context of other budget priorities, voters rank 
repealing the estate tax as the last priority, and 55 percent of voters 
oppose repeal.
  This so-called compromise, nearly as regressive and costly as a full 
repeal, is no compromise at all. Passing even this compromise 
legislation would constitute one of the most regressive tax cuts in the 
history of the United States. Middle- and lower-class Americans will be 
forced to shoulder the burden of radically decreasing the estate tax--
both monetarily and through decreased public programs. In order to 
cover the monetary gap, the government will plunge further into debt, 
which will limit its ability to address the Social Security solvency 
gap and reduce the money available for public programs. It will also 
have to tap other tax sources, like payroll taxes, which will 
overwhelmingly hinder lower-income families.
  I urge my colleagues to uphold the core American values of fairness 
and belief in meritocracy by rejecting this tax cut.
  If we really wish to help the most deserving American families, we 
should raise the minimum wage.
  Mr. VAN HOLLEN. Mr. Speaker, I rise today in opposition to this this 
so-called ``Compromise'' Estate Tax proposal. This bill does make 
compromises--it compromises our children's futures, it compromises the 
future of our Social Security system, and it compromises our working 
families.
  We're facing real issues in this country. We have rising deficits and 
a Social Security system that needs to be further secured. And today we 
are debating a bill to effectively repeal a tax that affects only the 
largest one half of one percent of estates. In the first 10 years after 
it takes effect, it will cost more than $750 billion, including 
interest on the added debt. That bill will have to be paid by the rest 
of America, including our grandchildren.
  My colleague, Congressman Pomeroy, offered a substitute to reform the 
estate tax and help shore up Social Security. We could increase the 
current estate tax exclusion to $3 million per individual and $6 
million per couple after 2006 and $3.5 million per individual and $7 
million per couple in 2009. This would exempt 99.7 percent of estates 
from tax liability. And we could funnel estate tax revenues into Social 
Security, solving a full quarter of the trust fund's shortfall.
  Let me remind my colleagues that Social Security not only provides 
essential retirement security for our Nation's seniors, it also 
provides disability and life insurance for our troops . We had an 
opportunity to turn estate tax funds into a dedicated source of revenue 
for this vital program. We had an opportunity for real reform.
  Unfortunately, the majority on the Rules Committee rejected this 
opportunity by rejecting the Democratic amendment. Now we are debating 
some very different priorities. Instead of guaranteeing a source of 
funding for Social Security for our Nation's seniors and military 
families, we're talking about guaranteeing a huge tax break to 
multimillionaires and billionaires. Instead of seriously facing our 
massive deficits, we're talking about adding to them. Instead of 
instituting real, clear tax reform, we are talking about a tax rate 
that is not even defined outright in this bill. I have been willing to 
consider certain creative proposals that would allow individuals to 
voluntarily prepay their tax, but this proposal is a non-starter.
  If we pass this legislation, who will pay for the deficits? This bill 
will add $750 billion to the national debt over 10 years. Who will pay 
that price? Certainly not those who can best afford it--they're the 
ones who are reaping the benefits. This bill gives a small portion of 
the richest people in this country a gift and asks the middle class and 
their children to pay for it.
  Mr. Speaker, I urge my colleagues to reject this false compromise. 
It's time to stop passing special interest legislation like this and 
start focusing on real reforms that benefit all Americans.
  Mr. STARK. Mr. Speaker, I rise in strong opposition to yet another 
tax break for the ultra-wealthy. This week, Republicans rejected an 
increase in the minimum wage that would have enabled people making 
$5.15 an hour to receive a $2 raise. Yet today they're falling all over 
themselves to give every single person worth more than $20 million a 
$5.6 million tax break.
  A cartoonist couldn't draw a clearer illustration of the Republicans' 
misguided priorities. Though 46 million Americans lack health insurance 
and millions of children are denied access to quality education, 
Republicans insist on enriching those who least need our assistance.
  It is irresponsible and immoral to decrease revenue by $800 billion. 
With this money, we could provide quality health care for every man, 
woman and child; make the dream of affordable college a reality for all 
those who can't now afford higher education; or fund groundbreaking 
scientific research. It took us less than a decade to go to the moon. 
With a similar effort, we might cure AIDS or cancer.
  The Republican priorities are clear: $5.6 million for each of their 
rich campaign donors and $0 for hard working stiffs trying to raise a 
family on $5.15 an hour.
  The Republicans are bowing down to 18 super-wealthy families who have 
spent nearly $500 million lobbying for estate tax repeal. These 
families own everything from Amway to Wal-Mart and stand to gain 
billions of dollars from any so-called compromise.
  Another quite wealthy man has a different view. Bill Gates, Sr., 
recently said: ``Given the fact that we have an unacceptable deficit, 
undeniable and huge demands resulting from our foreign involvement, and 
tragedies occurring here at home that need support from the federal 
government, it seems just plain irresponsible to talk about dismissing 
this particular source of federal revenue.''
  I couldn't say it any better myself, and I urge all my colleagues to 
vote ``no'' on this bill.
  Mr. TIAHRT. Mr. Speaker, I am disappointed the House today voted to 
pass a bill that would replace one arbitrary unjust tax with another 
arbitrary unjust tax under the guise of compromise. The House has 
overwhelmingly voted, with strong bipartisan support, to permanently 
repeal the death tax five times in the past 5 years. I have voted each 
time in favor of full repeal.
  Some of my colleagues believe we will not be able to gain the 
Senate's support for full repeal of this egregious tax. And for this 
reason, the House should pass a compromise bill that would partially 
eliminate a tax that an overwhelming majority of this body and my 
constituents believe should be completely repealed.
  Rather than partially doing the right thing in the name of 
compromise, the House should stand steadfast on this issue. When the 
House passed H.R. 5638 today, we sent a message of defeat on the 
willingness of this Congress to put this issue to rest. Once those who 
want to keep the death tax know the House is willing to compromise, it 
will be difficult, if not impossible, for this body to exert the 
political will to permanently and completely eliminate the death tax.
  For this reason I opposed passage of the premature compromise bill.
  My constituents in Kansas know the death tax is a duplicative tax on 
small businesses and family farms that, in many cases, families have 
spent generations building. Small business owners, farmers and ranchers 
should not

[[Page H4460]]

be taxed by the Federal Government when they die. This only forces 
their relatives to re-purchase what rightfully should remain in the 
family.
  Additionally, this tax forces family businesses to invest in Uncle 
Sam rather than the economy. When families are forced to repurchase 
businesses because of the death tax, that means less money is being 
invested in new jobs and capital expansion. The bottom line is that the 
death tax is a tax on the economy because it slows economic growth.
  Now is not the time to compromise on the economy. Instead, we should 
be doing everything in our power to support long-term economic growth. 
Permanent repeal of the death tax will mean more high-quality, high-
paying jobs for Americans.
  When I voted against the compromise bill today, I dId so to reassure 
my constituents I will continue fighting to permanently and fully 
repeal the death tax. Compromise is premature, and discriminatory 
against families who have been good stewards of what they have earned.
  My position is unchanged: The American people deserve full repeal of 
the death tax.
  Mr. CAMP of Michigan. Mr. Speaker, today I rise in support of a 
permanent solution to the ``estate tax'' or what many call the ``death 
tax.'' Whatever name it goes by, it is a tax on the American dream.
  This country was founded on, grew and has become the world's most 
powerful economic engine based on the entrepreneurial spirit of our 
citizens; the willingness to have an idea, invest in it and build a 
business around it.
  America's history is replete with once small family operations that 
are now some of the world's largest and best in their fields: Levi 
Strauss and his San Francisco dry goods store; Eberhard Anheuser and 
his son-in-law Adolphus Busch and their first struggling brewery in St. 
Louis; J. Willard Marriott and his wife Alice started with a root beer 
stand here in DC; and the Houghton family and their Corning Glass 
Works, which provided the glass for Edison's first light bulb and now 
is a leader in fiber-optics, just to name a few.
  Studies have shown that the death tax is the leading cause of 
dissolution for most small businesses. It is estimated that 70 percent 
of businesses never make it past the first generation because of death 
tax rates and 87 percent do not make it to the third generation.
  Resources that could be better used to expand a business or hire new 
employees are instead used inefficiently to plan for the impact of the 
death tax. This tax costs the American economy between 170,000 and 
250,000 jobs annually. The Joint Economic Committee noted that the 
death tax reduces the stock in the economy by $497 billion.
  By raising the base level and indexing it for inflation, we will give 
family operations a chance to grow. Just as Strauss, Houghton, 
Anheuser-Busch and Marriott grew and now employ over 210,000 people 
between the four companies.
  Our failure to act today will put a cap on the American dream and 
will keep the small businesses and family farms of today from passing 
to future generations. A failure to index for inflation would mean 
smaller and smaller operations would be impacted every year, creating a 
virtual noose that is slowly drawing closed around our ability to 
create new jobs.
  Mr. Speaker, the American dream is not a small dream, and our Tax 
Code should not keep our families, our businesses or our farms from 
growing to their fullest extent.
  Death should not be taxed at a rate of 55 percent. Make no mistake 
about it, if we do not pass this bill today that is exactly the rate 
families will face in 2011. The permanent solution within this 
legislation will ensure that small businesses and family farms are not 
subject to these unfair rates of taxation.
  Mr. Speaker, I urge my colleagues to honor the American 
entrepreneurial spirit by joining me in voting in favor of this 
legislation.
  Mr. BLUMENAUER. Mr. Speaker, in the face of a significant tax problem 
for a growing number of American families, the soon to be 30 million 
taxpayers who will be forced to pay the alternative minimum tax unless 
there is a significant effort to address tax reform, the Republican 
leadership is again fixating on the inheritance tax. This legacy from 
Teddy Roosevelt and the progressive era of over a century ago is a tax 
on significant wealth most often the bulk of which is accumulated 
capital which had never been taxed in the first place. The outright 
repeal has actually been opposed by some of America's wealthiest 
citizens, such as Warren Buffett. Indeed, Bill Gates, Sr., the father 
of America's richest person--Bill Gates--wrote a book about why the 
elimination of the inheritance tax was a bad idea.
  Since I came to Congress 10 years ago I have been supportive of 
making sensible reforms to raise the exemption, adjust the rates so 
that they are more gently graduated like they used to be, and provide 
deferral for owners of closely held businesses that wanted to continue 
in operation. Instead of a compromise that would be overwhelmingly 
supported by Republicans and Democrats alike, the Republican leadership 
continues to play games with families and businesses with this current 
bill.
  This bill is tantamount to full repeal and will add hundreds of 
billions of dollars to our national deficit. The cost of H.R. 5638, 
estimated at $280 billion over 11 years, is 70 percent to 80 percent of 
the full repeal cost to the national treasury. Like previous 
legislative proposals to repeal the inheritance tax, this bill is a 
solution in search of a problem aimed at helping the most well-off 
Americans while deepening the Federal debt. This is the latest in a 
long string of fiscally irresponsible moves reflecting the misplaced 
priorities of this Congress.
  Mr. ISSA. Mr. Speaker, I rise today in support of H.R. 5638, the 
Permanent Estate Tax Relief Act of 2006. Thank you for bringing this 
important issue to the floor.
  I cosponsored and voted in favor of H.R. 8, the Death Tax Repeal 
Permanency Act of 2005, which overwhelmingly passed in the House last 
year. I still believe in the permanent repeal of the estate tax, 
because without permanent repeal businesses will die. This bill simply 
isn't good enough. It doesn't keep the promise that I made to the 
people in my district to end, once and for all, the double taxation of 
the dead.
  I will vote for this bill today because it is the best we can do at 
this time. In my mind this is only a downpayment, and I will work with 
the Congress to permanently eliminate this unreasonable and unfair 
double taxation.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I have voted for estate tax 
relief before but I oppose this bill because it is irresponsible to cut 
taxes for the wealthy when the Nation is at war and the national debt 
is over $8 trillion. Indeed, Mr. Speaker, I think it is unconscionable 
to be considering voting another tax cut to the wealthiest 0.3 percent 
of Americans.
  The Joint Committee on Taxation estimates that this estate tax 
proposal will cost the Federal Government $602 billion, plus an extra 
$160 billion when interest is accounted for. Only 0.5 percent of the 
richest families in America currently pay estate taxes. Moreover, under 
current law in 2009, only 3 out of every 1,000 estates will pay a penny 
in estate taxes--all couples with estates up to $7 million, 99.7 
percent, will pass on their entire estates tax-free. Any compromise 
proposal which deviates from 2009 current law--such as H.R. 5638--is 
therefore crafted entirely to benefit this tiny sliver of the richest 
estates.
  American voters stand strongly against drastic estate tax 
legislation. According to recent polling data, nearly 60 percent of 
voters hold the initial, unaided view that estate tax should be left as 
is or reformed, and only 23 percent support repeal. When asked about 
the estate tax in the context of other budget priorities, voters rank 
repealing the estate tax as the last priority, and 55 percent of voters 
oppose repeal.
  This so-called compromise, nearly as regressive and costly as a full 
repeal, is no compromise at all. Passing even this compromise 
legislation would constitute one of the most regressive tax cuts in the 
history of the United States. Middle- and lower-class Americans will be 
forced to shoulder the burden of radically decreasing the estate tax--
both monetarily and through decreased public programs. In order to 
cover the monetary gap, the Government will plunge further into debt, 
which will limit its ability to address the Social Security solvency 
gap and reduce the money available for public programs. It will also 
have to tap other tax sources, like payroll taxes, which will 
overwhelmingly hinder lower-income families.
  I urge my colleagues to uphold the core American values of fairness 
and belief in meritocracy by rejecting this tax cut.
  If we really wish to help the most deserving American families, we 
should raise the minimum wage from $5.15 to $7.25 over 3 years. Mr. 
Speaker, did you know that today's minimum wage of $5.15 today is the 
equivalent of only $4.23 in 1995, which is even lower than the $4.25 
minimum wage level before the 1996-97 increase? It is scandalous, Mr. 
Speaker, that a person can work full-time, 40 hours per week, for 52 
weeks, earning the minimum wage would gross just $10,700, which is well 
below the poverty line.
  A minimum wage increase would raise the wages of millions of workers:
  An estimated 7.3 million workers, 5.8 percent of the workforce, would 
receive an increase in their hourly wage rate if the minimum wage was 
raised from $5.15 to $7.25 by June 2007. Due to ``spillover effects,'' 
the 8.2 million workers, 6.5 percent of the workforce, earning up to 
$1.00 above the minimum would also be likely to benefit from an 
increase.
  Raising the minimum wage will benefit working families. The earnings 
of minimum wage workers are crucial to their families' well-being. 
Evidence from the 1996-97 minimum wage increase shows that the average 
minimum wage worker brings home more than half, 54 percent, of his or 
her family's weekly earnings.
  An estimated 760,000 single mothers with children under 18 would 
benefit from a minimum wage increase to $7.25 by June 2007.

[[Page H4461]]

Single mothers would benefit disproportionately from an increase--
single mothers are 10.4 percent of workers affected by an increase, but 
they make up only 5.3 percent of the overall workforce. Approximately 
1.8 million parents with children under 18 would benefit.
  Contrary to popular myths and urban legends, adults make up the 
largest share of workers who would benefit from a minimum wage 
increase. Seventy-two percent of workers whose wages would be raised by 
a minimum wage increase to $7.25 by June 2007 are adults, age 20 or 
older. Close to half, 43.9 percent, of workers who would benefit from a 
minimum wage increase work full time and another third, 34.5 percent, 
work between 20 and 34 hours per week.
  Minimum wage increases benefit disadvantaged workers and women are 
the largest group of beneficiaries from a minimum wage increase; 60.6 
percent of workers who would benefit from an increase to $7.25 by 2007 
are women. An estimated 7.3 percent of working women would benefit 
directly from that increase in the minimum wage.
  A disproportionate share of minorities would benefit from a minimum 
wage increase. African Americans represent 11.1 percent of the total 
workforce, but are 15.3 percent of workers affected by an increase. 
Similarly, 13.4 percent of the total workforce is Hispanic, but 
Hispanics are 19.7 percent of workers affected by an increase.
  The benefits of the increase disproportionately help those working 
households at the bottom of the income scale. Although households in 
the bottom 20 percent received only 5.1 percent of national income, 
38.1 percent of the benefits of a minimum wage increase to $7.25 would 
go to these workers. The majority of the benefits, 58.5 percent, of an 
increase would go to families with working, prime-aged adults in the 
bottom 40 percent of the income distribution.
  Among families with children and a low-wage worker affected by a 
minimum wage increase to $7.25, the affected worker contributes, on 
average, half of the family's earnings. Thirty-six percent of such 
workers actually contribute 100 percent of their family's earnings.
  A minimum wage increase would help reverse the trend of declining 
real wages for low-wage workers. Between 1979 and 1989, the minimum 
wage lost 31 percent of its real value. By contrast, between 1989 and 
1997, the year of the most recent increase, the minimum wage was raised 
four times and recovered about one-third of the value it lost in the 
1980s.
  Income inequality has been increasing, in part, because of the 
declining real value of the minimum wage. Today, the minimum wage is 33 
percent of the average hourly wage of American workers, the lowest 
level since 1949. A minimum wage increase is part of a broad strategy 
to end poverty. As welfare reform forces more poor families to rely on 
their earnings from low-paying jobs, a minimum wage increase is likely 
to have a greater impact on reducing poverty.
  Mr. Speaker, the opponents of the minimum wage often claim that 
increasing the wage will cost jobs and harm the economy. Of course, Mr. 
Chairman, there is no credible study to support such claims. In fact, a 
1998 EPI study failed to find any systematic, significant job loss 
associated with the 1996-97 minimum wage increase. The truth is that 
following the most recent increase in the minimum wage in 1996-97, the 
low-wage labor market performed better than it had in decades. And 
after the minimum wage was increased, the country went on to enjoy the 
most sustained period of economic prosperity in history. We had 
historic low levels of unemployment rates, increased average hourly 
wages, increased family income, and decreased poverty rates. Studies 
have shown that the best performing small businesses are located in 
States with the highest minimum wages. Between 1998 and 2004, the job 
growth for small businesses in States with a minimum wage higher than 
the Federal level was 6.2 percent compared to a 4.1 percent growth in 
States where the Federal level prevailed.
  So much for the discredited notion that raising the minimum wage 
harms the economy. It does not. But it increases the purchasing power 
of those who most need the money, which is far more than can be said of 
the Republicans' devotion to cutting taxes for multimillionaires.
  Mr. Speaker, Americans overwhelmingly side with progressive 
principles of rewarding hard work with a living wage. In a recent poll 
conducted by the Pew Research Center, 86 percent of Americans favored 
raising the minimum wage. In the 2004 election, voters in Florida and 
Nevada, two States won by President Bush, overwhelmingly approved 
ballot measures to raise the minimum wage. Even in Nevada's richest 
county, 61.5 percent of Douglas, where Bush received 63.5 percent of 
the vote, voters supported raising the minimum wage.
  Forty-three percent of Americans consider raising the minimum wage to 
be a top priority. In contrast, only 34 percent considered making the 
recent Federal income tax cuts permanent and only 27 percent consider 
the passage of a constitutional amendment to ban same-sex marriage as 
top priorities.
  Members of Congress have legislated a minimum salary for themselves 
and have seen fit to raise it eight times since they last raised the 
minimum wage. It is time we gave the Americans we represent a long-
overdue pay raise by increasing the minimum wage to $7.25 over 3 years. 
Even this amount does not keep pace with the cost of living. The 
minimum wage would have to be increased to $9.05 to equal the 
purchasing power it had in 1968. And if the minimum wage had increased 
at the same rate as the salary increase corporate CEOs have received, 
it would now be $23.03 per hour.
  Mr. THOMAS. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Price of Georgia). Pursuant to House 
Resolution 885, the previous question is ordered on the bill, as 
amended.
  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.


                Motion to Recommit Offered by Mr. Rangel

  Mr. RANGEL. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. RANGEL. Yes, I am, Mr. Speaker, in its present form.
  Mr. THOMAS. Mr. Speaker, I reserve a point of order on the motion.
  The SPEAKER pro tempore. The gentleman reserves a point of order.
  The Clerk will report the motion to recommit.
  The Clerk read as follows:

       Mr. Rangel moves to recommit the bill promptly to the 
     Committee on Ways and Means with the following amendatory 
     instructions: At the end of the bill insert the following:
       (1) On June 21, 2006, the Committee on Rules of the House 
     of Representatives met in an emergency meeting to provide a 
     rule for the consideration of H.R. 5638, even though all of 
     the estate and gift tax provisions contained therein do not 
     take effect until January 1, 2010.
       (2) The estate tax provisions in H.R. 5638 will cost more 
     than $800 billion (including interest) in the first 10 years 
     in which the effect of the legislation is fully reflected in 
     the budget deficit (fiscal years 2012-2022).
       (3) More than half of that revenue cost will benefit only 
     the wealthiest 0.3 percent of all decedents. Annually 
     approximately 7500 estates nationwide will be the primary 
     beneficiaries of these reductions in revenue.
       (4) Under H.R. 5638, estates worth more than $20 million 
     (annually approximately 800-900 estates) alone will get a 
     $4.5 billion tax reduction, an average tax reduction of $5.6 
     million per estate.
       (5) All of that revenue cost will be financed through 
     Federal borrowing, much of which will be from foreign 
     investors.
       (6) In contrast, the Committee on Rules of the House of 
     Representatives has not met to provide a rule for the 
     consideration of legislation reported by a Committee of the 
     House of Representatives that would provide for an increase 
     of the minimum wage.
       (7) An increase in the minimum wage would benefit more than 
     6 million individuals, include 1.8 million parents with 
     children under age 18. These numbers dwarf the numbers of 
     individuals who would benefit from H.R. 5638.
       (8) Congress has not increased the minimum wage since 1997. 
     The minimum wage (on an inflation adjusted basis) is now at 
     its lowest level in 50 years.
       (9) Currently a person working full-time at the minimum 
     wage will earn just $10,700 annually, less than two-tenths of 
     one percent of the average benefit provided by H.R. 5638 to 
     estates worth more than $20 million.
       (10) The increase in annual income of a full-time minimum 
     wage worker under the minimum wage legislation reported by 
     the Committee of the House of Representatives would be less 
     than one-tenth of one percent of the average benefit provided 
     by H.R. 5638 to estates worth more than $20 million.
       (11) Enacting the estate tax reductions contained in H.R. 
     5638, while refusing to increase the minimum wage, amounts to 
     placing the interests of 7500 of the wealthiest estates 
     annually above the interest of 6.6 million individuals who 
     would benefit from a minimum wage increase, based on the 
     above the Committee shall report the same back to the House 
     only after the House has acted on an increase in the minimum 
     wage.

                             Point of Order

  The SPEAKER pro tempore. Does the gentleman from California insist on 
his point of order?
  Mr. THOMAS. Mr. Speaker, I make a point of order against the motion 
to recommit and believe the point of order is in order because this 
supposed motion to recommit is not germane.

[[Page H4462]]

  The SPEAKER pro tempore. Does any Member wish to speak on the point 
of order?
  Mr. RANGEL. Mr. Speaker, may I respond?
  The SPEAKER pro tempore. The gentleman from New York is recognized.
  Mr. RANGEL. Mr. Speaker, one may wonder how germane is it when we are 
considering a bill that 7,500 families will be the beneficiary at the 
cost of $800 billion, as opposed to what I am raising in the motion to 
recommit, and that is the lives of 6.6 million working people that 
really are working at the minimum wage. So there is a difference in how 
we perceive what we are doing today, whether the hundreds of million of 
people that work every day should be sacrificed at a cost of close to 
$1 trillion when, in fact, we are talking about 7,500 families that 
have not worked for the money but are going to inherit the money.


                         parliamentary inquiry

  Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. THOMAS. Mr. Speaker, is the gentleman supposed to respond to the 
point of order, or is he allowed to make a partisan political speech 
which is not germane to the point of order?
  The SPEAKER pro tempore. The gentleman is allowed to speak on the 
point of order and address the issue of germaneness.
  Mr. RANGEL. Well, that was my point, that I am trying to show the 
significance of taxpayers; taxpayers, where one group is at the minimum 
wage, and people who, right now 99.7 percent of these people, do not 
pay taxes on their estate. So clearly we are talking in terms of who is 
suffering the liability of taxes.
  The SPEAKER pro tempore. The gentleman will suspend. The gentleman 
must address the issue of germaneness, please. The gentleman may 
resume.
  Mr. RANGEL. The germaneness is who is going to pay for this bill that 
is before us today? And the motion to recommit says that we should 
consider the millions of people who work every day that don't get this 
type of relief.
  Mr. THOMAS. Mr. Speaker, I have a point of order. Beginning your 
statement with ``this is why it is germane'' is not addressing the 
germaneness question.
  The SPEAKER pro tempore. The gentleman must address his comments to 
the issue of germaneness of the motion to recommit.
  Mr. RANGEL. Well, I will yield to the Chair to determine what is fair 
and what is equitable as we talk about the lives of working people that 
pay taxes every day as opposed to having a trillion dollars to be 
disbursed to people who don't pay taxes.
  The SPEAKER pro tempore. If no other Member wishes to address the 
point of order, the Chair is prepared to rule.
  The gentleman makes a point of order that the amendment offered by 
the gentleman from New York is not germane.
  Clause 7 of rule XVI, the germaneness rule, provides that no 
proposition on a ``subject different from that under consideration 
shall be admitted under color of amendment.'' One of the central tenets 
of the germaneness rule is that an amendment should be within the 
jurisdiction of the committee of jurisdiction of the bill.
  The bill, H.R. 5638, was referred to the Committee on Ways and Means.
  The amendment offered by the gentleman from New York in pertinent 
part addresses the minimum wage, a matter within the jurisdiction of 
the Education and the Workforce Committee. By addressing a matter 
outside the jurisdiction of the Committee on Ways and Means, the 
amendment is not germane.
  The point of order is sustained. The motion is not in order.


                         Parliamentary Inquiry

  Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. THOMAS. Mr. Speaker, under the rule in consideration of this 
bill, the minority was allowed a motion to recommit. A motion to 
recommit was offered. It was clearly on its face nongermane. The Chair 
has just ruled that that so-called motion to recommit was nongermane. 
However, under the rules, that nongermane bill was read. It amounts to 
a political pamphlet.
  Mr. RANGEL. Mr. Speaker, I appeal the ruling of the Chair.
  The SPEAKER pro tempore. The gentleman will suspend.
  Does the gentleman have a parliamentary inquiry?
  Mr. THOMAS. Yes. The offer of the motion to recommit would have been 
exhausted, and I would simply say if that is not the case, they could 
offer another 10 partisan tracts on the argument that it is a motion to 
recommit, make the same arguments, and never violate the rules, and 
that is not under the spirit of the rules.
  The SPEAKER pro tempore. The gentleman has not stated a parliamentary 
inquiry.
  Mr. RANGEL. Mr. Speaker, I move to appeal the ruling of the Chair.
  The SPEAKER pro tempore. The question is, Shall the decision of the 
Chair stand as the judgment of the House? Those in favor say ``aye.'' 
(Members responded by voice.)
  Mr. THOMAS. Mr. Speaker, the gentleman was not timely in his request 
to appeal the decision of the Chair.
  The SPEAKER pro tempore. The gentleman will suspend.
  Mr. HOYER. Mr. Speaker, a vote is in progress.
  The SPEAKER pro tempore. Members will suspend.
  For what purpose does the gentleman from California rise?
  Mr. THOMAS. The gentleman moves to lay the motion on the table.
  Mr. HOYER. The House is in the process of a vote.


                 motion to table offered by mr. thomas

  Mr. THOMAS. Mr. Speaker, I move to table the motion.
  The SPEAKER pro tempore. The question is on tabling the appeal.


                         parliamentary inquiry

  Mr. HOYER. Mr. Speaker, parliamentary inquiry. I make a point of 
order that that motion is not in order. The Speaker called for a vote. 
The aye votes were taken. The next question is the no votes. We are in 
the process of a vote. And until such time as that vote is concluded, a 
motion is not in order.
  The SPEAKER pro tempore. The gentleman from California was seeking 
recognition. The question is on the motion to table.


                             point of order

  Mr. HOYER. Mr. Speaker, point of order.
  The SPEAKER pro tempore. The gentleman will state his point.
  Mr. HOYER. Mr. Speaker, you can run over us. We understand that. We 
do not have the votes. But you called the vote, Mr. Speaker, and we 
were in the process of a vote, and he had not been recognized at that 
point. Now, the fact that he was seeking recognition or not is 
irrelevant.
  The SPEAKER pro tempore. Does the gentleman have a point of order?
  Mr. HOYER. Yes.
  The SPEAKER pro tempore. State your point of order, please.
  Mr. HOYER. That the gentleman's motion is not in order because we 
were in the process of voting on the issue that was propounded by the 
gentleman from New York.
  The SPEAKER pro tempore. When the Chair began to put the question, 
the gentleman from California was on his feet seeking recognition. The 
gentleman's motion was to table.
  Mr. HOYER. I appeal the ruling of the Chair.

                              {time}  1500

  Mr. RANGEL. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore (Mr. Price of Georgia). The gentleman will 
state it.
  Mr. RANGEL. First of all, when I asked for a vote, you asked for the 
votes for the ayes. It was my intention, in case we had lost, to ask 
for a vote on this because a quorum is not present.
  What is happening here, and my parliamentary inquiry is, once you 
took the ayes, we never got an opportunity to find out the nays. So I 
am in the position now that I cannot challenge the Chair. After you 
asked for the aye votes, you never asked for the nay votes. How can we 
determine what the ruling of the Chair is?
  The SPEAKER pro tempore. The gentleman is not stating a parliamentary 
inquiry.
  Mr. HOYER. Mr. Speaker, I have appealed the previous ruling of the 
Chair. An appeal to the ruling of the Chair is pending.
  The SPEAKER pro tempore. The gentleman will suspend.

[[Page H4463]]

  For what purpose does the gentleman from California rise?
  Mr. THOMAS. The gentleman from California rises, just as he did 
previously, to gain recognition to indicate that I move that we table 
the motion to lay the bill on the table of the objection of the 
gentleman from Maryland on the ruling of the Chair.
  So I now have a lay on the table of two objections of the ruling of 
the Chair.
  The SPEAKER pro tempore. The Chair has made a ruling on a germaneness 
point of order. An appeal has been taken. No further appeal may be 
erected at this point. The situation that the gentleman from Maryland 
seeks to appeal from is not appealable.
  The Chair has recognized the gentleman from California and his motion 
to table, and that is the business before the House.
  Mr. SABO. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. SABO. Mr. Speaker, I was sitting here waiting for time to expire 
so I could cast a vote, and I heard the motion made by the gentleman 
from New York.
  The SPEAKER pro tempore. Does the gentleman have a parliamentary 
inquiry?
  Mr. SABO. Then I heard the Speaker call for a vote.
  The SPEAKER pro tempore. The gentleman will state his parliamentary 
inquiry.
  Mr. SABO. I am just curious, did the Speaker call for a vote, and did 
I hear some people vote aye?
  The SPEAKER pro tempore. The gentleman is not stating a pertinent 
parliamentary inquiry.
  The question is on the motion to table.
  Mr. SABO. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. Does the minority whip seek recognition?
  Mr. HOYER. I do. I make a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. HOYER. I would propound this parliamentary inquiry. Is it 
appropriate during the course of a vote, and after one side of the vote 
has been made and pending the request for the nays in this case, is it 
appropriate to stop that vote and then recognize someone at that point 
in time?
  The SPEAKER pro tempore. The Chair began to take a voice vote, but 
then realized that a Member timely sought recognition for a proper 
purpose.
  Mr. HOYER. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. HOYER. The Speaker's recollection is different than mine. The 
Speaker propounds and the Parliamentarian advises that apparently you 
began. Frankly, we were in the process. You had called for the ayes, 
the ayes had been made, and you were then about to call for the nays.
  So I would suggest it was not a question that you had begun and then 
saw that the gentleman from California had risen and then sought to 
recognize him. What you did was, after asking for the ayes, which were 
enunciated, you then stopped the vote and then recognized the gentleman 
from California.
  My question to you, therefore, you did not respond to. Once the vote 
is in progress, and I suggest to the Speaker and those who might advise 
him that the Record will reflect that the vote had been called, it is 
in that context that I again ask you, Mr. Speaker, not if you had 
started, but, in fact, we were in the progress of a vote.
  The SPEAKER pro tempore. The Chair made a ruling. An appeal was 
taken. The Chair first stated the question. The Chair next began to put 
the question but then realized that the gentleman from California was 
seeking recognition. The gentleman from California was recognized on 
the motion to table.
  The business before the House is the motion to table.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. HOYER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 229, 
nays 195, not voting 9, as follows:

                             [Roll No. 313]

                               YEAS--229

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schmidt
     Schwarz (MI)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--195

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Cooper
     Costa
     Costello
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Watson
     Watt

[[Page H4464]]


     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--9

     Berkley
     Davis (FL)
     Diaz-Balart, L.
     Evans
     Johnson, Sam
     Kennedy (RI)
     Serrano
     Shays
     Waters


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised that 
there are 2 minutes remaining in the vote.

                              {time}  1528

  Mr. SMITH of Washington and Mr. GORDON changed their vote from 
``yea'' to ``nay.''
  Mr. HALL and Mr. KINGSTON changed their vote from ``nay'' to ``yea.''
  So the motion to table was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.


               Motion to Recommit Offered by Mr. Pomeroy

  Mr. POMEROY. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. POMEROY. Yes, I am.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:
       Mr. Pomeroy moves to recommit the bill H.R. 5638 to the 
     Committee on Ways and Means with instructions to report the 
     same back to the House forthwith with the following 
     amendments:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Certain and Immediate Estate 
     Tax Relief Act of 2006''.

     SEC. 2. RETENTION 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.--Section 901 of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 shall not 
     apply to title V of such Act.
       (c) Conforming Amendments.--Subsection (d) of section 511, 
     and subsections (b)(2) and (e)(2) of section 521, 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. 3. IMMEDIATE INCREASE IN EXCLUSION EQUIVALENT OF UNIFIED 
                   CREDIT.

       (a) In General.--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 
     $3,500,000 ($3,000,000 in the case of estates of decedents 
     dying before 2009).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to estates of decedents dying, and gifts made, 
     after December 31, 2006.

     SEC. 4. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED CREDIT OF 
                   DECEASED SPOUSE.

       (a) In General.--Subsection (c) of section 2010 of the 
     Internal Revenue Code of 1986 (defining applicable credit 
     amount), as amended by section 3, is amended to read as 
     follows:
       ``(c) Applicable Credit Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable credit amount is the amount of the tentative tax 
     which would be determined under the rate schedule set forth 
     in section 2001(c) if the amount with respect to which such 
     tentative tax is to be computed were the applicable exclusion 
     amount.
       ``(2) Applicable exclusion amount.--For purposes of this 
     subsection, the applicable exclusion amount is the sum of--
       ``(A) the basic exclusion amount, and
       ``(B) in the case of a surviving spouse, the aggregate 
     deceased spousal unused exclusion amount.
       ``(3) Basic exclusion amount.--For purposes of this 
     subsection, the basic exclusion amount is $3,500,000 
     ($3,000,000 in the case of estates of decedents dying before 
     2009).
       ``(4) Aggregate deceased spousal unused exclusion amount.--
     For purposes of this subsection, the term `aggregate deceased 
     spousal unused exclusion amount' means the lesser of--
       ``(A) the basic exclusion amount, or
       ``(B) the sum of the deceased spousal unused exclusion 
     amounts of the surviving spouse.
       ``(5) Deceased spousal unused exclusion amount.--For 
     purposes of this subsection, the term `deceased spousal 
     unused exclusion amount' means, with respect to the surviving 
     spouse of any deceased spouse dying after December 31, 2006, 
     the excess (if any) of--
       ``(A) the applicable exclusion amount of the deceased 
     spouse, over
       ``(B) the amount with respect to which the tentative tax is 
     determined under section 2001(b)(1) on the estate of such 
     deceased spouse.
       ``(6) Special rules.--
       ``(A) Election required.--A deceased spousal unused 
     exclusion amount may not be taken into account by a surviving 
     spouse under paragraph (5) unless the executor of the estate 
     of the deceased spouse files an estate tax return on which 
     such amount is computed and makes an election on such return 
     that such amount may be so taken into account. Such election, 
     once made, shall be irrevocable. No election may be made 
     under this subparagraph if such return is filed after the 
     time prescribed by law (including extensions) for filing such 
     return.
       ``(B) Examination of prior returns after expiration of 
     period of limitations with respect to deceased spousal unused 
     exclusion amount.--Notwithstanding any period of limitation 
     in section 6501, after the time has expired under section 
     6501 within which a tax may be assessed under chapter 11 or 
     12 with respect to a deceased spousal unused exclusion 
     amount, the Secretary may examine a return of the deceased 
     spouse to make determinations with respect to such amount for 
     purposes of carrying out this subsection.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this subsection.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 2505(a) of such Code, after 
     the application of section 3, is amended to read as follows:
       ``(1) the applicable credit amount under section 2010(c) 
     which would apply if the donor died as of the end of the 
     calendar year, reduced by''.
       (2) Section 2631(c) of such Code is amended by striking 
     ``the applicable exclusion amount'' and inserting ``the basic 
     exclusion amount''.
       (3) Section 6018(a)(1) of such Code, after the application 
     of section 3, is amended by striking ``applicable exclusion 
     amount'' and inserting ``basic exclusion amount''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2006.

     SEC. 5. 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)),

[[Page H4465]]

       ``(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 retain the estate tax with 
     an immediate increase in the exemption, to repeal the new 
     carryover basis rules in order to prevent tax increases and 
     the imposition of compliance burdens on many more estates 
     than would benefit from repeal, and for other purposes.''.

  Mr. POMEROY (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion be considered as read and printed in the 
Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Dakota?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Dakota is recognized for 5 minutes in support of his motion.

                              {time}  1530

  Mr. POMEROY. Mr. Speaker, I am going to be brief with the 5 minutes 
allocated for this side. I do not intend to use all of it, with the 
reason we are presenting this information and this alternative under 
the motion to recommit is because the Rules Committee, when offering 
this House a so-called compromise on the estate tax reform, only 
allowed one version and did not allow the minority even the opportunity 
to present a different level of compromise. So we have to use this 
motion to recommit, and I will tell you quickly what it does.
  It would exclude all estates from taxation at the $3 million level 
and $6 million joint level beginning January of next year. In 2009, it 
would move as the present law affords to the $3.5- and $7 million, 
excluding all estates below that.
  Many of us believe that the estate tax needs reform, and we think 
this reform at the levels $7 million joint exclusion from 2009 and 
thereafter is very meaningful reform indeed, and, in fact, it makes the 
estate tax go away for 99.7 percent of the people in this country.
  Yet it compares very favorably in cost impact to the Thomas proposal 
before the House; indeed, 40 percent of the costs of outright repeal 
for the motion to recommit compared to the Thomas proposal, which, when 
fully phased in years 2010 to 2020, costs 80 percent, maybe even more. 
We estimate at least $800 billion will be lost, and we mean actually 
borrowed because we are in deep deficits.
  It is a simple fact. You take the tax off some, somebody else is 
probably going to have to pick up the tab. So here you have got a tax 
that is of no consequence to 99.7 percent of the people in this 
country. We are going to repeal the tax on the wealthiest sliver. You 
know what it means. Everyone else is going to have to pick up the 
slack.
  This is a House that has voted to raise the national borrowing limit 
in March, raised it again in May, all of this driven by out-of-control 
deficits, and here you are about to advance a proposal that would lose 
$800 billion in the next decade, the very decade when 78 million 
Americans will move into that 65-year age group beginning the draw on 
Medicare, which goes out of balance in 2012, beginning to draw on 
Social Security, which goes out of balance in 2017.
  We have got to take a breath here and ask ourselves what have we done 
to the revenue base of this country? We have got solemn commitments, 
the promise of Medicare and the promise of Social Security, and there 
is no way in the world we have the funding base, particularly if the 
Thomas alternative would become law, to meet those promises to the 
American people.
  So I say this: Let us pass this motion to recommit. Let us give 
estate tax relief to 99.7 percent of the people in this country, and 
let us retain some ability of our great Nation to meet the promises of 
Medicare and Social Security to those counting on it.
  Mr. THOMAS. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
  Mr. THOMAS. Mr. Speaker, first of all, I want to apologize to the 
Members for the wasted time based upon the obvious partisan motion to 
recommit which was not germane.
  The best thing I can say about this one is it is germane. It is an 
index. We have no score, nothing from the Joint Tax Committee. You will 
be pleased to know I will yield back the balance of my time. Vote 
``no'' on the motion to recommit.
  Mr. Speaker, I rise in support of the Motion to Recommit and in favor 
of the Pomeroy Substitute to H.R. 5638, the ``Permanent Estate Tax 
Relief Act of 2006.''
  The GOP bill is fiscally irresponsible, costing $762 billion over 10 
years--heaping even more debt onto our children and grandchildren. At a 
time of record deficits, the bill would cost about $290 billion from 
fiscal years 2006-2016. The estate tax provisions do not take effect 
until 2011. Thus, the actual cost of H.R. 5638 over the period from 
2012 until 2021 shows the impact that the bill will have in the first 
ten years it is in effect. This more accurate 10-year cost would exceed 
three-quarters of a trillion dollars when interest payments on the debt 
incurred are included according to the Center on Budget and Policy 
Priorities' estimates. Already, the GOP has squandered $5.6 trillion in 
10-year surplus and turned it into a $3.2 trillion 10-year deficit. 
Congress just raised the debt ceiling to nearly $9 trillion, in March--
amounting to about $100,000 of debt for each tax paying family.
  The Pomeroy Substitute provides estate tax relief for 99.7 percent of 
all estates. The Pomeroy Substitute offers more estate tax relief 
sooner, and is a simpler and more responsible solution over the long-
term--raising the amount of an estate excluded from taxes to $6 million 
per couple and increasing this to $7 million by 2009. Not only did this 
provide relief for small businesses and family farmers, but it would 
not have heaped more debt onto our children and grandchildren--costing 
only 60 percent of H.R. 5638. The Pomeroy Substitute is paid for by 
closing the gap in unpaid taxes, but Republicans are refusing to allow 
these provisions to be considered. It would also simplify estate tax 
planning for married couples who could carry over any unused exemption 
to the surviving spouse assuring that the full $7 million would be 
available.
  Furthermore, the Pomeroy Substitute transfers the estate tax revenue 
tax receipts to shore up the Social Security trust fund, and the Social 
Security Actuary has calculated that this action would solve one 
quarter of the trust fund's shortfall. Last year, Democrats voted for a 
similar measure.
  Almost no working farmers ever pay the estate tax. Under the $3.5 
million exemption to take effect in 2009, the number of family farms 
required to pay any taxes would have been just 65 in 2000, along with 
94 small businesses. Support the Pomeroy Substitute. Vote ``aye'' on 
the Motion to Recommit.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. POMEROY. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of passage.

[[Page H4466]]

  The vote was taken by electronic device, and there were--ayes 182, 
noes 236, not voting 15, as follows:

                             [Roll No. 314]

                               AYES--182

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Becerra
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Clyburn
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick (MI)
     Kind
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Sherman
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Wasserman Schultz
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--236

     Aderholt
     Akin
     Alexander
     Bachus
     Baker
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boucher
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole (OK)
     Conaway
     Cramer
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kucinich
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Sanders
     Saxton
     Schmidt
     Schwarz (MI)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skelton
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--15

     Berkley
     Conyers
     Davis (FL)
     Diaz-Balart, L.
     Evans
     Johnson, Sam
     Kennedy (RI)
     McKeon
     Moran (KS)
     Nadler
     Pitts
     Serrano
     Shays
     Visclosky
     Waters


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
are 2 minutes remaining.

                              {time}  1551

  Mr. CUELLAR changed his vote from ``no'' to ``aye.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.


                         Parliamentary Inquiry

  Mr. RANGEL. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. RANGEL. Is at this stage a motion to adjourn in order?
  The SPEAKER pro tempore. The motion to adjourn is not in order.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. RANGEL. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 269, 
noes 156, not voting 8, as follows:

                             [Roll No. 315]

                               AYES--269

     Abercrombie
     Aderholt
     Akin
     Alexander
     Bachus
     Baird
     Baker
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Cardoza
     Carter
     Case
     Castle
     Chabot
     Chandler
     Chocola
     Clay
     Coble
     Cole (OK)
     Conaway
     Costa
     Costello
     Cramer
     Crenshaw
     Cubin
     Cuellar
     Culberson
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Filner
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Herseth
     Hinojosa
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jefferson
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Larsen (WA)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris
     Melancon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mollohan
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Royce
     Ruppersberger
     Ryan (OH)
     Ryan (WI)
     Ryun (KS)
     Salazar
     Saxton
     Schmidt
     Schwarz (MI)
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skelton
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Tiberi
     Turner
     Upton
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wynn
     Young (AK)
     Young (FL)

[[Page H4467]]



                               NOES--156

     Ackerman
     Allen
     Andrews
     Baca
     Baldwin
     Becerra
     Berman
     Bishop (NY)
     Blumenauer
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Carnahan
     Carson
     Cleaver
     Clyburn
     Conyers
     Cooper
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Frank (MA)
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Higgins
     Hinchey
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (VA)
     Sherman
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Taylor (MS)
     Thompson (MS)
     Tiahrt
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu

                             NOT VOTING--8

     Berkley
     Davis (FL)
     Evans
     Johnson, Sam
     Pitts
     Serrano
     Shays
     Waters


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). There are 2 minutes left 
in this vote.

                              {time}  1600

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________