[Congressional Record Volume 152, Number 85 (Tuesday, June 27, 2006)]
[Extensions of Remarks]
[Pages E1284-E1285]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 PROVIDING FOR CONSIDERATION OF H.R. 5638, PERMANENT ESTATE TAX RELIEF 
                              ACT OF 2006

                                 ______
                                 

                               speech of

                           HON. BOB ETHERIDGE

                           of north carolina

                    in the house of representatives

                        Thursday, June 22, 2006

  Mr. ETHERIDGE. Mr. Speaker, I rise in opposition to H.R. 5638, the 
Permanent Estate Tax Relief Act of 2006, and I urge my colleagues to 
join me in voting against it.
  As a part-time farmer myself, I support tax relief that helps our 
farms and small businesses grow. I have supported raising the estate 
tax exemption level several times in previous years. However, this must 
be done in a responsible manner that does not dishonor our values, 
shortchange our essential services, or heap more debt on our children 
and grandchildren. Unfortunately, H.R. 5638 fails this basic test. H.R. 
5638, the Permanent Estate Tax Relief Act of 2006 is far from the 
``compromise'' that its authors claim. This bill would result in almost 
80 percent as much lost revenue as a full repeal of the estate tax. 
H.R. 5638 would cost the American people $762 billion in the first 10 
years of its enactment.
  The Permanent Estate Tax Relief Act of 2006 is the latest example of 
this Congressional Majority's misplaced priorities. Less than 1 percent 
of estates will pay the estate tax this year under the exemption in 
current law and only 7,500 estates nationwide would be taxable under 
the $3.5 million exemption that would take effect in 2009. Under 
current law, 997 of every 1,000 estates would not pay any part of 
Federal estate taxes. Given current circumstances, the timing could not 
be worse for giving tax breaks that only apply to multi-millionaires' 
estates.
  I am very proud that during my first term in the U.S. House, Congress 
and the President balanced the Federal budget for the first time in a 
generation. Until just a few years ago, the budget remained balanced 
and the surpluses we produced were being used to pay down the national 
debt and strengthen Social Security. The current Republican regime in 
the White House and Congress has reversed that progress and the Nation 
is much worse off because of their policies. Today the national debt 
stands at $8.4 trillion. We face the danger of being forced to borrow 
more money from countries like China to pay our national debt and 
putting ourselves at the mercy of their rising interest rates. A nation 
at war cannot justify adding almost $800 billion to this staggering 
debt. We cannot continue to pile on debt that our future generations 
will be forced to pay.
  Increasing this budget shortfall only makes it more difficult to 
invest in our true priorities. We are still a nation at war and some of 
our soldiers lack the best armor. We are facing another hurricane 
season while continuing to rebuild the Gulf Coast following Hurricane

[[Page E1285]]

Katrina. Already the Republican budget resolution cuts funds for 
homeland security, including port security by $6.1 billion over 5 
years, cuts essential services for working families by $9.4 billion, 
and slashes funding for health by $18.1 billion below current services. 
As the former Superintendent of North Carolina's public schools, I find 
the budget cuts for education especially disappointing. Instead of 
investing in our future Congressional Republicans are eliminating 42 
Federal education initiatives. The budget also eliminates vocational 
education ($1.3 billion); Perkins Loans ($730 million); Safe and Drug-
Free Schools State grants ($347 million); and Even Start family 
literacy services ($99 million). The Republican budget cuts $15 billion 
from the amount authorized for the No Child Left Behind education 
reform effort and reduces the 17.7 percent Federal contribution to 
Individuals with Disabilities Education Act (IDEA) to 17.0 percent. The 
loss of revenue from H.R. 5638 leaves a huge budget hole that will have 
to be filled by the States and the burden will be placed on middle 
class and low income families.
  In contrast, the Pomeroy Substitute is an alternative that offers a 
simpler solution without the damaging economic effects of H.R. 5638. 
Unlike the Republican bill, the Pomeroy Substitute would offer 
immediate tax relief by raising the estate tax exemption level to $6 
million per couple and growing to $7 million per couple in 2009. This 
would exempt 99.7 percent of all estates in the nation while costing 
only 60 percent of H.R. 5638. While there is no plan to make up for the 
huge losses in revenue resulting from H.R. 5638, the Pomeroy Substitute 
would be payed for by closing the gap in unpaid taxes. Additionally, 
the estate tax revenue collected under the Pomeroy Substitute would be 
transferred as receipts used specifically to shore up the Social 
Security trust fund. According to the Social Security Actuary, this 
would eliminate one quarter of the trust fund's shortfall.
  The Pomeroy Substitute offers immediate tax relief without adding to 
the crippling debt now facing future generations. This is the type of 
sound tax and budget policy Congress should pass. We owe the American 
people nothing less.

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