[Congressional Record Volume 152, Number 106 (Thursday, August 3, 2006)]
[Senate]
[Pages S8725-S8747]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                                 Senate

Thursday, August 3, 2006

     ESTATE TAX AND EXTENSION OF TAX RELIEF ACT OF 2006--MOTION TO 
                                PROCEED

  Mr. FRIST. Mr. President, we have had a lot of discussion in terms of 
what the plans would be. We will be proceeding where we can finish the 
bills, not the Department of Defense appropriations bill tonight, but 
in all likelihood the other bills. I will propound the unanimous 
consent request, and then we will lay out the evening.
  Mr. President, I ask unanimous consent that notwithstanding rule 
XXII, the cloture vote with respect to H.R. 5970, the Family Prosperity 
Act, occur following 15 minutes for Senator Grassley, 15 minutes for 
the Democratic manager, and 15 minutes for each leader; provided 
further that if cloture is not invoked, the Senate then proceed 
immediately to the consideration of H.R. 4, the pensions bill, and that 
there be 20 minutes for debate equally divided between the two leaders, 
with no amendments in order to the bill; further, that following the 
use or yielding back of debate, the bill be read the third time and the 
Senate proceed to a vote on passage, with no intervening action or 
debate; further, that it not be in order to consider any conference 
report on H.R. 2830 during this Congress.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Mr. President, reserving the right to object, I move that 
we amend H.R. 4388--it is the extenders, so that everybody knows what I 
am talking about--with the text of the extenders amendment I offered 
earlier to the defense bill. In effect, what I am saying is, we are 
going to try to have a decision made on the protection act. Following 
the disposition of that, we would go to the pension bill, and my 
request is that following that we would pass the extenders.
  The PRESIDING OFFICER. Is there objection?
  Mr. FRIST. Reserving the right to object, Mr. President, I have made 
it clear since the outset that our intention was to address the Family 
Prosperity Act, which are the three bills, which people have been 
referring to as the ``trifecta,'' unamended and without any attempt to 
either separate that and add it to the pensions bill. We will proceed 
as planned, consistent with the unanimous consent request that I 
outlined.
  I do object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. REID. Reserving the right to object, Mr. President. I understand 
the leader. He told me that earlier today. I told him I would do this. 
I hope that when we come back, following the completion of the Defense 
appropriations bill, this will be one of the first things we work on. 
This is an extremely important piece of legislation. I am disappointed 
that we were not able to complete this at the conference that was 
completed a week or so ago. I have no objection to the majority 
leader's request.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time?
  Mr. FRIST. Mr. President, I will yield to Senator Grassley when he 
comes. I think that I will go ahead and yield myself time on this bill. 
We have essentially 30 minutes on either side, of which 15 or 20 
minutes of our time will be used by Senator Grassley.
  We will be voting shortly on what we are calling the Family 
Prosperity Act. Heretofore, it has been called the trifecta bill 
because it addresses three different issues that are critically 
important to the American people.
  Each of these three bills that have been grouped together to become 
the Family Prosperity Act are important to hard-working Americans, 
millions of them. One of the three bills is the permanent tax relief 
bill. Let me say at the outset that this is a compromise bill that has 
been put together. We attempted earlier to do something that I strongly 
believe in, which is totally repealing this unfair and wrongful 
``death'' tax. We were unable to do that on the floor of the Senate, 
and after a lot of discussion between Republicans and Democrats, with 
the leadership, with Senator Kyl on our side and many Democrats, a bill 
that is a compromise was put together and is very similar to the bill 
that is in the Family Prosperity Act.
  Why is it important? Because this death tax punishes everyday 
Americans by forcing them to give up their businesses, give up their 
farms, which their loved ones--dads, moms, and grandparents--have 
worked hard to pass on to them. It has a direct impact on farming, 
ranching, construction. All of these bills are labor and capital 
intensive, but the cost of passing these enterprises on to future 
generations in one piece is often prohibitive and impossible to do.

[[Page S8726]]

  About 90 percent of family businesses don't survive that third 
generation. Even those who do manage to pass on their family businesses 
are adversely affected. Instead of spending money to innovate and grow 
the business, people have to pay money either to the Federal 
Government, to accountants and business people to, in some way, try to 
lessen the burden they would some day have to pay.
  There are a lot of issues that we have addressed in this body. It is 
time that we act on this one. Again, it is a compromise that we pulled 
together.
  The second aspect of the Family Prosperity Act are some very 
important tax extenders. There is a list of those that I am sure others 
will talk about, and one that is of particular interest to me is the 
sales tax deductibility. In my State of Tennessee, from 1986 to 2004, 
hard-working Tennesseans were placed at a disadvantage simply because 
Tennessee was one of seven States that chose to raise revenue primarily 
through a sales tax instead of an income tax. Thankfully, in 2004, this 
body, working with President Bush, restored fairness to that Federal 
tax policy, but that provision expired last year, and more than 64,000 
Tennessee families will suffer if that tax relief is not extended. That 
is just one provision. There are many others.
  The research and development tax credit, we know, is absolutely 
critical to our small businesses, mid-size businesses, and larger 
businesses in order to grow and to do that research and innovation that 
prepares them for the future and that creates jobs for the future.
  The final piece of the Family Prosperity Act increases the minimum 
wage. Specifically, it increases it by 40 percent; thus, if we were to 
pass this bill tonight, the Family Prosperity Act, in the very near 
term, because it already passed the House, minimum wage workers--
several million people--will have a 40 percent increase that will begin 
in the very near future. Young workers entering the job market for the 
first time would have a minimum wage hike that would be welcome.
  I see that my colleague, Senator Grassley, is here. At this point, I 
will be happy to yield to him. He has a statement of 15 to 20 minutes. 
I yield to him what time is required for his statement.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, it is my understanding that I have 15 
minutes, and if I need 5 minutes off of the leader's time, I could have 
it. Would you please inform me when my 15 minutes are up, and if I need 
a little bit more time, without asking unanimous consent at that time, 
to take it off of leader time. Does the Chair understand what I am 
talking about?
  The PRESIDING OFFICER. Yes, I understand the Senator. The Chair will 
make sure the Senator knows when 15 minutes have been used.
  Mr. GRASSLEY. I am going to support the trifecta bill. I want to 
speak about the bill and around the bill and about the environment that 
has taken place over the last week.
  On a preliminary note, I would like to talk a little bit about the 
nickname of this bill. Its authors in the House and Senate came up with 
that nickname. They call it the ``trifecta'' bill.
  Many folks know I'm a bit of a frugal person. You'd definitely hear 
it from my staff. Some might say I am cheap. I would say frugal. Frugal 
folks tend to be drudges and a bit predictable, but, at the end of the 
day, frugality tends to mean that you have your house to go home to and 
a little bit of savings in the bank.
  You don't see a lot of frugal folks that take big speculative 
gambles.
  So, when I saw this term ``Trifecta,'' not being much of a gambler, I 
didn't know what it meant. I asked my staff about it. They explained 
that it was a horse or dog racing term. It refers to a compound bet. 
That is, the bettor places a bet on three horses. The bettor indicates 
which horses will win, place, and show.
  I asked my staff about the typical odds on a trifecta in a horse 
race. They picked the 2006 Kentucky Derby. According to the record, 
Barbaro was favored to win by 6 to 1 odds, Bluegrass Cat was 30 to 1 
odds to win, and Steppenwolfer was 30 to 1 odds to win.
  The $2 Trifecta paid $11,418 which is a pay-out of $5,709 per every 
dollar. Big pay-off. Long odds. So does our trifecta have those kind of 
odds? The answer is no, but it does require 60 Senators to payoff.
  Being a frugal person and a cautious legislator, you can see how I 
might have problems with trifecta legislative strategy.
  I guess I would look at this exercise as that kind of longshot. With 
Senate votes as horses, let's take a look. At the last race, on a 
motion to proceed to the House death tax repeal bill, 57 horses came 
in. So, the bet was to find 3 horses among the horses that ran the 
other direction and turn them around. As a farmer with some experience 
with horses, let me say, once they're out of the barn and running 
around, it's hard to turn them around. Senators can be similar, 
especially when a vote is highly political.
  It looks to me like we may not turn around many of the horses today. 
I hope I am wrong. If I am right, the bottom line is that we bet on the 
wrong horses. Maybe we should've taken a bet that was more likely to 
pay-off.
  Now, I want to turn to the substance of the bill before us. What's 
this trifecta bill all about? There are really three key pieces. The 
first piece is permanent death tax relief. The second piece deals with 
expiring tax provisions and some other items, known as the ``trailer 
bill.''
  The last piece is a Federal minimum wage increase.
  I am not going to describe the minimum wage piece. It is not in my 
committee, the Finance Committee's, jurisdiction. It was an add-on by 
the House. I really have no history with it and feel no reason to 
explain it, support it, criticize it, or defend it. I will leave that 
to others.
  From a personal standpoint, I have supported minimum wage increases 
in the past. I'll continue to support them as long as the increase 
doesn't raise teen unemployment and doesn't hurt small business.
  I am going to focus on the first two pieces of the trifecta. That is, 
the death tax relief and the trailer bill. Those matters are squarely 
within the Finance Committee's jurisdiction. I have some history with 
those issues. I care a great deal about the policy in both of those 
areas. As chairman, I feel a lot of responsibility for the tax policy 
in these areas.
  Let's take a look at death tax relief first. I support repeal. I take 
it from the vote we had on the motion to proceed to the death tax 
repeal bill that a majority of the Senate also supports repeal or some 
sort of significant relief.
  I want to make it clear to the people listening, who may not 
understand how the Senate works, why we need 60 votes. A vast majority 
of this Senate supports repeal of the death tax, but it won't happen 
because of the 60-vote requirement.
  In this case, I did some checking around on the votes after the 
cloture motion failed. It became apparent to me, after conversations 
with members, staff, and interested parties that the bar for getting 
the 60 votes was pretty high. At first, the impression was kind of 
fuzzy, but it became clear as the weeks moved on. Several barriers 
existed for the Republican leadership and Senator Kyl. One, the fact 
that we were then so close to an election had politicized the issue. 
The Democratic leadership were becoming invested in blocking a 
Republican accomplishment. They made it clear to Democratic Senators 
who might otherwise be willing to work towards good policy that those 
Senators would face the wrath of the Democratic Caucus.
  Moreover, the Democratic leadership exploited the policy positions 
that Senator Kyl and others considered priorities. Even though 
Republicans moved, the movement never seemed to be enough. Also, 
Democrats were focusing on points that they knew the Republican 
negotiators could not be flexible. It was a troublesome negotiation. 
Unfortunately, members and staff often heard what they wanted to hear. 
This pattern only got worse as time went on.
  While these negotiations were going on, there was a parallel track 
developing. The Senate Republican leadership came up with a different 
plan. The plan was to add the death tax compromise to the pension 
conference. I counseled against it because I thought the mix of 
conferees would not be agreeable to it and it would be an awkward 
position to a broadly bipartisan

[[Page S8727]]

bill. Nevertheless, I agreed to consider this maneuver if the 
proponents could show me a path to 60 votes.
  The proponents went against my counsel and did not deliver on the one 
thing I asked them to do: show me the votes. That plan didn't work 
because, as I predicted, a majority of the conferees were not 
supportive of it, and I was one of the conferees who would have 
supported it.
  After 4 months of tough negotiations, none of the senior conferees, 
all of whom were invested in the pension policy, were keen to the idea 
either. And here, I am talking about both House and Senate conferees, 
Republicans and Democrats. The mission was launched and quickly 
aborted.
  Along came plan B. Plan B was the result of my ``wily'' counterpart--
you know, the guy who, according to House colleagues and staff, 
supposedly ``snookers'' the Senate year in and year out in conferences. 
My House counterpart, who, like the rest of the conferees, was never on 
board with the pension plan, raised this plan B with me. Plan B was the 
idea of combining some new death tax compromise with the trailer bill.
  I counseled against this plan. It was clear that pursuing this plan 
would cause problems with completing the pension conference. Chairman 
Enzi backed me in this view. Once again, I asked the proponents to show 
me the path to 60 votes. Once again, they didn't show the path, and 
then, as you know, they went ahead over my objection.
  So we are where we are right now at almost 9 o'clock on Thursday. The 
process was lousy and offensive, but the substance is good. I will 
support the bill's death tax relief proposal. I wish this death tax 
policy would become law. If that does not happen, then we have to think 
about the next step. We have to keep our eye on the ball. We should be 
aiming for good death tax policy and for the 60 votes on how to get 
there.
  We have all learned a few things in this painful process.
  One, death tax is a unique kind of issue. It is not like other tax 
issues. It is a moral issue to folks on both sides of the aisle. To be 
politically palatable, the death tax proposal needs to be either in 
isolation or proportionate if combined with other tax proposals. Small 
so-called sweeteners don't get us over the goal line. Holding up 
popular must-do current law tax provisions also doesn't get us there. 
Just look at the vote counts in the House on the various bills. Those 
vote counts show what I am talking about.
  So right now, we are stuck. The Democratic leadership is holding back 
Members from voting their consciences and their State interests. That 
resistance is there now, and it is very strong. It won't last past the 
political season. The Democratic caucus will be accountable. If the 
trifecta bill fails, we will be back, but we won't get anywhere until 
we are out of the political season. That is the ugly political fact I 
have to convey to Senators Kyl, Lincoln, and others who have worked in 
a bipartisan way to get this done.
  I took a look in the Tax Code and the recent history of the death tax 
relief. In the past 20 years, comprehensive death tax relief occurred 
two times: in 1997, in a bipartisan tax relief bill, and in 2001 on 
another bipartisan tax relief bill. Both were produced by Finance 
Committee members with a bipartisan working group and the involvement 
of the chairman. My judgment is that if the trifecta bill fails, this 
is the way we are going to have to go again.
  Now I turn to the other part of the trifecta, the so-called trailer 
bill. In this Congress, I have fought long and hard for extension of 
tax provisions that expired at the end of last year, now 8 months into 
the expired year. The extension provisions were included in the tax 
reconciliation bill which passed the Senate in the spring.
  Let's consider how we got here on extenders and the trailer package.
  Extenders were part of a package deal that I argued for in the Budget 
Committee. When the Budget Committee met in February and March of last 
year, I asked for $90 billion. The $90 billion was meant to cover 
expiring provisions, including capital gains and dividend rates and the 
hold harmless for the alternative minimum tax. Chairman Gregg agreed to 
a reconciliation instruction of $70 billion. In committee and on the 
floor, I defended the reconciliation instruction as part of this plan. 
Including extenders was a key part of the strategy. It came up a lot in 
debate. It was a factor in holding the instruction on the floor and in 
conference.
  When the reconciliation bill was marked up in the Finance Committee, 
the extenders were part of the same package deal. The inclusion of 2 
years of extenders on the floor helped us hold the Finance Committee 
bill together.

  When we went to conference, the House brought a year of extenders, no 
AMT hold harmless, and 2 years of capital gains and dividends. Although 
we could not get 2 years of capital gains and dividends through this 
Senate the first time, I knew it was important to the Republican 
leadership, especially Senator Kyl, and I would even put myself in that 
category. We could not fit all the pieces together because, in part, 
the House would not take our anti-tax shelter measures and loophole 
closers. Something had to drop. That something was what we call the 
extenders.
  Now, because the extenders were part of the plan and we were also 
into the expired year, I insisted on assurances from Chairman Thomas of 
the House Ways and Means Committee and also from the bicameral 
leadership. At that time, I released a statement stating that we would 
be putting the extenders in the pension conference report. This 
statement was based on assurances that I had from leaders in both the 
House and the Senate.
  I asked for those assurances to do the right thing from a policy 
perspective and also a political perspective. From the policy 
perspective, the taxpayers should be able to rely on the tax 
legislative process. This should be especially true with respect to the 
current law expiring provisions that enjoy overwhelming bipartisan 
support. From a political perspective, I asked for those assurances to 
defend Republican Senators who would be attacked when the 
reconciliation conference agreement was announced. Indeed, those 
attacks did come, and I referred to the assurances in defending the 
Senators who were under attack.
  In addition, several Republican Senators asked me to make sure there 
was a glidepath to those extenders. For instance, Senator Hutchison 
raised the State sales tax deductibility extender in a Senate 
Republican leadership meeting. Republican high-tech coalition members 
asked for similar assurances.
  My interest has always been to accomplish what is possible, not 
taking chances with widely applicable tax relief measures on which 
millions of taxpayers are relying. For example, over 12 million 
Americans benefit from the State sales tax. We have charts up. I am not 
going to take time to refer to them much, so I hope the audience will 
look and study them. Over 12 million Americans benefit from the State 
sales tax deduction. Over 3 million teachers benefit from tax 
deductions for education expenses. Teachers have prepared for the 
upcoming school year, and they don't know whether supplies they buy out 
of their own pocket will be deductible. Over 3.5 million families 
benefit from the college tuition deduction.
  The PRESIDING OFFICER. The Senator should be advised his 15 minutes 
has expired.
  Mr. GRASSLEY. I thank the Chair. I will use a little bit of time off 
the leader's time.
  A week ago, I said some colleagues want to engage in a riverboat 
gamble involving these popular tax relief provisions by including it 
with the death tax. They call Chairman Thomas's bill the trifecta bill. 
I will treat the proponents with more respect than they have treated 
this chairman and the institution of the Finance Committee. I will 
support this bill.
  The burden is on the proponents of this gambit to produce. But to do 
that, they are going to have to deal with the realities of the votes in 
the Senate. People want and should expect that Congress will provide 
certainty in estate planning. My colleagues have placed all the chips 
on the table. It is on them to make sure it is a winning hand. If the 
trifecta bill fails, they need to answer to those millions of Americans 
who relied on our promise and good will as legislators.
  I also have a message for the Democratic leadership. While I am 
frustrated with my leadership, let me say

[[Page S8728]]

that it should also be clear that the Democratic leadership has been 
more eager to produce press releases than results. The Democratic 
leadership has been actively and aggressively undermining efforts to 
reach a deal. This has only served to deny relief from the death tax 
for America's small business and family farmers. This obstruction has 
also forced these farmers and small business owners to have to live 
with continued uncertainty of the current death tax structure. That is 
not right. The people's business should be done.
  The time has come for the Democratic leadership to stop playing 
politics with family farmers and small business folks and let 
responsible Democrats work on a fair compromise. It is wrong that the 
Democratic leadership is preventing Senators from voting their 
consciences in this manner. Senators should be allowed to put the 
interests of their constituents first instead of the priorities of the 
Democratic leadership.
  When you cut through all the finger-pointing and the press releases, 
both sides are to blame that we can't get these extenders done. Both 
death tax and expiring provisions should be processed in a bipartisan, 
constructive way. We should be realistic and seek to accomplish the 
possible. Let's do the people's business.
  Mr. President, I will support the bill before us, but should it fail, 
I will use my best efforts to do what needs to be done. I will stick by 
my word to the American people and ask those who give their word to 
keep it with me. Either result would be right for the people. To do 
neither and not act on extenders would be the wrong thing for the 
people. That is why we are here to serve the people. We are here to 
govern.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I ask to be recognized for 10 minutes on 
the minority time.
  Mr. REID. Mr. President, I will be happy to yield 10 minutes to the 
distinguished minority whip.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Illinois is recognized for 10 minutes.
  Mr. DURBIN. Mr. President, this legislation is known as the trifecta. 
What a perfect name. What a perfect name for this legislation. Do you 
know what a trifecta is? It is when you go to the racetrack and you 
pick the horses that win, place, and show in the proper order--first, 
second, and third. The reason that is the right name for this bill is 
that a trifecta is a high-stakes gamble. That is exactly what this bill 
is. It is a high-stakes gamble with America's future. A trifecta is 
also a bet where there are many more losers than there are winners. And 
that is exactly what this bill is. There will be many more losers in 
America, if this bill is enacted, than winners.
  How about the winners when it comes to the estate tax? How many 
Americans are affected by the estate tax? If one listened to the other 
side of the aisle, one would think that every person who gets up in the 
morning and goes to work is going to pay the estate tax to the Federal 
Government. Guess what. When you take a look at the chart, look for 
that thin red line on this big blue circle. It represents 2 estates out 
of every 1,000 in America. Mr. President, .2 percent of the estates in 
America are wealthy enough to pay anything into the estate tax. So the 
obvious question is, If this estate tax, which they want to repeal, 
means so much to so few, how did we end up making this the flagship 
issue for the Republicans in this Congress, the most important single 
issue to them to the exclusion of every other issue, the issue that 
returns to us on the floor with such frequency? How did they reach this 
point?
  The New York Times wrote an article on June 7, 2006, that explained 
it. Do my colleagues want to know how these issues become big-time 
issues in Washington? They wrote that over the last decade, 18 of the 
wealthiest families in the country have spent more than $200 million 
lobbying in the Halls of Congress to repeal the estate tax. It turns 
out that these 18 families will be huge winners if this repeal is 
passed. How many families will benefit if the estate tax is repealed? 
Each year in America, a Nation of 300 million people: 8,200 families. 
You have to search long and hard to find them. These are families who 
are so well off, who have done so well in this great Nation, who have 
benefited from this democracy and the blessings of liberty, who have 
enjoyed a comfortable life because of their prosperity, who now have 
taken millions of dollars to hire the most effective lobbyists in 
Washington, DC to push through this outrageous special interest 
legislation.
  Trifecta: Many more losers than winners, but the winners are those 
8,200 families. That is what this is all about.
  Of course, they came up with a new name tonight. It is not just the 
trifecta. You have to hand it to whoever sits in the bowels of the 
Capitol and dreams up the names for the outrageous bills they bring to 
the floor. Senator Reid has reminded us so many times that they had the 
nerve to call a bill the ``Deficit Reduction Act'' which increased the 
deficit. They had the nerve to call a bill the ``Healthy Forest Act'' 
which cut down trees. They had the nerve to name a bill the ``Clean 
Skies Act'' which resulted in more air pollution. And they had the 
nerve to call a bill part of the ``ownership society'' which privatized 
Social Security.
  Now comes ``family prosperity.'' Oh, you just want to pull up a chair 
by the fireplace, relax, look at the ceiling and think: Thank God 
prosperity has arrived. And what does this bill do? This bill piles on 
the national debt. This bill adds to the outrageous debt which we have 
seen accumulated under this President.
  Take a look at this, my friends who call yourselves fiscally 
conservative. When this President was elected in 2001, our entire 
national debt was $5.8 trillion. In 6 years of the Bush-Cheney 
ownership society, family prosperity, we are now up to $8.5 trillion 
from $5.8 trillion. This President managed in such a short period of 
time to increase the national debt on America by 60 percent. And look: 
Follow his policies out to the year 2011, 10 years after President Bush 
was elected, follow them out and notice that the national debt in 
America virtually doubles. Boy, if that isn't family prosperity, I 
don't know where you would turn.
  Where do we look to this bill? What does it do to add to family 
prosperity in America? Well, American families, look at this 
prosperity. This bill adds $753 billion to the national debt. Oh, I 
tell you, you just want to curl up by the fire and thank the 
Republicans for coming up with this bill to make us feel so prosperous. 
They are prosperous in terms of creating debt for America.
  I asked Senator Frist on the floor just a day or two ago a very basic 
question: Is there any limit to the amount of debt you would create for 
future generations in order to give tax breaks to the wealthiest people 
in America? He couldn't answer the question.
  I think the answer is obvious. Senator Frist has said repeatedly he 
wishes we could repeal the entire estate tax, which would drive us even 
further and further into debt. American family prosperity. We are safe 
in the bosom of the Grand Old Party when all they can dream up are new 
ways to create debt by giving tax breaks to the wealthiest people in 
America.
  But there is a spoonful of sugar with this bitter medicine. They are 
going to finally increase the minimum wage. It didn't take them long to 
come around to this position--only 9 years. It has been 9 years since 
we enacted a minimum wage of $5.15 an hour; 9 years while they resisted 
us for every single attempt we have made to increase the minimum wage 
for some of the lowest-paid, hardest-working people in America; 9 years 
of saying no to every single proposal to give single moms raising 
children enough money so they can put their kids safely in day care, so 
they can buy their medicine and food and have a decent home to live in; 
9 years of saying no.

  And what led to this death-bed conversion by the Republicans at this 
moment in time? Could it be the threat of the Democrats that there will 
be no congressional pay raise until the minimum wage is increased? That 
kind of gets your attention around the halls of Congress. Apparently it 
caught the attention of the Republicans.
  Could it be the looming election where the Bush-Cheney economic 
policies are viewed so negatively across America, where people realize 
that average working families are falling farther and farther behind, 
that now the Republicans want to increase the minimum wage?

[[Page S8729]]

  Well, it could be all of those things. But even in their effort to 
get well 100 days before the election, they blew it. They blew it. 
Because in seven States they wrote the minimum wage change in a way 
which will force a pay cut on thousands of hard-working people. The 
waiters and waitresses who depend on tips in seven States will get a 
pay cut with this so-called minimum wage increase.
  It is an outrage, Mr. President. It is an outrage that we have 
reached this point in America where the party that used to pride itself 
on fiscal conservatism can add $753 billion to our national debt 
without flinching. They don't care to cut any spending or increase any 
other taxes; they are going to heap this debt on future generations. 
Boy, if that isn't a recipe for family prosperity, I can't imagine what 
would be. And then they turn around after 9 years of saying no every 
chance they have had to an increase in the minimum wage. Now they can 
go along with it. They can give 6.6 million Americans an increase in 
their basic minimum wage--as long as we promise that the fattest of 
cats in America will get a great big bowl of tax cuts, tax cuts on the 
estate tax. That is what it has come down to.
  They have thrown other things in this bill like tax extenders, but we 
all know what they are about. These tax extenders are kicked around 
like a football every congressional session. You wait and decide which 
bill you put them on to try to entice people to vote for the bill 
because everyone agrees with them. Everyone understands that they are 
necessary for our economy. People of all political stripes support 
them.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DURBIN. I ask unanimous consent for 30 additional seconds.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. I would just like to say in closing, the American people 
know better. This is a high-stakes gamble with America's future. This 
trifecta is going to have many more American losers than winners. This 
is the worst special interest bill I have seen in my time in Congress.
  This will not bring prosperity to America's families. This will bring 
deeper debt to our Nation at a time when we don't need it. This is the 
first President in the history of the United States to call for cutting 
taxes in the midst of a war, asking sacrifice from soldiers and their 
families and turning around to the wealthiest in America and saying: We 
are going to give you a tax cut. That is an outrage.
  I hope my colleagues will join me in opposing this trifecta. Don't 
buy a ticket on this race, because it is a loser.
  Mr. REID. Mr. President, I yield 5 minutes to the distinguished 
Senator from North Dakota, the ranking member of the Budget Committee.
  Mr. CONRAD. Mr. President, I thank the leader for this time.
  We have heard a lot of talk that there is a death tax in this 
country. All of us in this Chamber know there is no death tax. There is 
a tax that applies to estates that wealthy individuals have in this 
country, but only three-tenths of 1 percent of estates pay any tax in 
America.
  This shows the current level of exemptions. In 2006 a couple has to 
have $4 million before they pay a penny of estate tax. In 2009, that 
will rise to $7 million for a couple. Some of us believe we ought to 
increase the exemption before 2009 to this $7 million level, but that 
is not the proposal before us.
  The proposal before us is to virtually eliminate the estate tax or 
certainly the revenue that flows from it. In fact, as my colleague from 
Illinois just indicated, the proposal before us will cost us three-
quarters of the money that complete elimination of the estate tax would 
cost: $750 billion in the first 10 years that it is fully effective. 
This at a time that we are borrowing money as a nation in an 
unprecedented way.

  Last year we borrowed 65 percent of all the money that was borrowed 
by countries in the world. Let me repeat that. Last year, our country, 
which has now become the biggest debtor nation in the world, borrowed 
65 percent of all of the money that was borrowed by all the countries 
in the world--65 percent. A very weak second was Spain at 6.8 percent, 
and the United Kingdom at less than 4 percent.
  The point is very clear. This is absolutely unaffordable at a time 
that we are running up massive debt.
  Our friends on the other side say: Well, we have a good idea. Let's 
eliminate some more revenue and let's eliminate it on those who are the 
wealthiest three-tenths of 1 percent of the American population.
  If anybody wonders about the budgetary impacts or whether this is 
fiscally responsible, here are the budget points of order that this 
legislation before us now violates. It violates the pay-go rule. It 
exceeds the pay-go scorecard by more than $12 billion.
  On revenue, it exceeds the 2006 through 2010 revenue floor by more 
than $6 billion. It exceeds the outlay allocation for 2006 and 2006 
through 2010 for the Finance Committee by $1.5 billion. It contains 
unfunded mandates on State and local governments that are all subject 
to a point of order.
  It reduces the Social Security surpluses, also subject to a point of 
order.
  Let me just say to my colleagues, if this measure would pass tonight 
and cloture would be invoked, I intend to raise every single one of 
these budget points of order, and we will see who is serious about 
being fiscally responsible and who is not.
  I have shown this chart to my colleagues many times. It took 42 
Presidents--all the Presidents pictured here--224 years to run up $1 
trillion of debt held abroad. This President has more than doubled that 
amount in just 5 years.
  What are our colleagues saying? Our colleagues are saying: Let's go 
borrow some more money from abroad. Where are we going to get this 
money? The country we borrow the most from is Japan, so a lot of this 
money would be borrowed from Japan. The next country that we owe the 
most money to is China, so we would have to borrow more money from the 
Chinese to give this tax reduction to just a handful of Americans.
  Right now, there will only be 13,000 taxable estates in the entire 
country in 2006. By 2009, that will be down to 7,000. When our friends 
call this family prosperity, they are right. They are talking about 
family prosperity for 7,000 families in America, and they want to shift 
the burden on to all of the other American families. That is what this 
is about.
  If you are listening to this debate, if you have assets----
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CONRAD. Mr. President, I ask unanimous consent for 30 more 
seconds.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. If you have assets of more than $7 million, it is true, 
you will face a tax. If you have assets and you are a family, if you 
have more than $7 million, you will face a tax. Now, that is the only 
instance in which you will.
  My friends, the proposal before us is to reduce--for 7,000 families 
in America who are in that category in any one year--reduce their 
obligation and shift it to all of the rest of us. That is not fair. 
That is not right.
  The PRESIDING OFFICER (Mr. Ensign). The Democratic leader is 
recognized.
  Mr. REID. Mr. President, I would say through the chairman to my 
distinguished friend, that is a net estate; it is not 7 million worth 
of property.
  First of all, I would like to extend my compliments to Charles 
Grassley, the senior Senator from Iowa, a gentleman farmer who we are 
so fortunate to have in the Senate. He, in his gentlemanly way, 
indicated in his speech tonight how terribly upset he was for what 
happened a week ago. We had this all worked out. The conference was 
completed. The extenders would have been done. The pension bill would 
have been passed.

  Senator Baucus, who has been a partner with Senator Grassley for a 
long time, is not here tonight. As we speak, he is in Dover, DE, 
meeting his brother and his nephew, Philip. Philip is in a casket, 
having arrived from Iraq where he was killed.
  Max Baucus would like to be here, but we are going to have printed in 
the Record what Max Baucus said:

       Political games congressional leaders played with this bill 
     are not the way to get the job done. I hope that cooler heads 
     can

[[Page S8730]]

     prevail and we can work together for sensible reform in the 
     future.

  My distinguished friend, the majority leader, has placed a name on 
this legislation called the Family Prosperity Act. I suggest that it 
should be called the Prosperous Family Act. This legislation would only 
help the prosperous--only the prosperous. This should be called the 
Prosperous Family Act.
  Sunday's Washington Post had a quote from my friend--and I know a 
friend of the distinguished Presiding Officer--Tennessee Congressman 
Zach Wamp. In this column he is quoted about why Democrats don't 
support the bill we are about to vote on. Congressman Wamp said: I know 
why Democrats are mad. We've outfoxed them.
  Again:

       I know why you're mad. You have seen us really outfox you.

  It is not us, the Democrats, they tried to outfox; it is the American 
people. There is just one problem with this Republican legislation, 
this Republican shell game, this trick--the American people will not 
fall for it. As my colleague, Senator Durbin, said: This is a bet, and 
a bad one. The American people simply are too smart to be outfoxed. 
Americans are too smart to be tricked into cutting the wages of 136,000 
Nevadans, and more than a million, by far, people in Oregon, 
Washington, Montana, California, Nevada. Those States, under this so-
called Family Prosperity Act, would give less to those families who are 
struggling, struggling every day. In Nevada there are 136,000 of them. 
They work for minimum wage. If they work 40 hours a week, 52 weeks a 
year, they make $10,700, plus some tips in those seven States. But not 
under this bill. In seven States, the poorest of the poor would get a 
pay cut. They would get a pay cut so that 8,100 multimillionaires can 
enjoy almost $800 billion in tax breaks.
  Americans are too smart to be tricked into forgoing middle-class tax 
revenue so America can borrow hundreds of billions of dollars to give 
tax breaks to the wealthy few. Americans are too smart to accept any 
more debt and deception from this do-nothing Congress.
  Here we are at 9:20, finishing this work session. The Defense bill 
isn't complete. The pension bill isn't complete. I hope it will be 
within an hour and a half or so. Middle-class tax relief isn't 
complete, the so-called extenders. Minimum wage has not been made 
possible for almost 10 years. Why? Because the majority doesn't believe 
in it. They don't believe in having a decent standard of living for the 
poor. Let the free market decide.
  But, remember, the people drawing minimum wage are not kids at 
McDonald's flipping hamburgers. Sixty percent of the people drawing 
minimum wage are women, and for the vast majority of those women, that 
is the only money they get for them and their families. Not only do 
they have a tax cut for those seven States for the poorest of the poor, 
it is phased in over 3 years.
  So the leader has said: OK, you accept this; take this or leave it. 
If you don't accept this, we are not going to do the extenders and we 
are not going to do pensions.
  We have worked that out. Thank goodness we have been able to do the 
pensions. And we are certainly not going to do the minimum wage. We 
knew that. We know they don't like a minimum wage.
  But it is a threat, and it is a perfect metaphor for this do-nothing 
Congress. For the last 19 months, congressional Republicans have done 
nothing for the people. The little they have done on behalf of special 
interests and the well connected has made America less safe and the 
life of the middle class much more difficult.
  Look at the record. This Congress will be remembered more for 
interfering in the Terry Schiavo case than it will for trying to solve 
America's health care crisis. On every major issue, the Republican 
Senate has been missing in action.
  Look at Iraq. Look at Iraq. Tens of billions of dollars to repair the 
equipment and machinery our fighting forces use; these gallant men and 
women--about 2,600 of them having been killed and more than 20,000 
wounded, a third of them grievously, and hundreds of billions of 
dollars more in red ink. What we have said is please change course. But 
on party-line votes: No.

  In fact, the situation is being made worse by rubberstamping 
President Bush's failed policies and allowing him to stay the course, 
even as the evidence suggests we desperately need to change course.
  It is the same on the economy. We live in a very stressful economic 
situation. Over the last 6 years, the rich have gotten richer, the poor 
have gotten poorer, and the middle class is being squeezed. Even the 
administration admits their policies have failed for working Americans. 
Listen to what the Secretary of Treasury had to say the day before 
yesterday, Hank Paulson.

       Amid this country's strong economic expansion, many 
     Americans simply aren't feeling the benefits. . . . Many 
     aren't seeing significant increases in their take-home pay. 
     Their increases in wages are being eaten up by high energy 
     prices and rising health care costs, among others.

  The Secretary of Treasury said it. Has the Republican Congress done 
anything to turn this situation around? No. In fact they are seeking to 
make matters worse with the Prosperous Family Act--the Prosperous 
Family Act.
  This bill, as I said, will cut the wages of millions of people, most 
of them in the West. This bill will add to the bankruptcy coming about 
of our country, as expressed by the ranking member of the Budget 
Committee, Senator Conrad. It will add almost $1 trillion to the debt--
$1 trillion.
  Oh, well, not really. It is $200 billion less than that.
  We are told by the other side that with this trifecta--which we have 
nicknamed the ``defecta''--8,100 of the wealthy and well-off hit the 
jackpot while millions of working families get $800 billion in debt. It 
is another example of this do-nothing Congress putting their political 
interests ahead of America's interests.
  We keep hearing from the other side how the Senate needs to repeal 
the estate tax to preserve and protect small businesses and family 
farms. That is a myth. Very few small businesses or family farms pay 
any estate tax.
  The State of California is a State of 35 million people. The State of 
California is the breadbasket of this country. They grow so many things 
in the Imperial Valley and other places throughout California.
  Senator Dianne Feinstein asked the Farm Bureau, which supports repeal 
of the estate tax: Tell us how many farms were lost by families because 
of the estate tax.
  None. None. Over a 10-year period of time--none.
  It is the same with small businesses. In fact, the Small Business 
Council of America has said that the repeal of the estate tax will 
actually harm most small business owners because of how it will change 
the tax benefits they currently receive.
  I am all for fixing the estate tax. I have said so. But there is no 
reason for this fiscal irresponsibility, And it is a virtual repeal.
  I talked this morning for a little while about two of the richest men 
in the world. The richest man in the world, Warren Buffett, he is 
totally opposed to repealing the estate tax, as well as the Gates 
family. Pierre Omidyar lives in Las Vegas, NV--Henderson, actually--a 
rich man, worth over $10 billion. He is a young man. He is the man who 
invented eBay. The first time I had dinner with him he said: Whatever 
you do, don't mess around with the estate tax. I owe my country the 
prosperity that I have.
  In fact, I had a conversation yesterday with the head of the Business 
Roundtable. He said that all he cares about in the trifecta, the 
Prosperous Family Act--or the ``defecta''--is that we do something to 
extend the R&D tax credit. That is so important to him, he said. Guess 
where the R&D tax credit is. It is being held hostage with this, along 
with some of the other add-ons.
  The American people deserve more. It is unimaginable that the 
Republicans would deny millions of small businesses the research and 
development tax credit. It is unimaginable the Republicans would deny 
15 million workers a $2.10 raise. It is unimaginable they would deny 
millions of middle-class families tax relief with our extenders. If 
8,100 of their wealthy

[[Page S8731]]

friends don't get billions of dollars of tax breaks first--nothing.
  Soon the Senate will say its last words regarding the estate tax for 
this session of Congress, I hope. When this vote is completed, I hope 
we move on to the people's business--I will use leader time right now--
and the majority leader will consider his threat to never bring back 
middle-class tax relief and the minimum wage back to the floor this 
session. If he is serious about that threat, it just can't happen, and 
we will fight this. When the Senate returns in November, Democrats will 
not go home until the middle-class tax relief package, the extenders, 
is passed. My friend can make all the threats he wants, but the Senate 
will not adjourn until hard-working Americans get the help they need. 
They have to have it. They have waited 19 months. By then it will be 
longer.
  America needs new direction. I began with a quote by Congressman Zach 
Wamp. Here is another thing Republicans have been saying about their 
``defecta'' bill. They have been calling it a win-win.
  My friend, the majority whip, Senator McConnell, said: ``There's no 
risk. It's all reward.''
  No risk? Tell that to the millions of workers who have been making 
$5.15 for the last 10 years on the verge of waiting another year at 
least.
  Win-win? Tell that to the millions of middle-class families and small 
businesses that will be denied tax relief because Republicans have put 
their political interests first.
  All reward? Republicans have not outfoxed anyone. The American people 
can see through these political games. I am hopeful that the cloture 
motion will fail, and I am confident the Republican's cynical approach 
to dealing with the needs of our country will be rejected.
  Mr. President, I ask unanimous consent that Senator Murray be allowed 
to speak for 2 minutes. Is that OK with the majority leader? I have 
time left. I know we want to move on.
  Mr. FRIST. Yes.
  The PRESIDING OFFICER. The Senator from Washington is recognized for 
2 minutes.
  Mrs. MURRAY. Mr. President, a question has been raised about whether 
the minimum wage provision affecting States that allow tips to be 
exempt would be impacted by the legislation that is before us. I ask 
unanimous consent to have printed in the Record a letter from Gary 
Weeks, who is the director of the Washington State Department of Labor 
and Industries, that says definitively:

       Under our preliminary analysis, this proposal, in effect, 
     appears to nullify an employer's obligation to pay the 
     minimum wage rate in RCW 49.46.020 with regard to tipped 
     employees. This means that Washington workers who receive 
     tips--typically service industry workers--would see a 
     decrease in income.

  I ask unanimous consent to have that printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                              State of Washington,


                           Department of Labor and Industries,

                                      Olympia, WA, August 3, 2006.
     Hon. Patty Murray,
     United States Senator,
     Russell Senate Office Building, Washington, DC.
     Hon. Maria Cantwell,
     United States Senator,
     Hart Senate Office Building, Washington, DC.
       Dear Senators Murray and Cantwell: Your office asked me to 
     respond to an inquiry as to how the proposed HR 5970 would 
     affect workers in the state of Washington.
       As you know, Washington State does not recognize tips as 
     part of the minimum wage. Tipped employees are entitled to 
     the full minimum wage, currently $7.63 an hour. Additionally, 
     Initiative 688, passed overwhelmingly by voters in 1998, tied 
     the minimum wage to the Consumer Price Index, to be 
     recalculated and adjusted each year.
       The proposed bill, Section 402 of HR 5970, which amends the 
     Fair Labor Standards Act to add a paragraph that states:
       (2) Notwithstanding any other provision of this Act, any 
     State or political subdivision of a State which on or after 
     the date of enactment of the Estate Tax and Extension of Tax 
     Relief Act of 2006 excludes all of a tipped employee's tips 
     from being considered as wages in determining if such tipped 
     employee has been paid the applicable minimum wage rate, may 
     not establish or enforce the minimum wage rate provisions of 
     such law, ordinance, regulation, or order in such State or 
     political subdivision thereof with respect to tipped 
     employees unless such law, ordinance, regulation, or order is 
     revised or amended to permit such employee to be paid a wage 
     by the employee's employer in an amount not less than an 
     amount equal to--
       (A) the cash wage paid such employee which is required 
     under such law, ordinance, regulation, or order on the date 
     of enactment of the Estate Tax and Extension of Tax Relief 
     Act of 2006; and
       (B) an additional amount on account of tips received by 
     such employee which amount is equal to the difference between 
     the cash wage described in subparagraph (A) and the minimum 
     wage rate in effect under such law, ordinance, regulation, or 
     order, or the minimum wage rate in effect under section 6(a), 
     whichever is higher.
       Under our preliminary analysis, this proposal, in effect, 
     appears to nullify an employer's obligation to pay the 
     minimum wage rate in RCW 49.46.020 with regard to tipped 
     employees. This means that Washington workers who receive 
     tips--typically service industry workers--would see a 
     decrease in income. However, the proposal does give states 
     the right to amend their laws to specifically reinstate their 
     current minimum wage rate laws. Until and unless the 
     Washington State Legislature amends the minimum wage act to 
     reinstate the current wage rate provision for tipped 
     employees, it would diminish workers' rights in Washington 
     State.
       I trust that this is useful information. Please let me know 
     if I can be of further assistance.
           Sincerely,
                                                    Gary K. Weeks,
                                                         Director.

  Mrs. MURRAY. Mr. President, their preliminary analysis shows that 
this provision would take away the wages and reduce it dramatically for 
waiters and waitresses, bartenders, barbers, baggage porters, cooks, 
dishwashers, hairdressers, maids, manicurists, massage therapists, 
parking lot attendants, personal care and services workers, service 
station attendants, taxi drivers, and chauffeurs.
  It appears, indeed, that the provision in this bill will dramatically 
reduce the income of thousands of workers in my State and other States.
  I again reiterate that is why we are opposed to this bill.
  I yield the floor.
  Mr. BYRD. Mr. President, important provisions in H.R. 5970 provide a 
long-term solution for the Abandoned Mine Land, AML, program as well as 
resolve the uncertainty of the health care needs for retired miners and 
their families. Right now, there are 52,320 retired miners and their 
families nationwide who depend on these critical funds to provide for 
their health care needs. At least 17,195, or about one-third of these 
people, are in West Virginia. I have also worked for many years to keep 
the AML program going for West Virginia and other coal-producing 
States. This important program cleans up old mine hazards and improves 
the environment in the coalfields. I have always been there to shore up 
the funding for our coal miners' health care funds, and I have always 
been there for the AML program. The bill before us today is an 
opportunity to solve these issues permanently, and I embrace it.
  H.R. 5970 would also address the Federal estate tax, something that 
the small business owners and farmers of my State have made clear is a 
priority for them, and in need of reform. In the past, I have supported 
legislation to increase the estate tax exemption, and to lower the top 
tax rate, as an alternative to permanent repeal. This bill is 
consistent with those past efforts that I have supported.
  Senators have raised concerns about the cost of this bill, and its 
effect on the Federal budget. The fiscal course of deficits and debt 
chosen by the administration is abominable, and I have advocated 
tirelessly that the Congress abandon it. But of the budget-busting 
measures endorsed by the Congress, this one does not rate top billing. 
The revenue loss from the estate tax portion of this bill would not 
begin for 3 years, and the effect on the Federal budget would not be 
felt until the next decade. Meanwhile, the health care needs of my 
State's retired coal miners and their families are immediate and 
urgent. I will not vote against those miners who need this assistance 
now, based upon budget projections that may not mean much until the 
next decade.
  This bill would also guarantee a $2.10 increase in the Federal 
minimum wage within the next 3 years. Should a new Congress revisit the 
issue, I hope that that schedule could be accelerated.
  This bill would raise wages for workers who need it the most. It 
would provide health care to retired coal miners

[[Page S8732]]

and resolve our Nation's mine reclamation needs. It would codify a 
compromise measure that is less than repeal and consistent with 
previous efforts to try to reform the estate tax to help small 
businesses and farmers.
  This is a good bill for West Virginia, and it should receive an up-
or-down vote on this floor.
  Mr. KENNEDY. Mr. President, we have seen many outrages from this 
Republican Congress but none that demonstrates such utter contempt for 
the American people as holding the minimum wage hostage to give tax 
giveaways to the wealthiest Americans. The Republican leadership is 
playing a cynical game of politics with the lives of millions of 
hardworking American families.
  It may be a political game for Republicans, but it is hard reality 
for low-wage workers who worry every day if they can pay the bills. The 
bill is just a bad bargain for minimum wage workers. The minimum wage 
increase they receive does not have the same benefits as the Democratic 
proposal--1.8 million fewer workers would benefit because the increase 
is phased in too slowly.
  And what's worse, this Republican bill takes money right out of the 
pockets of more than 1 million tipped workers in seven States. It's a 
pay cut for maids, waitresses, bellhops, and other Americans who rely 
on tips to make a living. The Republican bill would boost the bottom 
line for America's restaurants, while taking money away from 
hardworking Americans who depend on tips to support themselves and 
their families.
  Under current Federal law, restaurant owners can pay their waiters 
and waitresses as little as only $2.13 an hour, and the rest of their 
compensation is supposed to come from tips. The same is true for hotel 
maids, parking attendants, bartenders--all workers who rely on tips to 
make a living. Federal labor and employment law sets a minimum floor, 
but States are free to guarantee higher wages for tipped workers. In 
fact, the Fair Labor Standards Act encourages States to enact laws that 
are more protective for workers than the Federal law.
  Seven States--Alaska, California, Minnesota, Montana, Nevada, Oregon 
and Washington--do not allow a ``tip penalty.'' They guarantee that 
tipped workers get the full State minimum wage plus any tips they 
receive.
  But the Republican bill would take power away from the States by 
nullifying these State laws providing stronger wage protections for 
tipped employees than the Federal standard. In fact, the bill would 
change the minimum wage for tipped workers in these seven States, 
requiring them to be paid only the Federal minimum wage--not the higher 
State minimum wage--until the State enacts a law with a tip penalty.
  Under this bill, tipped workers would see drastic reductions in their 
take-home pay. A waitress at a family restaurant in Washington State, 
for example, will see her hourly wages drop by $5.50 an hour. That's 
almost $11,500 per year. A hotel maid in Oregon will see her hourly 
wages drop by $5.37 an hour. That's almost $11,200 a year.
  Now the Republicans have spent a lot of time on the floor today 
trying to explain why this giveaway for the restaurant industry won't 
actually hurt American workers. My Republican colleagues--particularly 
the junior Senator from Oregon earlier this afternoon--accused 
Democrats of misrepresenting what this bill does. And they supported 
their claims with a letter authored by the chief lobbyist for the 
American Restaurant Industry. But the Republicans' claims that the bill 
is harmless just don't hold water--particularly when you look at this 
document from the American Restaurant Industry's own website claiming 
credit for the tip provision and bragging about how much money it will 
save employers. The Republicans know exactly what this provision does--
it takes money out of workers' pockets. It's a scandalous special 
interest giveaway to the restaurant industry, and it's outrageous.

  When we examine other, less partisan analyses, it's clear that the 
bill would do devastating harm to workers. The Congressional Budget 
Office says the bill ``would preempt the minimum wage laws of States 
that exclude tips from being considered as wages in determining if 
certain employees have been paid the minimum wage.'' The Congressional 
Research Service says the bill would force the affected States to 
choose ``between the federal tip credit requirements or the adoption of 
a law that allows for some form of a tip credit under State law.'' Even 
the Bureau of Labor and Industries in Senator Smith's home State of 
Oregon says that this bill will ``trample States' rights and reduce the 
wages of thousands of Oregonians already struggling to make ends 
meet.''
  I will ask to have all three of these documents printed in the 
Record.
  But we don't even have to rely on these respected authorities to know 
what this bill does. Let's look at the language itself. The bill says, 
on page 182, that any State that has a minimum wage law requiring that 
tipped workers be paid the full minimum wage plus any tips they receive 
``may not establish or enforce the minimum wage rate provisions of such 
law, ordinance, regulation, or order in such State or political 
subdivision thereof with respect to tipped employees.'' It couldn't be 
more clear. The bill is nullifying State laws. Once these State laws 
are rendered ineffective, the affected workers will be covered only by 
the Federal law and will lose thousands from their paychecks, until and 
unless their State enacts a new law that is more to the restaurant 
industry's liking.
  This is despicable--it is truly Robin Hood in reverse, robbing from 
some of the most vulnerable workers on a bill that gives tax cuts to 
the rich. Instead of denying more than a million tipped workers the 
protections of the minimum wage, we should raise the wage and expand 
the protection. The people who work in our restaurants, carry our bags, 
and clean our hotel rooms work hard for a living, and they deserve 
better.
  Everyone in America knows that after 10 long years without one, 
minimum wage workers deserve a raise. But this Republican bill is a 
cynical ploy to strongarm outrageous tax breaks for the wealthy through 
Congress on the backs of America's hardworking, low-wage workers. 
Republicans are using minimum wage families as a human shield to 
smuggle through tax giveaways. It's wrong. It's unfair. It has no place 
in America. And we're not going to let it happen.
  Mr. President, I ask unanimous consent to print the documents to 
which I referred in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                               Congressional Research Service,

                                   Washington, DC, August 2, 2006.


                               Memorandum

     To: Hon. Barbara Boxer, Attention: Alexander Hoehn-Saric.
     From: Jon O. Shimabukuro, Legislative Attorney, American Law 
         Division.
     Subject: Section 402 of H.R. 5970, the Estate Tax and 
         Extension of Tax Relief Act of 2006.
       This memorandum provides a brief interpretation of section 
     402 of H.R. 5970, the Estate Tax and Extension of Tax Relief 
     Act of 2006. Section 402 would amend section 3(m) of the Fair 
     Labor Standards Act (``FLSA'') to address the treatment of 
     certain tipped employees. A tipped employee is ``any employee 
     engaged in an occupation in which he customarily and 
     regularly receives more than $30 a month in tips.''
       Under the FLSA, an employer of a tipped employee is only 
     required to pay $2.13 per hour in direct wages if that 
     amount, when coed with the tips received by the employee, 
     equals at least the federal minimum wage. If the employee's 
     tips combined with the employer's direct wages of at least 
     $2.13 per hour do not equal the federal minimum hourly wage, 
     the employer must make up the difference.
       Section 402 of H.R. 5970 would amend the FLSA'' to add the 
     following paragraph to section 3(m) of the Act:
       (2) Notwithstanding any other provision of this Act, any 
     State or political subdivision of a State which on or after 
     the date of enactment of the Estate Tax and Extension of Tax 
     Relief Act of 2006 excludes all of a tipped employee's tips 
     from being considered as wages in determining if such tipped 
     employee has been paid the applicable minimum wage rate, may 
     not establish or enforce the minimum wage rate provisions of 
     such law, ordinance, regulation, or order in such State or 
     political subdivision thereof with respect to tipped 
     employees unless such law, ordinance, regulation, or order is 
     revised or amended to permit such employee to be paid a wage 
     by the employee's employer in an amount not less than an 
     amount equal to--
       (A) the cash wage paid such employee which is required 
     under such law, ordinance, regulation, or order on the date 
     of enactment of the Estate Tax and Extension of Tax Relief 
     Act of 2006; and

[[Page S8733]]

       (B) an additional amount on account of tips received by 
     such employee which amount is equal to the difference between 
     the cash wage described in subparagraph (A) and the minimum 
     wage rate in effect under such law, ordinance, regulation, or 
     order, or the minimum wage rate in effect under section 6(a), 
     whichever is higher.
       Seven states do not recognize a tip credit for employers of 
     tipped employees. In these states, the prescribed minimum 
     wage is the same for both tipped and non-tipped employees. 
     Stated differently, in these states, none of a tipped 
     employees tips may be considered for purposes of determining 
     if such employee has been paid the applicable minimum wage 
     rate. Under the proposed language, such states would seem to 
     be prohibited from enforcing the minimum wage rate provisions 
     of their laws with respect to a tipped employee unless such 
     laws are ``revised or amended to permit such employee to be 
     paid a wage by the employee's employer in an amount not less 
     than'' what is prescribed in the proposed subparagraphs (A) 
     and (B).
       Under general principles of statutory construction, the 
     meaning of a statute must, in the first instance, be sought 
     in the language in which the act is framed. If the language 
     is plain, a reviewing court will enforce it according to its 
     terms. In this case, the proposed language would seem to 
     refer clearly to those states that exclude ``all of a tipped 
     employee's tips from being considered as wages in determining 
     if such tipped employee has been paid the applicable minimum 
     wage rate.'' California, as one of seven states that does not 
     recognize a tip credit, would probably be affected by the 
     enactment of the proposed language. As an affected state, 
     California would appear to be unable to enforce its minimum 
     wage rate laws with respect to tipped employees until it 
     ``revised or amended'' such laws to permit tipped employees 
     to be paid a wage that conforms to subparagraphs (A) and (B) 
     of the proposed language. Thus, if enacted, California would 
     appear to have to choose between the federal tip credit 
     requirements or adopt a law that allows for some form of a 
     tip credit under state law.
                                  ____

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                   Washington, DC, August 1, 2006.
     Hon. Judd Gregg,
     Chairman, Committee on the Budget, U.S. Senate, Washington, 
         DC.
       Dear Mr. Chairman: As you requested, the Congressional 
     Budget Office, CBO, and the Joint Committee on Taxation, JCT, 
     have estimated the direct spending and revenue effects of 
     H.R. 5970, the Estate Tax and Extension of Tax Relief Act of 
     2006.
       The legislation would increase the estate and gift tax 
     exemption amounts and reduce the rates, as well as extend and 
     modify various other tax relief provisions. It also would 
     make several changes to the Surface Mining Control and 
     Reclamation Act, and it would increase the minimum wage. JCT 
     and CBO estimate that the legislation would decrease revenues 
     by $15.4 billion in 2007, by $48.1 billion over the next five 
     years, and by $302.4 billion through 2016. CBO and JCT 
     estimate that, under the bill, direct spending would increase 
     by $83 million in 2006, by $3.8 billion over the 2007-2011 
     period, and by $7.3 billion over the 2007-2016 period.
       For some budget enforcement procedures, the relevant budget 
     periods are 2006-2010 and 2006-2015. Therefore, we are 
     providing those summarized totals as well. CBO and JCT 
     estimate that enacting this legislation would decrease 
     revenues by $32.524 billion over the 2006-2010 period and by 
     $240.664 billion over the 2006-2015 period. The act would 
     increase direct spending for those periods by $3.008 billion 
     and $6.866 billion, respectively.
       The estimated budgetary impact of the act is shown in the 
     attached table.
       CBO has reviewed the non-tax provisions of the 
     legislation--subtitle A of title III and all of title IV--for 
     mandates and has determined that title III contains a 
     private-sector mandate and title IV contains both 
     intergovernmental and private-sector mandates as defined in 
     the Unfunded Mandates Reform Act, UMRA. CBO estimates those 
     mandates would impose costs that exceed the annual thresholds 
     established in that act ($64 million for intergovernmental 
     mandates and $128 million for private-sector mandates, in 
     2006 adjusted annually for inflation.)
       JCT did not review the tax provisions of H.R. 5970 for 
     mandates.
       Pursuant to section 407 of H. Con. Res. 95 (the Concurrent 
     Resolution on the Budget, Fiscal Year 2006), CBO estimates 
     that enacting H.R. 5970 would not cause an increase in direct 
     spending greater than $5 billion in any of the 10-year 
     periods between 2016 and 2055. (Direct spending would exceed 
     $5 billion over the 2007-2016 period, primarily because of 
     amendments to the Surface Mining Control and Reclamation Act, 
     but these effects would be significantly lower for subsequent 
     10-year periods.)


                                Revenues

       H.R. 5970 would make several changes to tax law, resulting 
     in decreases in federal revenues. JCT and CBO estimate that 
     the legislation would decrease revenues by $15.4 billion in 
     2007, by $48.1 billion over the next five years, and by 
     $302.4 billion through 2016.
       Title I would modify rules related to the estate and gift 
     taxes. Currently, the effective exemption amount for the 
     estate tax is larger than that for the gift tax. In 2009, 
     under current law, the estate exemption will be $3.5 million, 
     while the gift tax exemption will be $1 million. Under H.R. 
     5970, the estate and gift exemption amounts would be equal to 
     each other, as they were prior to enactment of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001. Further, 
     the exemption would be increased to $5 million in 2015. The 
     estate and gift tax rates would be reduced after 2009, and 
     any unused exemption amounts would be allowed to be used by a 
     surviving spouse. JCT estimates that this title would reduce 
     revenues by $14.9 billion over the 2007-2011 period and by 
     $267.6 billion over the 2007-2016 period.
       Title II would extend and modify various tax relief 
     provisions in current law. JCT and CBO estimate that this 
     title would reduce revenues by $15.5 billion in 2007, by 
     $35.3 billion over the 2007-2011 period, and by $38.2 billion 
     over the 2007-2016 period.
       Provisions in title II include:
       Modification (January 1, 2007, through December 31, 2007) 
     and extension (January 1, 2006, through December 31, 2007) of 
     a research credit of 20 percent of the amount by which a 
     taxpayer's qualified research expenses exceed the base amount 
     for that taxable year. JCT estimates that this provision 
     would reduce revenues by $7.5 billion in 2007, by $16.3 
     billion over the 2007-2011 period, and by $16.5 billion over 
     the 2007-2016 period.
       Extension for two years of 15-year straight-line cost 
     recovery for qualified restaurant property and leasehold 
     improvement property through December 31, 2007. JCT estimates 
     that this provision would decrease revenues by $418 million 
     in 2007, by $2.9 billion over the 2007-2011 period, and by 
     $5.7 billion over the 2007-2016 period.
       Extension for two years of taxpayers' option to deduct 
     state and local sales taxes instead of state and local income 
     taxes through December 31, 2007. JCT estimates that this 
     would reduce revenues by $3.0 billion in 2007 and by $5.5 
     billion over the 2007-2009 period.
       Extension for two years of the deduction for qualified 
     tuition and other higher education expenses ($2,000 to 
     $4,000, depending on gross income) through December 31, 2007. 
     This provision would decrease revenues by an estimated $1.6 
     billion in 2007 and $1.7 billion in 2008.
       Title III would make changes to the Surface Mining Control 
     and Reclamation Act and the Internal Revenue Code of 1986. 
     CBO estimates that those provisions would increase net 
     revenues by $560 million over the 2007-2011 period and by 
     $1.0 billion over the next 10 years.
       These estimates for title III are the net result of two 
     sets of provisions. CBO estimates that reauthorizing certain 
     fees charged to companies that produce coal would increase 
     revenues by $600 million over the 2007-2011 period and by 
     $1.3 billion over the next 10 years (net of effects on income 
     and payroll tax receipts). We also estimate that provisions 
     that affect the financing of retiree benefits for certain 
     retired coal miners would reduce federal revenues, on net, 
     primarily by reducing premiums paid by certain coal companies 
     in the future. Such changes would result in a net revenue 
     loss of $40 million over the 2007-2011 period and $300 
     million over the next 10 years.


                        Direct Spending Effects

       H.R. 5970 includes several provisions that would increase 
     direct spending. CBO and JCT estimate that the bill would 
     increase outlays by $83 million in 2006, by $3.8 billion over 
     the 2007-2011 period, and by $7.3 billion over the 2007-2016 
     period.
       The bulk of the new direct spending stems from the Surface 
     Mining Control and Reclamation Act Amendments of 2006 (title 
     III). Title III would make several changes to the Surface 
     Mining Control and Reclamation Act and the Internal Revenue 
     Code of 1986. CBO estimates that enacting this title would 
     increase direct spending by $2.1 billion over the 2007-2011 
     period and by $4.9 billion over the next 10 years. (Such 
     spending would drop off, though not completely, after 2016.)
       Most of the increased spending under title III--$3.8 
     billion over the next 10 years--would be payments by the 
     Department of the Interior to states, primarily to support 
     efforts to reclaim land that has been mined for coal and for 
     other public purposes. (Roughly $2 billion of that amount 
     would come from the general fund of the Treasury; additional 
     amounts would come primarily from revenues collected as a 
     result of the legislation.) An additional $1.1 billion would 
     be spent under the legislation for health benefits of certain 
     retired coal miners and their dependents and survivors who 
     are eligible to receive retiree health benefits through the 
     United Mine Workers of America Benefit Funds.
       H.R. 5970 also would affect outlays by:
       Instituting a refundable tax credit against the individual 
     alternative minimum tax, which JCT estimates would increase 
     outlays by $1.0 billion over the 2007-2011 period and $1.2 
     billion over the 2007-2016 period.
       Authorizing, in effect, New York City or the state of New 
     York to spend certain federal tax withholding amounts, which 
     CBO estimates would increase spending by $1.0 billion over 
     the 2007-2016 period.
       Extending for two years, through the end of 2007, the 
     payment to the treasuries of Puerto Rico and the Virgin 
     Islands of certain amount of excise taxes on imported 
     distilled spirits. CBO estimates this provision would 
     increase outlays by $83 million in 2006 and $95 million 
     over the 2007-2008 period, assuming that H.R. 5970 is 
     enacted in August 2006.
       Adding to the existing list of taxab1e vaccines two 
     additional vaccines, which CBO estimates would result in 
     increases in spending of $60 million over the 2007-2016 
     period because some of the proceeds of the excise tax

[[Page S8734]]

     are paid as compensation to injured individuals and some of 
     the vaccines are purchased by Medicaid.
       Extending for one year the option for individuals to 
     include combat pay in earned income for purposes of the 
     earned income credit, which JCT estimates would increase 
     refundable outlays by $10 million in 2008.


             Intergovernmental and Private-Sector Mandates

       JCT did not review the tax provisions of H.R. 5970 for 
     mandates.
       CBO has reviewed the non-tax provisions of the bill--
     subtitle A of title III and all of title IV--for mandates and 
     has determined that title III contains a private-sector 
     mandate and title IV contains both intergovernmental and 
     private-sector mandates as defined in UMRA. CBO estimates 
     those mandates would impose costs that exceed the annual 
     thresholds established in that act ($64 million for 
     intergovernmental mandates and $128 million for private 
     sector mandates, in 2006 adjusted annually for inflation.)
       Specifically, section 312 of title III would create a 
     mandate by requiring certain firms that currently pay for 
     health benefits for retired coal miners (and their dependents 
     and survivors) through collectively bargained agreements to 
     make additional payments for those benefits in specified 
     years. At the same time, other provisions would generate 
     significant reductions in financial obligations existing 
     under current law with regard to payments for retiree health 
     benefits.
       In addition, section 401 of title IV would amend the Fair 
     Labor Standards Act to increase the federal minimum wage in 
     three steps from $5.15 per hour to $7.25 per hour. The 
     provision would impose mandates, as defined in UMRA, on state 
     and local governments, Indian tribes, and private-sector 
     employers because it would require them to pay higher wages 
     than they are required to pay under current law. CBO 
     estimates that the costs to state, local, and tribal 
     governments and to the private sector would exceed the 
     thresholds established in UMRA.
       Finally, section 402 of title IV would preempt the minimum 
     wage laws of states that exclude tips from being considered 
     as wages in determining if certain employees have been paid 
     the applicable minimum wage rate. That preemption would be 
     considered an intergovernmental mandate as defined in UMRA; 
     CBO estimates, however, that this mandate would not impose 
     significant additional costs on states.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact for this 
     estimate is Emily Schlect.
           Sincerely,
                                                 Donald B. Marron,
     Acting Director.
                                  ____


                                                        ESTIMATED CHANGES IN DIRECT SPENDING AND REVENUES UNDER H.R. 5970, THE ESTATE TAX AND EXTENSION OF TAX RELIEF ACT OF 2006
                                                                                                (By fiscal year, in millions of dollars)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     2006         2007         2008         2009         2010         2011         2012         2013         2014         2015         2016      2007- 2011   2007-2016
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           CHANGES IN REVENUES
 
Title I: Estate and Gift Tax Effective Exclusion Amount........            0            0            0            0         -803      -14,096      -39,186      -44,073      -50,598      -57,157      -61,684      -14,899     -267,596
Title II: Extension and Expansion of Certain Tax Relief                    0      -15,442      -10,211       -3,956       -2,572       -1,582         -838         -435         -382         -282         -142      -33,766      -35,847
 Provisions....................................................
Title III: Surface Mining E Control and Reclamation Act                    0           30          160          150          120          100          110           90           90           90           90          560        1,030
 Amendments....................................................
Total Changes in Revenues......................................            0      -15,412      -10,051       -3,806       -3,255      -15,578      -39,914      -44,418      -50,890      -57,349      -61,736      -48,105     -302,413
    On-budget..................................................            0      -15,410      -10,041       -3,805       -3,255      -15,578      -39,914      -44,418      -50,890      -57,349      -61,736      -48,092     -302,400
    Off-budget.................................................            0           -2          -10           -1            0            0            0            0            0            0            0          -13          -13
 
                                                                                                       CHANGES IN DIRECT SPENDING
 
Surface Mining Control and Reclamation Act Amendments:
    Budget Authority...........................................            0           40          460          480          580          590          650          660          630          430          430        2,150        4,950
    Outlays....................................................            0           40          450          480          570          590          640          660          630          420          430        2,130        4,910
Refundable AMT Credits:
    Budget Authority...........................................            0            0          349          283          224          174          128           86            0            0            0        1,030        1,244
    Outlays....................................................            0            0          349          283          224          174          128           86            0            0            0        1,030        1,244
Spending Authorized for New York:
    Budget Authority...........................................            0           40          160            0          200          100          100          100          100          100          100          500        1,000
    Outlays....................................................            0           40          160            0          200          100          100          100          100          100          100          500        1,000
Cover-over of Tax on Distilled Spirits:
    Budget Authority...........................................           83           77           18            0            0            0            0            0            0            0            0           95           95
    Outlays....................................................           83           77           18            0            0            0            0            0            0            0            0           95           95
Meningococcal Vaccine:
    Budget Authority...........................................            0            2            3            3            3            3            3            3            3            4            4           16           33
    Outlays....................................................            0            2            3            3            3            3            3            3            3            4            4           16           33
HPV Vaccine:
    Budget Authority...........................................            0            1            4            4            3            3            3            3            3            2            2           14           27
    Outlays....................................................            0            1            4            4            3            3            3            3            3            2            2           14           27
Extend Option to Include Combat Pay in Earned Income:
    Budget Authority...........................................            0            0           10            0            0            0            0            0            0            0            0           10           10
    Outlays....................................................            0            0           10            0            0            0            0            0            0            0            0           10           10
Total Changes in Direct Spending:
    Budget Authority...........................................           83          160        1,005          770        1,010          870          884          852          736          536          536        3,815        7,359
    Outlays....................................................           83          160          995          770        1,000          870          874          852          736          526          536        3,795        7,319
 
                                                                                                     NET INCREASE IN BUDGET DEFICIT
 
Net Change in Deficit..........................................           83       15,572       11,046        4,576        4,255       16,448       40,788       45,270       51,626       57,875       62,272       51,900      309,732
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not add to totals because of rounding. AMT = Alternative Minimum Tax. HPV = Human papillomavirus.
Sources: Congressional Budget Office and Joint Committee on Taxation.


                                  ____
                               Bureau of Labor and Industries,

                                        Salem, OR, August 6, 2006.
     Hon. Gordon Smith,
     Russell Building,
     Washington, DC.
       Dear Senator Smith: I am writing to urge you in the 
     strongest possible terms to cast a ``No'' vote on H.R. 5970. 
     As Oregon's Labor Commissioner, I am infuriated by this move 
     by the House of Representatives to trample states' rights and 
     reduce the wages of thousands of Oregonians already 
     struggling to make ends meet.
       I am speaking, of course, of the provision in the bill 
     imposing a ``tip credit'' upon an estimated 65,000 minimum-
     wage workers in Oregon. It is estimated that each of these 
     workers--waiters, waitresses, bartenders etc.--stand to lose 
     on average $11,000 annually should this bill pass and become 
     law.
       As you know, I am a long-time champion of Oregon's minimum 
     wage and was one of the petitioners in the successful ballot 
     effort to link our state minimum wage to rises in inflation. 
     Each year, it is one of my proudest duties as state labor 
     commissioner to not only regulate the payment of minimum 
     wages to workers, but to set the new wage rate. However, 
     while I agree with the original efforts of lawmakers to raise 
     the federal minimum wage above the current, embarrassing 
     level of $5.l5 per hour, the political hijacking of that 
     effort has now resulted in a bill that will hurt, rather than 
     help, average, hard-working Oregonians.
       I would also appeal to your longstanding advocacy of 
     states' rights on a variety of issues. Why would you and your 
     colleagues waver from that stance when it comes to Oregon's 
     minimum wage?
       For all these reasons, I strongly urge you to vote against 
     the ill-conceived and potentially damaging piece of 
     legislation. All working Oregonians will thank you for 
     protecting their right to provide for themselves and their 
     families. I thank you for your consideration.
           Sincerely,
                                                      Dan Gardner,
     Commissioner.
                                  ____

  Mr. LAUTENBERG. Mr. President, we have very few hours before we 
depart for the August break. Let's say we have 6 hours--360 minutes--
before we leave to campaign or vacation or meet with constituents back 
home.
  How are we going to use 360 minutes?
  The Republican leadership's idea is to use that precious time to pass 
the so-called ``trifecta'' bill. It's a bill that was sent to us from 
the House, and I think it symbolizes all that is wrong with the 
Republican Congress.
  For one, it is a cynical ruse. This bill holds the minimum wage 
hostage in exchange for a dramatic reduction in the

[[Page S8735]]

inheritance tax--which only the richest families in America pay.
  The minimum wage has been stuck at $5.15 for almost a decade. That's 
$10,712 a year.
  And even though the Republican leadership has blocked a clean vote on 
the minimum wage for years, this ``trifecta'' bill marries the minimum 
wage increase with this huge cut in the inheritance tax. This 
inheritance tax only affects the richest one-half of 1 percent of 
families in the country.
  So, in other words, the Republican position is: we will only help 
everyday working people in America if you give multi-millionaires and 
billionaires a bribe.
  Mr. President, that is not the way to govern this country.
  This bill is also offensive because it is so out of touch with the 
priorities of the American people.
  Why aren't we taking steps to actually bring down gas prices? Gas is 
over $3 a gallon. It costs $60 to fill a tank for many people. That's 
what most Americans are concerned about right now.
  Are we going to use these last 360 minutes to deal with that issue?
  Meanwhile healthcare is in crisis. We have 43 million people without 
health insurance.
  And then there is a storm brewing over the new Medicare drug law. 
Indications of this storm are appearing in newspapers from Honolulu to 
Ho-Ho-Kus. This storm is called the Medicare prescription drug coverage 
gap.
  Some call this coverage gap the ``Doughnut Hole,'' but that is too 
kind a name. It's a much more serious crisis, and can have deadly 
consequences.
  Here is what is happening across America because of the coverage gap: 
millions of seniors on the new Medicare Prescription Drug Plan are 
going to the pharmacy counter and experiencing ``sticker shock.'' Why? 
Because their drugs suddenly cost four times as much as last month.
  Their drugs are costing four times as much because the Republican 
Medicare law allows drug plans to include a massive gap in coverage. In 
a nutshell, once you pay $750 out of pocket from the deductible and co-
pays, your coverage just stops. And to make matters worse, your 
coverage goes away but you still have to pay the monthly premium.
  A lot of unhappy seniors are starting to experience this problem, and 
it will only get worse through the end of August and into September.
  So what are we doing about it?
  An inheritance tax break for multi-millionaires is what the 
Republican leadership is concerned about while millions of seniors are 
facing a financial gap in their prescription drug coverage.
  I would like to share some stories with my colleagues from recent 
news articles about how this coverage gap is affecting people across 
the country.
  The Bergen Record in New Jersey told the story of Melba Heck, who is 
in the coverage gap. When she started the Medicare Part D plan, she was 
paying $50 a month. Now, all of the sudden, the bill is $400.
  Ms. Heck, a retired nurse, told the newspaper that ``For the first 
time in ten years, I've had to cut back on my church pledge.''
  Marcella Crown of Des Plaines, IL, reached the coverage gap back in 
April. Her husband said ``Blue Cross is saying that even though she 
will get no benefit, she must still pay the premiums. That's 
outrageous. We have never had insurance policies that gave us no 
benefit yet required us to pay premiums.''
  In Maryland, retired teacher Elise Cain walked into her Silver Spring 
pharmacy and said she nearly ``passed out'' at the cash register. Her 
drug monthly cost jumped from $20 to $175.
  These are just some examples of the pain that millions of senior 
citizens will have to endure. Unfortunately, this is only the beginning 
of this crisis.
  We need to deal with this Medicare coverage gap crisis now. If we 
wait until September, we do so at our own peril.
  Mr. President, this Congress is out of touch, and the Republican 
priority is to heap more wealth on a few of the richest people in 
America while tens of millions of their hardworking neighbors' children 
will struggle to get along with less as a result.
  Let's not let it happen.
  Mr. REED. Mr. President, I am deeply concerned about the cynical 
efforts to tie a much needed boost in the minimum wage to a massive tax 
cut for the heirs of the wealthiest Americans.
  The economic disparities between minimum wage workers and wealthy 
people whose large estates are subject to the estate tax are so vast 
that pairing these two measures together defies logic. I am also hard 
pressed to find a link between either of these issues and the extension 
of several expiring tax provisions that have been tacked on as well.
  No matter how my colleagues in the majority try to dress it up, this 
is really just another vote on the estate tax. It was less than two 
months ago that full repeal of the estate tax failed to pass in the 
Senate. Instead of addressing the pressing problems ordinary Americans 
face on a range of economic issues, the leadership is back again trying 
to pass near-elimination of the estate tax.
  The estate tax is an important component of our progressive federal 
tax system, it is the Federal Government's only tax on wealth, and by 
2009 less than one-half of one percent of all estates will be subject 
to the tax. Far from being a ``death tax,'' the tax falls on heirs who 
seldom had any real role in earning the wealth built up by the estate 
holder. The decedent's estate pays a portion of the total assets to the 
Federal Government and the remainder is then passed on to heirs. 
Capital gains that have built up in the estate tax free are passed on 
to the heirs on a ``stepped up'' basis, and the heirs are not liable 
for any income tax on these gains. No tax is levied if the estate 
passes to a spouse or is donated to charity. The overwhelming majority 
of estates pay no federal estate tax.
  As a matter of fact, the non-partisan Tax Policy Center estimates 
that only about 8,200 estates would owe any estate tax in 2011 if the 
2009 exemption level of $3.5 million were made permanent. Those are the 
people who would benefit from further cuts in the estate tax and their 
estimated average tax savings is about $1.3 million--a far cry from the 
$2.10 hourly wage increase that the Majority has put on the table for 
minimum wage workers.
  A minimum wage hike is long overdue. The Federal minimum wage, which 
today stands at $5.15 per hour, hasn't been raised since 1997. Since 
then, inflation has not only wiped out that pay increase but brought 
the real value of the minimum wage to its lowest level in half a 
century. Over the past 9 years, the minimum wage has lost one-fifth of 
its purchasing power.
  The majority's plan would increase the minimum wage from $5.15 to 
$7.25 per hour by the middle of 2009. The Economic Policy Institute 
estimates that 5.9 million workers would benefit directly from the 
increase and that the average benefit would be $1,200 per year. Another 
7.1 million workers earning somewhat more than $7.25 per hour could 
benefit indirectly as a ``spillover benefit'' of the minimum wage 
increase. However, 1.8 million fewer workers would benefit under the 
Republican proposal because it phases in the increase over a 3-year 
period rather than the 2-year phase-in under Senator Kennedy's 
proposal.
  Senator Kennedy's minimum wage legislation, which I have cosponsored, 
also does not contain any poison pills, such as the near-elimination of 
the estate tax or the egregious roll back of State pay protections for 
minimum wage workers. Currently, there are seven States that have 
chosen not to include a tip penalty in their minimum wage laws. Thus, 
tipped employees in these States earn the full State minimum wage. 
Under the Republican bill, however, one million tipped employees in 
these seven States will see a drastic cut in their base pay.
  Raising the minimum wage is vital because workers have been left out 
of the economic growth we have seen so far in this recovery. Strong 
productivity growth has translated into higher profits for businesses, 
not more take home pay for workers. The stagnation of earnings in the 
face of soaring prices for gasoline, home heating, food, health care 
and college tuition is squeezing workers' paychecks. Just this week, 
the administration admitted as much. At a speech at Columbia Business 
School, Treasury Secretary Paulson stated that ``amid this country's 
strong economic expansion, many Americans simply aren't feeling the 
benefits. Many aren't seeing significant

[[Page S8736]]

increases in their take home pay. Their increases in wages are being 
eaten up by high energy prices and rising health costs.''
  No one who works full time should have to live in poverty, but the 
current minimum wage isn't enough to bring even a single parent with 
one child over the poverty line--even if the parent works 40 hours a 
week, 52 weeks a year. Five million more Americans have fallen into 
poverty since President Bush took office--37 million Americans are now 
living in poverty, including 13 million children.
  The minimum wage is an important policy tool to lift low-income 
families out of poverty. Almost two-thirds of those who would benefit 
are adult workers, and more than a third of these adults are sole 
breadwinners for their families. This is not pocket change for 
teenagers, as opponents of the wage floor have argued.
  The devastation of Hurricanes Katrina and Rita last September put the 
national spotlight on the problem of poverty in America. As Senator 
Grassley, chairman of the Finance Committee, put it last year, ``It's a 
little unseemly to be talking about eliminating the estate tax at a 
time when people are suffering.''
  While the minimum wage has steadily lost purchasing power over the 
past 9 years, Federal Reserve data show that over roughly the same 
period the inflation-adjusted average net worth of the 10 percent 
families with the greatest wealth increased by almost 40 percent. The 
wealth of those most likely to have estate tax liability has increased 
substantially, but the taxes owed on an estate of any given size are 
lower now than they were in 1997 because of increases in the exclusion 
and reductions in the tax rate.
  The differences in economic circumstances between those at the very 
top of the income or wealth distribution and those at the bottom are 
vast and widening. Again, during his address in New York, Treasury 
Secretary Paulson stressed that ``addressing issues of wage growth and 
uneven income distribution is a longer-term challenge that we can 
address.'' And yet, again the rhetoric of this administration does not 
match its actions. The consideration of this bill before us today is 
proof that the majority and the administration are not serious about 
addressing disparities.
  Looking at earnings, minimum wage workers make about $206 for a 40-
hour week at the current rate of $5.15 per hour. That would put them in 
the bottom 10 percent of the distribution of usual weekly earnings of 
full-time workers and these workers have suffered the largest declines 
over the past 5 years. Those at the upper-income levels are seeing 
earnings gains but for those at the bottom- and middle-income levels, 
there is a loss in real earnings since the President took office 
whereas in the 1990s, when you saw the proverbial picket fence--there 
were positive gains at every percentile.
  Turning to household wealth, an overwhelming majority of households 
have very little in the way of accumulated wealth and assets and would 
not be subject to the estate tax. Households in the bottom fifth of the 
wealth distribution have a median wealth of just $2,000. In contrast, 
households in the top 10 percent have a median wealth of $1.4 million, 
which is less than the current estate tax exclusion of $2 million for 
an individual or $4 million for a married couple. Because half of the 
households in that wealthiest group have less than the median net worth 
of the group, most will not owe any estate tax.
  The inequity of this proposal is compelling enough, but the budgetary 
consequences of nearly eliminating the estate tax make it completely 
unpalatable.
  The Center on Budget and Policy Priorities estimates that this estate 
tax proposal would cost about $600 billion over the 2012-2021 period, 
or about $750 billion when the associated debt service costs are 
included. That is about three-quarters of the cost of full repeal, but 
probably understates the true cost because the latest proposal is not 
fully effective until 2015.
  We are financing near-repeal of the estate tax with debt, because the 
costs will be paid for with borrowed money. Future generations of 
taxpayers--minimum wage workers and others who will make significantly 
less than the heirs of deceased multimillionaires and billionaires--
will have to repay those funds. The drain on the budget would occur at 
the very time that the baby boom generation enters retirement and 
rising Social Security and Medicare costs would strain our budget. 
Secretary Paulson rightfully identified ``reforming entitlement 
programs, advancing energy security and maintaining and strengthening 
trade and investment policies that benefit American workers'' as 
``longer-term challenges that will face our economy in the years to 
come.'' However, as we all know these are challenges that we can only 
meet if we have the resources to do so. Making permanent fiscally 
irresponsible tax cuts only endanger our abilities to truly address 
what should be our national priorities.
  Raising the minimum wage will increase the likelihood that minimum-
wage workers will be paying taxes and drawing on fewer government 
services. In contrast, virtually eliminating the estate tax will reduce 
Federal revenues, increase the budget deficit, and put pressure on 
other government programs that contribute to the economic well-being of 
lower-income workers, including minimum wage workers.
  Today, we are at war and yet there is no sense of the shared 
sacrifice that has united this country in past conflicts. Ironically, 
the estate tax was first adopted in the nineteenth century to pay for 
government shortfalls due to wartime spending. Our military families 
are making tremendous sacrifices, and too many of them have made the 
ultimate sacrifice in service to our country. With $320 billion 
appropriated or pending for Iraq operations to date and more than 2,500 
service men and women killed, the human and financial tolls are both 
more staggering than imagined.
  With mounting war costs, the impending retirement of the baby-boom 
generation and deficits as far as the eye can see, due to the 
President's irresponsible tax cuts, it is unconscionable to think that 
we are going to vote again on gutting one of the most progressive taxes 
on the books.
  Putting a minimum wage hike that is so necessary for working families 
to make ends meet together with an estate tax bill that benefits a few 
wealthy heirs reveals a warped set of priorities. The same can be said 
for holding hostage a package of tax extenders that all support. Our 
focus should be on strengthening the safety net for American families--
whether it's raising the minimum wage or preserving Social Security, 
pensions, and health insurance coverage.
  I have been a consistent supporter of the minimum wage, but this is a 
cruel juxtaposition of policies which I can not support.
  Mr. AKAKA. Mr. President, it pains me to have to choose between the 
urgent needs of important groups in my constituency, which is why my 
decision to oppose cloture on the so-called trifecta bill, combining an 
estate tax compromise, minimum wage increase, and tax extenders, is a 
difficult one for me. However, it is one that I find to be necessary.
  There are some good measures in this bill, particularly in the tax 
extenders package. I applaud my colleague in the House, Representative 
Neil Abercrombie, for his hard work to reinstate a tax deduction for 
spousal travel that is included in this package. It would have a 
positive effect on tourism-based economies, such as Hawaii's economy. I 
also appreciate the extension of the research an development credit and 
higher education above-the-line deduction, among other provisions. 
However, on balance, as with so many other large legislative vehicles 
that we consider on this floor, it is not enough to convince me to 
support the overall package.
  I am disheartened that the majority in Congress uses the plight of 
our low-income and disadvantaged to better the cause for the wealthiest 
among us. For years, I, along with my Democratic colleagues, have 
offered amendments and introduced freestanding bills to increase the 
national minimum wage rate for our working men and women. If those in 
majority leadership are serious about increasing the wage rate, then 
they should pass freestanding bills that are currently pending action 
in both the Senate and the House of Representatives. This is truly an 
outrage that the majority has stooped so

[[Page S8737]]

low to do this, and to take such a cynical view of the support that a 
minimum wage increase truly has in our country.
  The package before us further disappoints me because its tip 
provisions will actually hurt many of those who could use a boost in 
wages. Restaurant staff, valets, parking attendants, bartenders, maids, 
and others who support themselves or their families on tip wages will 
have current protections taken away by this bill. States that want to 
guarantee a higher floor for tip wages would see their power to do so 
nullified. These hardworking Americans deserve to have the wage 
protections that their States want to grant them.
  On the estate tax, I have heard most passionately from auto dealers 
in Hawaii of the tragedies that could occur if the estate tax is not 
eliminated or scaled back. Hawaii, as with other States, has lost 
numerous family-owned businesses due to a number of factors. Our auto 
dealers, farmers, ranchers, and other family-owned entities fear that 
they will not have the resources to keep their businesses in the event 
of the deaths of current owners, if the estate tax is not repealed or 
rolled back.
  All of these concerns are heartfelt. I must assure those who have 
written that I have heard them and have taken their experiences and 
views into consideration while deciding what position to take on this 
matter. I have wanted to help them. However, the vote on cloture on 
H.R. 5970 can also be a missed opportunity to serve countless others in 
our home States and many who have not yet been born. I am talking about 
opposing cloture on a bill that would mortgage future generations by 
adding more than $300 billion to already alarming Federal deficits.
  According to the Joint Committee on Taxation, provisions to increase 
the estate tax exemption and link estate tax rates to the capital gains 
tax rate would cost nearly $268 billion over 10 years. Add that to 
extensions and expansions of several expiring tax relief provisions, 
some of which we must pass, and the bill's cost is $306 billion over 10 
years. The minimum wage increase would have a negligible revenue 
effect.
  My colleague from North Dakota, Senator Conrad, has instructed this 
body time and time again on the dire fiscal picture that we are facing 
on the federal level. Our Budget Committee ranking member noted 
yesterday that our Federal debt increased $551 billion last year and is 
projected to increase another $600 billion this year. These figures are 
shocking to me, and they will doubtlessly translate into hard decisions 
on programs that we already have a hard time funding yet are so 
essential to each of our communities.
  In fact, the Center on Budget and Policy Priorities notes that, 
should pending budget process reforms be put into place, the combined 
effect with the implementation of estate tax provisions would be to 
force drastic cuts in various entitlement programs that serve seniors, 
low-income families, veterans, students, and the disabled. Some of the 
programs that CBPP notes would surely be on the chopping block to make 
up for estate tax revenue losses include Medicare for seniors, SCHIP 
for children, Federal civilian retirement, the earned-income tax credit 
for lower income families, the child tax credit, military retirement, 
unemployment insurance, Supplemental Security Income for the elderly 
and the poor, veterans disability compensation and pensions, Food 
Stamps, school lunch and child nutrition, and farm programs.
  It is because of drastic impacts like this that I have heard from 
hundreds of other constituents who want me to vote to save these 
necessary programs and others in education, health care, and social 
services that would bear the brunt of further reductions in 
discretionary funding. I simply cannot put the needs of many above the 
needs of a few, even if they are a well-deserving few, which is why I 
cannot support cloture on this package before us.
  Once again, the choice to oppose cloture on this measure has been a 
tough one for me. It is far better than estate tax repeal in its 
projected fiscal outcome, and I thank its authors for their willingness 
to compromise to a certain point. However, the bill does not go far 
enough for me.
  I deeply appreciate hearing the arguments put forth on both sides of 
this debate and the work put in on this matter, but I cannot support 
this cloture motion.
  Mr. JOHNSON. Mr. President, the Senate is considering today an 
increase in the minimum wage, a package of tax extenders, and the 
repeal of the estate tax. I am highly disturbed and disappointed by the 
course that the Senate has chosen to hold badly needed tax cut 
extenders and the minimum wage increase hostage to the estate tax bill. 
And I find it ironic that the Republican leadership has been referring 
to this as a ``trifecta''--betting terminology. It certainly is a 
gamble. It is a gamble with the livelihoods and pocketbooks of the 
American taxpayer and American worker, and that is surely not what I 
was elected to do.
  Tying an increase in the minimum wage and important tax extenders to 
the estate tax in order to further a political agenda which has 
otherwise failed on this issue is outrageous and manipulative, and I 
will not support it. And to add insult to injury, the majority leader 
has refused to allow his Senate colleagues, who would like to 
substantively address these issues, to offer any amendments. This ``my 
way or the highway approach'' is quintessential partisan politics.
  I would like to be very clear on my position here. I strongly support 
an increase in the Federal minimum wage. I supported Senator Kennedy's 
amendment to the DOD authorization bill that would have increased the 
minimum wage to $7.25 over a 2-year and 2-month period, and I am a 
cosponsor of his Fair Minimum Wage Act. I am also a cosponsor of 
Senator Clinton's Standing with Minimum Wage Earners Act, S. 2725, 
which would raise the Federal minimum wage to $7.25 per hour and link 
future increases in the minimum wage to congressional raises. I have 
always supported updating the Federal minimum wage in the past and 
would like to have the opportunity for an up-or-down vote on the Senate 
floor.
  The Republican leadership in both the Senate and the House of 
Representatives has thus far managed to block an increase in the 
minimum wage. Ironically and sadly, that leadership continues to 
prioritize tax breaks for America's most fabulously wealthy over an 
increase in wages for hard-working families. It just makes no sense. A 
minimum wage employee working 40 hours per week, 52 weeks a year, would 
earn only $10,700, a figure far below the poverty level for even a two-
person family. Inflation has eroded the buying power of the minimum 
wage since it was last increased in 1997. The current minimum wage is 
woefully inadequate to provide enough income for workers to afford 
decent housing, set aside sufficient funds for a comfortable 
retirement, or meet any emergency needs. Increasing the minimum wage is 
about both economics and values. I tire of hearing people talk about 
``family values'' while at the same time doing little to increase wages 
or provide affordable health care and housing.
  I also strongly support the package of tax extenders that were left 
behind during tax reconciliation. I was disappointed that the final tax 
reconciliation measure, H.R. 4297, failed to include provisions that 
would allow South Dakotans to deduct their State and local sales taxes. 
South Dakota collects more than 50 percent of its revenue from sales 
tax assessments. It is unfair to expect South Dakotans to pay an 
additional Federal tax liability simply because of the form of taxes my 
home State collects, and I strongly favor making the sales tax 
deduction a permanent part of the Tax Code. I was also disappointed 
that this measure did not include provisions to allow families paying 
college tuition to deduct that tuition from their Federal taxes or 
teachers to deduct the cost of classroom supplies. These tax cuts are 
important to many Americans, and I support them unequivocally, but I 
will not allow the Republican leadership to tell me that I can only 
give these tax breaks to middle-class Americans by also voting for an 
estate tax repeal that will leave our grandchildren hundreds of 
billions of dollars of debt.

  Additionally, I will support tax cuts that target working Americans, 
so long as they are enacted in a fiscally responsible manner with 
appropriate revenue offsets. The estate tax noose that has been tied 
around this legislative

[[Page S8738]]

package is not in keeping with this philosophy.
  While I feel strongly that Congress must act to give some estate tax 
permanency and certainty to estate planning, I do not support full 
repeal or any measure that would only benefit a tiny number of 
fabulously wealthy estates while at the same time being so costly that 
it would require massive borrowing from foreign nations and from the 
Social Security trust fund in order to write the checks.
  Since the Federal Government is already running several hundred 
billions of dollars annually in the red as it is, any further tax cuts 
and giveaways for America's multimillionaires will require that we 
borrow the money to give to them. Increasingly, the borrowing will be 
from foreign nations and from Social Security revenues. That also means 
that additional tax cuts for the middle-income taxpayers will be almost 
impossible and that the middle class and their children will have to 
pay higher taxes for decades to pay off the debt service on the 
multimillionaire tax cut. That debt service already costs the taxpayers 
$1 billion per day.
  The estate tax legislation that has come before us thus far has been 
unrealistic and costly. I would be supportive of legislation exempting 
family farms, ranches, and small businesses from the estate tax. In 
fact, in 2001, I voted to do just that. Unfortunately, then, the 
Republican party decided to enact legislation that called for, among 
other things, a phaseout of the Federal estate tax that provides 
complete repeal in 2010 but reverts to an exemption of only $650,000 in 
2011. Because of this mistake we have had to have this discussion every 
election year since.
  Easing taxes on farms, ranches, and small businesses is one thing, 
but the total repeal being pushed as a political statement during this 
runup to the election season is irresponsible. I believe the Federal 
Government ought to be doing more for middle-class and working 
families, rather than focusing its attention on the Paris Hilton and 
Donald Trump crowd.
  Mr. DODD. Mr. President, I rise today to express my serious concerns 
with a bill before this body, H.R. 5970, that unnecessarily links a 
long-overdue increase in the minimum wage and a broadly-supported 
package of tax extenders to an unaffordable and irresponsible cut in 
the tax on multimillion-dollar estates.
  This so-called ``trifecta'' bill sends a clear message to the 
American people about the priorities of the leadership on the other 
side of the aisle--priorities that are badly out of step with the needs 
of ordinary Americans.
  Many of us in this body support fiscally responsible reform of the 
estate tax. But compared to most reasonable proposals, the one in this 
bill would cost nearly twice as much, while adding very little 
additional value.
  Over the last several years, the number of Americans affected by the 
estate tax has fallen dramatically as the exemption level has been 
raised. In 2000, with an exemption of $675,000, there were 50,000 
taxable estates. That number has fallen to only 13,000 today, with the 
exemption level now standing at $2 million for an individual and $4 
million for a couple. In 2009, the exemption will rise to $3.5 
million--or $7 million for a couple--and only 7,000 estates will be 
subject to the tax. These 7,000 taxable estates represent the largest 
three-tenths of 1 percent of estates in America, all of which exceed 
$3.5 million in size. By 2009, only this small fraction will owe even a 
cent under the estate tax.
  Compared to current or 2009 rates, this ``trifecta'' bill would 
provide a tax cut for only the largest 8,200 estates in the country. 
And the average size of the tax benefit received by each of these 
estates would be $1.4 million. Out of a nation of 300 million people, 
only the wealthiest 8,200 would gain from this bill's estate tax 
proposal, but it would cost the American people $753 billion over the 
first decade alone once it has been fully phased in.
  The leadership on the other side of the aisle knows that this body 
would rightly reject such a gratuitously irresponsible proposal if it 
were offered as a stand-alone bill. So the majority leader in this body 
and his counterparts in the House of Representatives have decided, in 
what amounts to political blackmail, to attach this estate tax measure 
to a moving vehicle, the package of tax extenders that includes 
provisions like the research and development tax credit that supports 
innovation by America's businesses, the tax deduction for college 
tuition that helps students and their families pay for the skyrocketing 
cost of higher education, and the tax deduction for teacher classroom 
expenses, among many other important items.
  In effect, the supporters of this ``trifecta'' bill have decided to 
hold hostage these important tax provisions, which benefit families and 
businesses across the income spectrum, to an estate tax measure that, 
on its own, would otherwise be rejected. And in a misguided attempt to 
``sweeten the deal'' or provide political cover, they have added a 
provision to raise the minimum wage that, itself, is flawed due to the 
wage cut it would force upon many employees who earn their pay through 
tips.

  Many of us in this body have been fighting for years to increase the 
minimum wage, only to have our efforts blocked repeatedly. America's 
lowest-wage workers have waited far too long for a raise--it has been 
10 years, almost to the day, since this body last voted to raise the 
minimum wage to $5.15 per hour.
  In the time since then, the minimum wage's real buying power has 
fallen to its lowest level in 51 years. For a full-time worker, a wage 
of $5.15 per hour translates to a yearly income of $10,700--an amount 
that is nearly $6,000 below the poverty line for a family of three. 
These are working adults, with full-time jobs, who are living in 
poverty.
  At those wages, these working Americans can barely afford housing and 
food. They certainly can't afford adequate health care, child care, or 
education needed to lift them out of a low-wage job. With gasoline 
prices and other energy costs rising, one wonders how people make ends 
meet.
  Unfortunately, too many are falling behind.
  And too often, the victims are children, whose only fault was to be 
born into the wrong family. More than a third of the 37 million 
Americans currently living in poverty are children. Through no fault of 
their own, these voiceless Americans live day-to-day without adequate 
food and shelter, forced to choose between food and rent or medicine or 
utilities.
  In my State of Connecticut, we have a population of about 3.4 million 
people and the perception is that we are a rich State. But we are not 
exempt, in Connecticut, from the scourges of poverty and hunger. In 
fact, more than 280,000 people in my State, many of them children, are 
food insecure--meaning they don't have access at all times to the food 
necessary to lead a healthy life. Two of the largest food banks in 
Connecticut provide food for more than 350,000 different people each 
year. Working people make up 25 percent of those using those emergency 
feeding programs. People are working hard and they can't even feed 
their families--how is this acceptable?
  Raising the minimum wage from $5.15 per hour to $7.25 per hour would 
directly boost the earnings of 6.6 million working Americans. It would 
also indirectly benefit an estimated 8.3 million additional workers who 
currently earn close to $7.25 per hour and would likely see their wages 
rise in response to a minimum wage increase.
  Some of my colleagues have argued that raising the minimum wage would 
harm employers or reduce overall levels of employment, but study after 
study has shown these claims to be unfounded. A recent Gallup poll 
found that 86 percent of small business owners do not think the minimum 
wage negatively affects their business. And a substantial body of 
research by well-known economists finds no significant harm to overall 
levels of employment based on changes to the minimum wage. So while a 
minimum wage increase would dramatically improve the lives of millions 
of Americans, the potential costs would be small.
  America's lowest-earning working men and women desperately need a 
raise--even a small one. But this bill, by tying an increase in the 
minimum wage to a costly ``virtual repeal'' of the estate tax, has the 
potential to cancel out the good that would be done. By adding $753 
billion to the national debt--which already stands at $8.4 trillion--
this estate tax proposal would

[[Page S8739]]

force deep cuts in services for all Americans, regardless of income. 
But those who earn the least would likely be hurt the most.
  No one who supports raising the minimum wage or approving the 
bipartisan package of tax extenders should be fooled into thinking that 
this bill represents a serious attempt to help American workers, 
businesses, or taxpayers.
  The estate tax proposal that has been attached to these important 
measures is unaffordable and unnecessary. It would drive us deeper into 
debt with foreign creditors, force damaging funding cuts during already 
tight budgetary times--not to mention during a time of war--and 
increase the burden on our children and grandchildren of paying for our 
excess.
  For these reasons, Mr. President, I cannot support this irresponsible 
legislation, and I urge my colleagues to join me in voting against this 
bill.
  Mr. OBAMA. Mr. President, I rise to speak about the latest effort to 
reduce the estate tax for a small fraction of the wealthiest Americans 
at a cost to all Americans of more than $750 billion. This time our 
friends in the House of Representatives realized that the Senate would 
reject such a reckless policy. So rather than scaling back Paris 
Hilton's tax cut to a reasonable level or suggesting a fair way to pay 
for their tax cuts, they have done something else. They have decided to 
hold an increase in the minimum wage hostage to a fiscally destructive 
cut in the estate tax.
  This is cynical politics at its worst. This is government by gimmick. 
Combining the estate tax with a minimum wage increase and temporary tax 
cut extenders is not an example of finding common ground or moving to a 
reasonable compromise; this is an example of political coercion. And 
the American people are wise to it.
  This is simply an attempt to dare members of my party to vote against 
an increase in the minimum wage which has been one of our long-time 
priorities.
  But why should we have to agree to nearly $800 billion of additional 
Federal debt--debt that our children and grandchildren will have to pay 
back in higher taxes down the road--in order to get a long-overdue wage 
increase for those struggling to make ends meet that would have no 
negative effect on the Federal budget?
  Why should we have to agree to an average tax break of $1.4 million 
for several thousand wealthy estates in order to add about $1,200 on 
average to the incomes of several million working families?
  Why should we have to agree to a permanent reduction in the estate 
tax for billionaires when all the tax benefits for students, small 
businesses, teachers, and neighborhoods will expire under this bill in 
a year or two?
  This bill is not the outcome of a robust policy debate or bipartisan 
compromise in the public interest. It's not the result of honest 
tradeoffs. No. This bill is a cynical ploy to say ``gotcha'' to the 
Democrats. At best it's politically clever, but in no way is it smart.
  Increasing the minimum wage would make a significant difference in 
the lives of this country's most vulnerable workers. The Federal 
minimum wage has not been adjusted since 1997 and the proposed increase 
really just keeps workers from falling further behind in their struggle 
to keep up with inflation. It is shameful that the President and 
Congress have not acted sooner to raise the minimum wage.
  My colleagues on the other side of the aisle know that. So they have 
tied the minimum wage vote to the estate tax. They have tied the fate 
of several million working families and their ability to buy food and 
gas and school supplies to the ability of wealthy heirs to inherit even 
larger estates tax free.
  I am confident that the American people will see through this. By 
2009, the estate tax will already be repealed for more than 99 percent 
of all Americans. For the few estates that are wealthy enough to have 
to pay the estate tax, they can make unlimited charitable deductions, 
they can pass along at least $7 million to their heirs tax free, they 
can take more than a dozen years to pay-off the taxes owed, and the 
effective tax rate will be fair and reasonable. We could extend that 
status forever, and members of both parties could claim victory and 
move on to addressing America's real priorities.
  Instead we are here once more, debating tax cuts and adding to 
America's debt.
  Now let's be honest. This is not about saving small businesses and 
family farms. We can reform the estate tax to protect the few farms 
that are affected. We can set it at a level where no small business is 
ever affected. We can even repeal the estate tax altogether for the 
99.5 percent of families with less than $7 million in taxable assets 
that means families with assets almost 100 times greater than the 
average American household's net worth. That would be compromise. That 
would be sensible.
  Democrats have offered to reform the estate tax in these ways time 
and time again. But over and over, our offers have been refused, which 
can only mean that the party in power is really interested in an 
unprecedented giveaway to the wealthiest of the wealthy.
  And don't think for a minute that there is any plan to pay for this. 
Every proposal to enforce pay-as-you-go rules for fiscal responsibility 
has been rebuffed. This tax cut will have to be paid for in the years 
ahead by higher taxes on working families and reduced public services 
in all of our communities. This tax cut will have to be paid for by 
higher interest rates on homes and student loans. And this tax cut will 
have to be paid for by greater dependence on foreign countries.
  It's amazing to me how little the Congress has actually accomplished 
this year and how much time we have wasted on the estate tax. You would 
think the richest among us were the most oppressed. And even now we are 
being blocked from dealing with bipartisan pension legislation, not to 
mention dealing with the costs of healthcare, our real homeland 
security challenges, or the threat of global warming.
  So if the Republicans want to bring up the estate tax yet again to 
use it as an election issue later, I say go for it. Because there may 
be no better illustration of how we differ in priorities than this 
irresponsible vote.
  I yield the floor.
  Mr. KERRY. Mr. President, a lot has changed in the last 10 years. 
Gasoline prices have risen, up 70 percent since President Bush took 
office in 2001. Child care costs have risen and now a typical family 
can expect to pay almost $10,000 per year for one child, which is more 
than the cost of public college tuition. Health care costs are soaring, 
and health insurance premiums are skyrocketing. In short, the cost of 
everyday life has greatly increased. We in Congress have certainly 
taken notice: we have given ourselves a pay raise eight times since 
1997, totaling $30,000, and we've given the President pay raises 
totaling $200,000. Yet in that time we have failed to give working 
Americans a raise by increasing the minimum wage.
  Now, facing tough reelection races and a disillusioned public, my 
Republican colleagues are finally willing to do something about it, but 
only on their terms. Despite the fact that the rich are getting richer 
and the poor are getting poorer, my colleagues' ``solution'' to help 
American families is to attach the long-overdue minimum wage increase 
to an otherwise un-passable estate tax reform bill that will benefit 
just a few wealthy families. This is nothing more than political 
blackmail. If Congress were genuine about its care for the lives of 
hard-working Americans--if we truly believed that any honest American 
working a full time job should not have to live in poverty--we would 
never condition a minimum raise increase on a windfall for the wealthy.
  Since President Bush took office, the number of Americans living in 
poverty has increased by 5.4 million, bringing the total to 37 million 
Americans who live in poverty today, 13 million of whom are children. 
What's even more disturbing is that over 70 percent of children in 
poverty live in a home where at least one parent works. So today in 
America we have a situation in which millions of children are living in 
poverty despite the fact that they live in homes with a working adult. 
Among full-time, year-round workers, poverty has increased by 50 
percent since the late 1970s.
  This may be surprising, but if you take a minute to understand the 
situation the picture becomes clear. Consider a single mother of two 
working a

[[Page S8740]]

minimum wage job 40 hours a week for 52 weeks a year. Without taking 
any time off for illness or vacation, she earns just $10,700 a year, 
nearly $6,000 below the Federal poverty line for a family of three. The 
current minimum wage equals only 31 percent of the average wage for the 
private sector, nonsupervisory workers, the lowest percentage on record 
since World War II. In the past 9 years, the purchasing power of the 
minimum wage has deteriorated by 20 percent, and today the value of the 
minimum wage is as its lowest level since 1955.
  What these figures make absolutely clear is that it's long past time 
to raise the minimum wage. Just 5 weeks ago, the Senate failed to give 
relief to hard-working Americans by increasing the minimum wage. What 
has changed? As far as I can tell, two things have changed. First, 
Republicans in tight races realized their failure to address the needs 
of working Americans would hurt their chances for reelection. Second, 
those in favor of repealing the estate tax realized that the likelihood 
of doing so was slim to none. So they agreed to increase the minimum 
wage to $7.25 over a 3-year period that will benefit millions of 
working families, but they would only do so at a cost of $268 billion 
in estate tax relief for a few wealthy families.
  I think we can all agree that the estate tax law needs to be 
revisited. The current policy does not make sense, but neither does 
relief that benefits a few. The estate tax relief before us has a long-
term negative impact on our deficit. The 10-year costs from 2012-2021 
are $753 billion when interest is included. That is $753 billion that 
will be added to the deficit or result in vital programs having their 
funding slashed. And there is no discussion now about how to pay for 
this bill.
  An increase in the minimum wage should not be saddled with an 
unrelated, unnecessary, and unfair tax provision. We should pass a 
clean minimum wage bill and then work on a bipartisan estate tax bill 
that is fiscally responsible and protects most small businesses from 
the estate tax.
  The legislation before us provides an average tax cut of $1.4 million 
to 8,200 estates. A minimum wage increase would provide an average 
benefit of $1,200 to 6.6 million hard-working Americans. The package 
before us clearly reflects misguided priorities. I cannot think of one 
reason why minimum wage legislation should include estate tax relief.
  When President Theodore Roosevelt advocated an estate tax nearly a 
century ago, he argued that, the ``man of great wealth owes a peculiar 
obligation to the state, because he derives special advantage from the 
mere existence of government.'' He further advocated that ``[w]e are 
bound in honor to refuse to listen to those men who make us desist from 
the effort to do away with the inequality, which means injustice; the 
inequality of right, opportunity, of privilege. We are bound in honor 
to strive to bring ever nearer the day when, as far as is humanly 
possible, we shall be able to realize the ideal that each man shall 
have an equal opportunity to show the stuff that is in him by the way 
in which he renders service.''
  We need to return to a society that values hard work. We cannot let 
ourselves become a society divided by income inequity. Defeating this 
bill is a step in the right direction toward fairness and the 
restoration of sane, responsible fiscal policy.
  In addition to the minimum wage, the bill before us includes so-
called expiring tax provisions that Congress should pass. There is no 
reason we cannot work together to extend expiring provisions such as 
the research and development credit and a tax deduction for the cost of 
a college education, which expired at the end of 2005. It is 
embarrassing that the Senate is leaving for our August recess without 
extending these provisions, especially since the capital gains and 
dividends rates that did not expire until 2008 have been extended to 
2010. The extension of these provisions should not be threatened. The 
price of helping families with college education should not be estate 
tax relief for the wealthiest estates.
  Mr. President, I support raising the minimum wage. I support tax 
credits for research development and college education. But I cannot 
support them when they are tied to fiscally irresponsible so-called 
reforms. I cannot support a bill that continues to put the interests of 
the wealthy above the interests of hard-working Americans. If my 
colleagues are serious about increasing the minimum wage, I challenge 
them to do so in a clean bill. I challenge them to put the best 
interests of working Americans front and center. I challenge them to 
stand up to this political blackmail and oppose the Estate Tax and 
Extension of Tax Relief Act. The American people deserve better than 
this.
  Mr. LEVIN. Mr. President, this so-called trifecta bill is a bet by 
the Republican leadership that the American people will not notice 
their strategy to gut the estate tax in order to give the wealthiest 
one-half of 1 percent of our families a huge tax break. I hope they 
will lose that bet.
  The Republicans have tried to sweeten their fiscally reckless 
proposal by extending popular tax cuts that have strong support and by 
adding an increase in the minimum wage that many of them do not even 
want and have opposed repeatedly for years. Republican leaders know 
that their estate tax proposal would not pass on its own, so they have 
added other provisions that many want in hopes of drawing enough votes 
to pass their true goal--more tax cuts for the superrich. Failing that, 
the Republican leaders seem willing to settle for having as a talking 
point that they tried to increase the minimum wage, even though they 
have opposed it year after year.
  The American people will not be fooled. They know that many have 
fought tooth and nail to increase the minimum wage, and that we will 
keep fighting. But we won't be blackmailed into supporting 
irresponsible tax cuts by a political gambit.
  This estate tax proposal is unfair and unaffordable. Only a tiny 
fraction of all estates pay any estate tax. In 2004, only 1 percent of 
estates in Michigan and 1.2 percent nationwide paid any estate tax. And 
as the amount exempted from the tax continues to rise to $3.5 million 
per person in 2009, the percentage gets even smaller. And despite 
claims to the contrary, even without this misguided bill, those 
families actually subject to the estate tax will still be able to pass 
on great wealth to their children.
  Once phased in, this so-called ``compromise'' proposal would cost at 
least 75 percent as much as repealing the estate tax entirely. In the 
first ten-year period in which the proposal would be in full effect, it 
would cost nearly $600 billion. The cost would be $750 billion when 
interest payments on the additional debt are taken into account.
  We simply cannot afford such a massive tax cut that would push us 
even further into the deficit ditch. Today, each American citizen's 
share of the debt is almost $29,000. As we continue to run up record 
yearly deficits, the country's total debt will be more than $11 
trillion by 2011, which is $37,000 per person. It is not just reckless 
fiscal and economic policy to saddle future generations with this kind 
of crushing debt burden; passing this kind of burden to our children 
and grandchildren goes against what should be our basic values.
  In the words of Republican President Teddy Roosevelt, who proposed 
the estate tax: ``[I]nherited economic power is as inconsistent with 
the ideals of this generation as inherited political power was 
inconsistent with the ideals of the generation which established our 
government.''
  If we have any hope of getting our Federal budget deficit under 
control, eliminating the estate tax for the extremely wealthy is 
exactly the wrong thing to do. We need to look out for all of our 
citizens, not just the very wealthiest among us. This giveaway to a 
tiny fraction of estates will ultimately have to be paid for by steep 
cuts in government services or tax increases that will likely impact 
far more Americans.
  To achieve the goal of more tax cuts for the very few, this bill 
holds hostage two critical issues. First, it includes a desperately 
needed, though flawed, increase in the minimum wage. And, second, it 
has a package of popular tax benefits that includes allowing families 
to deduct up to $4,000 in tuition payments and tax credits for research 
and development.
  Minimum wage workers have not seen a Federal raise for 10 years. 
During that same time period, Congress

[[Page S8741]]

raised its own pay eight times. An employee working full-time on 
minimum wage earns only $10,712 per year, which is below the Federal 
poverty level. It is shameful this Congress find it acceptable that 
Americans work hard every day, all year long, at legal jobs and still 
languish in poverty.
  I have cosponsored a bill that gives the working men and women of 
this country the pay raise that they deserve, legislation that would 
raise the minimum wage to $7.25 an hour in several increments. If the 
majority cared about rewarding the hard work of a large number of 
Americans as much as they cared about protecting the enormous wealth of 
a few others, there would be a clean vote just on raising the minimum 
wage.
  Even though the so-called trifecta bill would raise the minimum wage 
for many workers, it would also result in a pay cut for many Americans. 
It includes a ``tip credit'' provision that really should be called a 
tip penalty. The bill allows workers in industries in which tips are 
commonplace--such as waiters, waitresses, hotel maids, parking 
attendants and bartenders--to receive as little as $2.13 before the 
tips.
  Although this tip penalty has been Federal law for years, States have 
been free to guarantee higher wages to workers in these industries. 
This bill would supersede those state laws to permit the lower wages. 
This will decrease wages in at least seven States, and it will set a 
dangerous precedent by allowing the Federal Government to interfere 
with the States to cut the wages of the lowest-paid workers.
  This bill also holds captive several important expiring tax 
provisions that have broad support and would easily pass on their own. 
The provisions include the work opportunity tax credit, which 
encourages employers to hire members of targeted groups such as high 
risk youth, families receiving food stamps, SSI recipients, and 
qualified veterans. Another provision, the welfare-to-work tax credit, 
enables employers to claim a credit on the first $10,000 of wages paid 
to certain long-term family assistance recipients.
  Another provision is the deduction for the expenses of elementary and 
secondary school teachers of up to $125 for books and other supplies. 
And there is a deduction of up to $4,000 for qualified tuition and 
related expenses. There is also a provision that would help shippers on 
the Great Lakes.
  Finally, the expiring provisions include a critical tax credit for 
research and development done here in the U.S. This is an important way 
for the Government to help our Nation's economic competitiveness, 
especially in the manufacturing sector, which represents nearly two-
thirds of our total private R&D. While the R&D credit's cost of $16 
billion for two years is a significant investment by the Government, 
each dollar of the credit leads to a significant increase in business 
R&D spending, thus spurring economic growth. Congress should enact this 
important program on a permanent basis, instead of revisiting it every 
year or two, given all the uncertainty that is created by doing so.
  It will be shameful if these provisions--which are good for the 
economy, important for our people, and supported by this Congress--are 
not renewed because of the political gamesmanship on this bill.
  Mr. President, we hopefully will not fall for this political trick. 
The American people deserve better from their Government.
  If the Republican leaders want to pass a minimum wage increase, give 
us a clean bill that does that and we'll pass it today. If they want to 
extend the popular and reasonable tax provisions that are expiring, 
let's work together to do that. But the pending bill would require us 
to swallow two poison pills and one aspirin. Hopefully, that 
combination will be resoundingly rejected by the Senate.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
 Mr. BAUCUS. Mr. President, I favor repeal of the estate tax. 
The estate tax often forces ranchers and farmers in my home State of 
Montana to have to struggle just to pass their land on to their 
children. But the political games that Congressional leaders played 
with this bill are not the way to get the job done. I hope that cooler 
heads can prevail and that we can work together for sensible reform in 
the future.
  Mr. BIDEN. Mr. President, our country is at war. We face fundamental 
challenges to our security at home and abroad. The President himself 
has compared our situation to the Cold War, to World War II. Those were 
existential struggles, for which we made great sacrifices and which 
fundamentally realigned our priorities.
  Thousands of American families have paid the ultimate sacrifice, tens 
of thousands of our sons and daughters have been wounded. Tens of 
thousands more have been put in the line of fire, some of them for 
multiple tours of duty.
  The war in Iraq alone has lasted longer than World War II, and its 
cost, at $315 billion, continues to grow.
  Here at home, we face challenges to the American dream--the faith 
that hard work would be rewarded with a decent job, a better future for 
our children, and secure retirement.
  The income of the average American family has not risen in the past 6 
years. Global competition from a billion and a half new workers will 
change the world our children inherit. American families have virtually 
no money left over to save, and private retirement savings are woefully 
inadequate to meet the wave of retirees now upon us.
  To meet these challenges, we will have to make massive investments in 
education and in research to boost the productivity and earnings of 
American workers. We need to find alternative fuels to reduce our 
dependence on oil that undermines our foreign policy and holds our 
economy hostage.
  Over 46 million Americans are without health insurance. Only 5 
percent of the containers that pass through our ports are inspected for 
weapons. Our passenger rail system lacks the basic lighting, fences, 
dog patrols, and cameras that could prevent attacks by terrorists we 
know have that system in their sights. This is just a short list of the 
profound challenges we face as a Nation. We can all think of others.
  While our needs multiply, we lack the resources to meet them. Handed 
a 10-year surplus of $5.6 trillion, this administration has dragged us 
down, through the most dramatic reversal in our Nation's history, into 
an additional $3 trillion in debt.
  They have doubled our debt to foreign governments. We now owe more 
than $2 trillion to Japan, China, and others. We are losing control of 
our financial future.
  We are borrowing from our own national retirement savings, the Social 
Security system. This year alone, we will borrow $177 billion from 
Social Security.
  Every day we go deeper into debt to foreign governments. Every day we 
spend more of our national retirement savings. And every day our basic 
needs, from homeland security to our retirement savings to our 
children's future--those needs are ignored.
  That is the setting, that is the background, those are the 
circumstances in which we are now asked to cut taxes on just 7,000 of 
the wealthiest heirs in our country--at a cost of over $750 billion in 
the first decade it is in effect.
  All of that will be borrowed. It is a transfer of $750 billion to the 
wealthiest two-tenths of 1 percent of Americans, borrowed from China, 
from Japan, from our own Social Security system. Somebody will have to 
pay that back.
  Our children and our grandchildren will pay that back. It is a 
transfer from those with no voice of their own in our system, a 
transfer to those whose wealth speaks the loudest.
  Under current law, the estate tax will affect fewer than 7,000 
estates in the whole country by 2009. That year, a couple will be able 
to exempt a $7 million estate from taxes--a $7 million estate will pay 
no estate taxes. None.
  The Congressional Budget Office has estimated that only 65 family 
farms in the whole country will be subject to estate tax at that point, 
under current law. Sixty-five farms, period.
  Seven thousand of the wealthiest families will be the only ones 
paying any estate tax, and only 65 of those estates will be family 
farms, barely more than 1 farm per State across Our Nation.
  And yet we are here today, actually considering reducing those 
numbers further, and driving our debt deeper, to save the most 
fortunate among us from that small remainder of an estate tax.

[[Page S8742]]

  I believe that with the changes in current law we have accomplished 
some appropriate reform. I believe that family businesses and family 
farms should not be broken up to pay taxes. With the booming economy of 
the 1990s, many more Americans joined the ranks of those who could face 
estate taxes. Raising the exemption level and lowering the rate made 
sense.
  Under current law, in my State of Delaware, fewer than 50 families 
will face any estate tax in 2009. Those are reforms that protect all 
but a few from the estate tax. It protects family businesses and family 
farms.
  But I opposed complete repeal of the estate tax, and I oppose this 
legislation that will cost us $750B, three quarters of the cost of full 
repeal.
  I oppose it, not because those who would benefit aren't good 
Americans. I am sure they are. Because they are good Americans, I think 
most would agree that given the world we live in today, facing a global 
threat to our security, with gaps in our homeland security, with clear 
domestic needs unmet, with our Federal finances already in the red--in 
the face of those facts, full repeal is a luxury that we cannot afford.
  We could provide our middle class with some tax relief, by extending 
protection from the marriage penalty for $46 billion. We could extend 
the child tax credit for $183 billion. We could extend the college 
tuition deduction for $19 billion. Instead, the top priority of the 
leadership in this Congress is a handout to the most fortunate, paid 
for by three-quarters of a trillion dollars in debt heaped on our kids.
  To add insult to this injury, the first pay raise for minimum wage 
workers in 10 years is now hostage to this estate tax cut. Under 
current law, you can be paid a wage that keeps you below the poverty 
line even if you are working full time.
  Over the past 24 years, the most fortunate Americans, in the top 1 
percent, saw their incomes more than double--from an average of 
$306,000 to over $700,000. During that same period, the incomes of 
average Americans grew just 15 percent.
  But the poorest fifth of our citizens saw their already inadequate 
incomes grow just $600--over 24 years.
  We are moving apart, not coming together, as a nation.
  The minimum wage has not increased since 1996--and all of that 
increase has been wiped out by the cost of living. The minimum wage 
today, at $5.15 an hour, is even worth less in today's dollars than the 
$4.25 rate it replaced.
  Today, the minimum wage is worth only a third of the average hourly 
wage of American workers, the lowest level in more than half a century. 
The bottom rung of the ladder of opportunity is broken. It is time to 
fix it.
  That means a pay raise for over 7 million workers, in three stages, 
over the next 3 years, to $7.25 an hour. That will lift the floor under 
everybody's wages.
  But now we are told that to get those folks on minimum wage a raise, 
we have to go three-quarters of a trillion dollars into debt to China, 
Japan, and other countries so that the sons and daughters of the 7,000 
most fortunate families among us will be spared the estate tax.
  Everyone else's sons and daughters will get that bill. Our country, 
already the world's biggest debtor nation, already borrowing 65 percent 
of all the money borrowed by countries around the world, already 
spending the retirement savings that should be going into Social 
Security, our country will be weaker financially because of it.
  The American people are tired of seeing this kind of ``gotcha'' 
politics while our country is at war, while we face serious challenges 
to our economic competitiveness, our health, our children's future. 
Instead of a long overdue adjustment in the minimum wage, we get 
political theater.
  And finally, instead of extending important tax credits to promote 
research and development, to clean up brownfields--even to give our 
fighting forces tax credits for combat pay--we are given this take-it-
or-leave-it deal that makes estate tax cuts the top priority.
  Those are not the priorities of the American people, and this Senate 
should reject them.
  We can pass a minimum wage increase to reward work at the bottom of 
our economic ladder. We can extend the tax breaks that meet real needs 
and that serve genuine public policy needs. We can do that, and we can 
leave in place substantial reforms to the estate tax that have already 
taken place.
  First, we must say no to this transparent gimmick. Then we can do 
what we should have done in the first place.
  Mr. FRIST. Mr. President, has time been used on our side?
  The PRESIDING OFFICER. There is 7 minutes remaining.
  Mr. FRIST. Mr. President, I yield 3 minutes to the Senator from 
Pennsylvania.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized 
for 3 minutes.
  Mr. SANTORUM. Mr. President, thank you. I thank the leader for 
yielding.
  This body is criticized a lot because we stand here and yell at each 
other and don't get a lot done. We block and we blame, we obstruct, we 
don't do the people's business.
  The bill that we are about to vote on, 20 years ago, 30 years ago, 
would have been hailed by all as a compromise out of the great 
compromises that we have seen in the Senate over the centuries, truly a 
compromise.
  The No. 1 highest priority of the Senate Democrats, included in this 
bill--their highest priority. We have voted on minimum wage more in 
this Chamber than probably any other issue. The No. 1 priority in this 
bill, their highest priority with respect to taxes, the R&D tax credit, 
the extenders provision, and a variety of different provisions, tax 
provisions, that were key provisions for many Senate Democrats, 
included in this bill.
  In addition to that, we have the abandoned mine lands bill that 
Senator Rockefeller and I have worked on for months and months. This is 
the only opportunity for the abandoned mine lands issue to be voted on 
in the Senate. There may be attempts to throw this in and attach it to 
other bills and all sorts of pounding the chest of how we are not 
letting it happen.
  This is a compromise. This is giving things that I can tell you many 
on this side of the aisle don't want to give--whether it is minimum 
wage, whether it is AMT, whether it is many of the provisions in this 
bill, there are a lot of folks on this side of the aisle who do not 
like any of this, and, in fact, have never voted for any of these 
things.
  In exchange for that, what most of the Members on this side of the 
aisle would like to see done is to do something about the onerous death 
tax which is scheduled to expire in 2010, and then revive itself from 
the dead the next year--horrible tax policy.
  But that is where we are. We are trying to fix this. We are trying to 
get the priorities of both sides together in a bill to move this 
country forward in a way that both sides can walk away and say: We 
didn't get everything we wanted, but we made progress; I got something 
that was really important to me.
  Both sides can say that. Both sides can say: I didn't get everything 
I wanted or I have to vote for something I don't like in this bill; 
This isn't exactly the way I would do it. This problem is bigger than 
all the other good things.
  You know what? One thing I have always learned in my time in 
government is you can always find a reason to vote no. You can always 
find a reason to vote no. It takes a bigger step to compromise, to meet 
someone halfway down that middle aisle, to compromise and get something 
that is important for both sides. This bill does that.
  Mr. FRIST. Mr. President, I yield 2 minutes to the Senator from 
Texas.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I was listening to the debate, and I 
heard the Democratic leader call this a ``do-nothing Congress.'' He 
said that several times. I have heard it before. Yet here we have a 
bill that will go directly to the President. This is a bill that brings 
together pieces of legislation that have been worked on for years in 
this body, a chance to score a huge victory for all sides, that gives a 
minimum wage increase of over $2 that we have been trying to do, along 
with tax cuts for small businesses so that it is a balance for years in 
this Congress. We have been trying to permanently ease the burden of 
the death tax ever since I got to this Senate.

[[Page S8743]]

  It is the small businesses; it is not Bill Gates, it is not Warren 
Buffett who is worried about the death tax. It is the farmer who is 
going to have to sell his farm when he dies or his children who will 
because his children can't pay the taxes because the farm is more 
valuable than they can earn and produce to pay the taxes. It is the 
small business that has been built by a family. It is the restaurant 
owner that is going to have to sell the business that we are fixing 
tonight.
  This is a bill that would take away the ability to call this a ``do-
nothing Congress.''
  Why is it that almost every Republican is going to vote for it and 
almost every Democrat is going to vote against it?
  I think this is an excuse to make this a ``do-nothing Congress'' and 
we are turning our backs on the middle class and the poor people of 
this country who depend on the minimum wage and death tax relief.
  Mr. FRIST. Mr. President, I yield 1 minute to the distinguished 
Senator from Arizona.
  The PRESIDING OFFICER. The Senator from Arizona is recognized for 1 
minute.
  Mr. KYL. Mr. President, the Senator from Washington had printed in 
the Record a letter from an official in the State of Washington. In 
response and in refutation of the point of that letter, I will read 
from a letter from the Assistant Secretary of Employment Standards for 
the U.S. Department of Labor, Victoria Lipnick.
  Mr. President, this letter is dated August 2. It says, among other 
things:

       Were this passed into law, the Wage and Hour Division of 
     the Department of Labor would read section 402 as protecting 
     the current minimum wages of the tipped employees in the 
     seven states that now exclude tipped employees' tips from 
     being considered as wages. To do otherwise would be 
     inconsistent with what we understand to be the intent of the 
     Congress and Fair Labor Standards Act which the WHD enforces.

  The bottom line of this legislation, as has been said, is it will 
increase the standards of living and decrease the cost of dying.
  I urge my colleagues to support moving forward with it.
  Mr. DOMENICI. Mr. President, I rise today in support of the Estate 
Tax and Extension of Tax Relief Act of 2006 (H.R. 5970) more commonly 
known as the Family Prosperity Act.
  I believe that the Family Prosperity Act is a good compromise because 
it raises the inheritance tax exemption to $10 million per couple, 
increases the minimum wage by $2.10, and extends some personal and 
business tax cuts. I support this legislation because it represents a 
fair and reasonable compromise on all three of these important issues.
  For some time now, the Senate has debated the death tax, which is the 
most confiscatory tax of all. It has been a battle to repeal or modify 
this tax. In my opinion this tax is in need of modification; however, a 
full repeal of the death tax has been unsuccessful. Congress must act 
before the current repeal sunsets and the death tax is reinstated in 
2011. Inaction on our part will lead to taxation of estates over $1 
million at a rate 55 percent. Therefore, we are now attempting to seek 
agreement on this compromise measure that will benefit Americans. After 
careful consideration I have concluded that this bill represents a fair 
and reasonable compromise. Furthermore, passage of this bill will bring 
relief that is long overdue.
  H.R. 5970 is a permanent reduction of the death tax that will exempt 
$5 million per individual and $10 million per couple. Estates under $25 
million would have a maximum tax equal to the capital gain rate of 15 
percent. Estates over $25 million would be taxed at 30 percent. The 
exemptions and $25 million threshold are indexed for inflation and will 
be fully phased in by January 1, 2015.
  This tax relief is substantial to States, like my home State of New 
Mexico that are filled with small business owners, family farms, and 
ranches. The assets accumulated by these hard-working people should not 
be taxed a second time nor at a rate that is too high. I believe that 
by enacting this relief from the death tax, we will be fostering 
economic growth, business investment, and entrepreneurship. Moreover, 
this bill will decrease the number of estates that are liquidated in 
order to pay taxes and will ultimately decrease the number of estates 
that are required to file a tax return.
  Some have argued that this legislation is not a compromise and that 
it will preserve wealthy estates. I firmly believe that this argument 
is unfounded. This bill will continue to tax estates that hold 
considerable wealth while at the same time exempting small and medium 
sized estates that are overly burdened, and often times extinguished, 
by this tax.
  I would now like to turn our attention to the minimum wage provisions 
contained in the Family Prosperity Act. It has been almost 10 years 
since Congress last voted to raise the minimum wage. In the meantime, 
our cost-of-living has increased annually and working families have 
struggled to meet their most basic needs.
  The pending legislation before the Senate will increase the minimum 
wage by $2.10 an hour--phased in over 3 years. I have said many times 
before that I would support an increase in the minimum wage if it was 
crafted properly. I believe that this bill is crafted properly because 
it raises the minimum wage while extending some personal and business 
tax cuts and reduces the overreaching death tax.
  The current Federal minimum wage just isn't sufficient. Now is the 
time to raise the minimum wage. It's time to give low-wage workers a 
raise.
  There was an editorial published recently in my hometown newspaper, 
the Albuquerque Journal. The editorial was entitled ``Raise the Minimum 
Wage: Reduce the Death Tax.'' The editorial hit on some very important 
points. The focus was that we have tried to address these issues 
before--and we have failed. It stressed that we need compromise in 
order to get things done in this Congress.
  Mr. President, I will ask that a copy of this Albuquerque Journal 
editorial be printed in the Record.
  This bill is a good compromise. We have before us a chance to work 
together to accomplish something for the American people. We should 
embrace this opportunity and work together.
  The Family Protection Act contains extensions of several important 
tax cuts that are currently set to expire. The research and development 
credit is of significant importance. H.R. 5970 will extend the research 
and development credit through 2007.
  Advanced technologies drive a significant part of our Nation's 
economic strength. Our economy and our standard of living depend on a 
constant influx of new technologies, processes, and products from our 
industries. Former Federal Reserve Chairman Greenspan frequently 
reinforced the critical dependence between advanced technology and our 
economic strength.
  Many countries provide labor at lower costs than the United States. 
Thus, as any new product matures, competitors using overseas labor 
frequently find ways to undercut our production costs. We maintain our 
economic strength only by constantly improving our products through 
innovation. Maintaining and improving our national ability to innovate 
is critically important to the Nation.
  With this extension, we will significantly strengthen incentives for 
private companies to undertake research that leads to new processes, 
new services, and new products. The result will be stronger companies 
that are better positioned for global competition. Those stronger 
companies will hire more people at higher salaries with real benefits 
to our national economy and workforce.
  Another important tax credit that should be extended is the deduction 
for higher education expenses. Higher education expenses are on the 
minds of many families. Saving to invest in education is important to 
the future of all young adults and to our society as a whole. We must 
ensure our Nation's future by helping educate America's young adults. 
That is why it is important to offer tax breaks for qualified higher 
education tuition and expenses. The Family Protection Act allows 
taxpayers to deduct $4,000 in qualified higher education tuition and 
expenses through 2007.
  The last credit that I would like to comment on is the welfare-to-
work credit. This bill extends the welfare-to-work credit through 2007. 
Business plays an important role in transitioning people receiving 
welfare

[[Page S8744]]

into the workforce, and providing incentives for employers to hire 
welfare recipients strengthens our economy. This is an important 
provision in the bill and provides one more reason for me to support 
passage of this compromise.
  I support this three-part compromise package because it represents a 
fair and reasonable compromise on all of these important issues.
  Mr. President, I ask unanimous consent that the article to which I 
referred be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

         [From the Albuquerque Journal Editorial, Aug. 1, 2006]

                  Raise Minimum Wage; Reduce Death Tax

       Santa Fe did it in 2003. Albuquerque did it in April. 
     Sandia Pueblo did it in May. In fact, 17 states and the 
     District of Columbia have done it.
       Maybe before Senators go on vacation this week, they can 
     get the United States to do it, too: Raise the minimum wage.
       The federal minimum wage has been $5.15 an hour for almost 
     a decade. In June the Senate killed the ninth attempt in as 
     many years to increase what those on the lowest tier of the 
     pay scale make. In the interim, municipalities have had to 
     step in, creating a patchwork pay scale that follows 
     geography instead of skill set. If a minimum wage makes 
     sense, it's better done from Washington.
       On Friday night the House passed a bill that would increase 
     the minimum wage by $2.10 phased in over 3 years, extend some 
     business tax cuts, create others, secure pensions and raise 
     the inheritance-tax exemption to $5 million.
       Representative Tom Udall, D-N.M., says he would have 
     preferred a vote solely on the minimum wage--which apparently 
     means he would have preferred a 10th defeat in as many years 
     to a compromise.
       The Republican majority can accept the minimum wage 
     increase if the bill also includes something for one of their 
     constituencies--in this case, excluding more wealth from the 
     estate tax, which many Democrats oppose. Under current law, 
     taxes would revert to 55 percent on estates worth more than 
     $1 million after 2011. That's not soaking the aristocracy, 
     but forcing heirs to liquidate a family-built business or a 
     farm to pay the taxman. Not to mention these family assets 
     have already been taxed.
       Critics say Republicans want political cover come the 
     November elections--after all, they didn't come out against 
     their 2 percent raise last month.
       But to the single mother making $10,700 a year busing 
     tables, the only important cover is covering her family's 
     bills, and $15,000 a year goes a lot further toward that end.
       Senators have their 10th chance this week to get the United 
     States in line with Santa Fe, Albuquerque, Sandia Pueblo, 17 
     states and the District of Columbia. They should take it.

  Mr. ENZI. Mr. President, I rise today in strong support of H.R. 5970, 
the Estate Tax and Extension of Tax Relief Act of 2006. Specifically, I 
strongly support inclusion of the Surface Mining Control and 
Reclamation Act Amendments of 2006 in this piece of legislation. This 
legislation is very important to my home State and to coal-producing 
States throughout our Nation.
  I have been working to fix the Abandoned Mine Land Trust Fund since I 
was first elected to the Senate in 1996. We have legislation before the 
Senate to make that happen, and I applaud my colleagues from 
Pennsylvania and West Virginia for their hard work on this proposal. 
Senators Santorum, Rockefeller, Specter, and Byrd have helped produce a 
solid piece of legislation, and I strongly support moving this forward.
  For years, reauthorizing the Abandoned Mine Land--AML--Trust Fund has 
been an issue that pitted the East versus the West. Consensus was never 
reached on the issue, and the AML Trust Fund continued to be a broken 
system. Members from the East argued that we needed to send more money 
to do reclamation, while members from the West argued that we needed to 
take care of the Federal Government's promise to the States. That 
promise was made in 1977 with passage of the Surface Mining Control and 
Reclamation Act, SMCRA.
  When SMCRA was passed in 1977, a tax was levied on each ton of coal 
produced. The purpose of that tax was to reclaim coal mines that had 
been abandoned before laws existed that required reclamation. Half of 
that tax was promised to the State where the coal was mined. That money 
is known as the State share. The other half went to the Federal 
Government to administer the reclamation program and to send additional 
funding to the States with the most abandoned coal mines.
  It was a simple enough concept. Half of the money was to be sent to 
the State share, and the other half administers the AML program and 
goes to States with the largest reclamation needs. Unfortunately, like 
many things in Washington, while the concept was good, the 
implementation has been disastrous and the program has not worked as it 
was intended. For years, States have been shortchanged and reclamation 
work has not been done. Today, the Federal Government owes States more 
than $1.2 billion. At the same time, more than $3 billion in 
reclamation remains unfinished.
  When I was named the chairman of the conference committee whose job 
it was to find a compromise between the House and Senate on pension 
legislation, I was approached by Senator Santorum who had a proposal. 
He brought with him a coalition made up of coal companies, the United 
Mine Workers of America, UMWA, environmental groups and other 
businesses. Together, they expressed an interest in including an AML 
Trust Fund reauthorization in the pension conference report.
  Where I come from, when something does not work, we work to fix it, 
and so the idea of fixing the AML program on the pension conference was 
intriguing. For years, I have worked with the other members of the 
Wyoming delegation to reauthorize this program, and as chairman of the 
conference committee, I was in a unique position to make a difference.
  After listening to the proposal, I laid out a set of principles that 
were necessary to gain my support for such a move.
  First, I wanted to see the return of the money owed to the States, 
including the $550 million owed to my State. Because Wyoming is a 
certified State, I wanted to see that money come from the Federal 
Government with no strings attached. The legislation we have before us 
today accomplishes that goal by guaranteeing that Wyoming will receive 
the money we are owed from the Federal Government in 7 years.
  Second, I wanted a guarantee that future monies would be directed to 
States like Wyoming where significant amounts of coal are produced.
  Third, it was important that more money be directed toward 
reclamation in States where the reclamation work is needed. Those goals 
are accomplished with the legislation that is included in this bill.
  Finally, I wanted to see a reduction on the tax charged to Wyoming's 
coal companies. Some of the companies in my State do not have the 
problems associated with abandoned coal mines, nor do they have the 
orphan miner liability that is held by some companies. Those companies 
agreed not to fight an extension of the tax if it was reduced, and this 
legislation includes a slight reduction in the fee.
  The priorities of other members are also included in this bill, 
including provisions that shore up health care for orphan miners who 
fall into the Combined Benefits Fund. Those priorities include the 
addition of health care coverage for members who fall into the 1992 
fund and the 1993 fund. Although the shoring up of those three funds 
was not a priority for me, this represents compromise legislation.
  The compromise brought all of the major players on board. The coal 
companies strongly support this bill. The United Mine Workers of 
America, UMWA, strongly support this bill. Other businesses who had 
interests in the AML fund strongly support this bill. With all these 
groups on board, we set out to gain support for this bill.
  Senators Santorum and Rockefeller worked hard to bring members from 
both sides of the aisle on board, and I commend them for their efforts. 
At the end of the day, we had seven committee chairmen who supported 
this bill. The chairman and ranking member of the Energy Committee, who 
have jurisdiction over a portion of the bill, signed a letter to the 
majority leader asking that it be included in the pension conference. 
The chairman and ranking member of the Finance Committee, who have 
jurisdiction over the rest of the bill, expressed support for moving 
this forward.
  As we gained support, we also learned of opposition from members who 
objected to the cost of the legislation.

[[Page S8745]]

They claimed that the bill was too expensive and that the health care 
coverage for the orphan and widow miners was too good. As a member of 
the Senate Budget Committee, I want to spend taxpayer dollars 
appropriately. I want programs to work the way they are intended to 
work, and this program has not done so.
  For my colleagues who have concerns about the cost of the 
legislation, it is important to remember that a $1.8 billion Federal 
trust sits in the Federal Treasury. It is important to remember that, 
although the fee is reduced slightly, we will continue to collect 
significant income from the fee. It is also important to remember that 
the Federal Treasury will collect significant revenues from coal 
production.
  For years, we have been using Federal dollars in a way that they were 
not intended to be used. We have not made progress on the reclamation 
side, nor have we kept our promise to the States. This legislation 
corrects that error. It sends significant amounts of money to do 
reclamation, and it returns the money that was promised to the States.
  As for the health care aspect of the bill, it is important to know 
that the Federal Government already provides funding for some health 
care. It is provided for with interest from Wyoming and other States' 
money. The Senators who represent the families who receive this health 
care continue to make sure the families receive it. Since miners' 
health care continues to be funded, we needed to find a way to fulfill 
the promise to the States. This legislation was such a fix.
  As more members were brought on board, I worked with my colleagues on 
the pension conference to include this provision in the final 
conference report. Much progress was made, and at the end of the day, I 
included the AML bill that is a part of H.R. 5970 in my chairman's mark 
for the pension conference. This AML fix fit nicely in a section 
containing important tax credits, such as a State sales tax deduction 
from Federal income tax for Wyoming and other States with no income 
tax.
  A last-minute strategy decision by some House members was made to 
separate the AML bill and the tax credits from the pension portion of 
the conference report. The House put the AML and the tax credits in a 
bill that also included the death tax forgiveness and a minimum wage 
increase. The second bill included many of the pension provisions of 
the pension conference report. The House then passed the pension bill 
and the tax credit bill and then adjourned on July 29, 2006, for the 
August home work period. That is where we stand.
  I also take this opportunity to voice my support for the estate tax 
relief contained in this legislation. While I support a full and 
permanent repeal of this burdensome and unfair tax, the language 
contained in H.R. 5970 is a big step forward. Under this legislation, 
the estate and gift tax exemption will be increased over time to $5 
million per person. The elimination of this unjust tax will allow many 
small, family-owned businesses throughout Wyoming and the Nation to 
keep their businesses open.
  As I have said time and time again, the death tax is fundamentally 
unfair because it constitutes another layer of taxation. After years of 
paying State and Federal income taxes and other property taxes while 
trying to operate a successful business, the family must pay again at 
the time of death. The land subject to the death tax is the exact same 
land that the owner has been paying annual property taxes on. Double 
taxation is not only unfair on a philosophical level, it causes severe 
financial harm to the small businesses that are the driving force 
behind our economy. Our tax laws should encourage investment and growth 
and not stifle small businesses.
  In addition to affecting many small businesses, the death tax forces 
landowners to sell their property to afford paying this tax and avoid 
passing on the costs to the next generation. Throughout Wyoming, I hear 
stories of families who are struggling to decide whether to sell part 
of their farm or ranch or risk leaving their children and grandchildren 
with this overly burdensome tax. Families should not have to make this 
impossible choice. In Wyoming, we work hard, in pursuit of the American 
dream, to create a better life for our children and grandchildren. Yet 
the death tax punishes this dream and the families who must pick up the 
pieces after losing a loved one.
  There is another hidden cost to this double tax that many people do 
not consider. The death tax also forces families to spend thousands of 
dollars on estate planning. By requiring individuals and families to 
use vital financial resources on estate planning, money is being taken 
away from the family business, farm, or ranch. Permanently eliminating 
this tax will move precious financial resources to the business and 
employees themselves instead of to extensive estate planning costs.
  Finally, I would like to briefly address one additional provision in 
this legislation--the State and local sales tax deduction. H.R. 5970 
includes an extension of the State and local sales tax deduction for 2 
years. I applaud the extension of this deduction. The ability to deduct 
State sales tax is an issue of fairness and parity. Under this 
legislation, taxpayers have the option to deduct their State and local 
sales tax or their State income tax. Federal taxpayers who reside in a 
State without an income tax should not be punished and forced to pay 
additional Federal taxes. Under this extension, taxpayers can choose 
whether to deduct their State and local sales or income tax.
  I intend to vote in favor of the overall package. I strongly support 
the inclusion of the AML legislation. I am also strongly supportive of 
the tax extenders and the death tax relief. I hope that my colleagues 
will see the importance of this legislation and will join me in 
supporting its passage.
  Mr. FRIST. Mr. President, how much time remains?
  The PRESIDING OFFICER. Thirty seconds.
  Mr. FRIST. Mr. President, I yield 1 minute using leader time to my 
distinguished colleague from Kentucky.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.
  Mr. McCONNELL. Mr. President, how can we have bipartisanship in the 
Congress if Democrats won't take yes for an answer?
  Of course, I am speaking about the bill before us--H.R. 5970, the 
Estate Tax and Extension of Tax Relief Act of 2006.
  This legislation package isn't everything the Republicans wanted, and 
it is not everything the Democrats wanted. But both parties, and both 
Houses of Congress, now have an opportunity to vote on compromise 
legislation that accomplishes the goals we all aimed for.
  We will substantially reduce the estate tax, or as I prefer to call 
it, the death tax. No American family should be forced to visit the 
undertaker and the tax collector on the same day.
  Nothing could place more stress on a family than the loss of a loved 
one. Yet at such a difficult time, too many families in America today 
must make decisions about selling a business or a farm that has been in 
the family for generations in order to pay the death tax. That is 
wrong, and with this legislation, we will end that problem for many 
Americans.
  We will also extend tax relief for many, to help encourage economic 
growth.
  At the same time, we will increase the federally mandated minimum 
wage, from its current rate of $5.15 an hour to $7.25 in 2009. My 
friends on the other side of the aisle have continually said that 
raising the minimum wage is their top legislative priority.
  Well, now is the time to vote for their top priority. Yet the 
Democratic leadership is threatening to kill this bill.
  What part of ``yes'' do my friends on the other side of the aisle not 
understand? What part of ``bipartisanship'' do they not want?
  We want to meet them halfway on this compromise legislation. We have 
taken their legislation, and some of our legislation, and also a host 
of tax provisions that we all agree on. But apparently it is not 
enough.
  The Democrats cannot call this a do-nothing Congress on the one hand, 
and block every bill they can and try to blame the majority on the 
other.
  We have a choice. We can work together and pass legislation that will 
benefit millions of Americans, or we can devolve into obstruction, and 
get nothing. I think what the American

[[Page S8746]]

people deserve is positive action. That means passing this bipartisan 
compromise bill.
  We were all elected to get something done on behalf of our 
constituents, and this legislation will mean real, tangible results for 
millions of Americans. As always, I stand ready to work with my 
Democratic friends to pass much-needed tax relief, and add to the long 
list of accomplishments of the 109th Congress.
  Unfortunately, it appears the Democrat leadership would prefer to 
have a political issue rather than an accomplishment.
  Mr. President, what we have heard tonight on the other side of the 
aisle is block and blame.
  We have before us is a provision in three parts, each of which is 
supported by a bipartisan majority.
  Let me say that again.
  Each of the three parts of this bill are supported by a bipartisan 
majority of the Senate.
  So what can possibly be wrong with passing the three bills together 
since they are each supported by a bipartisan majority of the Senate?
  What is going on here? It is block and blame. They want to say this 
is a ``do-nothing Congress.''
  If there is anything this Congress has not been able to accomplish, 
you can point the finger at the Democratic side of the aisle. Their 
strategy is block and blame.
  I yield the floor.
  Mr. FRIST. Mr. President, in closing, I will be very brief.
  In a few moments, we will be voting on the motion to proceed to this 
very important bill called the Family Prosperity Act. It is called that 
very specifically for the reasons we have outlined.
  There are three very important components: The extension of tax 
relief--we spoke about it on the floor, key provisions such as the 
State and local tax deduction affecting the many States, in my State 
alone, 670,000 Tennessee families; college tuition deduction affecting 
millions of families; research and development tax credit which 
stimulates growth, innovation, creativity, and jobs; teachers' 
classroom expenses deduction, affecting 55,000 teachers.
  Secondly, the permanent solution to the death tax challenge that we 
have today is a compromise. It is not only a compromise that prevents 
the death rate from escalating to 55 percent and dropping to $1 million 
in 2011, it is a $5 million exemption per spouse indexed for inflation, 
and a 15-percent tax rate from $5 million to $25 million.
  Thirdly, a minimum wage increase, 40 percent over the next 3 years--
40 percent.
  In summary, an ``aye'' vote is a vote for that permanent death tax 
relief. An ``aye'' vote is for that extension of tax relief. And an 
``aye'' vote is for that 40 percent minimum wage increase.
  We have a lot of challenges before us. We have addressed many others 
in the last 4 weeks. This gives us the opportunity to address an issue 
that will affect the typical American out their working, their family, 
that farmer, that small business owner.
  I encourage my colleagues to vote aye.
  I ask unanimous notwithstanding rule XXII that the mandatory quorum 
be waived.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order, the clerk will 
report the motion to invoke cloture on the motion to proceed to H.R. 
5970 the Estate Tax and Extension of Tax Relief Act of 2006.
  The assistant legislative clerk read as follows:

                             Cloture Motion

  We the undersigned Senators, in accordance with the provisions of 
rule XXII of the Standing Rules of the Senate, do hereby move to bring 
to a close debate on the motion to proceed to H.R. 5970: a bill 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, to 
repeal the sunset provision for the estate and generation-skipping 
taxes, and to extend expiring provisions, and for other purposes.
         Bill Frist, Mike Crapo, Lamar Alexander, Richard C. 
           Shelby, Sam Brownback, Saxby Chambliss, Chuck Hagel, 
           Tom Coburn, Richard Burr, Orrin Hatch, Thad Cochran, 
           John Ensign, David Vitter, Pat Roberts, Craig Thomas, 
           Jeff Sessions, Mel Martinez.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to H.R. 5970, a bill to amend the Internal Revenue 
Code of 1986 to increase the unified credit against the estate tax to 
an exclusion equivalent of $5 million, to repeal the sunset provision 
for the estate and generation-skipping taxes, and to extend expiring 
provisions, and for other purposes, shall be brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Montana (Mr. Baucus) and 
the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--56 yeas, nays 42, as follows:

                      [Rollcall Vote No. 229 Leg.]

                                YEAS--56

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Byrd
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     DeWine
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (FL)
     Nelson (NE)
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Thune
     Vitter
     Warner

                                NAYS--42

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Dayton
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Frist
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Menendez
     Mikulski
     Murray
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Schumer
     Stabenow
     Voinovich
     Wyden

                             NOT VOTING--2

     Baucus
     Lieberman
  The PRESIDING OFFICER. On this vote, the yeas are 56, the nays are 
42. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected.
  The majority leader is recognized.
  Mr. FRIST. Mr. President, I now enter a motion to reconsider the vote 
by which cloture was not invoked.
  The PRESIDING OFFICER. The motion is entered.
  Mr. FRIST. Mr. President, the real vote would have been 57 to 41. I 
switched my vote from ``aye'' to ``no,'' thus the reported vote is 56 
to 42.
  I want to clarify, very briefly, where we are now. For purely 
procedural reasons, as leader, I switched my vote to a ``no'' vote to 
preserve all of my procedural options. As everyone knows, I strongly 
support cloture and moving to proceed to the three important issues in 
the Family Prosperity Act. I initially voted ``yes'' on cloture, but by 
switching to a ``no'' vote, I preserve my right, as leader, to revisit 
this issue in the future as a package.
  The Senate just had a majority vote to move forward to this bill 
which reforms the onerous death tax, raises the minimum wage for 
millions of Americans, and provides a number of important tax relief 
extenders that will expire. Had the Senate invoked cloture, I am 
confident we could have finished this measure this weekend and 
presented it to the President in the next couple of days to become the 
law of the land.
  With my switched vote, I preserve the procedural option to bring the 
bill back as a package. I hope the Democratic Senators will rethink 
long and hard over the weeks to come before we return for business in 
September.
  Mr. President, finally, just for the record, a number of comments 
were made just prior to the vote about the tip wage issue. As my 
colleagues know, I have made it clear to them that is an issue that we 
would be able to address once on the bill. But we have now been 
prevented from getting on the bill.

[[Page S8747]]

  I am confounded. There is no other way to put it.
  My colleagues on the other side of the aisle come to this floor, time 
and again, raving about a ``do nothing'' Congress.
  Well, today, just a few minutes ago, we had yet another opportunity 
to do something--as we have already many times this Congress.
  We had the chance to bring three very important issues to the floor 
for debate: permanent death tax relief, extension of expiring tax 
provisions, and a minimum wage Increase.
  These are issues that matter in the day-to-day lives of our 
constituents--issues that actually mean something to hard-working 
Americans.
  And yet some of my colleagues decided these issues aren't important 
enough to debate here on the Senate floor.
  This package--it's about securing America's prosperity.
  It's about easing the tax burden facing America's families.
  It's about helping hard-working Americans tackle an increasing cost 
of living head on.
  And it's about fostering innovation and reinvestment in our homegrown 
small businesses and farms.
  Quite simply, it's vital to the economic security of everyday 
Americans.
  These are challenging issues, and they must be addressed here on the 
Senate floor.
  And as I have said before, these issues must be addressed as a 
package: permanent death tax relief, tax policy extensions, and a 40-
percent increase in the minimum wage.
  All three together. All or nothing.
  Not bringing this package--the Family Prosperity Act--to the floor is 
tantamount to saying, ``We don't care about America's economic 
security.''
  And I am deeply ashamed that we, the U.S. Senate, would ever dare 
send such a message to the American people.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. REID. Mr. President, everyone will be relieved to know I don't 
have anything to say.

                          ____________________