[Congressional Record (Bound Edition), Volume 146 (2000), Part 10]
[Senate]
[Pages 14379-14393]
[From the U.S. Government Publishing Office, www.gpo.gov]



                   DEATH TAX ELIMINATION ACT OF 2000

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of H.R. 8, which the clerk will report.
  The legislative clerk read as follows:

       A bill (H.R. 8) to amend the Internal Revenue Code of 1986 
     to phase out the estate and gift taxes over a 10-year period.

  Pending:

       Kerry amendment No. 3839, to establish a National Housing 
     Trust Fund in the Treasury of the United States to provide 
     for the development of decent, safe, and affordable housing 
     for low-income families.
       Santorum amendment No. 3838, to provide for the designation 
     of renewal communities and to provide tax incentives relating 
     to such communities, to provide a tax credit to taxpayers 
     investing in entities seeking to provide capital to create 
     new markets in low-income communities, and to provide for the 
     establishment of Individual Development Accounts.
       Dodd amendment No. 3837, to amend the Internal Revenue Code 
     of 1986 to increase the unified credit exemption and the 
     qualified family-owned business interest deduction, to 
     increase, expand, and simplify the child and dependent care 
     tax credit, to expand the adoption credit for special needs 
     children, to provide incentives for employer-provided child 
     care.
       Roth amendment No. 3841, to provide for pension reform by 
     creating tax incentives for savings.
       Harkin amendment No. 3840, to protect and provide resources 
     for the Social Security System, to amend title II of the 
     Social Security Act to eliminate the ``motherhood penalty,'' 
     increase the widow's and widower's benefit and to amend the 
     Internal Revenue Code of 1986 to increase the unified credit 
     exemption and the qualified family-owned business interest 
     deduction.
       Gramm (for Lott) amendment No. 3842, to provide tax relief 
     by providing modifications to education individual retirement 
     accounts.
       Bayh amendment No. 3843, to amend the Internal Revenue Code 
     of 1986 to increase the unified credit exemption and the 
     qualified family-owned business interest deduction and 
     provide a long-term care credit.
       Feingold amendment No. 3844, to preserve budget surplus 
     funds so that they might be available to extend the life of 
     Social Security and Medicare.
       Roth (for Lott) motion to commit to Committee on Finance 
     with instructions to report back forthwith.


                       Vote on Amendment No. 3839

  The PRESIDING OFFICER. The question occurs on the Kerry amendment No. 
3839.
  Mr. ROTH. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to amendment No. 3839. The clerk will 
call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from New Mexico (Mr. 
Domenici) is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
and the Senator from Connecticut (Mr. Dodd) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``aye.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 45, nays 52, as follows:

                      [Rollcall Vote No. 189 Leg.]

                                YEAS--45

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Chafee, L.
     Cleland
     Conrad

[[Page 14380]]


     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Specter
     Wellstone
     Wyden

                                NAYS--52

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner

                             NOT VOTING--3

     Daschle
     Dodd
     Domenici
  The amendment (No. 3839) was rejected.
  Mr. MOYNIHAN. Mr. President, I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                       Vote on Amendment No. 3838

  The PRESIDING OFFICER. The question is on agreeing to the motion to 
waive the Budget Act with respect to the Santorum amendment No. 3838. 
The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Pennsylvania (Mr. 
Specter) is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
and the Senator from Connecticut (Mr. Dodd) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``no.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 57, nays 40, as follows:

                      [Rollcall Vote No. 190 Leg.]

                                YEAS--57

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cleland
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     Crapo
     DeWine
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Gorton
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kerry
     Kohl
     Landrieu
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--40

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Bryan
     Chafee, L.
     Domenici
     Dorgan
     Durbin
     Edwards
     Feingold
     Graham
     Gramm
     Harkin
     Hollings
     Inouye
     Kennedy
     Kerrey
     Kyl
     Lautenberg
     Leahy
     Levin
     Lincoln
     Mikulski
     Moynihan
     Murray
     Nickles
     Reed
     Reid
     Robb
     Rockefeller
     Roth
     Sarbanes
     Schumer
     Torricelli
     Voinovich
     Wellstone
     Wyden

                             NOT VOTING--3

     Daschle
     Dodd
     Specter
  The PRESIDING OFFICER. On this vote, the yeas are 57, the nays 40. 
Three-fifths of the Senators duly chosen and not having voted in the 
affirmative, the motion is rejected. The point of order is sustained 
and the amendment falls.


                       Vote on Amendment No. 3837

  Mr. DOMENICI. Mr. President, I believe the next amendment is numbered 
3837.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. DOMENICI. Mr. President, this amendment offered by Senators 
Wellstone and Dodd----
  Mr. REID. Mr. President, if I could--I apologize to the Senator--we 
are having no statements before the votes.
  Mr. DOMENICI. I am making a point of order.
  Mr. REID. I apologize very much.
  Mr. DOMENICI. I thank the Senator.
  Mr. President, this amendment increases direct spending in excess of 
the committee's allocation.
  I raise a point of order against the amendment under section 302(f) 
of the Budget Act.
  Mr. WELLSTONE. I move to waive the Budget Act and ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from South Dakota (Mr. 
Daschle), the Senator from Connecticut (Mr. Dodd), and the Senator from 
Massachusetts (Mr. Kerry) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``aye.''
  The yeas and nays resulted--yeas 41, nays 56, as follows:

                      [Rollcall Vote No. 191 Leg.]

                                YEAS--41

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Bryan
     Chafee, L.
     Cleland
     Conrad
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Specter
     Torricelli
     Wellstone
     Wyden

                                NAYS--56

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Kerrey
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                             NOT VOTING--3

     Daschle
     Dodd
     Kerry
  The PRESIDING OFFICER (Mr. Gorton). On this vote, the yeas are 41, 
the nays are 56. Three-fifths of the Senators duly chosen and sworn not 
having voted in the affirmative, the motion is rejected. The point of 
order is sustained and the amendment falls.


                       Vote on Amendment No. 3841

  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
3841.
  The amendment (No. 3841) was agreed to.
  Mr. ROTH. Mr. President, I move to reconsider the vote.
  Mr. MOYNIHAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                       Vote on Amendment No. 3840

  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
3840. The yeas and nays have been ordered. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson) and the Senator from Vermont (Mr. Jeffords) are necessarily 
absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
and the Senator from Connecticut (Mr. Dodd) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``aye.''
  The result was announced--yeas 42, nays 54, as follows:

                      [Rollcall Vote No. 192 Leg.]

                                YEAS--42

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Cleland
     Conrad
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Johnson

[[Page 14381]]


     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Torricelli
     Wellstone
     Wyden

                                NAYS--54

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chafee, L.
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchison
     Inhofe
     Kerrey
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                             NOT VOTING--4

     Daschle
     Dodd
     Hutchinson
     Jeffords
  The amendment (No. 3840) was rejected.
  Mr. LOTT. I move to reconsider the vote.
  Mr. MOYNIHAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                       Vote On Amendment No. 3843

  The PRESIDING OFFICER. The question now is on agreeing to the Bayh 
amendment No. 3843. The yeas and nays have been ordered. The clerk will 
call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson) is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
and the Senator from Connecticut (Mr. Dodd) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``aye.''
  The result was announced--yeas 46, nays 51, as follows:

                      [Rollcall Vote No. 193 Leg.]

                                YEAS--46

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Chafee, L.
     Cleland
     Conrad
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Specter
     Torricelli
     Wellstone
     Wyden

                                NAYS--51

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                             NOT VOTING--3

     Daschle
     Dodd
     Hutchinson
  The amendment (No. 3843) was rejected.
  Mr. REID. Mr. President, I move to reconsider the vote.
  Mr. MOYNIHAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                       Vote on Amendment No. 3842

  The PRESIDING OFFICER. The question is on agreeing to the Gramm for 
Lott amendment No. 3842.
  Mr. REID. Mr. President, I make a point of order that the pending 
amendment violates section 302(f) of the Congressional Budget Act of 
1974.
  Mr. LOTT. Mr. President, I move to waive the Budget Act and ask for 
the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson), is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. 
Daschle), is necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``no.''
  The yeas and nays resulted--yeas 14, nays 84, as follows:

                      [Rollcall Vote No. 194 Leg.]

                                YEAS--14

     Abraham
     Ashcroft
     Biden
     Breaux
     Collins
     DeWine
     Fitzgerald
     Gorton
     Roth
     Santorum
     Smith (OR)
     Snowe
     Specter
     Torricelli

                                NAYS--84

     Akaka
     Allard
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Boxer
     Brownback
     Bryan
     Bunning
     Burns
     Byrd
     Campbell
     Chafee, L.
     Cleland
     Cochran
     Conrad
     Coverdell
     Craig
     Crapo
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Frist
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hollings
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Rockefeller
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner
     Wellstone
     Wyden

                             NOT VOTING--2

     Daschle
     Hutchinson
       
  The PRESIDING OFFICER. On this vote, the yeas are 14, the nays are 
84. Three-fifths of the Senators duly chosen and not having voted in 
the affirmative, the motion is rejected. The point of order is 
sustained and the amendment falls.


                       Vote on Amendment No. 3844

  The PRESIDING OFFICER. The question is on agreeing to the Feingold 
amendment No. 3844. The yeas and nays have been ordered. The clerk will 
call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson) is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
is necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``aye.''
  The result was announced--yeas 44, nays 54, as follows:

                      [Rollcall Vote No. 195 Leg.]

                                YEAS--44

     Akaka
     Baucus
     Bayh
     Biden
     Boxer
     Breaux
     Bryan
     Byrd
     Chafee, L.
     Conrad
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Frist
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCain
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Torricelli
     Wellstone
     Wyden

                                NAYS--54

     Abraham
     Allard
     Ashcroft
     Bennett
     Bingaman
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cleland
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Lott
     Lugar
     Mack
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                             NOT VOTING--2

     Daschle
     Hutchinson
       
  The amendment (No. 3844) was rejected.
  Mr. MOYNIHAN. Mr. President, I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

[[Page 14382]]




                        Vote On Motion To Commit

  The PRESIDING OFFICER. The question is on agreeing to the motion to 
commit.
  Mr. KENNEDY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  Mr. KENNEDY. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson) is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
is necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``no''.
  The result was announced--yeas 53, nays 45, as follows:

                      [Rollcall Vote No. 196 Leg.]

                                YEAS--53

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--45

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Chafee, L.
     Cleland
     Conrad
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--2

     Daschle
     Hutchinson
       
  The motion was agreed to.
  Mr. MOYNIHAN. I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DODD. Mr. President, earlier today I was necessarily absent while 
attending to a family member's medical condition during Senate action 
on rollcall votes 189 through 193.
  Had I been present for the votes, I would have voted as follows: On 
rollcall vote No. 189, Senator Kerry's amendment No. 3839, to establish 
a National Housing Trust Fund in the Treasury of the United States to 
provide for the development of decent, safe, and affordable housing for 
low-income families, I would have voted aye.
  On rollcall vote No. 190, the motion to waive the Budget Act with 
respect to Senator Santorum's Amendment No. 3838, to provide for the 
designation of renewal communities and to provide tax incentives 
relating to such communities, to provide a tax credit to taxpayers 
investing in entities seeking to provide capital to create new markets 
in low-income communities, and to provide for the establishment of 
Individual Development Accounts (IDAs), and for other purposes, I would 
have voted no.
  On rollcall vote No. 191, the motion to waive the Budget Act with 
respect to my and Senator Wellstones amendment. No. 3837, to amend the 
Internal Revenue Code of 1986 to increase the unified credit exemption 
and the qualified family-owned business interest deduction, to 
increase, expand, and simplify the child and dependent care tax credit, 
to expand the adoption credit for special needs children, provide 
incentives for employer-provided child care, and for other purposes, I 
would have voted aye.
  On rollcall vote No. 192, Senator Harkin's amendment No. 3840, to 
protect and provide resources for the Social Security System, to amend 
title II of the Social Security Act to eliminate the ``motherhood 
penalty,'' increase the widow's and widower's benefit and to amend the 
Internal Revenue Code of 1986 to increase the unified credit exemption 
and the qualified family-owned business interest deduction, and for 
other purposes, I would have voted aye.
  On rollcall vote No. 193, Senator Bayh's amendment No. 3843 to amend 
the Internal Revenue Code of 1986 to increase the unified credit 
exemption and the qualified family-owned business interest deduction 
and provide a long-term care credit, and for other purposes, I would 
have voted aye.


                           amendment no. 3838

  Mr. ROTH. Mr. President, while I am sympathetic to the goals of the 
Santorum amendment and I strongly support some of its provisions, I 
must vote against it at this time.
  The amendment offered by the Senator is 251 pages long and has 12 
titles. It includes new tax incentives and new authorization programs. 
Some of the incentives are new starters that have never been considered 
before. While the amendment is based on an agreement that has been 
announced by the Speaker's Office and the White House, that specific 
agreement has not been finalized, introduced, or considered by the 
House of Representatives.
  A few weeks ago, Senator Santorum introduced a slightly smaller 
version of his amendment as a bill. That bill, S. 2779, was referred to 
the Finance Committee. Our Committee has held no hearings on the bill 
and we have not marked it up. The Joint Committee on Taxation has not 
had a chance to offer its comments on the full package or formally to 
tell us how much it costs. The Administration has not provided us with 
its views. Since the bill was introduced, my staff has been contacted 
by a variety of groups asking for technical changes to make the tax 
incentives operate better.
  My colleagues know that I am a strong supporter of some of the 
provisions in the amendment. Increases in the low income housing credit 
cap and the private activity bond volume cap are long overdue. Tax 
credits for individual development accounts are a new and promising 
concept that I included in last year's tax bill. Nevertheless, I 
believe that the proper course is for the Finance Committee to take the 
time to review and evaluate all the provisions of this amendment. 
Accordingly, I will vote against it at this time.


                           amendment no. 3838

  Mr. REED. Mr. President, I oppose this amendment because it contains 
language that raises serious First Amendment questions regarding the 
separation of church and state.
  This amendment basically allows taxpayer dollars to flow to religious 
institutions, such as churches, mosques, and synagogues, to administer 
social services and public health benefits on behalf of our federal 
government. I believe this provision is Constitutionally suspect and 
requires more thoughtful Congressional scrutiny in the form of hearings 
and public discussion. Instead, this dubious language has been slipped 
into a several-hundred page amendment that few, if any, of my Senate 
colleagues have probably read.
  Unlike the charitable choice provision in the 1996 welfare reform 
act, which applies to a very limited number of social service programs, 
this language would expand the scope of ``charitable choice'' to every 
current and future public health and social service program that 
receives federal funds. This new charitable choice language also would 
go further by allowing religious institutions receiving taxpayer 
dollars to discriminate in their hiring and firing decisions on the 
basis of their particular religious beliefs and teachings, abrogating 
the intent of our nation's civil rights laws.

[[Page 14383]]

  Thus, under this particular provision, persons hired with federal 
taxpayer money, notwithstanding their personal religious beliefs, could 
be fired because they did not abide by particular religious standards, 
such as regular church attendance, tithing, or perhaps abstinence from 
coffee, tea, alcohol, and tobacco. This new language could allow a 
federally funded employee to be fired because she remarried without 
seeking an annulment of her first marriage. This seemingly innocuous 
``charitable choice'' language amounts to federally funded employment 
discrimination, and allows religious organizations supported by 
taxpayer money to exclude people of different tenets, teachings and 
faiths from government-funded employment.
  I would also like to address a point made by Senator Santorum last 
evening regarding Vice President Gore's support of ``charitable 
choice.'' Senator Santorum failed to mention that in a speech given in 
May 1999 by the Vice President, he stated that any charitable choice 
``extension must be accompanied by clear and strict safeguards.'' He 
also said that ``government must never promote a particular religious 
view, or try to force anyone to receive faith.'' This amendment fails 
on both accounts.
  There is a tradition in Rhode Island of religious tolerance and 
respect for the boundaries between religion and government. Indeed, 
Roger Williams, who was banished from Massachusetts for his religious 
beliefs, founded Providence in 1636. The colony served as a refuge 
where all could come to worship as their conscience dictated without 
interference from the state. With that background, I believe that we 
should be very careful to maintain the distinction between government 
and religion. They both have important roles to play, especially in 
helping some of our country's neediest citizens. However, if a church 
or mosque is going to accept taxpayer dollars to perform contractual 
government services, they should not be able to deny employment to 
qualified American citizens. Our nation's laws should not allow 
discrimination on the basis of religion.
  I suspect that the drafters of the amendment understand the 
Constitutional infirmities of their language. They seek some protection 
by inserting a reference to the ``Establishment Clause in the First 
Amendment'' as a check on permissible programs. However, such an 
approach blithely ignores the succeeding words of the same sentence. 
``Congress shall make no law respecting an establishment of religion, 
or prohibiting the free exercise thereof . . .'' (emphasis added).
  Their use of the Establishment Clause is a transparent ploy to dress 
up dubious legislation in the trappings of the Constitution without 
giving effect to the full meaning of the Constitution. The proposed 
legislation raises serious questions about the ``free exercise'' of 
religion. By imposing religious tests on federally funded employment 
and by condoning religious based treatment regimes paid for by public 
funds which may conflict with the religious beliefs of beneficiaries, 
this legislation severely impinges on the ``free exercise'' of 
conscience.
  With specific regard to the religious beliefs of beneficiaries, the 
drafters try to salvage this amendment from the Constitutional morass 
that they have created. They purport to require governmental entities 
to provide access to an ``alternative'' service provider if an 
individual objects to the religious character of the service provider. 
Having abandoned the Constitution, the amendment now abandons reality. 
In a country with insufficient resources to fully treat and serve all 
who qualify for public services, where are these alternative service 
providers? We are all familiar with the long waiting lists for 
substance abuse treatment, just to name one area of concern. We are 
equally familiar with situations in many areas, both rural and urban, 
where there is only one realistic provider. How available can any 
alternative provider be in practice? Moreover, why should a qualified 
beneficiary have to advance a ``religious'' reason as a condition to 
receiving public benefits?
  Unfortunately, the enactment of the ``charitable choice'' language in 
this amendment will result in expensive and time-consuming 
Constitutional litigation, bogging down the passage of its laudatory 
community renewal provisions.
  Mr. President, I would urge my colleagues to oppose this amendment 
and to vote against federally supported religious discrimination.
  I ask unanimous consent that the full text of my remarks be included 
at the appropriate place in the Record.


                           amendment no. 3838

  Mr. ROCKEFELLER. Mr. President, I believe in the importance of the 
New Markets initiative to promote growth and economic development in 
struggling communities across our country. I have worked closely with 
Senator Robb on this effort, as well as the President and his 
Administration. Given the commitment of President Clinton and Speaker 
Hastert, I believe we may have a real chance to enact meaningful 
legislation on New Markets.
  But I do not believe the Santorum amendment is the right starting 
point. I have serious questions about the provisions in the bill 
labeled ``Charitable Choice.'' While I strongly support and admire the 
community development and social service work performed by faith-based 
organizations, I am deeply troubled by the potential for discrimination 
in hiring on the basis of an applicant's faith with programs funded by 
federal dollars. This is not good public policy.
  Senator Robb has announced his intention to introduce another New 
Markets bill, and I will continue to work closely with the 
distinguished Senator from Virginia. We introduced the original New 
Markets bill in August of 1999, and I am committed to working for 
passage of a final package. But such an important initiative deserves 
consideration in the Finance Committee, and more than ten minutes of 
flood debate.
  West Virginia has several Empowerment Zones/Enterprise Communities, 
including Huntington, McDowell County, the Central Appalachia Community 
and the Upper Kanawha Community. These communities are working hard to 
deliver on the promise of the President's economic development 
initiative, and I am proud of our progress. Together we can make a real 
difference.
  I hope that the Santorum amendment will not prevail, but that Members 
will work together to build on the Clinton-Hastert initiative to 
develop vital legislation to promote New Markets. We should provide tax 
incentives to promote new investments. We should expand on the success 
of Empowerment Zones and create new Renewal Communities to help small 
businesses get started in struggling communities. We should invest in 
affordable housing by expanding the Low-Income Housing Tax Credit and 
promote home ownership by expanding Mortgage Revenue Bonds. We should 
make these strategic investments, but not include language that might 
allow discrimination in hiring practices which would cause controversy 
and hinder the important investments of New Markets.
  Mr. CRAIG. Mr. President, during debate of H.R. 8, the question has 
been raised: Does the death tax really impact family-owned farms and 
businesses?
  The answer is an emphatic ``Yes!''
  According to the book, ``The Millionaire Next Door,'' self-employed 
individuals are four times as likely to accumulate $1 million in assets 
over their lifetime than those people who work for someone else. 
Moreover, while self-employed individuals make up only 20 percent of 
the workforce, they comprise two-thirds of those Americans whose 
estates are worth more than $1 million. As a tax on accumulated wealth, 
the estate tax is a direct attack on these individuals.
  Meanwhile, the Small Business Administration Office of Advocacy 
estimates that seven out of ten family-owned businesses fail to survive 
from one generation to the next. While this failure rate can be 
attributed to many factors, the federal estate tax is cited by family 
business owners as a major obstacle blocking a successful transition. 
For example, a report by the

[[Page 14384]]

Family Enterprise Institute found that 60 percent of black business 
owners believe the estate tax makes the survival of their business 
significantly more difficult or impossible.
  Finally, the estate tax hampers the ability of family-owned 
businesses to compete against larger corporations. In testimony before 
the House Ways and Means Committee, a lumberyard owner from New Jersey 
spoke of incurring up to $1 million in costs associated with preserving 
the family business pending the death of his grandmother. At the same 
time the family was incurring these costs, the business was also 
competing against a new Home Depot store that had moved into the area. 
Home Depot is not subject to the estate tax.
  Mr. President, death tax repeal is also pro-jobs. A survey of 365 
businesses in upstate New York found an estimated 14 jobs per business 
were lost in direct consequence of the costs associated with estate tax 
planning and payment. That amounts to more than 5,000 jobs lost in a 
limited geographical area. Nationally, the Wall Street Journal reported 
that an estimated 200,000 jobs would be created or preserved if the 
estate tax were eliminated.
  Mr. President, a false argument made by the opposition is that the 
tax code already protects family-owned businesses from the death tax. 
While the 1997 Taxpayer Relief Act included provisions to protect 
family-owned businesses from the death tax, these provisions have 
proven so complicated and cumbersome that few family businesses choose 
to use them.
  For example, in order to qualify for the Family Business Exclusion, 
an heir has to have worked in the family business for at least five of 
the eight years leading up to the death of the owner. Following the 
death of the owner, the family must continue to participate in the 
business for at least five out of eight years.
  Both these restrictions create significant problems for family 
members. How does a son or daughter know when the eight-year ``clock'' 
starts ticking. If their parents are elderly, do they sacrifice going 
to college in order to begin working in the business? Moreover, once 
the business is transferred, the tax deferred by receiving the 
Qualified Family Business designation hangs over the business for at 
least eight years, affecting the ability of the business to attain 
credit or attract investors.
  Similar difficulties have been realized from other carve-outs. For 
example, Section 2032A allows closely-held farms and businesses to 
receive a valuation based upon the property's current use--say 
farming--rather than its ``highest and best'' use--say commercial 
development.
  In order to qualify for the lower valuation, however, the estate and 
heirs must meet qualifications similar to those required for the Family 
Business Exclusion. Despite the obvious benefits, only a small 
fraction--less than one percent in 1992--of taxable estates elect to 
use it. The provision is simply too complicated for widespread use.
  With regard to the death tax, it is proving very difficult to protect 
one set of assets while taxing another. A good-faith attempt was made 
to protect family-owned businesses from the death tax three years ago, 
but by most accounts that attempt has largely failed. The best way to 
protect family farms and businesses from the death tax is to repeal it.
  I have a paper by Bill Beach of the Heritage Foundation summarizing 
just a few of the real life stories of farms and businesses harmed by 
the death tax. I ask unanimous consent that it be printed in the Record 
at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection it is so ordered. (See 
exhibit 2.)
  Mr. CRAIG. Mr. President, repealing the estate tax is one of the more 
populist tax cuts considered by Congress this session. Not only do 
studies show the estate tax has a dramatic impact on the ability of 
family-owned farms and businesses to survive and create job 
opportunities, survey after survey has revealed that 70 to 80 percent 
of Americans in general are critical of the tax and supportive of its 
repeal. This broad-based support is evident in the number of states 
that have acted to repeal their state-level estate taxes. Since 1980, 
more than 20 states have elected to repeal their estate taxes.
  Mr. President, there is no excuse for continuing a tax that 
confiscates capital from our most productive citizens. It's anti-
growth. It's anti-jobs. It's anti-American.
  Mr. President, it's time to bury the death tax.

                               Exhibit 1

    Death Tax Devastation: Horror Stories From Middle-Class America

(By William W. Beach, Director, Center for Data Analysis, The Heritage 
                              Foundation)

       The death tax is the nightmare of the American dream, as 
     these real-life experiences from middle-class America will 
     show.
       Millions of Americans spend their adult lives working hard, 
     sacrificing and saving, obeying the law, and doing the 
     countless other things that official Washington has told them 
     are the ingredients of a successful life. They are encouraged 
     as federal laws are passed that should expand economic 
     opportunity and guarantee that civil rights will be as much a 
     part of the marketplace as they are a part of community life 
     and education. Thousands of political speeches reinforce the 
     impression they have that Washington believes the United 
     States really is a land of opportunity and a place where the 
     financial fruits of hard work can be used to endow the next 
     generation's economic struggle with greater potential.
       However, for those whose economic success also resulted in 
     significant assets (like a farm, a small business, a factory, 
     or a trucking fleet), what official Washington says is 
     nothing less than a lie. At the end of life, the federal 
     death tax will sweep across the profits of family-owned 
     businesses and estates and leave in its wake millions of 
     devastated survivors, employees, and communities. Many people 
     whose assets will be depleted to pay the death tax 
     unfortunately learn about estate and gift taxes so late in 
     life that they spend their last days as frequently in the 
     company of their tax lawyers and accountants as they do with 
     their families.
       The federal government taxes the transfer of wealth between 
     generations at rates as high as 55 percent. At $30 billion, 
     the death tax burden in the United States is the greatest in 
     the world. Indeed, this country owns the dubious distinction 
     of holding the fruits of economic success in lower regard 
     than many of its ideological and economic adversaries.
       The full case for repealing federal death taxes will 
     involve more than testimony from its victims. However, 
     evidence of harm to the U.S. economy and public finances 
     pales in comparison to the stories of the men and women whose 
     economic virtues regrettably laid the basis for their own and 
     their offspring's financial devastation. The following 
     sampling of evidence from that anecdotal record has been 
     compiled from testimony before Congress, newspaper articles, 
     and statements of family members whose lives were changed by 
     federal death taxes.


              the death tax hurts family farms and ranches

       The death tax destroys family businesses and farms, and 
     forces families to spend their hard-earned money on lawyers, 
     accountants, and life insurance policies to deal with it. The 
     Public Policy Institute of New York found a negative 
     relationship between anticipated death tax liability and 
     growth in employment, particularly for growing firms. 
     Business owners are afraid to hire new people and expand 
     their businesses when they face the death tax. The reason is 
     simple: Hiring new people is optional; paying taxes on the 
     family estate is not.

                      Family Farm Horror Story #1

       Tim Koopman's family has owned ranch property in California 
     for most of this century. His children would like to continue 
     to run the ranch, but the death tax may prevent this.
       Since Tim's mother died four years ago, the Koopman's have 
     paid about $400,000 in death taxes. For three of those years, 
     however, Tim has been able only to pay the interest on the 
     death tax bill, and soon he will not be able to pay that 
     without selling some or all of his land. This is a decision 
     that he does not want to face. This land is an important part 
     of his life.
       The Koopman's faced the death tax once before. In 1973, Tim 
     was forced to sell one of the family's ranches to pay the 
     $125,000 death tax bill that he owed when his father died. 
     Now the family faces the death tax again. Tim wants to pass 
     the ranch on to his children, but the hefty death tax may 
     leave little ranch for him to do so.

                      Family Farm Horror Story #2

       Lee Ann's family owns a ranch in Idaho. They have lived 
     there for three generations, providing jobs for the local 
     economy and helping to create a strong community. The family 
     did not acquire a lot of material wealth, so it came as a 
     great shock when the government hit them with a $3.3 million 
     death tax bill after their father's death.
       Although the death of Lee Ann's father was devastating, the 
     death tax bill made it

[[Page 14385]]

     worse. The family had no debts and owned their land outright; 
     they thought they had nothing to tax. However, their land had 
     increased in value enough to trigger the death tax. Lee Ann's 
     mother, who has been under tremendous strain since her 
     husband's death, is haunted by the realization that after she 
     dies, her family may lose the ranch because of this tax.
       Another concern is who will buy the ranch if they are 
     forced to sell. Lee Ann worries that, as is the case with so 
     many other properties, the purchaser will not be another 
     family rancher, but rather a wealthy absentee owner who flies 
     in once or twice a year for a vacation. This has been 
     happening more frequently in Idaho, and the sense of 
     community that Lee Ann enjoyed for most of her life is 
     quickly being lost.

                      Family Farm Horror Story #3

       Robert Sakata is a 42-year-old vegetable farmer from 
     Brighton, Colorado. Back in 1944 his father paid $6,000 for 
     40 acres of land to begin a family farm. Six years later, he 
     purchased additional land for $700 an acre. Today, the elder 
     Sakata is 73 and owns 2,000 acres of farmland near the Denver 
     International Airport--a piece of land worth nearly $380 
     million.
       This might seem like a wonderful situation for the Sakata 
     family, yet the family owns no other investments; after the 
     elder Sakata and his wife pass away, Robert will face a tax 
     bill of over $200 million. Robert has admitted that he would 
     have to sell off half the farm and lay off many of his 350 
     workers ``who are like family.'' ``We don't live like 
     millionaires,'' Robert has stated. ``We're just trying to 
     sustain a family business.''
       They will have a difficult time. the death tax will force 
     them to lay off workers and sell land that has been part of 
     the family for more than five decades. This treatment of 
     hardworking successful citizens is hardly the story line for 
     an American dream.


               THE DEATH TAX THREAT TO FAMILY BUSINESSES

       The Center for the Study of Taxation found that three out 
     of four families faced with liquidating all or part of their 
     business to pay the death tax would have to cut their payroll 
     in the process. Moreover, studies by the Institute for Policy 
     Innovation (IPI) and Congress's own Joint Economic Committee 
     have found that the death tax costs communities more in lost 
     jobs and lower economic growth than it raises for the U.S. 
     Treasury.

                    Family Business Horror Story #1

       After her father's death from cancer, Terry Deeny, like 
     many Americans, could not reflect on her personal loss, spend 
     time with her family, and build family cohesion. Instead, 
     death taxes forced Terry to concern herself with her family's 
     survival. As Chairman and CEO of Deeny Construction Co., 
     Terry watched as payment of the death taxes drove her company 
     deeply into debt. She had no choice but to lay workers off, 
     sell much of the company machinery, and stop many business 
     transactions that had kept the business alive. ``We barely 
     survived. It was not an American dream; it was an American 
     nightmare.''
       It is hard for people like Terry to find justification for 
     the federal government to force Americans to scrounge for 
     money in order to pay a tax that puts many into debt, 
     especially when the money otherwise could be used to help 
     create jobs and enable even more citizens to achieve the 
     American dream.

                    Family Business Horror Story #2

       Barry, an entrepreneur in Kentucky, likens the death tax to 
     the old saying about sheep: Slaughter your sheep and you will 
     get dinner for a night. Shear it and you will get a lifetime 
     of wool. By endangering the future of his family's business, 
     the death tax is threatening his employees' livelihoods as 
     well as costing the government future revenue.
       For three generations, Barry's family ran their own 
     business in Kentucky. Today, they own 20 gas stations and 
     convenience stores and employ about 100 people. However, 
     Barry's father is growing older and would like to pass on the 
     business.
       According to Barry, the family has spent a significant 
     amount of money on accountants and attorneys in preparation 
     for shifting ownership of the businesses from his father to 
     Barry's generation and the grandchildren. Family members have 
     purchased insurance and have gone through rewriting several 
     wills and trusts. ``It's something you continually update,'' 
     Barry says; ``every time a new grandchild is born, we have to 
     revise the will and trusts.''
       The death tax also affects the ability of Barry's 
     businesses to grow. New opportunities take time to develop, 
     but between worrying about how to pay the death tax and meet 
     other federal regulations, Barry finds it is harder to pursue 
     new opportunities. In the end, the businesses and their 
     communities suffer.

                    Family Business Horror Story #3

       Clarence owns a farming and lumber business in North 
     Carolina. He provides jobs to 70 people in the community who 
     work on his three small farms, in his fertilizer and tobacco 
     warehouse, and at a small lumber mill. His family has worked 
     hard for four generations to build the business. However, all 
     this may be lost when Clarence dies and his family is faced 
     with an enormous death tax bill.
       Clarence has tried to reduce the burden of the death tax. 
     He has intentionally slowed the growth of his business, hired 
     lawyers, purchased life insurance, and established trusts--
     all to create a plan that he hopes will enable his children 
     to keep the family business when he dies.
       But all that work and planning may not be enough. Clarence 
     figures that his son will owe the federal government about 
     $1.5 million upon his death--a difficult sum for most people 
     to raise, but especially so for a man who makes $31,000 a 
     year. It will be impossible for his son to pay that much, so 
     he may have to sell all or part of the business. It would be 
     the fourth time that Clarence's family will have had to pay 
     the death tax. The federal government, in the end, will have 
     destroyed the work of four generations.

                    Family Business Horror Story #4

       Everett has been in the newspaper business for 30 years. 
     His company publishes six weekly papers in northern 
     California and the telephone directory for two counties. He 
     employs 97 people. From his first small weekly paper, Everett 
     has built his company into a $3 million business.
       Nevertheless, all the hard work may be for naught. 
     Everett's wife died two years ago, and he placed her share of 
     the corporate stock in a trust for their daughter. His 
     daughter and her husband, who is the publisher for all the 
     business's publications, will still face a hefty death tax 
     that may cause them to lose the business when Everett dies.
       For years, the number of small, family-owned weeklies has 
     been declining in northern California. The people who work 
     for the weeklies and the small towns that depend on these 
     newspapers for information and entertainment will suffer when 
     these businesses shut down. Abolishing the death tax would 
     help preserve the legacy of hard work and dedication that 
     thousands of families like Everett's have given to their 
     communities.

                    Family Business Horror Story #4

       Wayne Williams' family has owned a telecommunications and 
     video communications business in Washington since 1982. The 
     family's philosophy is that it is important to reinvest 
     profits in employees, new products, and expanding 
     opportunities. The company has maintained a commitment to 
     improving the local community and tied most of its financial 
     worth up in the business. That means Wayne does not have the 
     cash on hand to pay the death tax when his parents die.
       So Wayne has had to take other measures to save his family 
     from the devastation of the death tax, including scheduling 
     gifts, buying life insurance, and slowing reinvestment in the 
     firm. This last action does not mesh well with the family's 
     philosophy of reinvesting profits, but the death tax makes it 
     necessary.
       The fact that thousands of family businesses are in the 
     same fix explains why eliminating the death tax is the number 
     one priority of so many owners of small businesses. It also 
     could explain why a majority of Americans agree that the 
     death tax is simply unfair and should be eliminated.

                    Family Business Horror Story #5

       David Pankonin, whose story first appeared in the Wall 
     Street Journal, is the fourth-generation owner of Pankonin's 
     Inc., in Nebraska. David's great-grandfather established this 
     retail farm equipment company in 1883 in Louisville, 
     Nebraska. The business has been handed down there times 
     through the family, and David hopes that some day he will be 
     able to hand it down to his own son. He worries because the 
     odds--and the estate tax laws--are against him.
       Only 30 percent of businesses survive a first 
     intergenerational transfer. Only 4 percent survive to the 
     next generation. A third transfer--the transfer that put 
     Pankonin's in David's hands--usually has survival odds of 
     less than 1 percent. Now David wonders if the business can 
     survive another transfer. In his words, ``Will I be able to 
     pass the company inherited from my father along to my son or, 
     in spite of what my will might say, am I just working hard to 
     pay an heir called Uncle Sam?''


                THE DEATH TAX THREAT TO THE ENVIRONMENT

       When people think about the death tax, they tend to focus 
     on its devastating effect on family businesses and farms. 
     However, the death tax also hurts the environment. Many 
     landowners, especially those in rural areas, are ``land rich, 
     but cash poor.'' If the owner of a family business dies, the 
     heirs often will have to sell their assets because they do 
     not have enough money to pay the death tax. Since land is 
     valued at its ``highest and best use,'' they must sell to 
     developers in order to raise the necessary cash.

                   Impact on the Environment Case #1

       The Hilliard family is a good example of how the death tax 
     hurts the environment. The family was forced to sell 17,000 
     acres of land in southern Florida to developers to pay its 
     death tax bills. So far, 12,000 acres have been developed; 
     the rest will soon follow. The family did not intend to sell 
     the land before the death tax bill and had not made plans to 
     develop it.
       The Hilliard's land is in the heart of Florida panther 
     habitat. The panther, an endangered species, requires a large 
     amount of land to survive. The death tax indirectly

[[Page 14386]]

     threatens the panther's habitat every time it forces local 
     Florida's landowners to sell their land to real estate 
     developers.
       Today, over 75 percent of species listed under the 
     Endangered Species Act rely on privately owned land for some 
     or all of their habitat. The death tax creates a huge burden 
     for those that wish to keep their land undeveloped.


                             TAX AVOIDANCE

       Historically, the death tax brings in only about 1 percent 
     of total federal revenues. Yet, the costs to administer and 
     collect the death tax, including litigation, as well as the 
     costs of its economic effects can add up to 65 cents on every 
     dollar collected. That means net revenue collected from this 
     onerous tax is just nearly one-third of the total tax 
     collected.
       According to the Institute for Policy Innovation, the death 
     tax costs the economy almost as much as it raises for the 
     federal government. This is because the death tax harms the 
     most potent engine of growth in the economy--America's small 
     businesses and their employees. The IPI study found that if 
     Congress repealed the death tax today, the increase in 
     economic growth that resulted from this reform would replace 
     any loss to the U.S. Treasury by the year 2010.
       A 1996 Heritage Foundation analysis of death taxes using 
     the WEFA Group U.S. Macroeconomic Model and the Washington 
     University Macro Model found that, if the estate tax had been 
     repealed in 1996, then over the next nine years: The U.S. 
     economy would average as much as $11 billion per year in 
     extra output; an average of 145,000 additional jobs could be 
     created each year; personal income could rise by an average 
     of $8 billion per year above the current projections; and the 
     extra revenue generated by the additional growth in the 
     economy would more than compensate for the meager revenue 
     losses stemming from the death tax's repeal.

                        Wasted Resources Case #1

       Robert, an entrepreneur, began investing in Northern 
     California real estate early in life, making large profits 
     from the resale of his land. He used the profits to invest in 
     a vineyard in Napa Valley that now has a fair market value of 
     $20 million.
       Robert planned on leaving the vineyard to his children. Two 
     of his three children work on the vineyard already and they 
     would like to continue to do so. However, Robert is afraid 
     that when he dies he is going to have to leave all that he 
     has worked hard to build to the federal government, rather 
     than to his children. To make sure his legacy lives on, 
     Robert has spent approximately $50,000 on legal, accounting, 
     and appraisal bills.
       He is also making annual $10,000 gifts to his children and 
     has given away 45 percent of his winery to his children. He 
     has changed his company from a sole proprietorship to a 
     limited liability company, and has formed a family limited 
     partnership for the vineyards.

                        Wasted Resources Case #2

       Richard Forrestel, Jr., of Akron, New York, has spent a 
     substantial amount of time and effort to avoid the 
     devastation wrought by the death tax. Forrestel's father 
     founded Cold Spring Construction Company. Forrestel stated 
     that, ``My family's construction company has already wasted 
     over $4 million since 1980 in insurance purchases and stock 
     redemptions solely in order to be able to pay the death 
     tax.'' ``I wish death tax proponents would tell the truth--
     they simply want to redistribute wealth,'' continues 
     Forrestel. ``The American dream of my father should not be 
     broken up and sent to Washington when he dies.''
       Each day, hundreds of Americans spend more and more money 
     in an attempt to shelter as much of their estate as possible 
     from taxation after they pass away, so that their offspring 
     can benefit from their years of hard work. This money could 
     have been reinvested into the company, creating more jobs and 
     helping more Americans in their daily lives, but the death 
     tax makes this almost impossible.

                        Wasted Resources Case #3

       Ronald works at a steel manufacturing plant his father 
     started in Philadelphia in 1952. Its stainless steel plate 
     products are sold to other manufacturers for various uses. 
     Ronald and his brother have been working with their father to 
     develop an estate plan to smooth the transition of ownership 
     from the second generation to the third.
       However, this task has been difficult. Ronald does not have 
     55 percent of his business assets in cash so, that he can pay 
     off the death tax bill when his father dies. So, he has to 
     spend his precious time and money on lawyers and insurance 
     agents. He has to stop the growth of his plant to ensure he 
     can pay the tax bill. The death tax means that Ronald cannot 
     buy a new piece of equipment or hire a new employee because 
     he must spend his extra money on lawyer's fees.

                        Wasted Resources Case #4

       Helen and her husband dreamed of owning a community 
     newspaper. After years of planning, they finally realized 
     their dream in 1965 and bought a small, struggling weekly 
     paper in northern Georgia. They invested all their savings 
     and have turned that small paper into a $2 million business 
     that publishes three other weeklies as well.
       Helen is worried that all of their hard work will go to 
     waste when she and her husband die. She would like to pass 
     the business on to her sons, but she may not be able to if 
     the government hands her a 55 percent death tax bill. Her 
     family has spent thousands of dollars already in legal fees 
     to ensure she can pass her business on as she and her husband 
     hope, but this still may not happen. The 55 percent death tax 
     will be levied on the family estate despite all the corporate 
     and personal taxes they have paid through the years.

                        Wasted Resources Case #5

       The family business of Michael Coyne has lasted through 
     three generations across 67 years. What started as a small 
     New Jersey lumber company in 1932 has grown into three home 
     improvement stores and a separate kitchen and bath store. 
     However, the same business that made it through the ravages 
     of the Great Depression and the shortages of World War II may 
     not survive the death tax.
       Michael's experience with death taxes began 10 years ago 
     when his grandfather passed away. The majority of the estate 
     was left to his grandmother; though they obtained appropriate 
     legal representation and death tax planning, it became clear 
     that the business would not survive after his grandmother's 
     death.
       Michael and his family have contributed more than just 
     stability to their community for generations. They employ 70 
     people, and they have paid all their taxes. Yet for the past 
     10 years, they have been forced to spend over $1 million on 
     life insurance policies, lawyers, accountants, and other 
     efforts to protect the business from the death tax. Despite 
     these efforts, the family faces a death tax bill in the 
     millions of dollars. The business might not survive.


                               conclusion

       Even though many countries such as Australia and Canada do 
     not have a death tax, the United States continues to reserve 
     its highest marginal tax rate of 55 percent for estates that 
     involve family farms and businesses. The lowest rate imposed 
     by Washington (37 percent) is nearly twice the average death 
     tax rate of 21.6 percent in 24 other countries that do impose 
     death taxes. And while most countries impose a top rate on 
     estates of $4 million or more, the top death tax rate in this 
     country is imposed on estates valued $3 million or more. This 
     policy is wrong in a country that built its future on the 
     idea that with enough hard work and determination anyone 
     could move up the economic ladder.
       By eliminating the death tax, Congress could put more money 
     in the pockets of Americans who in turn, would give more to 
     their favorite charities and to their communities during 
     their life times as well as after death. While the death tax 
     was supposed to be a tax on the rich, American families who 
     work hard to build a family business or farm and their 
     employees of are the ones most often left paying the bill. 
     The mathematics are simple: The tax rate on a worker who 
     loses his other job as a result of the death tax is 100 
     percent. Clearly, with estimates of the federal budget 
     surplus now exceeding $1.87 trillion over the next ten years, 
     it's time to do away with this faulty tax policy.

  Mr. LEAHY. Mr. President, in Vermont, small businesses and family 
farms form the backbone of our economy. I have always been a strong 
supporter of targeted estate tax relief for these family-owned farms 
and small businesses. Targeted relief would help families in Vermont 
keep their property intact and in the family.
  What we have are two very different approaches to estate tax relief.
  Under the Republican proposal, H.R. 8, relief from the estate tax 
would be phased in gradually over ten years and the initial benefits 
would be directed towards the wealthiest estates, those valued at over 
$20 million. Under this proposal, not a single small business or family 
farm would be removed from the tax next year or even 9 years from now. 
That is because H.R. 8 does not actually repeal the estate tax until 
the next decade. This proposal would cost American taxpayers $105 
billion in the first ten years and $50 billion in each year after that.
  Under the second proposal, the Democratic Alternative put forth by 
Senator Moynihan, thousands of additional farms and small businesses 
would be exempt from the estate tax in the very first year after its 
enactment. Under the Democratic Alternative, business owners and 
farmers would be able to leave $2 million per individual and $4 million 
per couple without paying estate tax in 2001. By 2010, business owner's 
and farmer's assets totaling $8 million would be exempt. This proposal 
would cost approximately $64 billion over 10 years.
  We now have a choice between a proposal that would provide immediate 
relief to small business owners and farmers at a cost we can afford and 
a fiscally irresponsible measure that would provide a windfall to the 
wealthiest estates at a high cost to Vermonters and

[[Page 14387]]

the American public. I choose the affordable, immediate, targeted 
relief that we have with the Democratic proposal--a proposal that I 
believe is a better deal for Vermonters.
  The Republicans have stated that H.R. 8 is designed primarily to help 
small businesses and family farms. But who would benefit the most from 
this proposal? I think an article on the front page of the Business 
Section of today's New York Times sums it up well, and I ask unanimous 
consent that this article be printed in the Record at the conclusion of 
my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. LEAHY. The New York Times article said that had the estate tax 
been repealed in 1997, as the Republicans now propose, more than half 
of the tax savings would have gone to the slightly more than 400 
individuals who died that year leaving estates valued at $20 million or 
more. Only about 400 estates in the entire nation, Mr. President.
  In other words, under the Republican proposal, once again, only the 
wealthiest individuals would reap the majority of the benefits. Only 
gradually would any benefits trickle down to the small business owners 
and farmers who Republicans are professing to help. Under the 
Republican proposal hard working Vermonters would bear the burden of a 
windfall to the wealthy.
  In Vermont, in 1998, 227 estates were subject to the estate tax. If 
the Republican proposal were adopted in 1997, not a single one of those 
estates would have been removed from the rolls in the following year. 
Under the Democratic Alternative, small business owners and farmers 
would have received immediate relief. When all is said and done, with 
the Democratic Alternative, approximately two-thirds of all estates 
would not be subject to the estate tax.
  Do we want relief for our farmers and small business owners now, at a 
cost we can afford? Or do we want an unworkable partisan solution that 
will lead inevitably to a presidential veto, endless debate, and empty 
campaign slogans? I think that Vermonters deserve the immediate relief 
that is available under the Democratic proposal, relief that would keep 
small businesses and family owned farms intact, relief that is balanced 
and affordable.

                             Exhibit No. 1

                [From the New York Times, July 13, 2000]

               Democrats' Estate Tax Plan Is Little Known

                        (By David Cay Johnston)

       Small business owners and farmers whose Washington 
     lobbyists are ardent backers of a Republican-backed plan to 
     repeal the estate tax seem largely unaware that President 
     Clinton--who has vowed to veto the Republican proposal--has 
     said he would sign legislation that would exempt nearly all 
     of them from the tax starting next year.
       Business owners and farmers would be allowed to leave $2 
     million--$4 million for a couple--to their heirs without 
     paying estate taxes under the plan favored by the President 
     and the Democratic leadership in Congress. The Republican 
     proposal, which passed the House last month with some 
     Democrats' support and is being debated in the Senate this 
     week, would be phased in slowly, with the tax eliminated in 
     2009.
       Supporters of the Republican plan say the tax is so 
     complicated that eliminating it is the only effective reform; 
     they argue that the nation's growing wealth means more 
     estates will steadily fall under the tax if it remains law on 
     the Democratic proposal's terms.
       Still, had the Democratic plan been law in 1997, the last 
     year for which estate tax return data is available from the 
     Internal Revenue Service, the estates of fewer than 1,300 
     owners of closely held businesses and 300 farmers would have 
     owed the tax.
       According to the data, 95 percent of the roughly 6,000 
     farmers who paid estate tax that year would have been 
     exempted under terms of the Democrats' plan, as would 88 
     percent of the roughly 10,000 small-business owners who paid 
     the tax.
       Had the estate tax been repealed in 1997, as the 
     Republicans now propose, more than half of the tax savings 
     would have gone to the slightly more than 400 individuals who 
     died that year leaving individual estates worth more than $20 
     million each.
       Two prominent experts on estate taxes said yesterday that 
     the Democrats were offering a much better deal to small-
     business owners and farmers, because the relief under their 
     bill would be immediate and the estate tax would be 
     eliminated for nearly all of them.
       ``The fact is that the Democrats are making the better 
     offer--and I'm a Republican saying that,'' said Sanford J. 
     Schlesinger of the law firm of Kaye, Scholer, Fierman, Hays & 
     Handler in New York. With routine estate planning, he said, 
     the $4 million exemption could effectively be raised to as 
     much as $10 million in wealth that could be passed untaxed to 
     heirs. Only 1,221 of the 2.3 million people who died in 1997 
     left a taxable estate of $10 million or more, I.R.S. data 
     shows.
       Neil Harl, an Iowa State University economist who is a 
     leading estate tax adviser to Midwest farmers, said that only 
     a handful of working family farms had a net worth of $4 
     million. ``Above that, with a very few exceptions, you are 
     talking about the Ted Turners who own huge ranches and are 
     not working farmers,'' he said.
       Mr. Harl said he was surprised that farmers were not 
     calling lawmakers to demand that they take the president up 
     on his promise to sign the Democratic bill.
       One reason for that may be that in leading the call for 
     repeal of the tax, two organizations representing merchants 
     and farmers--the National Federation of Independent Business 
     and the American Farm Bureau Federation--have done little to 
     tell members about the Democratic plan. Interviews this week 
     with half a dozen people whom the two organizations offered 
     as spokesmen on the estate tax showed that only one of them 
     had any awareness of the Democratic proposal.
       Officials of the business federation and the farm bureau 
     said that in the event full repeal failed, they might push 
     for approval of the Democratic plan. But both groups say 
     outright repeal makes more sense.
       ``My concern is not over the Bill Gateses of the world,'' 
     said Jim Hirni, a Senate lobbyist for the business 
     federation. ``But we have to eliminate this tax, because it 
     is too complicated to comply with the rules. Instead of 
     further complicating the system, the best way is to eliminate 
     the tax, period.''
       A farm bureau spokesman, Christopher Noun, said that the 
     Democrats' plan appeared to grant benefits that would erode 
     over time. ``Farmers are not cash wealthy, they are asset 
     wealthy,'' he said. ``And those assets are only going to 
     continue to gain value over the years. So while some farmers 
     may not be taxed now under the other plan--10 or 15 years out 
     they will.''
       Whether the proposal to repeal the tax dies in the Senate 
     or is passed and then vetoed by the President, it will become 
     a powerful tool for both parties in the fall elections. The 
     Republicans will be able to paint themselves as tax cutters 
     who would carry out their plans if they could just win the 
     White House and more seats in Congress. The Democrats could 
     try to paint the Republicans as the party that abandoned Main 
     Street merchants and family to serve the interests of 
     billionaires.
       A vote in the Senate could come as early as this evening.
       At the grass roots, however, those who would benefit from 
     any reduction in the scope of the estate tax take a much more 
     pragmatic view of the matter.
       ``The whole reason I took up this cause is I do not want to 
     see another small family business get into the situation we 
     are in,'' said Mark Sincavage, a land developer in the Pocono 
     Mountains of Pennsylvania whose family expects to sell some 
     raw land soon to pay a $600,000 estate tax bill to the 
     federal and state governments.
       The independent business federation cited Mr. Sincavage's 
     situation as an especially good example of problems the 
     estate tax causes its members who are asset rich but short on 
     cash. Facing similar circumstances is John H. Kearney, a Ford 
     and Lincoln dealer in Ravena, N.Y., who said he ``got slammed 
     pretty hard'' when his father died last year. Most of his 
     father's $1.6 million estate was in land and the car 
     dealership, said Mr. Kearney, who added that he dipped into 
     savings intended for his children's education to pay the 
     estate tax bill.
       Neither Mr. Sincavage nor Mr, Kearney said he was aware of 
     the Democrats' plan to roll back the tax.
       But Mr. Kearney said his interest was in reasonable tax 
     relief so that merchants and farmers could continue to 
     nurture their businesses, not in helping billionaires.
       ``No part of me has any sympathy for people with more than 
     $5 million,'' he said. ``Would I feel terrible if all they 
     did was raise the exemption to $4 million or $5 million? I 
     would say from my selfish standpoint that we have covered the 
     small family farm and small business and thus we achieved 
     what we wanted to achieve.
       ``But I would still be asking: Is it really a moral tax to 
     begin with? And that's a point you can argue a hundred 
     different ways.''
       Carl Loop, 72, who owns a wholesale decorative-plant 
     nursery in Jacksonville, Fla., said he favored repeal, partly 
     because estate tax planning was fraught with uncertainty.
       ``The complexity of it keeps a lot of people from doing 
     estate planning because they don't understand it,'' Mr. Loop 
     said. ``And they don't like the fact that they have to give 
     up ownership of property while they are alive.''
       Professor Harl, the Iowa State University estate tax 
     expert, said that he had heard many horror stories about 
     people having to sell farms to pay estate taxes. But in 35

[[Page 14388]]

     years of conducting estate tax seminars for farmers, he 
     added, ``I have pushed and hunted and probed and I have not 
     been able to find a single case where estate taxes caused the 
     sale of a family farm; it's a myth.''

  Mr. ENZI. Mr. President, I rise in support of the Death Tax 
Elimination Act of 2000. The time has come to stop death from being a 
taxable event.
  The repeal of the Federal death tax is one of the top priorities for 
tax reform in my home State of Wyoming. The reason is simple--Wyoming 
is made up almost exclusively of small businesses, and the Federal 
death tax hits small business owners the hardest of any group in 
society. Many of the small businesses in Wyoming are in the 
agricultural sector--ranching and farming businesses that have been 
built up by families working together to help feed Wyoming and America. 
These farms and ranches not only provide a great service to our State 
and the country as a whole by helping provide food that we eat every 
day, but they are an integral part of the western way of the life. All 
too often, I have heard the painful stories of families who were forced 
to sell their ranches or farms just to pay the taxes when their parents 
pass away. The death tax chips away at our very way of life in the West 
and elsewhere and should be abolished.
  The death tax discourages thrift and pierces the very heart of the 
American economy--small businesses. We should never forget that small 
businesses are the backbone of the American economy. The simple fact is 
that most businesses in this country are small businesses. Out of the 
nearly 5.5 million employers in this country, 99 percent are businesses 
with fewer than 500 employees. Almost 90 percent of those businesses 
employ fewer than twenty employees. Since the early 1970s, small 
businesses have created two out of every three net new jobs in this 
country. This remarkable job growth continued even during periods of 
slow national growth and downturns when most large corporations were 
downsizing and laying off workers. Small businesses employ more than 
half of the private sector workforce and are responsible for producing 
roughly half of our nation's gross domestic product. By punishing small 
businesses, the Federal death tax stifles our economy, discourages 
ingenuity, and threatens the economic security of many of our families.
  The Federal death tax also tears at the bonds that unite parents and 
children and families and communities. The family business has 
historically been one of the primary means for children to learn skills 
and virtues that help them throughout their entire lives. I know many 
of the hard-working men and women in Wyoming who run our State's family 
ranches and farms. The whole family pitches in to harvest the crops, 
feed the livestock, mend the fences, fix the irrigation ditches, plow 
the roads, herd the sheep and cattle, and plan for next year's crops or 
herds. Children learn that hard work and responsible planning are 
necessary ingredients for success in work as in life. They learn 
respect for the land that is their livelihood. They learn to appreciate 
the labor of their parents and grandparents and they realize their own 
labor is an investment in their future and the future of their 
children.
  Unfortunately, we live at a time in America when there are all too 
many forces in our society telling our children that everything goes 
and that instant gratification is the only goal in life. It we as 
policymakers want to curb this trend, if we want to teach our children 
the importance of personal responsibility, hard work, and investment in 
their future, we should encourage family-owned businesses which are one 
of the domestic classrooms for teaching our children these time-honored 
virtues.
  I have a little experience in operating a small business myself. My 
family and I ran a couple of small family-owned shoe stores in 
Gillette, WY. We didn't have separate division for merchandising and 
marketing. We didn't have an accounting department to sort out the 
complicated tax code. We all wore many hats. We had to sell the shoes, 
balance the books, keep track of our inventory, and straighten out the 
shelves. We had to sweep the sidewalks when we opened in the morning 
and at the end of a long day, we had to clean the floors and organize 
the store room. Let me tell you that we all learned to pitch in to get 
the job done. We learned to work together and we learned to appreciate 
the hard work and sacrifices each of us made to keep the store running 
smoothly.
  We also learned firsthand the importance of living by the golden 
rule. If you don't treat your customers well in the retail business 
they don't forget. This is especially true of folks in small towns 
where there are always a few people who remember what you did as a kid 
and who can even tell you stories about your parents and grandparents. 
The joy is, they also remember you when you treat them well. The 
family-owned business is an important means we have in America of 
passing on our heritage from one generation to the next.
  Our tax code represents our tax policy and we should be ashamed at a 
code which punishes families and stifles our economy. Every year our 
tax code forces thousands of families to sell their businesses just to 
pay the repressive Federal death tax. It is time we correct this 
injustice by eliminating the death tax. I commend Chairman Roth for his 
diligent work bringing this bill to the floor. I also commend Senator 
Kyl, who has been a tireless advocate for the repeal of this tax ever 
since he came to the United States Senate and who made an important 
contribution to the legislation before us today. I urge my colleagues 
to join me in standing up for America's small businesses by putting the 
death tax permanently to rest.
  Mr. HOLLINGS. Mr. President, since the beginning of the fiscal year, 
the national debt has increased, not decreased. Since we have been 
running a deficit and there is no surplus, any tax cut or loss of 
revenues only increases the debt rather than paying down the debt. 
Accordingly, I oppose the telephone tax cut, and I oppose this estate 
tax cut. As John Mitchell used to say, ``Watch what we do, not what we 
say.'' We say pay down the debt but we increase it.
  Mr. KENNEDY. Mr. President, I am disappointed that the Senate has 
taken four days now to debate the estate tax before making any real 
progress on education, health, or debt reduction. Democrats agree that 
owners of small businesses and farms need relief from this tax, and if 
the Republicans had worked with us, this problem could have been solved 
long ago. Instead, our Republican colleagues are holding small business 
owners and farmers hostage as their excuse to provide an enormous 
windfall to the wealthiest 1 percent of taxpayers--people who have an 
average income of over $800,000 a year. The repeal of the estate tax 
that they seek, costing over $50 billion a year, is the ultimate tax 
break for the wealthy, and any repeal bill will eminently deserve the 
veto that President Clinton has promised if it reaches his desk.
  The Senate has much higher priorities that we should have addressed 
this week. Tens of millions of senior citizens face a crisis because 
they can't afford the prescription drugs they need. The extraordinary 
promise of fuller and healthier lives brought by new prescription drugs 
is beyond their reach. They need help to afford these life-saving, 
life-changing miracle drugs. But instead of doing the work that is 
needed to enable all seniors to access the prescription drugs they 
need, the Senate spends day after day doing the bidding of a few 
thousand of America's wealthiest citizens.
  We send tens of millions of young children to dilapidated, crumbling, 
over-crowded schools with underpaid teachers each day--yet we stand 
here debating a bill to repeal the tax on multi-million dollar estates.
  Millions of working men and women and their families struggle to 
survive on the minimum wage at its current unfair level of $5.15 an 
hour. The Republican Senate has no time to meet their needs--yet the 
time of the Senate is instantly available to those who make thousands 
of dollars each hour.
  Congress has not found time to resolve any of the daily problems 
facing the vast majority of the nation's working families, its senior 
citizens, and its

[[Page 14389]]

school children. In this ``do-nothing Congress,'' the list of priority 
matters on which nothing is done goes on and on--gun safety, the 
patients' bill of rights, protecting children from tobacco, protecting 
the environment. There is no time for any of these issues--but there is 
always time to help millionaires and even billionaires reduce their 
taxes. It is obvious where the priorities of our Republican friends 
lie.
  All Americans should take a clear look at what the Republicans really 
want when they propose a full repeal of the estate tax. Current law now 
taxes only the largest 2 percent of all estates. No one else pays any 
estate tax. Today anyone can bequeath unlimited resources to a spouse 
completely free of the estate tax, and $675,000 to anyone else--again 
completely without tax. Present law already exempts up to $1.3 million 
for family-owned businesses and farms.
  We Democrats seek to substantially raise these exemptions so that 
next year, no one pays the tax on the first two million dollars in 
value of any estate, and by 2010, no one pays the tax on the first four 
million dollars in value of any estate. The Democratic plan affords 
owners of small businesses and family farms double these exemptions, so 
that couples who own a small business or family farm worth up to $8 
million would pay no estate tax at all. If a business or farm is worth 
over $8 million, only the portion over $8 million in an estate is taxed 
under the Democratic plan. The Democratic plan will eliminate all 
estate taxes for more than half of those who currently pay them. I 
stand with my Democratic colleagues in fully supporting this common 
sense approach to estate tax reform.
  Estate tax repeal, however, is simply a boon for the three thousand 
largest estates each year, valued not in millions, but in the tens of 
millions of dollars. These huge estates are the only ones significantly 
affected by the estate tax.
  Currently, over half of all estate taxes are paid by the top one 
tenth of the wealthiest one percent--estates worth more than $5 
million. There are fewer than three thousand of these estates out of 
the 2.3 million Americans who die each year. According to an analysis 
by the Citizens for Tax Justice, 91 percent of the tax benefits from 
repeal of the estate tax would go to the top 1 percent of taxpayers--
who have an average annual income of $837,000. As Treasury Secretary 
Lawrence Summers has said, repealing the estate tax would qualify as 
the most regressive and back-loaded tax legislation ever.
  Republicans don't want to talk about who will really benefit from 
this enormous tax cut. Instead, they talk about the plight of small 
family owned farms and businesses. What they don't tell you is that 
these family owned small businesses and farms account for less than ten 
percent of estate taxes today.
  We could act now--and we should--to help families keep their farms 
and businesses when the owner dies. This concern is legitimate--but it 
does not justify eliminating the entire estate tax. The estate tax 
problem for small businesses and family farms could be solved at a 
fraction of the cost of the Republican bill. Our Democratic proposal 
provides full relief to these families.
  If helping owners of small farms and businesses were the Republicans' 
real goal, they would join us to pass the Democratic estate tax reform 
overwhelmingly. After all, the Democratic plan exempts almost all 
owners of small businesses and farms immediately, while the Republican 
plan takes ten years before exempting anyone. Republicans obviously 
know that giving immediate relief to family farms and small firms will 
take away any pretext at all for the enormous windfall that they want 
to give the richest taxpayers. They know they can never explain the 
real purpose of their estate tax repeal to the voters--so they are 
holding relief for small business owners and small farmers hostage to 
their unacceptable larger scheme for helping the super-rich.
  The people whom the Republican leadership is really working for--but 
whom they don't want to mention--are those few people who inherit the 
3,000 estates each year that are worth more than $5 million. These 
estates are one in every thousand estates--yet they pay over half of 
the current estate tax. When pressed to explain why these estates need 
to have taxes eliminated entirely, Republicans respond vaguely in terms 
of ``fairness.'' They never explain why it is fairer to tax the earned 
income of working families than the unearned inheritance of the 
wealthiest families in America. That is a fairness issue they never 
want to talk about. There is nothing compassionately conservative about 
repealing the estate tax.
  Republican President Theodore Roosevelt thought the estate tax was 
fair when he proposed it a century ago. He believed then and we believe 
today that those who have the largest financial resources have an 
obligation to help provide for the basic needs of the less fortunate 
members of this community. Obviously, today's Republicans don't share 
Teddy Roosevelt's values.
  The supporters of the Republican estate tax repeal have also 
carefully designed it to conceal its real long-run cost. Under their 
scheme, full repeal would not occur until the year 2010. When fully 
phased in, the repeal will cost over $50 billion a year. The cost of 
repealing the estate tax will be nearly three quarters of a trillion 
dollars in the second ten years. This nation cannot afford to devote 
three quarters of a trillion dollars to repealing the estate tax. The 
98 percent of Americans who would receive no tax relief from repeal of 
the estate tax know it is unfair to spend this vast amount on the 
wealthiest taxpayers.
  Let's consider what $50 billion a year can accomplish for the 
American people--if we don't repeal the estate tax. It is more than the 
entire budget for the Department of Education. We could double the 
federal investment in schools--provide smaller classes with better 
teachers, state of the art computer technology for every classroom, and 
modern school facilities across the nation. We could double the 
financial assistance for college students.
  Consider what $50 billion a year could do for senior citizens. It is 
$10 billion more than is needed to fully fund prescription drug 
coverage for all elderly Americans under Medicare.
  We have a bipartisan congressional goal to double the funding for 
medical research through the National Institutes of Health and improve 
the health of our entire nation. Fifty billion dollars a year would 
allow us to virtually triple the NIH budget.
  These are the most pressing needs of the American people--not repeal 
of the estate tax.
  Astonishing as it may seem, I have heard my Republican colleagues 
stand on this floor and claim that the projected budget surplus enables 
us to easily afford their estate tax repeal. But by the time their law 
is fully effective in 2010, it will cost the Treasury over $50 billion 
each year, rising to $750 billion over ten years.
  Repeal of the estate tax would also cost the country billions in 
charitable contributions. A Treasury Department analysis estimates that 
it would cause charitable contributions to be reduced by $6 billion per 
year. Colleges that rely on donations to build buildings and provide 
scholarships would be hurt. Medical schools that rely on donations to 
conduct medical research would be halted. Public Hospitals that rely on 
donations to buy equipment and buildings would have to cut back on 
their ability to provide health care. Shelters that rely on donations 
to keep people warm and fed would have to turn more people away. Six 
billion dollars is precious to the non-profit sector of this Nation.
  The entire Department of Education will have budgeted $48 billion in 
fiscal year 2005. You don't hear Republicans saying we can easily 
afford to double education spending. Instead, during the recent debate 
on the Labor-HHS appropriations bill, we repeatedly heard our 
Republican colleagues say that they had to compromise among competing 
meritorious priorities to fit within their limited budget. They have 
ample money for the super-rich--but nothing for students in crumbling 
schools.

[[Page 14390]]

  The same is true for prescription drugs. President Clinton's proposal 
would cost about $40 billion in 2010, the year before Republicans want 
to begin giving over $50 billion each year in tax breaks to the 
wealthiest of all Americans.
  I vote for prescription drugs over estate tax repeal. I vote for 
education over estate tax repeal. I vote for medical research over 
estate tax repeal. This issue should not even be a close question for 
98 percent of Americans.
  The Republican Party is living up to its reputation as the ``Let Them 
Eat Cake'' Party.
  What do they propose for senior citizens who desperately need 
prescription drugs? Republicans say, ``Let them eat cake.''
  What do they propose for schools and students? Republicans say ``Let 
them eat cake.''
  What do they propose for workers struggling to survive on the minimum 
wage? Republicans say, ``Let them eat cake.''
  What do they propose for the richest 1 percent of taxpayers? A $50 
billion annual windfall at the expense of America's hard-working 
families.
  I say, ``Let them eat cake'' will work no better for the Republican 
Party than it did for Marie Antoinette.
  Mr. GRAMS. Mr. President, I rise to make a few brief follow-up 
remarks about the repeal of the unfair and unjust death tax. As I said 
before, it is the family farms and small business owners that the death 
taxes particularly harm, not the rich, as our colleagues from the other 
side of aisle claim.
  Mr. President, the death tax hurts average American workers as well. 
Let me give you another example of how this tax penalizes those 
workers:
  Hy-Vee, Inc., headquartered in Iowa, with operations in my state of 
Minnesota and 7 other Midwestern states, is one of the largest 
employee-owned companies in the nation. Over the past half a century, 
the employees and the management of Hy-Vee have built a very successful 
business. It is ranked one of the top 15 supermarket chains in this 
country, and top 5 supermarket chains based on cleanliness, and other 
services.
  Through the company's profit-sharing mechanism, workers in Hy-Vee are 
rewarded for their hard work. Over 171 workers of the Hy-Vee company 
have accumulated assets of over $650,000. These employees are not 
wealthy individuals by any means but average workers who work at the 
checkout lines or at mid-level management.
  However, a large portion of the earnings from their hard work can be 
taken away by the government if we don't eliminate the death tax.
  Ron Pearson, CEO of Hy-Vee, says: ``We believe that in many ways, 
employee ownership represents the truest expression of the American 
dream. It is simply unfortunate that the dream also contains a 
nightmare--the estate tax.''
  Mr. President, I believe Mr. Pearson is right. We must repeal the 
death tax to preserve the American dream for working Americans.
  Mr. President, I ask unanimous consent that an article telling Hy-
Vee's story be printed in the Record.
  There being no objections, the material was ordered to be printed in 
the Record, as follows:

                              Hy-Vee, Inc.

                            (By Ron Pearson)

       A strong case could be made that Hy-Vee, Inc., Iowa's 
     largest employer, represents the essence of American 
     capitalism.
       Hy-Vee, headquartered in West Des Moines, is one of the 
     nation's largest employee-owned companies, ranking 32nd in 
     Forbes Magazine's list of the top private firms. With the 
     slogan, ``A Helpful Smile in Every Aisle,'' Hy-Vee, Inc. 
     operates more than 200 stores in seven Midwestern states, and 
     generates annual sales in excess of $3.5 billion--making it 
     one of the top 15 supermarket chains in the nation. In 
     addition to 184 Hy-Vee Food Stores, the Company operates 27 
     Drug Town drug stores. Hy-Vee also has developed or acquired 
     several subsidiary companies to provide goods and services in 
     dairy, perishables, floral, grocery products, banking, 
     construction and advertising.
       Hy-Vee was founded in 1930 by Charles Hyde and David 
     Vredenburg, who opened a small general store in Beaconsfield, 
     Iowa. Eight years later, the two men incorporated as Hyde & 
     Vredenburg, Inc., with 15 stores and 16 stockholders. The 
     name Hy-Vee is a contraction of the two founders' names.
       From its very beginning, Hy-Vee has been employee-owned. 
     Profits are shared with employees through the Company's 
     Profit-Sharing Trust Fund, and a combination of bonus, 
     commission, and incentive systems. Every Hy-Vee employee, 
     from CEO Ron Pearson to produce clerks and truck drivers, is 
     included in the plan. The result is an incredibly loyal and 
     long-serving employee group renowned throughout the Midwest 
     for unflagging dedication to customer service, efficient 
     operation, and community involvement. Within the grocery 
     industry, Hy-Vee enjoys a sterling reputation as a retailing 
     innovator as well as a Company with a strong commitment to 
     high ethical standards and business integrity. Hy-Vee's food 
     safety training program, for example, has become a national 
     model of workplace procedures designed to insure freshness 
     and quality. Ron Pearson has served as co-chairman of a 
     national task force on diversity in the supermarket industry, 
     reflective of his Company's involvement in expanding 
     management opportunities for female and minority employees. 
     In 1997, Hy-Vee was ranked by Consumer Reports magazine as 
     one of the nation's top 5 supermarket chains on the basis of 
     cleanliness, courtesy, speed of checkout and price/value.
       All in all, Hy-Vee represents the pinnacle of success not 
     only within the supermarket industry, but also as an 
     organization in which the individual employees are held to 
     the highest standards--and rewarded for their work. Some 171 
     active employees of the Company have accumulated balances of 
     $650,000 or more in their retirement holdings and Hy-Vee 
     stock. These are store employees, mid-level managers and the 
     like, people who hardly fit the negative stereotype that most 
     Americans have of the wealthy. Yet it is these individuals--
     and their families--whose life holdings are at risk because 
     of the federal estate tax.
       The estate tax was implemented early in the 20th Century as 
     a way to break up the incredible wealth that had concentrated 
     among a relatively small group of families. The tax has long 
     outlived its usefulness; in fact, the amount of estate taxes 
     collected each year doesn't even cover the cost of 
     collection. But it lives on, penalizing people like the 
     estate tax employees who have earned a secure future for 
     their families over a lifetime of hard work.
       ``As an employee-owned company, we've had great success in 
     building a reputation for customer service, efficient 
     operations, and community involvement, in large part because 
     we're the owners,'' Pearson says. ``The federal estate tax 
     ends up penalizing employees who've built a retirement nest 
     egg through hard work and dedication.''
       The estate tax places the philosophy underlying employee 
     ownership at risk. Hard work, after all, should have its own 
     rewards.
       Still, Hy-Vee has no doubt that its formula works best--for 
     all concerned: its employees, certainly, but also its 
     customers and the communities it serves. ``We believe that in 
     many ways, employee ownership represents the truest 
     expression of the American dream,'' Pearson says. ``It is 
     simply unfortunate that the dream also contains a nightmare--
     the estate tax.''

  Mrs. MURRAY. Mr. President, I rise today to speak briefly about the 
estate tax repeal bill before the Senate.
  Along with eight of my Democratic colleagues, I am a cosponsor of S. 
1128, the Kyl-Kerrey repeal bill. Barring the attachment of any 
egregious amendments, I intend to vote for final passage of H.R. 8.
  But while I am a cosponsor of S. 1128, I want to take a moment to 
voice my concern about the debate we have had so far.
  I believe there are two policy challenges before us.
  First, Congress needs to ensure the vast majority of Americans--
including those who do not own family business and farm assets--do not 
need to worry about paying estate taxes or going through burdensome 
estate tax planning. Current law does a fairly good job in this area. 
In fact, only two percent of estates actually pay an estate tax each 
year.
  The estate tax reform provisions we passed as part of the Taxpayer 
Relief Act of 1997 helped take us further in the right direction. But 
the prosperity we've had in the last seven years has threatened to push 
more people in the direction of costly estate tax planning. In the 
spirit of a fairer tax code, Congress needs to take additional action.
  The second policy challenge we face is more complex. That challenge 
is to ensure the tax code does not prevent the efficient transfer of 
family businesses and farms to the next generation. Unfortunately, in 
its current form, the estate tax can be a major hurdle to the efficient 
transfer of family business and farm assets.
  One of the arguments made for the estate tax is it deconcentrates 
wealth.

[[Page 14391]]

The problem is family businesses--sometimes as the result of planning 
for the estate tax or paying the estate tax--have been swept up by 
large corporations with no ties to the community. We need to recognize 
changes in the economy have also changed the debate we should be having 
on the estate tax.
  I am a cosponsor of S. 1128 because I believe it is the only 
reasonable vehicle before us that addresses how we transfer family 
businesses and farms to the next generation. Unfortunately, estate tax 
repeal is extremely expensive. And at the end of the day, I am still 
hopeful we can find another solution to the two policy challenges I 
have outlined.
  While I will vote to pass H.R. 8, I must express some disappointment 
with the estate tax debate we've had in Congress. It's as if both sides 
have dug in so deep with the same arguments for so long that we can't 
have a thoughtful debate on the merits of the issue. The black and 
white choice is either to repeal the ``death'' tax or to oppose a tax 
break that will only benefit America's wealthiest citizens.
  My friends in the majority could be proposing estate tax reform or 
repeal in the context of a responsible, long-term fiscal plan. 
Unfortunately, they have chosen not to do so. It seems the extent of 
the fiscal planning our majority colleagues have done is to note there 
were 279 votes in the House for H.R. 8--enough to override an expected 
veto. I believe the American people deserve more thoughtful 
deliberation.
  Meanwhile, many Democrats and the Administration have been slower to 
react to real and heartfelt concerns people have about the estate tax. 
H.R. 8 has been criticized by some of my colleagues as a bill that 
would simply benefit the wealthiest estates. I can tell you that I have 
not been contacted by the wealthiest individuals in my state. Rather, 
for the last seven years, I have heard from family business and farm 
owners who are desperate to get a tax code that effectively allows them 
to transfer their operations to the children and grandchildren. They 
want their Washington state businesses to remain Washington state 
businesses for many years to come.
  Since I first began working on estate tax reform in 1995, my 
commitment has been to provide estate tax relief to small family 
businesses and farmers. I believe the public interest on this issue is 
to continue to work--as I have done the last five years--to push 
forward with estate tax reform. Therefore, I supported the Democratic 
alternative and I will support H.R. 8. It is my sincere hope we can 
work on a bipartisan basis to craft a compromise that President Clinton 
will sign before the end of the year. And I hope the compromise will 
include estate tax relief for small businesses and farms in the next 
ten years, which H.R. 8 does not do.
  It is clear H.R. 8 will be vetoed, and likely Congress will sustain 
the veto. But I'm glad we had the debate. Earlier this week, when we 
appeared deadlocked on the estate tax bill, I initiated a letter signed 
by all nine of the Democratic cosponsors of S. 1128. The letter urged 
the majority leader to allow a reasonable number of Democratic 
amendments on the estate tax bill.
  Following my letter, I was pleased we were able to move forward with 
a unanimous consent agreement to consider the estate tax bill. After 
this debate, I hope we can move forward to consider the other pressing 
business before us, including passage of permanent normal trade 
relations for China.


                       Carryover Basis Provisions

  Mr. FEINGOLD. Mr. President, the Senator from California inquired of 
me about the intent of the amendment with regard to the carryover 
basis. Let me assure the Senator from California that it is the intent 
of the sponsors that for estates over $100 million in size the 
carryover basis provisions would not apply. Those estates would be able 
to benefit from the stepped-up basis provisions of current law. To the 
extent that my amendment is unclear on this matter, I would fight for 
changes in Conference that would make that entirely clear.
  Mrs. FEINSTEIN. Mr. President, I thank the Senator from Wisconsin for 
his clarification. The point he makes is essential to me. If I had not 
had the understanding with regard to the carryover basis that he has 
just indicated, I would not have supported the amendment.
 Mr. DASCHLE. Mr. President, we have worked hard over the last 
7 years to restore strength to our Nation's economy. We have turned 
record deficits into record surpluses. Today, we are about to make a 
decision none of us could have imagined making in 1993. The question 
facing us is: How should we spend the first significant portion of the 
surplus?
  Our Republican colleagues believe we should use the first major 
portion of the surplus to eliminate a tax that is paid by only the 
wealthiest 2 percent of Americans. They say the first, best use of the 
surplus is to give people with estates worth more than $20 million a 
$10.5 million tax break.
  The cost of their plan is $105 billion for the first 10 years. In the 
second 10 years, the cost balloons to $750 billion. Three-quarters of a 
trillion dollars in the second 10 years alone--to eliminate a tax paid 
only by the wealthiest 2 percent of Americans. The full cost of the 
Republican estate tax cut would hit at the worst possible time: just as 
the baby boomers are starting to retire. That is our Republican 
colleagues' highest priority for the surplus: to help those who are 
already benefitting most from this economy.
  Democrats disagree. We support cutting the estate tax. We voted in 
1997 to do just that.
  Today we are offering a plan to cut estate taxes even further. But 
our plan is different--in three very important ways--from the 
Republican plan.
  First, our plan helps family farmers and ranchers, and small-business 
owners, immediately.
  The Republican plan does not remove one family-owned farm or ranch or 
small business during the first 10 years. Not one.
  Just as an aside, I must say I have been surprised, during this 
debate, to hear so many of our colleagues on the other side of the 
aisle expressing concern for family farmers and ranchers. In South 
Dakota and all across this country, family farmers and ranchers are 
working practically around the clock to scratch out a living. They are 
working 12 hours a day, 7 days a week--not even making back their 
production costs, earning less than their parents and grandparents 
earned in the Depression.
  Too many of them are being forced to sell farms and ranches that have 
been in their families for generations--not because they cannot pay 
estate taxes; their farms and ranches are not worth enough to owe any 
estate taxes. They are being forced out by the disastrous Federal 
agriculture policies put in place by a Republican Congress. I am 
relieved to hear our colleagues acknowledge, finally, that family 
farmers and ranchers need help from this Government. I hope they will 
continue to believe that when we move on to the agriculture 
appropriations bill next week.
  That is the first difference between our plan to cut estate taxes and 
the Republican plan: Our plan cuts estate taxes for family farmers and 
ranchers immediately. Their plan does nothing for family farmers and 
ranchers for the first 10 years.
  The second major difference is, our plan costs less: $65 versus $105 
billion over the first 10 years. Our plan does not cost in the second 
decade, as their plan does.
  Our plan is simple and effective. For couples with assets of up to $4 
million, we eliminate the estate tax entirely. We also eliminate the 
estate tax on all family farms, ranches, and businesses worth up to $8 
million. Under our plan, only the wealthiest seven-tenths of 1 percent 
of estates and the wealthiest one-half of one percent of family-owned 
businesses would pay any estate taxes.
  Let me say that again: Only the wealthiest seven-tenths of one 
percent of couples and the wealthiest one-half of one percent of 
businesses would pay any estate taxes under our proposal.
  The third major difference between our plan and the Republican plan 
is: Our plan also helps the other 98 percent of Americans who do not 
pay estate

[[Page 14392]]

taxes. Because we target our estate tax relief, we are able to provide 
additional tax breaks to families, to help them with real, pressing 
needs--like child care, paying for college, and caring for sick and 
aging relatives. Because we target our estate tax relief, we are able 
to provide a real Medicare prescription drug benefit.
  Under our plan, someone who inherits an estate worth $20 million 
would receive a tax cut of roughly $1 million. Our Republican 
colleagues say that is not enough. They want to spend hundreds of 
billions of dollars more than is in our plan, on far bigger tax cuts 
for multimillionaires. That is their priority for the surplus: bigger 
tax cuts for the very wealthiest Americans--at the expense of everyone 
else.
  I urge my colleagues on the other side of the aisle: before you cast 
this vote, imagine sitting down at the kitchen table with parents who 
are wondering how they are going to pay for their children's college 
education. Imagine sitting around a kitchen table with a middle-aged 
woman who is wondering what will happen when her parents need long-term 
care--where the money will come from. Imagine talking with a retired 
couple who have cut back on necessities in order to pay for their 
prescriptions each month. How would you explain your vote to them? How 
would you explain to them that eliminating a tax that affects only the 
wealthiest 2 percent of Americans is more important than helping them 
care for their children, or their aging parents--or helping them with 
the cost of their prescriptions?
  What could you possibly say to convince them to sign onto a $750 
billion tax bill that won't help them one nickel, and will come due 
just as the baby boomers start to retire? For the life of me, I can't 
imagine.
  A Nation's budget is full of moral implications. It tells what a 
society cares about and what it doesn't care about. It tells what our 
values are. There are better ways to spend the first major portion of 
the surplus than by repealing a tax that affects only the wealthiest 2 
percent of Americans. America's families have needs that are far more 
urgent. Those are the needs that should come first.
  Mr. ROBB. Mr. President, I supported final passage of the Death Tax 
Elimination Act. I'm a cosponsor of similar legislation, and I've long 
believed that simply dying shouldn't be a taxable event. Death and 
taxes may be inevitable, but they don't have to be simultaneous.
  Because we've been willing to make some tough decisions over the last 
seven years, we now have the first budget surplus we've seen in this 
nation in a generation. We need to continue making those tough 
decisions. We need to keep the prosperity going by investing in our 
schools and roads and paying down the debt. We need to strengthen 
Social Security and modernize Medicare by adding a prescription drug 
benefit. We need to bolster our nation's defenses, which includes 
improving the quality of life for those who now serve in our military 
and honoring our commitment to provide health care for life for those 
who've already served. And we need to provide targeted tax relief.
  To address these many needs, we in Congress ought to establish our 
priorities first. I continue to believe that before we enact massive 
untargeted tax cuts, we should make sure that Social Security is strong 
and that Medicare contains a prescription drug benefit. I voted today 
to phase out the estate tax because I'm committed to making sure that 
no one loses their farm or their small business because of the way we 
tax gifts and estates. We know this legislation we passed today will be 
vetoed. Once the bill is vetoed, I hope we can come to the table in a 
bipartisan way to address a few of our more pressing national 
priorities and construct a fair way to protect family farms and small 
businesses from having to be broken up or sold just to pay estate 
taxes.
  Mr. HATCH. Mr. President, I rise today in support of H.R. 8, the 
Death Tax Elimination Act of 2000. The death tax, which is also known 
as the estate and gift or the transfer tax, is an unfair and 
counterproductive burden on our economy, and it is past time Congress 
repealed it.
  Many of my colleagues who agree with me that this tax ought to be 
repealed have made many persuasive arguments as to why. Rather than 
repeat all of these excellent arguments, I would like to focus on just 
one vital reason the death tax should be repealed: by hurting millions 
of closely-held businesses and farms, the death tax harms the economy 
and every American.
  Mr. President, our colleagues from across the aisle have been quick 
to assert that only two percent of all estates are affected by the 
estate tax and that fewer than five percent of these estates are made 
up of farms and small businesses. These statistics are highly 
misleading and conceal a very important point. Estates that actually 
pay the estate tax represent only the tip of the iceberg of the total 
number of estates that are harmed by the tax. Let me explain.
  Millions of individuals and the owners of millions of family-owned 
farms, ranches, and closely-held businesses are potentially subject to 
the estate tax, but the majority of them are able, with great effort 
and expense, to avoid the tax by complex tax planning or by selling the 
business or farm. What are left are the two percent of death tax-paying 
estates my colleagues keep mentioning.
  Every year, billions of dollars are spent in legal and tax planning 
fees and other costs so that estates may effectively avoid the death 
tax. A survey conducted by the National Association of Manufacturers 
last month found that, over the past five years, more than 40 percent 
of respondents spent more than $100,000 on attorney and consultant 
fees, life insurance premiums, and other estate planning techniques. 
More than half had spent over $25,000 in the past year. Despite this 
planning, nearly one-third of the respondents believed the business 
would have to be sold to pay the death tax if the owner died tomorrow.
  Furthermore, thousands of businesses are prematurely sold each year 
in order to escape the death tax. Business owners are forced into 
selling their business when they have tangible assets of significant 
value, such as land or business machinery, and yet have few liquid 
assets to pay an estate tax bill. Clearly, a great many more taxpayers 
are affected by the estate tax than opponents of repeal would have us 
believe.
  Let me give you an example, Mr. President. Until late last year, Ken 
Macey was the chairman of his second-generation family-owned grocery 
business based in Sandy, Utah. Ken's father had founded the business in 
1946, opening a tiny store called ``Sava Nickel'' in a renovated house 
in North Salt Lake. Relying on old-fashioned hard work and thrift and 
the principle of treating customers and employees as they would want to 
be treated, the Macey family built their business into an eight-store 
chain, with $200 million per year in revenues and 1,800 employees.
  Mr. Macey tells me he would have liked to keep the business in the 
family. However, the long shadow of the death tax loomed. Even though 
Mr. Macey had spent many thousands of dollars in professional fees for 
estate tax planning, he still believed his estate was vulnerable for 
tax rates of up to 60 percent. Rather than risk the trauma of a forced 
sale upon his death that could have been devastating to his children 
and the 1,800 employees and their families that depended on Macey's for 
their livelihood, Mr. Macey decided to sell his business to a larger 
food store chain.
  Although this story could have been much worse if some or all of 
Macey's employees has lost their jobs, it is a tragedy that a business 
founded by this Utahn's father was forced to be sold outside the 
family. Macey's Inc. is another example of the millions of American 
family businesses that do not survive to the next generation.
  Some of the same senators and congressmen--and our President--who 
have decried the loss of family farms and family-owned small businesses 
and who have wondered aloud why large corporations seem to be taking 
over Main Street have totally ignored the

[[Page 14393]]

estate tax as one major reason. Yet, many of these colleagues continue 
to argue that repealing the death tax benefits only the wealthiest two 
percent.
  According to the National Federation of Independent Businesses, only 
about 30 percent of family farms and businesses survive to the second 
generation, and only about 4 percent survive a second-to-third 
generation transfer. No one can tell Mr. Macey or his children or 
grandchildren that they are not the victims of an unfair death tax.
  The point is that a huge amount of money, effort, and talent is 
wasted by millions of individuals and owners of family farms and 
businesses on activities designed to avoid the death tax. Most of these 
efforts are successful in the sense that the majority of these estates 
avoid paying the tax. However, the cost to the economy in terms of lost 
productivity, business disruption, and lost jobs is enormous.
  A December 1998 study by the Joint Economic Committee concluded that 
the death tax has reduced the stock of capital in the economy by almost 
a half trillion dollars. By putting these resources to better use, as 
many as 240,000 jobs could be created over a seven year period, 
resulting in an additional $24.4 billion in disposable personal income.
  A study released last year by the Institute for Policy Innovation 
(IPI) estimated that the repeal of the estate tax would, over 10 years:
  Increase annual gross domestic product by $137 billion.
  Boost the nation's capital stock by $1.7 trillion.
  Create 275,000 more jobs than would otherwise be created.
  The IPI study also estimated that over the first decade following 
repeal of the death tax, added growth from capital formation would 
generate offsetting federal revenues of 78 percent of the static 
revenue loss. By 2010, these gains would totally offset the loss in 
revenues.
  Mr. President, my colleagues who oppose the repeal of the estate and 
gift tax would have the American people believe that this repeal would 
benefit only a very few rich families in America. What a distortion of 
the facts! All of us are hurt by a tax that drives millions of people 
to spend billions of dollars in largely effective, but economically 
destructive, activities to avoid paying the death tax. When these 
efforts fail, jobs are often lost and dreams often die. All of us will 
benefit by repealing the tax, through increased economic activity, more 
jobs, more disposable income, and a fairer tax system.
  Again, I commend Senator Roth and other supporters of this bill for 
pointing out the many reasons it should be passed and passed 
expeditiously.
  I would like my friends and colleagues on the other side of this 
issue to remember that the estate and gift tax--the ``death tax''--is 
not a tax on income. Income was already taxed. This is a tax on the 
American dream. This is a tax on a way of life for many American 
families and the accumulation of their hard work. This is a tax on 
their hope for the future, which often includes leaving something for 
their children and grandchildren.
  We must repeal it, and the time is now.
  The PRESIDING OFFICER (Mr. Brownback). The clerk will read the bill 
for the third time.
  The bill was read the third time.
  Mr. LOTT. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The bill having been read the third time, the question is, Shall the 
bill pass? The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson) is necessarily absent.
  Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle) 
is necessarily absent.
  I further announce that, if present and voting, the Senator from 
South Dakota (Mr. Daschle) would vote ``no.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 59, nays 39, as follows:

                      [Rollcall Vote No. 197 Leg.]

                                YEAS--59

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Cleland
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchison
     Inhofe
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Murray
     Nickles
     Robb
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Warner
     Wyden

                                NAYS--39

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Bryan
     Byrd
     Chafee, L.
     Conrad
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moynihan
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Specter
     Voinovich
     Wellstone

                             NOT VOTING--2

     Daschle
     Hutchinson
       
  The bill (H.R. 8) was passed.
  Mr. ROTH. Mr. President, I move to reconsider the vote.
  Mr. MOYNIHAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

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