[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Senate]
[Pages 540-553]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     HOPE FOR CHILDREN ACT--Resumed

  The PRESIDING OFFICER. The clerk will report the bill.
  The bill clerk read as follows:

       A bill (H.R. 622) to amend the Internal Revenue Code of 
     1986 to expand the adoption credit, and for other purposes.

  Pending:

       Daschle/Baucus amendment No. 2698, in the nature of a 
     substitute.
       Reid (for Baucus) amendment No. 2721 (to amendment No. 
     2698), to provide emergency agriculture assistance.
       Bunning/Inhofe modified amendment No. 2699 (to the language 
     proposed to be stricken by amendment No. 2698), to provide 
     that the exclusion from gross income for foster care payments 
     shall also apply to payments by qualified placement agencies.
       Hatch/Bennett amendment No. 2724 (to the language proposed 
     to be stricken by amendment No. 2698), to amend the Internal 
     Revenue Code of 1986 to allow the carryback of certain net 
     operating losses for 7 years.
       Domenici amendment No. 2723 (to the language proposed to be 
     stricken by amendment No. 2698), to provide for a payroll tax 
     holiday.
       Allard/Hatch/Allen amendment No. 2722 (to the language 
     proposed to be stricken by amendment No. 2698), to amend the 
     Internal Revenue Code of 1986 to permanently extend the 
     research credit and to increase the rates of the alternative 
     incremental credit.
       Smith of New Hampshire amendment No. 2732 (to the language 
     proposed to be stricken by amendment No. 2698), to provide a 
     waiver of the early withdrawal penalty for distributions from 
     qualified retirement plans to individuals called to active 
     duty during the national emergency declared by the President 
     on September 14, 2001.
       Smith of New Hampshire amendment No. 2733 (to the language 
     proposed to be stricken by amendment No. 2698), to prohibit a 
     State from imposing a discriminatory tax on income earned 
     within such State by nonresidents of such State.
       Smith of New Hampshire amendment No. 2734 (to the language 
     proposed to be stricken by amendment No. 2698), to provide 
     that tips received for certain services shall not be subject 
     to income or employment taxes.
       Smith of New Hampshire amendment No. 2735 (to the language 
     proposed to be stricken by amendment No. 2698), to allow a 
     deduction for real property taxes whether or not the taxpayer 
     itemizes other deductions.
       Sessions amendment No. 2736 (to the language proposed to be 
     stricken by amendment No. 2698), to amend the Internal 
     Revenue Code of 1986 to provide tax incentives for economic 
     recovery and provide for the payment of emergency extended 
     unemployment compensation.
       Grassley (for McCain) amendment No. 2700 (to the language 
     proposed to be stricken by amendment No. 2698), to amend the 
     Internal Revenue Code of 1986 to provide a special rule for 
     members of the uniformed services and Foreign Service in 
     determining the exclusion of gain from the sale of a 
     principal residence.
       Kyl amendment No. 2758 (to the language proposed to be 
     stricken by amendment No. 2698), to remove the sunset on the 
     repeal of the estate tax.
       Reid modified amendment No. 2764 (to amendment No. 2698), 
     to amend the Internal Revenue Code of 1986 to provide a 
     refundable credit for recreational travel, and to modify the 
     business expense limits.
       Reid (for Durbin) amendment No. 2766 (to amendment No. 
     2698), to provide enhanced unemployment compensation 
     benefits.
       Lincoln amendment No. 2767 (to amendment No. 2698), to 
     delay until at lease June 30, 2002, any changes in medicaid 
     regulations that modify the medicaid upper payment limit for 
     non-State Government-owned or operated hospitals.
       Thomas amendment No. 2728 (to the language proposed to be 
     stricken by amendment No. 2698), to amend the Internal 
     Revenue Code of 1986 to modify the qualified small issue bond 
     provisions.
       Craig amendment No. 2770 (to the language proposed to be 
     stricken by amendment No. 2698), to amend the Internal 
     Revenue Code of 1986 to expand the availability of Archer 
     medical savings accounts.
       Grassley amendment No. 2773 (to the language proposed to be 
     stricken by amendment No. 2698), to provide tax incentives 
     for economic recovery and assistance to displaced workers.


                    amendment no. 2699, as modified

  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
2699, as modified.
  Mr. REID. Mr. President, I ask unanimous consent the yeas and nays on 
the Bunning amendment, which have been previously ordered, be vitiated.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is on agreeing to amendment No. 2699, as modified.
  The amendment (No. 2699), as modified, was agreed to.
  Mr. REID. I move to reconsider the vote and move to lay that motion 
on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 2721

  Mr. REID. Mr. President, it is my understanding we are now on the 
Baucus amendment, which has been previously debated.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. REID. It is my understanding there are others who wish to speak 
on this amendment. I ask all those within the sound of my voice to come 
over and renew the debate.


                Amendment No. 2807 to Amendment No. 2721

  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I believe we are on the Baucus 
amendment. On behalf of Senator Kyl, I call up amendment No. 2758 as a 
second-degree amendment.
  Mr. REID. Mr. President, does it take unanimous consent to move off 
the Baucus amendment to the Kyl amendment?
  Mr. SESSIONS. I offer this as a second-degree amendment.
  The PRESIDING OFFICER. Second-degree amendments are in order.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Alabama [Mr. Sessions], for Mr. Kyl, 
     proposes an amendment numbered 2807 to the amendment No. 
     2721.

  Mr. SESSIONS. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To remove the sunset on the repeal of the estate tax)

       At the end, add the following:

     SEC.   . PERMANENT REPEAL OF ESTATE TAXES.

       Section 901 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is amended--
       (1) by striking ``this Act'' and all that follows through 
     ``2010'' in subsection (a) and inserting ``this Act (other 
     than title V) shall not apply to taxable, plan, or limitation 
     years beginning after December 31, 2010.'', and
       (2) by striking ``, estates, gifts, and transfers'' in 
     subsection (b).

  Mr. REID. Mr. President, will the Senator yield for the purpose of a 
unanimous consent request? This will require no debate. There is an 
amendment Senator Kyl and I filed on which Senator Dorgan wants to 
offer a second-degree amendment. He says he does not need to debate it 
at this time.
  I ask unanimous consent that we be allowed to move off the pending 
amendment temporarily so that Senator Dorgan can offer his amendment to 
the Reid-Kyl amendment, and then we will be right back on the second-
degree amendment of the Senator from Arizona.
  Mr. SESSIONS. Do we have a time agreement? How quickly will we be 
back on the Kyl amendment?
  Mr. REID. Two minutes?
  Mr. DORGAN. Yes, Mr. President, that will be fine.
  Mr. SESSIONS. Will the Senator from Nevada restate the unanimous 
consent request?
  Mr. REID. Mr. President, I ask unanimous consent that the Senate 
proceed to the Reid-Kyl amendment, which is two amendments down the 
line, and that Senator Dorgan offer a second-degree amendment, be 
allowed to speak for 2 minutes, and then we immediately return to the 
Kyl second-degree amendment to the underlying Baucus amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I wish to offer a second-degree amendment. 
I ask unanimous consent that we be on amendment No. 2764 which has been 
proposed by Senator Reid and Senator Kyl.
  Mr. KYL. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. The point of the unanimous consent request of the Senator 
from Nevada was to allow the second-degree amendment to the Reid-Kyl 
amendment and to allow the Senator from

[[Page 541]]

North Dakota to speak about that amendment for 2 minutes and 
immediately return to the pending business, which is the Baucus 
amendment with the second-degree amendment, offered by the Senator from 
Alabama on behalf of myself, pending; is that correct?
  Mr. REID. The Senator from Arizona is correct.
  The PRESIDING OFFICER. The last request of the Senator from North 
Dakota is consistent with the order of the Senator from Arizona.
  Mr. KYL. Mr. President, I ask the Senator from North Dakota to 
restate his request. I obviously misunderstood.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the amendment 
proposed by Senator Reid and Senator Kyl, amendment No. 2764, which had 
previously been offered but set aside, be brought back so I can offer a 
second-degree amendment to it. I ask that amendment No. 2764 be the 
pending business.
  Mr. SESSIONS. Reserving the right to object, my concern is that has 
already been taken care of by Senator Reid. It might confuse matters. I 
object.
  The PRESIDING OFFICER. Objection is heard.


                Amendment No. 2808 to Amendment No. 2764

  Mr. DORGAN. Mr. President, I send an amendment to the desk. This is 
an amendment I had filed. It is called the travel industry 
stabilization amendment. I offer it as a second-degree amendment to the 
Reid-Kyl amendment that was offered previously.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan] proposes an 
     amendment numbered 2808 to amendment No. 2764.

  Mr. DORGAN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To preserve the continued viability of the United States 
                            Travel industry)

       At the end, add the following:

                TITLE ___--TRAVEL INDUSTRY STABILIZATION

     SECTION _01. SHORT TITLE.

       This title may be cited as the ``American Travel Industry 
     Stabilization Act''.

     SEC. _02. TRAVEL INDUSTRY DISASTER RELIEF.

       (a) In General.--Notwithstanding any other provision of 
     law, the President shall take the actions described in 
     subsection (b) to compensate eligible travel-related 
     businesses.
       (b) Actions Described.--
       (1) In general.--Subject to such terms and conditions as 
     the President deems necessary, and upon application, the 
     President is authorized to issue Federal credit instruments 
     to eligible travel-related businesses described in subsection 
     (c) that do not, in the aggregate, exceed $2,000,000,000 and 
     provide the subsidy amounts necessary for such instruments in 
     accordance with the provisions of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661 et seq.).
       (2) Time for application.--An application for a Federal 
     credit instrument shall be filed by an eligible travel-
     related business not later than 1 year after the promulgation 
     of regulations.
       (3) Terms of credit instruments.--A loan guaranteed under 
     this title may be used exclusively for the purpose of meeting 
     obligations and expenses to the extent that an applicant 
     demonstrates--
       (A) business operations were directly and adversely 
     affected by the events of September 11, 2001;
       (B) the loan guarantee is necessary to meet such 
     obligations;
       (C) the inability of the applicant to meet such obligations 
     or expenses is directly attributable to the impact of 
     September 11, 2001; and
       (D) the applicant has the ability to repay the loan.
       (c) Definitions.--In this title:
       (1) Board.--The term ``Board'' means the Air Transportation 
     Stabilization Board established under the Air Transportation 
     Safety and System Stabilization Act (49 U.S.C. 40101 note; 
     P.L. 107-42).
       (2) Eligible travel-related business.--The term ``eligible 
     travel-related business'' means a business that was injured 
     by the Government shutdown of the airline industry following 
     the terrorist attacks on the United States that occurred on 
     September 11, 2001, and that on such date--
       (A) had a contractual arrangement with an air carrier to 
     provide goods or services, including those with a contractual 
     relationship with the Airline Reporting Corporation; or
       (B) was a nonaeronautical for-profit business operating at 
     an airport engaged in the sale of consumer goods or services 
     to the public under an arrangement with the airport or the 
     airport's governing body.
       (3) Federal credit instrument.--The term ``Federal credit 
     instrument'' means any guarantee or other pledge by the Board 
     issued under section _02(b) to pledge the full faith and 
     credit of the United States to pay all or part of any of the 
     principal of and interest on a loan or other debt obligation 
     issued by an obligor and funded by a lender.
       (4) Financial obligation.--The term ``financial 
     obligation'' means any note, bond, debenture, or other debt 
     obligation issued by an obligor in connection with financing 
     under this section and section _02(b).
       (5) Lender.--The term ``lender'' means any non-Federal 
     qualified institutional buyer (as defined by section 
     230.144A(a) of title 17, Code of Federal Regulations (or any 
     successor regulatory) known as rule 144A(a) of the Securities 
     and Exchange Commission and issued under the Securities Act 
     of 1933), including--
       (A) a qualified retirement plan (as defined in section 
     4974(c) of the Internal Revenue Code of 1986 (26 U.S.C. 
     4974(c))) that is a qualified institutional buyer; and
       (B) a governmental plan (as defined in section 414(d) of 
     the Internal Revenue Code of 1986 (26 U.S.C. 414(d))) that is 
     a qualified institutional buyer.
       (6) Obligor.--The term ``obligor'' means a party primarily 
     liable for payment of the principal of, or interest on, a 
     Federal credit instrument, which party may be a corporation, 
     partnership, joint venture, trust, or governmental entity, 
     agency, or instrumentality.
       (d) Emergency Designation.--Congress designates the amount 
     of new budget authority and outlays in all fiscal years 
     resulting from this title as an emergency requirement 
     pursuant to section 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such 
     amount shall be available only to the extent that a request, 
     that includes designation of such amount as an emergency 
     requirement as defined in such Act, is transmitted by the 
     President to Congress.

     SEC. _03. ADDITIONAL FUNCTIONS FOR THE AIRLINE STABILIZATION 
                   BOARD.

       (a) Additional Functions To Stabilize the Travel 
     Industry.--The Board shall review and make recommendations to 
     the President with respect to applications for Federal credit 
     instruments submitted under section _02(b).
       (b) Federal Credit Instruments.--
       (1) In general.--The Board may enter into agreements with 1 
     or more obligors to issue Federal credit instruments under 
     section _02(b) if the Board determines, in its discretion, 
     that--
       (A) the obligor is an entity in a travel-related business 
     for which credit is not reasonably available at the time of 
     the transaction;
       (B) the intended obligation by the obligor is prudently 
     incurred; and
       (C) such agreement is a necessary part of maintaining a 
     safe, efficient, and viable travel industry in the United 
     States.
       (2) Terms and limitations.--
       (A) Forms, terms, and conditions.--A Federal credit 
     instrument shall be issued under section _02(b) in such form 
     and such terms and conditions and contain such covenants, 
     representatives, warranties, and requirements (including 
     requirements for audits) as the Board determines appropriate, 
     provided that--
       (i) a loan shall be repaid over a period not to exceed 5 
     years from the date that the loan is guaranteed under this 
     title;
       (ii) the Government guarantee shall cover not less than 80 
     percent of the value of the loan;
       (iii) loan guarantees under this title shall be extended 
     based upon the ability of the eligible travel-related 
     business to repay the loan without regard to collateral; and
       (iv) any loan origination fee may not exceed 1 percent of 
     the loan value.
       (B) Procedures.--Not later than 14 days after the date of 
     enactment of this title, the Director of the Office of 
     Management and Budget, in consultation with the Board, shall 
     issue regulations setting forth procedures for application 
     and minimum requirements.
       (c) Financial Protection of Government.--
       (1) In general.--To the extent feasible and practicable, as 
     provided in paragraphs (2) and (3), the Board shall ensure 
     that the Government is compensated for the risk assumed in 
     making guarantees under this title.
       (2) Government participation in gains.--To the extent to 
     which any participating corporation accepts financial 
     assistance, in the form of accepting the proceeds of any 
     loans guaranteed by the Government under this title, the 
     Board is authorized to enter into contracts under which the 
     Government, contingent on the financial success of the 
     participating corporation, would participate in the gains of 
     the participating corporation or its security holders through 
     the use of such instruments as warrants, stock options, 
     common or preferred stock, or other appropriate equity 
     instruments.
       (3) Deposit in treasury.--All amounts collected by the 
     Secretary of the Treasury under this subsection shall be 
     deposited in the Treasury as miscellaneous receipts.

[[Page 542]]

       (e) Authorization of Funds.--Congress authorizes and hereby 
     appropriates such sums as are necessary to carry out the 
     purposes of this title.

  Mr. DORGAN. Mr. President, I will not take 2 minutes because I will 
speak on this at another time. I indicated previously I support the 
underlying Reid-Kyl amendment which deals with travel and tourism-
related issues. The amendment I have offered is an amendment that deals 
with some loan guarantees to those businesses that have a connection to 
the airports and the airlines that had been shut down by the Federal 
Government post-September 11. Many of them remain in very difficult 
straits. They face some very difficult financial troubles.
  The Federal Government did provide loan guarantees and grants to the 
airlines. I was supportive of that. But there were ancillary businesses 
that are related to the airlines and related to the airports that 
suffered substantial losses as a result of actions by the Federal 
Government to shut down air service.
  This is legislation I have written to address that situation in the 
form of loan guarantees. I have spent time with my colleague from 
Nevada, Senator Reid, and others of my colleagues who are supportive of 
this approach.
  I offer it as a second-degree amendment because I believe it is 
appropriately something that should be attached to the Reid-Kyl 
amendment which I intend to support as well.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I appreciate the spirit in which the Senator 
from North Dakota proposed the second-degree amendment. I am hopeful we 
will be able to adopt the Reid-Kyl amendment at a later time.


                           Amendment No. 2807

  Mr. KYL. Mr. President, what is pending before the Senate is my 
second-degree amendment to the Baucus amendment, which for those who 
are interpreting this means we are back on the question of whether we 
can repeal permanently the estate tax or, as it is frequently called, 
the death tax.
  As we all will recall, last year when we passed the Tax Reform Act, 
one of the provisions that was incorporated within that bill was a 
gradual reduction of the estate tax rates and enlargement of the 
exemption, and finally, in the ninth year, an actual repeal of the 
existing death tax.
  We were joined in a bipartisan coalition to support that. There were 
literally scores and scores of organizations--and I am going to ask 
unanimous consent after a bit to print in the Record the list of 
organizations that supported the repeal of the death tax--and we even 
defeated an amendment of Senator Conrad of North Dakota that would have 
put the Senate on record as saying we should not make it permanent.
  Clearly, the intention was to make it permanent; the desire was to 
make it permanent. I do not think anybody would have stood before the 
Senate and said we wanted to repeal the estate tax for 1 year. They 
would have been laughed out of the body. Yet that is precisely what the 
effect of our action was.
  There is a rule in the Senate that does not allow us to work in more 
than a 10-year window without a 60-vote majority. There is a rule that 
required us to change the procedure, and by making the procedure for 10 
years, the effect is to sunset the repeal. That means we go right back 
to where it was last year with a 60-percent rate of the death tax and 
only a $675,000 exemption.
  If one wants to see how this works, in the year 2010 you do not have 
to pay any death tax if you die. It basically pays you to die in that 
year, but do not try to live a day into the next year because you are 
then going to have to pay the entire death tax as it existed in 2001.
  We go way back, in other words, to a punitive, destructive death tax. 
Clearly, we did not mean for this to be the way it was. Clearly, we 
would like to make it permanent, and this is the time to do it because 
there is significant evidence that making the death tax repeal 
permanent will significantly stimulate the economy and create jobs. 
That is the reason for bringing it up at this time.
  We are talking about the stimulus package. The President is talking 
about creating jobs, and by repealing the death tax permanently we can 
achieve those objectives.
  How is that so? In simple terms, people still have to plan for the 
death tax. They still have to buy the insurance. They still have to pay 
the lawyers. They still have to pay the estate tax planners, the 
accountants, and all the rest of it unless they are absolutely sure 
they are going to die during one of the 365 days of the 10th year. If 
they cannot be sure they are going to die during that period of time, 
then they need to plan because the tax is back in effect.
  Who, after all, except someone who would be deliberately taking their 
life, can predict when they are going to die? One sure does not want to 
be lucky enough to live beyond the 10th year because then they are 
going to get stuck with the death tax with its punitive rates, just as 
it was last year. That is why there is a huge expense involved in the 
existing law, and that expense every year, by farmers and small 
businessmen and other people in this country, is money that is spent on 
an unproductive enterprise that could be spent in creating jobs.
  Let us get to a couple of specifics, and then I will ask some of my 
colleagues to join in this debate. A December 1998 report by the Joint 
Economic Committee concluded the existence of the death tax in this 
century has reduced the stock of capital in the economy by nearly half 
a trillion dollars. By repealing the death tax and putting those 
resources to better use, i.e., investment, the Joint Committee 
estimates as many as 240,000 jobs could be created over the next 7 
years, and Americans would have an additional $24.4 billion in 
disposable personal income. That is stimulus.
  You want to stimulate the economy? You want to create jobs? You want 
investment in capital and other businesses? Permanently repealing the 
death tax will do that.
  Last year, Dr. Wilbur Steger, a Ph.D. president of CONSAD Research 
Corporation, and an adjunct professor of policy science at the Heinz 
School of Carnegie Mellon University, testified before the Senate 
Finance Committee and disputed the death tax supporters' arguments that 
only 2 percent of Americans are affected by the tax. Rather than 
affecting less than 500 family businesses in a typical year, he said 
the total number of taxable estates that consist largely of family-
owned businesses likely exceeds 10,000 families annually. He went on to 
state an immediate death tax repeal would provide a $40 billion 
automatic stimulus to the economy.
  So what we could do best to stimulate the economy and create jobs is 
to ensure that the death tax repeal we voted for last year is in fact 
made permanent.
  I am going to provide some additional evidence that we can create 
jobs and stimulate the economy with the permanent repeal of the death 
tax, but at this time I yield to my colleague from Oklahoma, who I know 
wanted to make a few remarks before he has to leave.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I ask unanimous consent to be made a 
cosponsor of Senator Kyl's amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, this amendment is a very positive 
amendment. The Senator from Montana, Mr. Baucus, introduced an 
amendment that would add another $2.3 billion in emergency spending for 
agriculture. We debated that last week. We defeated it. We defeated it 
on a budget point of order. I made that motion because we have had a 
lot of emergency spending for agriculture. As a matter of fact, the 
last couple of years it has just ballooned. We averaged less than a 
billion or two for decades, and then all of a sudden the last couple of 
years we start doing $12 billion, $13 billion, $14 billion of emergency 
spending.
  The Senator from Montana said we have more problems; let's add 
another

[[Page 543]]

$2 billion or $3 billion--not in the context of the farm bill or the 
budget but just another couple billion dollars. Now that we are in 
deficits, I question that. My colleague from Arizona offered an 
amendment that my farmers have been talking to me about for the last 
20-some years, and that is to repeal the death tax. Why in the world 
should agriculture, or anybody who has a business, have to sell the 
business because somebody happens to pass away? Somebody passes away 
and all of a sudden the Government says it wants 55 percent of their 
farm, 55 percent of their business. I happen to think that is wrong.
  In the tax bill we passed last year, we reduced the estate tax and we 
increased the exemptions. We increased the exemption from $675,000 to a 
million dollars beginning January 1 of 2002. So that is a positive 
thing, a good thing. Over the course of the tax bill, over the next 10 
years, we eliminated the death tax, increased the exemption from $1 
million to $2 million to $4 million, where in the year 2010 the death 
tax is repealed. That entire bill was sunsetted. People who do not 
follow the Senate and do not know our rules ask why did we sunset it? 
We sunsetted it because of the reconciliation bill. The reconciliation 
bill, by law, has to be within a 10-year timeframe. We could not make 
permanent tax law changes. We could change the law in 10 years. So that 
is exactly what we did.
  The Senator from Arizona says in this particular case the sunset does 
not work. When people are doing estate planning, they want to know what 
their tax liability is when they die and, if they have an estate, they 
can plan accordingly. Maybe they can give their property to a son or a 
grandson, a grandchild, a granddaughter, or maybe they want to give it 
to a trust or they want to give it to a charity or they want to break 
it up. Whatever they want to do, they should have those options. They 
should not be faced with the current situation of well, OK, we are 
going to reduce the death tax for years, increase the exemption up to 
$4 million, in effect reducing the death tax, but in the year 2011 it 
reverts back and all of a sudden you are looking at an enormous tax 
rate, a tax rate that would be as high as 50 percent. That is wrong.
  So the Senator from Arizona says: Let us fix it. Let us make it 
permanent. That was the intent of the bill that we passed last year. I 
believe that is where the votes are in the Senate. If they believe in 
free enterprise, if they believe in agriculture, if they believe in 
family farms, if they do not want an enterprise, whether it be a farm 
or a business, if they do not want somebody to have to sell it because 
someone passes away, to give Government half of it, then support the 
amendment of Senator Kyl.
  If my colleagues really want to do something, let us make this tax 
change, which, because we were under reconciliation last year had to be 
temporary, had to be sunsetted. We are not under reconciliation now so 
we do not have those constrictions imposed upon us as Members of the 
Senate. We are not under those rules, so I encourage my colleagues to 
not say, oh, yes, they supported elimination of the death tax, and in 
the year 2011 it is reinstated at the previously higher rates. That 
would be grossly unfair and grossly inequitable.
  For people who are trying to do estate planning and trying to 
estimate what their tax liability would be for their kids or for their 
grandkids, it is tremendously unfair. It might be great for the estate 
lawyers, for estate planners and others because the more Congress 
changes this, the more they get to do in writing wills and rewriting 
estates and how planning should be done. So the way to solve this 
problem is to pass the amendment of the Senator from Arizona. That is 
the best thing we could do for agriculture, not another $2 billion, $3 
billion in emergency assistance.
  Every Congressman and every Senator knows if we could go back and 
tell our agricultural community, the Farm Bureau, the farmers union, 
the wheat growers, the cattlemen, and so on, that we repealed the death 
tax, we know we would get a standing ovation because of the very fact 
that many of those farms are second and third generation. They are 
wealthy on paper but they are cash poor.
  So if they pass away now, they know their survivors will have to sell 
the operation to pay the death tax, to pay the tax that will be owed 
the Federal Government. When the Government comes in and says they want 
half, they will have to sell it; they will have to break it up. In the 
process, it will cost a lot of jobs.
  The amendment of Senator Kyl creates jobs. It will help maintain 
small businesses so they do not have to break up. It will help maintain 
farms and ranches so they will not have to break them up into smaller 
units or sell them for the taxman.
  So I again compliment my colleague from Arizona. I think he has an 
excellent amendment. He has added it to the amendment of Senator 
Baucus. I encourage people on both sides of the aisle to vote in favor 
of the amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that I be named 
as a cosponsor of Senator Kyl's amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Mr. President, when I first came to the Senate and I 
met with farm people in my State, this was their No. 1 issue--to 
eliminate the death tax. It is savaging closely held enterprises all 
over America, particularly farms. It is something that touches people 
in a very real way. The way this elimination has occurred as part of 
the budget reconciliation, as Senator Nickles so ably described, we 
will have elimination of the death tax 1 year, and a reimposition of it 
the next year, leaving estate planning problems for people trying to 
wrestle with that. It has human consequences.
  I remember being on an airplane not too long ago with a professional 
woman. She told me about her grandfather dying back in the 1980s. A tax 
change in the death tax was passed during the Reagan years. It was to 
take effect January 1. The family was home for Christmas. He was dying 
of cancer. He had terminal cancer. Each morning he asked what day it 
was. He died 11 a.m., January 1--his last contribution to his family. 
This is personal. It is real. It savages businesses.
  Let me try to explain why I believe we have a particularly pernicious 
consequence as a result of the death tax that has not been sufficiently 
discussed and is causing damages to our economy far greater than a lot 
of people thought. This is the reason. I thought about farmers in 
Alabama. Maybe they own a couple thousand acres, and maybe some of that 
land is near an airport or town and the value on paper is high but they 
don't want to sell it. Compare that to an international paper company 
that may own 600,000 acres of land, 200,000 or 100,000 acres of land. 
They compete against one another. If they are timber producing, and 
both grow timber, they compete against one another.
  The big multinational corporation that does business all over the 
world is never impacted adversely by the estate tax. People who own 
stock in it may be, but not that corporation. But the individual 
competitor, the competitor of the big international corporations, 
builds up a little capital, equity, and realizes some success, and they 
can get savaged, each generation, by a 50-percent tax. This makes them 
uncompetitive. Is there any doubt why farmers getting to the end of 
their lives, small businessmen wanting to pass on their business to 
their family, have to sit down and discuss what they are going to do? 
They have to sit down and decide if they can pay that generational tax 
and still operate the business. What if the business has a lot of 
investment, a lot of capital, hiring a lot of people, but they do not 
have a lot of cash? How can each generation pay this huge death tax to 
the Government? Yet the big business competitor, a broadly held 
international corporation, with which they compete, does not ever 
become impacted by the death tax.

[[Page 544]]

  That is happening in America. We need to encourage locally owned 
corporations. We need to nurture them, not oppress them. We need more 
competition in the American economy.
  It is troubling that virtually every bank in my home State of Alabama 
has been sold and bought up by a bigger bank, and they get bought up by 
bigger banks. Why? One reason is families who used to routinely own 
banks, that were tied to the community, supporting Boy Scouts, schools 
and the United Way, cannot compete. They are looking at the death tax 
coming down on them. They figure they can protect themselves against it 
more effectively by selling off their small business to a larger 
corporation that does not have to pay that tax.
  I thank Senator Kyl for his leadership. I believe we ought to 
consider that the death tax is an anticompetitive activity that hurts 
competition by damaging small businesses and farms in a way that does 
not occur to larger, wealthier international enterprises.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. I ask unanimous consent to have printed for the Record a 3-
page listing of a variety of organizations, all of which support repeal 
of the estate tax.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

                The Family Business Estate Tax Coalition

       Air Conditioning Contractors of America, American Business 
     Press, American Consulting Engineers Council, American 
     Council for Capital Formation, American Family Business 
     Institute, American Farm Bureau Federation, American Forest 
     and Paper Association, American Forest Resources Council, 
     American Hotel & Lodging Association, American International 
     Automobile Dealers Association, American Supply Association, 
     American Wholesale Marketers Association, American Vintners 
     Association, Americans for Fair Taxation, Associated Builders 
     & Contractors, Associated Equipment Distributors, Associated 
     General Contractors, Association for Manufacturing 
     Technology, Citizens Against Government Waste, and Citizens 
     for a Sound Economy.
       Communicating For Agriculture, Construction Industry 
     Manufacturers Association, Farm Credit Council, Fierce and 
     Isakowitz, Food Distributors International, Food Marketing 
     Institute, Guest & Associates, Independent Community Bankers 
     of America, Independent Insurance Agents of America, 
     International Council of Shopping Centers, Kessler & 
     Associates, National Association of Beverage Retailers, 
     National Association of Convenience Stores, National 
     Association of Home Builders, National Association of 
     Manufacturers, National Association of Plumbing-Heating-
     Cooling Contractors, National Association of Realtors, 
     National Association of Wholesaler-Distributors, National 
     Automobile Dealers Association, and National Beer Wholesalers 
     Association.
       National Cattlemen's Beef Association, National Corn 
     Growers Association, National Cotton Council, National 
     Electrical Contractors Association, National Federation of 
     Independent Business, National Grocers Association, National 
     Licensed Beverage Association, National Lumber and Building 
     Material Dealers Association, National Marine Manufacturers 
     Association, National Newspaper Association, National 
     Restaurant Association, National Roofing Contractors 
     Association, National Small Business United, National 
     Taxpayers Union, National Telephone Cooperative Association, 
     National Tooling & Machining Association, National Utility 
     Contractors Association, Newspaper Association of America, 
     Ocean Spray Cranberries, Inc, and Organization for the 
     Promotion & Advancement of Small Telecommunications Companies 
     (OPASTCO).
       Painting & Decorating Contractors of America, Petroleum 
     Marketers Association of America, Printing Industries of 
     America, Rock Hill Telephone Company, Safeguard America's 
     Family Enterprises, Society of American Florists, 
     Southeastern Lumber Manufacturers, Texas and Southwestern 
     Cattle Raisers Association, Textile Rental Services 
     Association, Tire Association of North America, United States 
     Telecom Association, U.S. Business & Industry Council, U.S. 
     Chamber of Commerce, Wine and Spirits Wholesalers of America, 
     and Wine Institute.

         Members of the Small Business Legislative Council (71)

       Air Conditioning Contractors of America, Alliance of 
     Independent Store Owners and Professionals, Alliance of 
     Affordable Services, American Bus Association, American 
     Consulting Engineers Council, American Council of Independent 
     Laboratories, American Machine Tool Distributors Association, 
     American Moving and Storage Association, American Nursery and 
     Landscape Association, American Road & Transportation 
     Builders Association, American Society of Interior Designers, 
     American Society of Travel Agents, Inc., American 
     Subcontractors Association, Associated Landscape Contractors 
     of America, Association of Small Business Development 
     Centers, Association of Sales and Marketing Companies, 
     Automotive Recyclers Association, Bowling Proprietors 
     Association of America, Building Service Contractors 
     Association International, and Business Advertising Council.
       CBA, Council of Fleet Specialists, Council of Growing 
     Companies, Cremation Association of North America, Direct 
     Selling Association, Electronics Representatives Association, 
     Health Industry Representatives Association, Helicopter 
     Association International, Independent Community Bankers of 
     America, Independent Electrical Contractors, Inc., 
     Independent Medical Distributors Association, International 
     Association of Refrigerated Warehouses, International 
     Association of Used Equipment Dealers, International Business 
     Brokers Association, International Franchise Association, 
     Machinery Dealers National Association, Mail Advertising 
     Service Association, Manufacturers Agents for the Food 
     Service Industry, Manufacturers Agents National Association, 
     and Manufacturers Representatives of America, Inc.
       National Association for the Self-Employed, National 
     Association of Plumbing-Heating-Cooling Contractors, National 
     Association of Realtors, National Association of RV Parks and 
     Campgrounds, National Association of Small Business 
     Investment Companies, National Community Pharmacists 
     Association, National Electrical Contractors Association, 
     National Electrical Manufacturers Representatives 
     Association, National Lumber & Building Material Dealers 
     Association, National Ornamental & Miscellaneous Metals 
     Association, National Paperbox Association, National Private 
     Truck Council, National Retail Hardware Association, National 
     Tooling and Machining Association, National Wood Flooring 
     Association, Painting and Decorating Contractors of America, 
     Petroleum Marketers Association of America, Printing 
     Industries of America, Inc., Professional Lawn Care 
     Association of America, and Promotional Products Association 
     International.
       The Retailer's Bakery Association, Saturation Mailers 
     Coalition, Small Business Council of America, Inc., Small 
     Business Exporters Association, SMC Business Councils, 
     Society of American Florists, Specialty Equipment Market 
     Association, Tire Association of North America, Turfgrass 
     Producers International, United Motorcoach Association, and 
     Washington Area New Automobile Dealers Association.

  Mr. KYL. Mr. President, let me give a sense of the businesses and 
organizations involved--everything from the American Council for 
Capital Formation, American Family Business Institute, Hotel & Lodging 
Association, the National Automobile Dealers Association, Citizens 
Against Government Waste, Citizens for a Sound Economy, a long list of 
agricultural organizations, Independent Insurance Agents of America, 
National Association of Home Builders, National Association of 
Manufacturers, National Cattlemen's Beef Association, National Corn 
Growers Association, National Taxpayers Union, Chamber of Commerce, and 
on and on, a whole number of businesses and organizations. As we recall 
from the debate we had last year, a group of environmental 
organizations, as well, were involved because of the pro-environmental 
ramifications of repealing the death tax permanently.
  It is very important to focus for a moment on why we are proposing 
this amendment on this bill at this time. President Bush's budget for 
the next fiscal year incorporates a permanent repeal of the estate tax. 
This is something the President knows will benefit our economy and 
create jobs. That is why it is included within his fiscal year 2003 
budget sent here yesterday. This is propitious timing. We have the 
opportunity to act on this now.
  Earlier I indicated the reason this has such a stimulative effect is 
that there is such a large amount of money being spent on lawyers and 
estate planning and insurance that could be more productively put into 
investment in companies for the creation of jobs.
  To give an idea of the magnitude of the money we are talking about, I 
will cite a study done for last year. Alicia Munnell, a member of 
President Clinton's Council of Economic Advisers, estimates the cost of 
complying with death tax laws is roughly at the same magnitude as the 
revenue raised by the tax itself.
  In 1998, that was about $23 billion. In other words, for every dollar 
the death tax raises for the Treasury, it almost costs Americans that 
same amount of money to prepare to deal with the

[[Page 545]]

death tax when their time comes. It is literally a double tax. Half of 
it is totally unproductive.
  I am a lawyer. I don't mean to suggest that paying money to lawyers 
is a bad thing. But one can hardly argue that it creates new jobs. 
Perhaps one could say we need to have more lawyers. As long as we keep 
this law on the books and we do not permanently repeal the death tax, 
we can put a few more lawyers to work. It is a stretch to argue that 
justifies keeping this unfair law on the books.
  No, the reality is that we can create a lot more jobs, 240,000 jobs 
over the next 7 years, by a repeal of the estate tax. We can provide 
another almost $25 billion in disposable personal income, according to 
the Joint Economic Committee. These numbers do not lie. We have an 
opportunity to do something positive for our economy, for job creation, 
for investment. That is why the President has included this permanent 
repeal in his budget for this year.
  Let me show how this works and how unfair it is. Somebody dies in the 
year 2009. None of us can predict when we will die. If you die in the 
year 2009, those in your family who succeed you will be faced with a 
potentially high 45-percent death tax rate. The good news is they have 
a $3.5 million exemption because that is the way we structured it under 
our tax bill last year. If you are lucky enough to die in the year 
2010, assuming that dying is a good thing--when I say ``if you are 
lucky enough,'' I don't mean it that way--if you can avoid dying in the 
year 2009 and stretch your life into 2010, you will be able to have 
your loved ones avoid the death tax entirely as a result of the bill we 
passed last year. However, if you are able, through good medicine and 
health care and the like, to extend your life to the following year, 
the year 2011, your family is in a world of hurt. Because you lived a 
little bit longer, they are going to go back to the days when we had a 
60-percent death tax rate and an exemption of only $675,000.
  What is a sensible small business person, farmer--whoever--going to 
do, given the fact that it is pretty difficult to predict when you are 
going to die? And you clearly do not want to take the chance that the 
only year that you are likely to die in is 2010. What you are going to 
do is pay lawyers and accountants and estate planners and buy the 
insurance that needs to be purchased to reduce that death tax liability 
to as little as possible. That is the expenditure we are talking about 
that is unproductive. That is to say it does not create any new jobs, 
it doesn't stimulate the economy; all it does is continue the status 
quo of a death tax that is going to take effect when you die.
  This is the reason it is not only unfair, but what we accomplished 
last year is really, in some respects, a cruel hoax. I know a lot of 
people I talk to back home believe we actually repealed the death tax. 
There was some bragging about the tax bill last year. It was a great 
bill. The problem with it is, as the Senator from Oklahoma said, 
because it was done as part of a reconciliation package, it could not 
exceed a 10-year time span.
  I have tried to go back home and explain to people what we did was 
really good. We established the principle that we did not want the 
death tax anymore and we had a bipartisan coalition of Senators who 
voted overwhelmingly for that. But we now have to finish the business 
we started. As the President is proposing in his budget, we have to 
make that repeal permanent. Otherwise, we not only have a very unfair 
situation, but we have a very inefficient and I would say uneconomical 
situation here.
  We have the opportunity to put that money to work that otherwise 
would simply go--again, I don't mean to denigrate lawyers--to pay those 
lawyers to figure out how to enable you to maximize the reduction in 
your death tax when you die.
  Mr. SESSIONS. Will the Senator yield for a question?
  Mr. KYL. I am happy to yield.
  Mr. SESSIONS. First I want to express my personal appreciation to 
Senator Kyl for his leadership on this issue since I have been in the 
Senate. There is no one here who understands it more than he, or has 
fought more effectively to see it become more a reality, the 
elimination of the tax.
  But, I say to Senator Kyl, what I was thinking about was the 
circumstance of a small business seeing a death on the horizon and a 
death tax coming up. The fact that they know they have to make a 
payment of significance to Uncle Sam--would that not perhaps cause them 
to hesitate to invest in new equipment, to modernize or expand their 
business, knowing that that might cause them to use up their cash or 
even borrow money, and in fact make the economy less vibrant than it 
otherwise would be?
  Mr. KYL. Mr. President, I say to the Senator from Alabama, that is 
another entirely separate argument for eliminating the tax and making 
its repeal permanent. The Senator is absolutely correct.
  In addition to the wasteful money we spend trying to avoid the 
liability or reduce it as much as possible, rather than putting that 
into productive assets, the Senator is pointing out that because of the 
possibility--it is almost like a black cloud hanging over your head--if 
you think you are going to die, you are not going to make that new 
investment, you are not going to revitalize your plant and equipment or 
hire that other team that is going to produce a new product, or maybe 
go out of your way to market the product--all of those things that will 
be an investment in our economy. You are going to defer that because 
you know you are going to need it for something else; namely, to pay 
the grim reaper, because you know you are going to pass away.
  I think of an example back home of a company that became very 
successful. One entrepreneur moved to our State and over time built up 
a wonderful business employing over 200 people. He was a great 
contributor to the charities in our community. He was one of those 
pillars of the community that you just like to think of but he died. 
His family had a terrible time. The tax liability there was so great 
that they ended up having to sell this business.
  The idea of a death tax is to prevent an accumulation of wealth. That 
is the theory of it. What happened here? They had to sell to a big 
company, the kind of big corporation the Senator from Alabama was just 
talking about. Instead of this small--I would say, with 200 employees, 
it is getting to be a medium-size business, but it was still a sole 
proprietorship basically. But instead of having the business in our 
town, employing all those people from town, contributing to the 
charities and the local economy, and so on, this big corporation came 
in. Are they still employing that number of people? No. Are they 
contributing to the community as did our friend Jerry? No. These people 
are not making the kind of investment--and I don't denigrate them at 
all, but they are trying to run a business, and that is fine, but there 
is a difference here.
  The small businessman who built up his business continued to plow 
everything he had back into the business, which is exactly the point 
the Senator from Alabama is making here. You put it back into the 
business so it can continue to grow because it is a family-owned 
business. You do not have to take out all the money and send it 
someplace else. Because they did that, they were asset rich and cash 
poor. You do not want to find yourself in that position if you are 
going to die, because you cannot pay the taxes. That is why his family 
had to end up selling the business.
  Mr. SESSIONS. I would like to follow up on that. The company that 
bought them, bought your friend Jerry's business, presuming they were a 
broadly held stock corporation, maybe of national size--that 
corporation would never have to plan its economic future with the fear 
of having to pay an estate tax because corporations do not pay death 
taxes; is that correct? Isn't that a factor, an economic incentive we 
have created for small businesses to sell out to big businesses when 
really they ought to be competing against them and keeping them honest?

[[Page 546]]


  Mr. KYL. I say the Senator from Alabama is exactly correct. It is an 
unfairness for the small business because the small businessmen are 
taxed in this fashion. The big corporation--I am all for big 
corporations, too, but they don't have to worry about this kind of 
thing. So there is, in effect, a perverse incentive working here, but 
it is one of the things that is not only bad for the economy but it 
makes it unfair. It is not really an American way of looking at things, 
to my way of thinking.
  If the Senator from Nevada would like to speak, we have had our 
chance here, so the Senator is welcome to the floor.
  The PRESIDING OFFICER. The deputy majority leader.
  Mr. REID. Mr. President, I hope people are beginning to see what 
Senator Daschle has put up with now for months on the stimulus 
package--months. It is never quite right. There is always something 
just a little bit lacking.
  Remember, there were rules set down for what a stimulus package 
should be. I may not have it down exactly right, but it is supposed to 
be fiscally responsible, supposed be short term, and would have no 
effect on the deficit. That is what we were supposed to do to get a 
stimulus package. And we have tried very hard.
  But what are we working on today, now, to divert attention from what 
the underlying Daschle bill does? We are now talking about something 10 
years from now. I don't know if any of the unemployed are watching. 
There are probably some watching TV because they are not working, so 
maybe some of them slipped onto C-SPAN. I hope the unemployed 
understand what is going on here. The minority is now focusing again on 
the wealthy. We can have all the stories about the poor family farmers, 
and I understand that. I think the estate tax needs some revision, and 
we were willing to do that, to work with the minority to do that.
  Say what you want to say. This affects the top one-half percent of 
the people in America as it relates to income. We were willing to 
change it from the standard before. But no matter how you twist and 
turn it, this relates to people who have assets--a lot of assets.
  How do the unemployed feel? We have given them nothing--zero. Since 
September 11, we have taken care of the airlines. We have focused on 
the insurance industry. We have done all kinds of things for corporate 
America but very little for consuming America.
  We talk about meeting the qualifications for having something 
stimulative. Studies have shown that every dollar invested in 
unemployment insurance produces $2.52 in gross domestic product. Those 
unemployed out there should understand that we want to help. We have 
tried to help.
  Part of Senator Daschle's legislation deals with extended 
unemployment benefits. During the previous Bush administration, we 
extended unemployment benefits five times. We did it during the Reagan 
years. But now we are not doing it. We are not messing around with 
something to help the unemployed.
  In Nevada, over 100,000 jobs have been lost because of September 11. 
Indirectly, in the service industry--people who wait tables, waiters, 
waitresses, park cars--over 30,000 jobs were lost. Those people are now 
without unemployment benefits. Their time has run out.
  I think we should extend it. They did not do anything wrong. We have 
done it in the past. It is not as if they are not willing to work. They 
are on the union lists. If something picks up, they will be rehired. In 
the meantime, they need help.
  I was a big supporter of Welfare to Work. I think we did good work 
during the Clinton years to get Welfare to Work. As you recall, 
President Clinton didn't accept proposals that were sent to him. He 
kept vetoing them until he got it just right. He improved it by his 
veto.
  There are people in Nevada who are working in the service industry. 
Some of those 30,000 people are people who went into Welfare to Work. 
These people may be dishwashers. They may be people who assist maids in 
cleaning up the hotel rooms in Las Vegas and Reno. They may be someone 
working in some other rather low-paying job, but they get paid 
certainly a lot better than being on welfare. Those people are out of 
work and haven't been on the job long enough to qualify for 
unemployment benefits. We want to give them some help. But no, this 
isn't quite the right time to do this.
  There was the Department of Labor study done in 1999. This is not 
some new study to justify an unemployment insurance extension. This was 
done in 1999. Every dollar invested in unemployment insurance extension 
generates $2.52 in gross domestic product.
  Another study by the Department of Labor estimated that unemployment 
insurance mitigates real loss in gross domestic product by 15 percent. 
In the last five recessions, the average peak number of jobs saved was 
131,000.
  Joseph Stiglitz, co-winner of the Nobel Peace Prize in economics last 
year, stated that we should extend the duration and magnitude of the 
benefits we provide to our unemployed. This is not only the fairest 
proposal but also the most effective. People who become unemployed cut 
back their expenditures. Giving them more money directly would increase 
expenditures.
  But here we are not doing what is called for by the President of the 
United States, saying that if we are going to do something on an 
economic recovery plan, it should be short term, fiscally responsible, 
and it should do anything for the deficit. This amendment fails on all 
three.
  The Congressional Research Service concurs with Joseph Stiglitz. They 
say that extending unemployment compensation is in fact likely to be a 
more successful policy for stimulating aggregate demand than any other 
tax or transfer charge.
  There is a time and place to debate whether or not the estate tax 
repeal should be made permanent. I acknowledge that. There is a time 
and place to do it. But it is not on this legislation. This is another 
effort to allow the minority and the President of the United States and 
the people around him to blame Senator Daschle and the Democrats, that 
we didn't do anything to pass an economic stimulus package.
  But the American people aren't that stupid. They know that we have 
done it. It was laid out here yesterday in detail by Majority Leader 
Daschle. He has tried to get an economic stimulus package passed.
  What did he ask for? What does the underlying bill call for? It calls 
for extended unemployment benefits. It calls for tax rebates for those 
people who didn't get tax rebates during the first round. Remember, the 
most successful part of President Bush's tax cut program was our 
program that he stole from us. I was glad he did. But that was our 
program. We called for rebates. That was us. We asked for that because 
we knew those people would spend that money quickly. They have.
  Also, part of Senator Daschle's legislation was bonus depreciation. 
What is that? The bill would increase the bonus depreciation deduction 
for the cost of any capital asset purchased between September 10, 2001, 
and September 11, 2002, and it would be certified by the end of 2002.
  One of the amendments offered by the chairman of the Finance 
Committee, Senator Baucus, extended that. So Senator Daschle's 1-year 
proposal has been extended. The bonus depreciation up to 30 percent of 
the cost of the asset would be in addition to the normal first year 
depreciation. Leaseholds would qualify for the bonus depreciation 
deduction. This would really help small business. It would help big 
business, but it would really help small business. That is why the 
majority leader included this in his legislation.
  Finally, a provision in his legislation would provide temporary 
increases for a Federal Medicaid matching rate, called FMAP. The 
Federal Government matches between 50 and 83 percent of the cost of 
Medicaid in each State depending on the State's per capita income. 
Medicaid matching rates for fiscal year 2002 are based on a State's per 
capita income in 1997, 1998, and 1999, in which the economy was very 
strong. The most recent economic trends do

[[Page 547]]

not reflect a new matching rate. Senator Daschle wanted to adjust that.
  Why did he pick these four things: Extended unemployment benefits, 
tax rebates, bonus depreciation, and fiscal relief for the States? The 
reason he did it is people believed these things would be stimulative 
to the economy. But he narrowed it down to four things he had heard 
speeches about given by the majority and the minority in the Senate 
saying we think this should be done. There was general agreement on the 
four things he put in this legislation. But, no, it is not quite the 
right time. No matter what happens, it really is not quite the right 
time to do it.
  Now we are in a debate about making the estate tax repeal permanent. 
Let us see. Does that stimulate the economy? No. Is it short term? No. 
Is it fiscally responsible? No. But again it deals with the rich 
people. I am all for helping rich people. I think it is something we 
have an obligation to do. I think helping rich people helps everybody. 
But there is a limit.
  I say to those unemployed watching C-SPAN today, keep in mind that we 
are trying to help. We have tried and tried and tried. This has been 
going on for months now. On this particular legislation, we tried again 
after the Christmas break, starting January 23. This is the third week 
we have been on this. It is never quite right. There just isn't 
anything we can quite do to get to finality.
  Under the Senate rules, it is not like the House of Representatives. 
If you have one more than a majority over there, you can ram anything 
through. It is like the British Parliament. When you are in the 
majority in the British Parliament, you march down the road and get 
anything you want. But that is not the way it is in the Senate.
  For 200-plus years, the Senate has had certain rules. They work well. 
But it does not make things easy in passing legislation. And you 
usually have to have 60 votes.
  Senator Daschle thought he had 60 votes for everything that was done 
here. But, no, it is not quite the right time to do an economic 
stimulus package today. Maybe tomorrow. Maybe the next day.
  But what we are faced with is a farm bill we would like to complete, 
we have election reform we would like to complete, and we have energy 
legislation we would like to work on prior to a week from this Friday. 
It leaves the majority leader with very few alternatives because it is 
obvious this is a slow walk--this has been a slow walk since January 
23--because no matter what the leader does, it is not quite good 
enough.
  So I respect the feelings, the passion that my friend from Arizona, 
Mr. Kyl, has. He is very good at expressing how strongly he feels about 
that. I understand the strength of his feelings. My counterpart, 
Senator Nickles, I understand the strength of his feelings in repealing 
the death tax. The manager of the bill today, Senator Sessions from 
Alabama, makes a very good point on why he feels as strongly as he 
does. And I appreciate that.
  But I say to my friends--and all three are my friends--it is so 
obvious what is happening here. This stimulus bill, which we have been 
trying to pass since January 23, is going no place. Everyone can see 
that. We are going to have a cloture vote on it tomorrow to try to get 
60 votes. It seems pretty clear to me the minority is not going to 
allow debate to stop on this legislation. That being the case, it is up 
to the majority leader how we will proceed. He is the only one who has 
that decisionmaking power.
  We have other things we have to get to, such as the farm bill. Nevada 
is not really a State that depends heavily on agriculture. We grow 
garlic. We are the largest producer of white onions in America. We grow 
a few potatoes. We have many cows. We have some large dairies to supply 
some very thirsty people in Las Vegas. We even supply Carolina some 
milk. But we are not a State dependent on agriculture as are so many 
States.
  But the farm bill is very important to many Senators. Of course, that 
is something we could not complete. We could not stop the filibuster on 
that at year's end.
  We thought we had a bipartisan agreement on election reform, and I 
think we do. There has been tremendous work done by Senator Dodd, 
Senator Bond, and others--bipartisan legislation--so we don't have the 
problems we had in the last Presidential election.
  I am not necessarily picking on Florida. I think if a lot of States 
had been looked at with a magnifying glass like Florida was looked at 
in the last election, we would all have problems. But this is a 
bipartisan effort to try to make that no longer the case--that we would 
have certain standards for elections and that the Federal Government 
would assist States in obtaining and then maintaining those standards. 
So we need to do that.
  Of course, energy legislation is something for which there has been a 
hue and cry from the minority, and rightfully so. We need to get to 
that legislation. Senator Daschle, last year, made a commitment that we 
would get there before the Presidents' Day recess. The Presidents' Day 
recess starts next Friday, so that leaves very little time.
  With all due respect to the fervency of the feelings of those who 
want to repeal and make permanent the death tax, keep in mind that at 
this stage it is only an effort to divert attention from what we are 
really trying to do; that is, pass a bill that will stimulate the 
economy, will be short term, will have no effect on the deficit, and be 
fiscally responsible--not legislation that, once again, has the 
unemployed getting zilch, zero, nothing, and the wealthy, again, 
getting the largest amount that we throw to them. And even though they 
deserve attention--and we have given them plenty--I think the time has 
come to help those people who need help: the unemployed, the 
underemployed, small business people, and helping States that are 
having difficult times because of the Medicaid matching funds.
  Of course, as I have indicated earlier, we really need to do 
something to help small business. And in the process, we would be 
helping big business with this bonus depreciation.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I thank my colleague for his speech. I 
think we all share some frustration--obviously, from different 
viewpoints--about the stimulus bill. I would just like to suggest there 
is a solution to the problem; and that is, we could have a unanimous 
consent agreement where we would let our Democrat colleagues put 
together a stimulus package, we would put together a stimulus package, 
we would have a unanimous consent agreement to vote on both of them, 
and if they both got over 50 votes, then the one that got the highest 
number of votes we would take to conference with the House. And we 
would, therefore, be on our way to have a stimulus package.
  Our Democrat colleagues are not going to accept that proposal because 
the problem is, we have a majority vote for a bipartisan agreement that 
was put together by Senator Snowe and Senator Breaux it has nice 
rhythm: Snowe and Breaux and it is supported by moderates on both sides 
of the aisle and has very strong support among Republicans in general.
  I remind my colleagues the sad history of the stimulus package is 
that the President met with Democrats and met with Republicans, took 
some Democrat ideas, took some Republican ideas, and made a bipartisan 
proposal, which I believe the President earnestly thought, in the 
aftermath of September 11, we would adopt.
  What happened--almost immediately--is that our Democrat colleagues 
said: We will take the half of the bill that is ours, but not the half 
of the bill that came from the White House and from Republicans.
  We can go back and forth and make our arguments. We have clever 
people on both sides of the aisle. We can argue we don't see any 
stimulus in the Democrat package. Obviously, they can make the same 
argument. I don't know who would be convinced on either side.
  But when that effort failed, Democrats and Republicans in the Senate 
got together and put forth the only bipartisan proposal for a stimulus 
package that has been put forward in the

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Senate. At that point, we clearly had more than 51 votes for a stimulus 
package. This was way back before Congress adjourned in December.
  In an extraordinary action, the President said: Take that bipartisan 
compromise. Let's agree on it. I will sign it into law. He asked the 
House of Representatives to take a bill written by the Senate, to 
introduce the bill in the House, and pass it, and send it to the 
Senate.
  At that point, as the session drew to a close last year, the majority 
leader, Senator Daschle, knew that the bill that had been passed by the 
House, and had come over here, and was waiting at the desk, that there 
were a majority of the Members of the Senate--Democrats and 
Republicans--who would vote for that bipartisan proposal if it were 
brought to the floor of the Senate.
  No one can dispute those facts.
  What did the majority leader do? He refused to bring it to the floor 
of the Senate.
  When we came back into session, the majority leader took three 
provisions from the President's proposal--some in a slightly different 
form than the President had put in his proposal--because Democrats had 
proposed them, threw the rest of the package out, and then made up a 
fourth proposal that no one had seen, and brought that forward as a 
stimulus package.
  He has every right to do that. He is the majority leader. But we have 
a right to offer our amendments. We have offered amendments. Some have 
been adopted. Some have been rejected. We have had an orderly debate. 
We have been willing to set time limits on votes. And now the Democrat 
floor leader says that we are getting nowhere and that this is not a 
real effort.
  We ought to have an opportunity to vote on a bipartisan proposal. I 
believe it would pass. It looks as if we are not going to do that.
  We want an opportunity to vote on some things we believe will 
stimulate the economy. I will, before I address the amendment before 
us, sum up the point I made earlier.
  The majority leader has some choices. He can bring up his bill and 
give us the right to try to improve it. That is what we are trying to 
do. He says now he is going to pull down the bill because we are trying 
to improve it. He has the right to do that.
  A second alternative is to bring up the bipartisan bill and give 
Senator Daschle a chance to amend it. I think we can work out an 
agreement to do that, but I do not believe Senator Daschle is going to 
do that because the bipartisan bill will pass.
  A final proposal, which I repeat in case anybody is interested in a 
compromise, is let the Democrats sit down and write the best bill they 
can write. We are going to take the bipartisan bill. It is not the best 
bill we can write, but it is a bill that has over 51 votes. It is not 
wonderful, but it would help the economy both in the short term and in 
the long term. We are going to take that bill. Let the Democrats bring 
forward their proposal as to how we stimulate the economy, and let us 
bring ours forward. We will vote on both of them, and the so-called 
``king of the hill'' parliamentary procedure that we could put into 
place by unanimous consent is the one that gets the most votes will be 
deemed passed, and then we can go to conference with the House, and 
perhaps we might get a stimulus bill.
  I do not see how anybody can say that is unfair. Senator Daschle 
could get a vote on his stimulus package. We could get a vote on the 
bipartisan one, and majority would rule.
  I do not think that is going to happen because the Daschle package 
would get fewer votes. We all know it. The bipartisan bill would pass, 
and I believe that would be objected to.
  What does this all boil down to? The one bill that can pass the 
Senate, the majority leader will not allow to be voted on.
  You can say that is a good thing and you can say that is a bad thing, 
but it is a fact, and that is the impasse in which we find ourselves.
  We now have a bill that very few people are for, and we just want to 
try to amend it.
  We have an amendment before the Senate which is a very important 
amendment. When we passed the tax cut last year, we faced a 
parliamentary problem that most people do not understand; that is, we 
were operating under a process called reconciliation. That is a budget 
process. It means the things you do under that process can extend no 
longer than the budget unless you can waive a point of order and get 60 
votes.
  Some will sadly remember that the tax cut received 58 votes in the 
Senate. We did not have the votes to waive this process so the tax cut 
could last only as long as the budget, and the budget was only 10 years 
long.
  It produced this incredible situation that stuns the American people 
when we tell them. The tax cuts that we passed--eliminating the 
marriage penalty, eliminating the death tax, reducing tax rates 
dramatically--all of those provisions go away in 10 years.
  Nothing is more destabilizing to the economy than having a temporary 
tax system. There is no doubt that we affect behavior when people do 
not know what the system is going to be in the future. This is 
especially true with regard to the so-called death tax.
  As our dear colleague from Arizona has pointed out very clearly, we 
have this incredible anomaly that if you die, depending on in what year 
you die, between now and the 10th year of the tax cut, the taxes you 
pay will vary. If you die in the 10th year, your family will inherit 
your business or your farm or your assets tax free. If you die in the 
11th year, they are going to have to sell your business or sell your 
farm, sell or mortgage your life's work to give the Government 55 
percent of every dollar you accumulated worth of value on your farm, 
your business, your assets in your lifetime.
  Needless to say, that is an absurd circumstance. I, quite frankly, am 
concerned that people who have some kind of serious illness might 
actually choose to end their lives in the 10th year. That is not beyond 
my imagination.
  We had a strong consensus on repealing the death tax. I know our dear 
colleague talked about rich people, but, we had a consensus that if 
somebody works their whole life, they pay taxes on every penny they 
earn and they skimp, they save, and they sacrifice and they build up a 
family farm, it is not right that their children have to sell the 
family farm to give Government a double taxation by paying 55 cents out 
of every dollar they accumulate in their life back to the Government.
  The same is true for small business. The National Federation of 
Independent Businesses, in surveying companies, found that the No. 1 
reason small businesses do not survive into the second and third 
generation is death taxes.
  I rejoice. I know some of my colleagues view the whole world as a 
class struggle. They believe all of existence is a conflict between the 
rich and the poor. I always get confused about who is who because it 
changes so often.
  I liken the stimulus package to the coldest week of the year, it is 
snowing, it is sleeting, it is freezing, and a breeze comes along and 
blows a roof off an apartment building. Logical people say: Why don't 
we rebuild this roof?
  We have colleagues who say: Wait, won't people make money rebuilding 
this roof? There will be a profit, and don't rich people tend to live 
on the higher floors of this apartment building? Won't they benefit 
more by having a roof than the poor people who live in the basement and 
on the first and second floors?
  Really, wasn't that what the stimulus debate was all about? Honest to 
God, what we do, remarkable as it sounds, is we end up buying a bunch 
of blankets, stockpiling penicillin, we hire a bunch of doctors and 
nurses, and we spend a whole winter treating people for exposure rather 
than rebuilding the roof on the apartment building.
  On the death tax--and I am sure my colleague from Arizona will 
concur--I have never spoken on this subject in my State to any audience 
no matter what their background, what their education, no matter what 
their income, no matter what their wealth that did not believe that it 
was fundamentally wrong to force a family to destroy

[[Page 549]]

their life's work in a business or a farm to pay taxes when somebody 
died. People fundamentally think it is wrong to tax death. You have to 
die anyway. That is never a happy event. Why should we compound it by 
rushing in and collecting a tax at that moment?
  I have found in watching audiences, when I have spoken on this 
subject, it does not seem to matter whether it is a local banker or 
whether it is a guy who works at the filling station. Nobody believes, 
at least in my State, that it is right when somebody has paid taxes 
their whole lives, has built up a farm or a business, to take it away 
from their children when they die.
  We reached a bipartisan consensus on that principle, but because of 
this fluke in the budget process the death tax comes back in 10 years. 
So we have 1 year where it is repealed. The Senator from Arizona, in an 
amendment I am proud to support, has proposed we make the repeal of the 
death tax permanent.
  My guess is we are not going to get to vote on that this evening. I 
assume the Senator from Arizona would love to vote on it today. Our 
Democrat leader, our dear friend, has said there is a stall underway.
  We would like to vote on this amendment now. At some point, the 
Senator from Arizona might ask unanimous consent that we have an 
opportunity to vote on this amendment this afternoon. What I am fearful 
is going to happen is we are going to have a vote on cloture--and 
nobody knows what that means except people in the Senate, but that 
means no more amendments can be voted on, the Daschle proposal has to 
be voted on by a yes or no. If that is defeated, as I believe, A, it 
should be and, B, it will be, then in listening to Senator Reid it 
sounds to me as if the majority leader is saying he will pull down the 
bill and we will never get a chance on this bill to vote on making the 
death tax repeal permanent.
  I think this is an important issue. I would like to vote on it. 
Perhaps if people want to get on with writing the bill, if we could 
make the death tax repeal permanent, as bad as I believe the Daschle 
proposal is, I believe it does absolutely nothing for the economy, I 
would have a hard time not voting for it if we were making the death 
tax repeal permanent.
  Quite frankly, if Senator Daschle wanted to pass his bill he could 
probably pick up at least two votes by supporting our amendment. So, A, 
I hope we can vote on this today. B, I hope we can vote on it someday. 
C, I believe when the American people understand we did not really 
repeal the death tax unless you die 10 years from now and if you do not 
die in that year it comes back, I think they are going to demand it be 
repealed, and I believe it will be repealed. I do not have any doubt in 
my mind we will repeal the death tax.
  I thank the Senator from Arizona. I urge him to talk to the majority 
leader about having a vote this afternoon. We would like to vote. Every 
Senator in the Chamber right now, except Senator Reid, is convinced, 
and the Presiding Officer, and we are ready to vote. We would like to 
have a vote on this issue. Perhaps if we could adopt this amendment, we 
might be moving toward a stimulus package that would be truly 
bipartisan.
  I thank my colleague for his leadership, and I yield the floor.
  The PRESIDING OFFICER (Mr. Dayton). The Senator from Arizona.
  Mr. KYL. I thank the Senator from Texas very much for his great set 
of comments, and also for what he said personally. I agree, when the 
assistant majority leader says there is an attempt to slow walk this 
bill, that is simply not the case. In fact, I will not do it right now 
because he is preoccupied, but at some time when we have the Senator's 
full attention--he has had a chance perhaps to talk with others on his 
side--I will propound a unanimous consent to vote as soon as we can, to 
vote this hour, to vote next hour, to vote sometime this evening, to 
vote sometime before the cloture vote, on this amendment. If we could 
vote before 4:30, we would be prepared to do that. Or if there is an 
effort to get a little bit more debate before the vote, that is fine, 
too, but there is no effort to draw this out. I am ready to vote right 
now on this amendment and move on.
  The Senator from Nevada made the point that this amendment offered by 
the Senator from Arizona shows how hard it has been for the majority 
leader, what he has had to put up with for many months; that it does 
not matter quite what he does, the bill is never quite right and 
amendments are offered.
  There are three responses to that. First, there have not been that 
many amendments offered to this bill, certainly not that many which 
have been debated and voted on, only a handful. Secondly, I think the 
Senator from Nevada must concur the bill is not quite right because he 
and I have an amendment which we both think is a pretty darn good 
amendment that would make the underlying bill a lot better. Senator 
Reid himself proposed that amendment on our behalf. I believe it was 
yesterday. So, no, we do not think the bill is quite right either.
  Of course, when Senators do not think it is quite right, then we have 
an opportunity to offer an amendment. Frankly, there are a lot of 
things I do not like about it. I would love to propose a lot of 
amendments, but I selected only two: this very important death tax 
repeal because of the effect it will have in stimulating the economy, 
and the other is the amendment that Senator Reid and I sponsored, which 
also would have a direct stimulative effect on the economy because it 
helps the precise industry that was most dramatically affected, the air 
travel industry. We can relate it to the travel industry generally 
after September 11.
  So, no, there is no effort to slow walk this bill or to prevent it 
from ever being considered or voted on. We are simply trying to do what 
Senator Reid himself has tried to do, and that is make it better.
  I dare say the amendment I have offered would make the bill a whole 
lot better. As the Senator from Texas said, even though I am not much 
in favor of the underlying bill, if we were able to adopt this death 
tax repeal and make that permanent, I would be sorely tempted to vote 
for the majority leader's bill.
  The other point I wanted to make with respect to this business of 
slow walking is exactly what the Senator from Texas said. We could vote 
on the Centrist Coalition proposal right now. I think everybody 
recognizes that would pass. We could be out of here by 5 tonight by 
allowing the bipartisan Centrist Coalition bill, which President Bush 
has endorsed, to come to the floor. It is, in fact, the only bill that 
can pass this body.
  So if we are talking about getting something passed and getting it to 
conference so we can actually have a stimulus package bill, we all know 
the formula for that. It does not have to take but another few minutes 
and we could be done with it. We offered to do that. I offered to be 
sorely tempted to vote for the underlying bill if my death tax 
amendment is adopted, and I probably would. We can get all this done 
very quickly.
  One other thing I wanted to respond to that my friend from Nevada 
argued, and it is the same old argument that was made when we 
considered the death tax repeal the first time around--it was wrong 
then and it is wrong now--is that the death tax only applies to the top 
1\1/2\ percent and therefore it is a tax on the rich, and who would 
care about the rich?
  Well, there are really three responses to that. The first is that it 
is just not true. As I noted before in my earlier comments, Dr. Wilbur 
Steger, who is a Ph.D. and president of CONSAD Research Corporation, 
and a professor, has noted this argument that it only applies to the 
top 1\1/2\ or 2 percent is wrong.
  He says that, in fact, in a typical year, the total number of taxable 
estates that consist largely of family owned businesses likely exceeds 
10,000.
  What does that number really mean? First of all, that is 10,000 
businesses. Multiply by that the number of employees who work in each 
business. Pick any number. One certainly has to say the people who work 
for those businesses are directly affected. If the business goes out of 
business because the

[[Page 550]]

death tax has to be paid, that directly affects every employee in that 
business, times the number of family members with each one of those 
employees, times the number of stores that they buy things from and all 
the rest of it.
  A lot more people are affected by the death tax than just the number 
of people who happen to die each year who end up paying the tax, in 
addition to which everybody who might have to pay the tax has to be 
worried every year about the estate planning. They, too, are directly 
affected.
  As I pointed out before, they end up paying at least $23 billion a 
year, and the lawyers, accountants, estate planners, insurance, and 
other expenses of estate planning that enable them to deal with this 
future contingency. They may not die this year, but they are having to 
shell out a lot of money this year in order to deal with their 
potential future estate liability.
  It turns out a lot of people are affected by the existence of the 
death tax. What the Senator from Texas pointed out a while ago is the 
clincher. There is nothing more destabilizing to an economy than having 
a temporary tax, especially one which no one can predict with any 
degree of certainty is going to apply in the future. I refer 
specifically to the estate tax. We phase it down a little bit over the 
next 8 years. Then we repeal it altogether. Then it goes right back 
into existence as it was last year with a 60-percent rate. How can I 
plan against that if I don't know when I am going to die? Do I plan for 
it in the eighth year, in the seventh year, or maybe in the year that 
it is repealed altogether? That would be great if I died that year; at 
least my heirs would not be burdened. But if I live an extra year, they 
have big problems. What about beyond that? Nobody knows.
  As the Senator from Alabama argued earlier, you do not know whether 
to invest in the plant equipment or put the money away because you have 
to pay the estate tax with it. It is very destabilizing. In the 
meantime, you keep shelling out that money to the estate planning folks 
rather than investing it in your business. That is why it belongs on 
this bill.
  We know it will create jobs, 240,000 jobs in 7 years. Americans would 
have $25 billion in additional disposable personal income. This is from 
a report of the Joint Economic Committee, not my numbers. We have other 
estimates that back up this point. As a matter of fact, Dr. Steger, who 
I quoted earlier, indicates an immediate death tax repeal would provide 
a $40 billion automatic stimulus to the economy. That is because of the 
pent-up capital that citizens do not deal with because of the potential 
tax liability that exists; a $40 billion automatic stimulus to the 
economy at virtually no cost to the Treasury. Talk about getting the 
bang for the buck, I don't think there is anything we can do that would 
have a greater immediate impact on our economy than the repeal of the 
death tax.
  We talk about extending unemployment benefits for 13 weeks. Does that 
stimulate the economy in any way? No. Does that create any jobs? No. 
But it is a central feature of the stimulus bill that is before the 
Senate.
  We may want to extend unemployment benefits for the people currently 
out of work. But I don't think anyone can argue that stimulates the 
economy. To anyone who says, Senator Kyl, how come you are offering the 
death tax repeal on the stimulus bill? I say, how come you are offering 
or supporting the unemployment extension? That does not create a single 
job. I know people would rather have a paycheck than an unemployment 
check. Let's do something that would stimulate the economy, create 
jobs, provide that investment, take the $40 billion in pent-up capital, 
and get it into our economy, create the 240,000 jobs.
  I have heard the arguments in response. I cannot imagine the Senate, 
which passed the death tax repeal before, would not want to finish the 
job of making that permanent, given the fact that it does not do a 
whole lot of good, except if you die in the 10th year, to do the 
partial repeal, the temporary repeal, the confusing and destabilizing 
repeal that we effected last year, without going into the final step 
and making it permanent. It seems to me to make so much sense.
  The Senator from Texas made a comment; he thought maybe the effort 
would be to deny a vote. I certainly hope that is not the case. I think 
the American public deserves to know where their Senators stand on this 
issue. Do you believe in making the death tax repeal permanent or not? 
Do you believe it can help stimulate the economy and create jobs or 
not?
  There are those who are going to differ on this. That is what the 
Senate is all about. That is fine. Take the vote. Stand where you want 
to stand on the issue. But we can do that quickly. We can move on to 
the next amendment. We can consider a whole number of amendments before 
we have the vote on cloture sometime tomorrow. That would be my 
proposal.
  As Senator Gramm said, perhaps what we should do, and I will wait 
until the assistant majority leader is on the floor, perhaps we should 
ask unanimous consent, and I will indicate at the appropriate time when 
someone from the other side is here to respond other than the Senator 
from Minnesota, who just walked on the floor, we will ask unanimous 
consent to be able to vote for this at a time of their choosing prior 
to the cloture vote.
  The Senator from Minnesota has arrived. If he wishes to speak to 
this, I am happy to defer to him.
  Mr. WELLSTONE. I thank my colleague. I say to the Senator from 
Arizona, I thank him for his graciousness.
  I do not know what the dynamic is here. I know there is an amendment 
I want to do again with Senator Durbin and Senator Dayton. My 
understanding is we may not be able to do that so there may be some 
problems in terms of what amendments we are able to vote on before 
cloture tomorrow.
  However, I want to make it clear, and I assume this would make the 
Senator from Arizona feel better, I do want to go on record as to where 
I stand whether there is a vote or not. I am in very strong opposition 
to the amendment of the Senator from Arizona.
  The good news is that in the short run, just a complete repeal of the 
estate tax would be over the first 10 years about $55 billion. The bad 
news is, over the second 10 years, when many will be 65 years of age 
and over, and we will all be looking to see what is in the Social 
Security trust fund and what is in Medicare, this amendment will cost 
$800 billion.
  I say to the presiding Chair, I had interesting discussions with 
business people in Minnesota who say I am wrong. They need some help 
for when we pass our business to our children. I said: How about up to 
$5 million? And they say that would be reasonable.
  But that is not what we are talking about. We are talking about an 
amendment that does away with all of the estate tax. I have a figure 
that actually 636 Minnesotans paid the estate tax in 1999.
  When we hear about small farmers and small businesspeople, we are 
talking about the top, of the top, of the top, of the top of the 
population. For example, I don't pick on Bill Gates. I think he just 
did a good thing, talking about where is the United States and other 
countries in terms of our commitment to developing nations. But I don't 
think the Gates family really needs any help. And I think it is a 
little outrageous to take $800 billion out of the Social Security trust 
fund at the very time that many of the baby boom generation are going 
to be turning 65 years of age and over. That is exactly what we got in 
the President's budget.
  I say to my colleague from Arizona, whether there is a vote or not, I 
am on record opposed to this, and pleased to be opposed to it. I find 
absolutely incredible the situation now. We have a budget that comes 
out from the President. We find we are going to eliminate the 
empowerment zones in our city. In Minneapolis, they are extremely 
important. The budget will actually eliminate the grants to the 
empowerment zones. What is supposed to be for additional child care or 
affordable housing will not be there, and the budget will cut the 7(a) 
program in the State of Minnesota. Since 1996, we leveraged $1 billion 
to small businesses

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in the State of Minnesota. We will cut the 7(a) program in half. That 
is $1 billion of capital we have been able to leverage to small 
business. It will cut the 7(a) program by 50 percent.
  I hear Secretary Paige say in order to figure out how to make up for 
potential cuts in the Pell Program, because we keep the maximum at 
$4,000 a year, we will take away from true north in Minnesota. It also 
affects telework, people trying to find jobs and develop businesses at 
a time when our steelworkers are losing their jobs. Then we will go 
after child care. Then we go after homeless votes. Then we will cut 
counselors and there is no additional money for affordable child care, 
no additional money for Head Start. My gosh.
  I hear this administration; they love the children. They are all for 
the small children. I am sorry to be cynical, but in the words of 
Fannie Lou Hamer, who once said, ``I am sick and tired of being sick 
and tired,'' I am sick and tired of this symbolism.
  Then, I say to the Presiding Officer, we are still waiting. The 
Senate did a good job; Republicans did a good job--bipartisan. We were 
going to make the program for children, for special education, 
mandatory over 6 years, full funding. It would have helped our State 
$45 million this year, $2 billion, I say to Senator Dayton, over the 
next 10 years. None of that is in the budget. But now what we have is a 
proposal that over the next 10 years--I mean the first 10 years, $55 
billion--is bad enough. The next 10 years, when we are not going to 
have money because the administration has taken the money out of the 
Social Security and Medicare trust funds, put us into deficit, and then 
by the Kyl amendment, over the second 10 years, it is $800 billion. 
This is simply unacceptable, and I want to make clear how strongly I am 
in opposition.
  Mr. REID. Will the Senator yield for a question?
  Mr. WELLSTONE. I am pleased to.
  Mr. REID. My good friend from the State of Arizona, Senator Kyl, said 
that unemployment insurance extension does not create a single job to 
stimulate the economy.
  Does the Senator from Minnesota, who has spent a lifetime dealing 
with those who are not privileged, including the unemployed--would the 
Senator agree with that statement? Or would the Senator agree with the 
statement from Joseph Stiglitz, Nobel Prize winner in economics, who 
says:

       . . . we should extend the duration and magnitude of the 
     benefits we provide to our unemployed. This is not only the 
     fairest proposal, but also the most effective. People who 
     become unemployed cut back on their expenditures. Giving them 
     money will directly increase expenditures.

  Would the Senator agree with that statement or the one from our 
friend from Arizona, Senator Kyl, who said unemployment extension does 
not create a single job to stimulate the economy?
  Mr. WELLSTONE. Mr. President, I say to my colleague from Nevada, the 
truth is--first of all, even if I did think extending unemployment 
insurance was not a stimulus to the economy, I would be for it because 
we ought to help people who are flat on their backs through no fault of 
their own.
  Second of all, Joseph Stiglitz, who was with the World Bank, a fine 
economist, is exactly right. It is not just him, it is just about every 
economist you talk with, much less people back in Minnesota, talking to 
people in their homes and coffee shops, who all know, by definition, if 
you are going to extend unemployment insurance to people and put some 
additional dollars in their pockets, they have to go out and buy 
necessities for their families. They are living month to month trying 
to pay their bills, so of course they are going to use that money to 
consume, and of course it is going to stimulate the economy as opposed 
to--here is the interesting question, I say to my colleague--ending all 
of the estate tax, which, by the way, again, 636 Minnesotans pay; you 
have to be super, super wealthy, rich. What we are going to do instead 
is end that for everyone--not target it, not $5 million or $6 million, 
just end it for Bill Gates, who is doing good work right now, again 
dealing with the developing world. We are going to give it to him, and 
that is somehow going to stimulate the economy. But extending 
unemployment insurance for people who are out of work, that is not 
going to stimulate the economy? I think that argument is profoundly 
mistaken.
  Mr. REID. Will the Senator respond to one more question? The minority 
all afternoon has said they want to vote on the package that came from 
the House. They said it can get more than 50 votes.
  Is the Senator from Minnesota aware that just in recent days we, over 
here, many times have gotten more than 50 votes? On the farm bill, 53 
to 45, 54 to 43, 54 to 43; unemployment insurance, we got 56 votes on 
that; on the Social Security lockbox, we got 53; on the Durbin 
unemployment insurance amendment, we got 56 or 57 votes; on the Baucus 
farm amendment, 57 votes.
  The Senator from Minnesota and I have been in the Senate a number of 
years. It is very frustrating to recognize you need 60 votes to pass 
things here, but that is how much it takes, doesn't it, generally 
speaking?
  Mr. WELLSTONE. That is correct.
  Mr. REID. If we used the logic of the minority, we would have passed 
several Democratic amendments by this point because they received 50 
plus votes. I ask my friend, is the minority's argument sound, when we 
have had a tradition of more than 200 years that you need more than 50 
votes; in fact, you need 60 to get things going--is that a fair 
statement?
  Mr. WELLSTONE. There are two points I would like to make for my 
colleague. I don't know if he would agree with the second point, but we 
could have a good colloquy about this.
  First of all, the Senate is designed as a deliberative body. There is 
going to be debate. That is part of what makes the Senate unique. 
Sometimes it can drive you crazy, but what makes the Senate unique is 
the unlimited amendments and unlimited debate. So you have the 60-vote 
requirement, quite often, on all pieces of legislation. That is the 
Senate. That is the way the Senate operates.
  But my second point is a little bit different, which is, frankly, I 
hate to say this, however many votes you get in the Senate, sometimes 
there is a disconnect between the Senate votes and the people we 
represent.
  I have to tell you this. The House proposal that comes over here, 
that House proposal is a proposal that repeals the alternative minimum 
tax. That House proposal is a proposal that gives away money, gives tax 
breaks to companies such as Enron. It gives $1 billion General 
Electric, for this multinational corporation. By the way, that is in 
the President's budget proposal: $13 billion of tax breaks for the 
Enrons of this world, yet we don't have the money for children in 
education; we are cutting the Low Income Energy Assistance Program; we 
don't have the money for affordable housing.
  I say to my colleague again, if you talked to the vast majority of 
people in the country, they would say: What in the world are you doing? 
If you are going to have an economic recovery package, at least extend 
unemployment insurance, at least help the people who need the help, at 
least get the money in the hands of people who will consume.
  Yes, there is a 60-vote requirement, and then there is the substance. 
I am sorry to say this. I am well aware that up until very recently the 
Enrons of this world have had way too much influence here, and I am 
well aware of the fact that some of these other big multinationals are 
big givers, heavy hitters, investors, and have a lot of clout. But the 
truth is, the vast majority of people in Minnesota and the rest of the 
country cannot understand this at all. They don't know what in the 
world giving tax breaks and tax loopholes for these big multinational 
corporations has to do with fairness, or has to do with economic 
recovery, or has to do with helping people who are unemployed, or 
underemployed, or subemployed, or among the ranks of the working poor.
  Mr. REID. Will the Senator indicate how many millions of people live 
in the State of Minnesota?

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  Mr. WELLSTONE. Close to 5.
  Mr. REID. The Senator from Minnesota said that last year 
approximately 650 people paid estate tax?
  Mr. WELLSTONE. It was 636.
  Mr. REID. So 636 people paid estate tax. How many people would you 
estimate are now unemployed in the State of Minnesota?
  Mr. WELLSTONE. We are up to about--the percentage is about 4.5 or 5 
percent, I think, unemployment in Minnesota right now.
  Mr. REID. So it is tens of thousands of people?
  Mr. WELLSTONE. Oh, yes.
  I think it is about 5-percent unemployment, which is quite high for 
our State. That is the official definition of unemployment. That 
doesn't include the people who quit looking for work because they are 
discouraged, or people who are working part time because they cannot 
find a full-time job, or people working way under the wages they would 
normally make in a better economy, or people who work but still have 
poverty wages.
  There was a report last week indicating that almost a third of adult 
Minnesotans are working jobs at under $10 an hour.
  Mr. REID. The last question I ask my friend is this: Doesn't it seem 
we should be spending time on the tens of thousands of people in 
Minnesota who are out of work, or are no longer looking for work, or 
those people who are underemployed? Wouldn't it be better if we were 
spending some time dealing with them rather than something that is 
going to happen 10 years from now for the wealthiest people in America?
  Mr. WELLSTONE. Of course. The Senator's words are near and dear to my 
heart. The answer is yes. That is why I decided to come out on the 
floor. I was thinking to myself: We are trying to have a simple 
extension of unemployment insurance; are we not down to 13 additional 
weeks?
  In my State of Minnesota, we are focused on what is going on with 
education, what is happening to our children, what is happening to our 
schools, and where the resources are. Why can't we get the money for 
special education? Why can't we do better making sure the kids come to 
kindergarten ready to learn? Why can't we do more with afterschool 
programs?
  Look at this budget from the administration. What you find from what 
the President is proposing is all of these discussions about priorities 
and values. But we are not going to have the money for prescription 
drug benefits. We are going to say in Minnesota if you are an 
individual with an income of $13,000 or under, or a couple with an 
income of $17,000 or under, you are eligible, but the rest of you 
aren't. We have about over 600,000, and closer to 700,000, Medicare 
recipients. The income profile is not high. Many of them have incomes 
over this, but they cannot afford prescription drug benefits. They are 
out.
  The small business 7(a) program is cut in half. They are out. One 
would eliminate homeless programs for veterans. That is out. One would 
eliminate true north economic development work on the Iron Range in 
Minnesota. That is out. One would eliminate help in funding for 
childcare in Minneapolis. That is out. They want to go after 
empowerment zones and enterprise zones in Minneapolis. That is now out. 
They want to go after affordable housing. That is out. Help for school 
counselors is out. Rural education is out--all for the sake of Robin-
Hood-in-reverse tax cuts giving away money to the wealthiest citizens 
in the country.
  These are distorted priorities. This is a no-brainer. I think I am 
going to make this point over and over again. Let me frame the issue 
differently.
  What we have out here is an amendment that says eliminate the estate 
tax for the wealthiest citizens in the country--I mean the very 
wealthy. It is not targeted. I would be for actually targeting this. I 
wouldn't mind at all doing something that would help our family farms 
and small businesses. We should do that. That is not what this 
amendment does.
  We have an amendment targeted to the wealthiest citizens in the 
United States of America which will deplete this economy over the next 
10 years at the very time baby boomers are 65 years of age and over. I 
am one of them. This amendment further depletes the Social Security 
trust fund.
  That is one of the issues that people have to understand. With the 
President's budget proposal, we are talking about over the next 10 
years taking close to $1 trillion out of the Social Security trust 
fund, and now another $855 billion over the next 20 years, all for the 
sake of tax breaks for the very wealthy, the very powerful, and the 
very well connected.
  My colleagues on the other side of the aisle don't want to move 
forward with--I don't even know what you call it anymore--lifeline 
legislation, some help for people who are out of work, some extension 
of unemployment benefits. They don't want to do that.
  I would like to have included coverage for the working poor and part-
time workers. I would like to have increased benefits. I would 
certainly like to have included some help for COBRA and health care 
coverage. Most of that is not in here. It is just a simple extension of 
unemployment insurance. It is hardly anything else.
  They oppose that but instead come out here with a $855 billion 
program over the next 20 years with all of it going to the wealthiest 
of Americans. That is basically the choice we have.
  I would love to do a poll in coffee shops in Minnesota and across the 
country as to what people think about these choices.
  Judge me by what I do. Judge me by my budget--not by my words.
  When you start to look at the details of this budget, it is 
breathtaking. I am for homeland defense. I think we need to do a lot 
better. We need to do a lot better with our northern border control. We 
need to get the public health infrastructure out there. God forbid 
there is a terrorist attack. We need to be prepared. First of all, we 
need to try to prevent it. If it happens, we need to be prepared. I am 
for strong defense.
  I hope Senators will carefully scrutinize this budget. We have before 
us--between the dramatic increase in the Pentagon budget and all of 
these tax cuts with about 40 or 50 percent going to the top 1 percent 
of the population--I am now talking about tax cuts that have already 
passed. Now we have this estate tax. With this House proposal, they 
want to repeal the alternative minimum tax. I don't think they want to 
reach back to the mid-1980s. That is too embarrassing. Ronald Reagan 
was for it. The whole idea in 1986 was not to make these multinational 
corporations pay any taxes when all the other people in the country 
were.
  You have $13 billion in tax breaks for multinational corporations. 
You have Robin-Hood-in-reverse tax cuts with about 40 or 50 percent 
going to the top 1 percent of the population.
  You have a $855 billion reckless proposal to do away with the estate 
tax for the richest and wealthiest Americans in the country while at 
the same time cutting homeless vets programs; cuts in small business 
programs; cuts in childcare; cuts in empowerment zone; cuts in economic 
development programs for the Iron Range; cuts in counselor programs; 
not live up to your commitment and promise on special education, 
helping our kids, helping our school districts, and helping our 
children; don't live up to your commitment on the Pell grant program; 
cuts in job training during a recession and during hard economic times 
when people in northeast Minnesota, or in greater Minnesota, or in 
metro Minnesota, many of them are going back to school, or trying to go 
into a job training program for skills development. They have been spit 
out of the economy. They are looking for training so they can get back 
to work--cut those programs.
  My party needs to find its voice. Majority Leader Daschle has been 
out there and he has been vilified. I smile. I think sometimes it is an 
effort to make him out to be a Newt Gingrich of the left. It is 
outrageous. But this party, my party, the Democratic Party, is supposed 
to be the party of the people. If there ever were a time for us to find 
our voice and for us to speak out and for our country to have a real 
debate about these values, it is now. In

[[Page 553]]

the words of Rabbi Hillel: If not now, when?
  Personally, I think the thing I feel worse about is the children in 
relation to the education piece. I am going to be one of these people, 
in not too many years, who is going to be over 65 years old. Lord, we 
have six grandchildren. I just took our granddaughter Cari to see 
``Fiddler on the Roof.'' There is that song: ``Sunrise, Sunset.'' I 
don't know what has happened to the time.
  I believe that ultimately the way we are judged is in relation to 
what we have done for our children, what we have done for our 
grandchildren. Have we made this country better and this world better 
for them? I think that is how we are judged. I think that is how we are 
judged as parents and I think that is how we are judged as adults. I 
think that is how we are judged as Senators. I think that is how we are 
judged as Representatives. I think that is how we are judged as a 
nation.
  How have we done for our children? We are not doing very well. In 
this budget, we flat-lined affordable child care. I think only about 10 
percent of low-income families are able to participate in affordable 
child care right now because that is all the funding there is.
  We say we love the little children and are concerned about the 
development of the brain and that we want children to read better, but 
we have funded Early Head Start at about the 3- or 4-percent level.
  We could be a real player for children prekindergarten. We could make 
a real difference. We could do so much more for our schools. We could 
live up to our commitment on special education. For title I--I am 
sorry, I have indignation--they make the claim we have added $1 billion 
and that this is great. In real dollar terms, there is no additional 
money because there are more children who are eligible for title I.
  We are going to test these children, all in the name of rigor. So you 
go to a Bancroft Elementary School and, big surprise, 80, 90 percent of 
them are on a free or reduced school lunch program; 60 percent of them 
are in homes where English is the second language; and 20, 25 percent 
of them move several times during the year for lack of affordable 
housing. There is a key education program, and there is no more funding 
for that. In fact, they are cutting funding for affordable housing, and 
we are surprised these children do not do as well? And we do not give 
them any more help to do better.
  I think this is a debate about values. Everybody wants to talk about 
family values. This is a family value. How are we doing for our 
children? How are we doing for our grandchildren? Are we making life 
better for them? Are we going to make it possible for them to be good 
leaders in the future?
  I think we have some seriously distorted priorities out there. I hope 
my party will directly challenge them.
  A reporter said to me: The President is very popular. Does that make 
it hard for Democrats to be critical?
  I said: Look, it is good for people to do well. The President is 
doing well in terms of the polls. Fine. But the real issue is whether 
or not we are willing to speak up for what we think is right, for what 
we believe in, for what we think is best for States and best for the 
country.
  That is what people want us to do. It is important, as Democrats, 
that we find our voice.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. HELMS. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending business is the Kyl second-degree 
amendment.

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