[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5180-5183]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE ENERGY BILL

  Mr. GRAMM. Mr. President, when we resume consideration of the energy 
bill later today, we will be on a revenue measure. As all of my 
colleagues know, the Constitution gives a special privilege to the 
House of Representatives by requiring all money bills to originate in 
the House. This represents a constraint on the Senate in terms of 
voting on tax issues because in order to have a vote on a tax issue 
that could actually become law, you have to have a vote on a bill that 
is already a revenue measure and has been passed by the House. So this 
means the bill before us, in addition to being an energy bill, becomes 
a very important bill because it will contain energy tax provisions, 
and therefore will be a revenue bill.
  I have now about 15 Members of the Senate, on a bipartisan basis, who 
are determined to have a vote on making the death tax repeal permanent. 
I will not repeat the whole debate because we will have plenty of 
opportunity to talk about it--we have in the past and will have in the 
future. But we have the anomaly that the tax cut passed last year will 
expire in 10 years because of a budget technicality that was in place 
when it was adopted. And this creates the incredible anomaly that while 
we are phasing out the death tax now, 9 years from now it will spring 
back in full force and will ensure that families that worked to build 
up a business or a family farm would end up having to sell that 
business or sell that farm to give the Government 55 cents out of every 
dollar of its value upon the death of the people who created it before 
it can be passed on to their children.
  We have every right, on any revenue measure, to offer any amendment 
we wish. That is how the rules of the Senate work. On Thursday, I had 
called for regular order--which brought up Senator Kerry's amendment 
with Senator McCain--and I offered my amendment to it. I was unaware at 
the time that discussions were going on as to how we were going to 
proceed from there. As it turned out, Senator Kerry came over and 
withdrew his amendment. At that point, the distinguished Democrat floor 
leader filled up the amendment tree by offering a second-degree 
amendment to the next amendment under regular order. I think there were 
about nine amendments that had been set aside as we went on to consider 
other measures.
  In working with our leadership and, through their discussions, with 
the leadership on the Democrat side, I have now proposed in writing an 
agreement whereby we would agree to forgo the ability to offer an 
amendment on this bill to make death tax repeal permanent, if we could 
have a guarantee that at some point in the future we would get such a 
vote. The proposal I have made is that we pull up H.R. 8, which is on 
the Senate Calendar. It, in fact, is a bill to repeal the death tax. I 
hope it will be looked at.
  We feel very strongly we ought to have the right to offer this 
amendment. This is a revenue measure. We have no guarantee there will 
be another revenue measure considered by the Senate this year. I know 
there are people in the Finance Committee--and I am privileged to serve 
on that committee--who hope we will have other opportunities. But it 
may well be that this is the only opportunity we have this year.
  As my colleagues are aware, the House of Representatives has voted to 
make the whole tax cut permanent. We want to have a vote on making the 
death tax repeal permanent. I am hoping that something can be done to 
accommodate us in terms of our right.
  I know there are many people who want to finish this bill. There are 
things in the bill I am for, but I don't know of anything that is more 
important than making the repeal of the death tax permanent.
  I wanted my colleagues to know that we do have a growing number of 
people who are working to achieve this goal. It would be our objective. 
I think there are two amendments the managers of the bill wanted to do 
this afternoon that we have agreed to step aside and allow them to do. 
But beyond that point, it would be our intent to object to bringing up 
new amendments or to setting aside the pending amendment until we get 
some agreement. We don't have to do our amendment now, but we want to 
be guaranteed that at some point we will have our right as Senators to 
offer an amendment related to making the repeal of the death tax 
permanent.
  I came over today to simply outline that there is the beginning of a 
discussion on how to accommodate Senators who wish to offer this 
amendment. I have talked to our leader, and nothing would make me 
happier than to get a guarantee that we will get a vote on making 
repeal of the death tax permanent. In that case, we would get out of 
the way and allow consideration of the energy tax amendment and adopt 
it, perhaps on a voice vote.
  Mr. REID. Will the Senator yield?
  Mr. GRAMM. I am happy to yield.
  Mr. REID. The majority leader and the Republican leader have spoken 
about this issue. The Senator has submitted to us in writing his 
proposal which has now been reviewed. We will do everything we can to 
move this bill along. We hope as to the written proposal for the 
unanimous consent agreement, that we can work something out on that 
before the end of the day.
  Mr. GRAMM. I appreciate the Democrat floor leader's willingness to 
try to work on this. I am very grateful. It would break a major impasse 
and virtually guarantee that the bill will be adopted. What we would 
like to do is have a vote on permanently repealing the death tax. We 
realize the vote might come on cloture or it might come on a point of 
order. But we would like to have a vote nonetheless.
  I thank the Senator for his help.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. GRAMM. I would be happy to yield, but I am getting ready to give 
up the floor. I am happy to yield.
  Mr. DURBIN. That is fine, if he is going to yield the floor.
  Mr. GRAMM. I yield the floor.
  The PRESIDING OFFICER (Mr. Rockefeller). The Senator from Illinois.
  Mr. DURBIN. Mr. President, if I might respond very briefly to what 
the Senator from Texas has said, the Senator from Texas is very honest 
and forthright in his position. He stated in the Chamber, and it will 
be reflected in the Record, that he believes the elimination of the 
estate tax, the death tax, is the most important priority for this 
Congress when it comes to tax legislation.
  I disagree. Right now, fewer than 2 percent of the estates in America 
pay any estate tax whatsoever. We have changed the law so even fewer 
will pay it in the future. What the Senator from Texas and those in 
support of his position are arguing for is to eliminate this estate tax 
for the very few remaining wealthiest people in America, and it is his 
belief that this is the highest tax priority for Congress. I would like 
to take that question to his State of Texas, let alone my State of 
Illinois.
  I just finished a tour of Illinois, and I went to small business 
after small business. I asked: What is the biggest problem you are 
facing?
  They answered: The cost of health insurance. We can't pay for health 
insurance for our employees, let alone for the owners of the business.

[[Page 5181]]

  A labor union, the plumbers and pipefitters, came from Chicago last 
week. I asked: What is your agenda in Congress?
  They said: The cost of health insurance. We can't get a penny more in 
our paychecks when we negotiate a contract each year with our union 
because all the money is going into health insurance.
  So if you want to know where my highest priority is in terms of tax 
breaks for businesses and families across America, it doesn't start at 
the top with people who are worth megamillions. It starts with working 
families who cannot afford their health insurance.
  I will say to the Senator from Texas and those supporting his 
position, please bring a tax bill to the floor. There are those of us 
who want to try some other issues that we think are much more 
important.
  Do you know what this means if we make President Bush's tax cut 
permanent? It means 65 percent of all of the tax breaks will go to 
people making over $500,000 a year. That is their highest priority--
people with incomes of $500,000 a year or more.
  Do you know how much of a tax break they will get if we go ahead with 
their proposal to make the President's tax cut permanent? It turns out 
to be $39,000 a year on average for people making over a half million a 
year.
  If you are making a half million a year, let's assume that is about 
$10,000 a week, and times are tough. You are going to get $39,000 more 
to deal with it. Meanwhile, the small business in southern Illinois, 
the small business in Humboldt Park in Chicago that can't afford to pay 
its health insurance premiums brings the employees in and says: We are 
sorry, we can't do it anymore. We can't offer you health insurance for 
you and your family.
  Which is the greater priority in America? The people making over a 
half million a year who get $39,000 more in tax cuts to put in some 
investment or another vacation home or a boat or a luxury car or is it 
more important that families across America have health insurance so 
they can protect themselves and their children?
  While we are on the subject of children, ask those same families 
about the importance of the deductibility of college expenses. If you 
want to know a tax break people across America want, talk to any family 
with a new baby. They will show you the child and say: Doesn't he look 
like his dad or doesn't she look like her mom?
  The next thing they will tell you is they better open a savings 
account for their college right now. Otherwise, they won't be able to 
pay for college education.
  So if we are going to talk about priorities in tax cuts, wouldn't it 
be good for the first time in America to allow people to deduct the 
cost of college education from their taxes? Isn't that a good 
investment for America? I think it is a far better investment than the 
same people who make over a half million a year, guess what, getting 
another windfall check of $39,000 from President Bush's permanent tax 
cut.
  Incidentally, so the record is clear, that permanent tax cut of 
President Bush's that gives $39,000 to the wealthiest people, for all 
the rest of the folks in America it is less than $1,000 a year.
  So you look at it and say, well, everything is upside down in this 
world if the most important thing in Congress, when it comes to taxes, 
happens to be the wealthiest people in America. The people I represent 
in Illinois--some are wealthy, but the vast majority are not--are hard 
working, low- and middle-income families struggling to pay for health 
insurance, for education, and for college expenses. Those are the 
people who deserve a break.
  In my State, we are facing a health care crisis, and it has to do 
with more than just the cost of health insurance. That is a major 
problem, but we are also seeing a crisis that is reaching in many 
different directions. Talk to folks with parents and grandparents on 
Medicare. Ask them what they are facing when it comes to paying for 
prescription drugs. The Senator from Texas wants to take what limited 
amount of money we might spend for tax relief and give it to people 
making over $500,000 a year.
  Frankly, I would like to see us also consider--in addition to the 
cost of health insurance--the deductibility of education expenses and 
prescription drug costs for the elderly in America. Do you know how 
much prescription drug costs went up last year in our country? It was 
16 percent. Put yourself on a fixed income and in a position with a 
serious illness. You go to the doctor and he says: Durbin, if you want 
to stay out of the hospital, here is a prescription that I think will 
do the trick. Then you go down to the pharmacy and they say: Well, I am 
sorry to tell you that it will cost you $300 to fill the prescription. 
Well, if you are living on $800 or $900 a month--and that is not 
uncommon if you are on Social Security--what are you going to do? Many 
people have to make a hard choice: Am I going to fill the prescription 
and figure out how to pay the rent and utilities and the other bills, 
or am I going to walk away from it? Which is the higher priority in 
America, the seniors who have to walk away from the medicine they need 
too survive, or people making over $500,000 a year and to give them 
$39,000 a year in tax breaks? That is what it comes down to; that is 
the choice we face.
  You have heard the Senator from Texas make his choice very clear: The 
highest priority, when it comes to taxes, from his point of view, is to 
say that the estate tax is going to be eliminated for everybody 
forever. I see it differently. We can reform the estate tax and do it 
in a sensible way. We can protect family farmers and family-owned 
businesses. I will sign up for that any day. But to say we are going to 
give a windfall in tax breaks to the wealthiest, at the expense of the 
people I have described, is unfair. It is the reason there are two 
different political parties in this Chamber, why we need political 
debate. It is the reason, when we disagree, sometimes it gets to the 
heart of issues that make a difference to families in America.
  Mr. DORGAN. I wonder if the Senator will yield for a question.
  Mr. DURBIN. Yes.
  Mr. DORGAN. There was a discussion earlier on the estate tax. They 
call it the ``death tax'' because the pollsters figured that 
politically it sounded better, but it is the estate tax. Also, the 
discussion about estate taxes always comes in terms of helping family 
farmers or small businesses. I wonder if the Senator remembers that 
last year, when we had this debate, I offered an amendment to the 
estate tax. The amendment was one to the proposal by the then-majority, 
who wanted to abolish the estate tax. My amendment said I don't believe 
we ought to interrupt the passage of any family business from the 
father and mother to the descendants who want to continue to operate 
the business. It doesn't matter whether it is a family farm or a 
hardware store, and it doesn't matter how big it is. If it is a family 
enterprise being transferred from the parents to the children, I think 
it ought to be totally exempt from the estate tax. So I offered an 
amendment.
  My amendment said that transfers of family businesses, regardless of 
size, to family heirs to operate shall be totally exempt from estate 
taxes beginning in the year 2003, and all other estates shall have a $4 
million exemption. So if you have up to $4 million in assets, or if you 
are transferring a family business, you are not going to pay any estate 
tax at all.
  Now, the estate tax provision passed by the Senate said we will begin 
creating larger exemptions for the transfer of family assets including 
a family farm or a family business so that, in 2010, there shall no 
longer be any tax. I said, no, if you package this by saying what you 
really want to do is help family farmers and family businesses, why 
don't you vote for my amendment and they will all be exempt next year, 
in 2003?
  We had 43 Senators who voted for my amendment. All of those who have 
spent their careers in the Senate saying ``we want to get rid of this 
burdensome death tax for family-owned businesses and family farms'' 
voted against that amendment. So when there is a family farm or a 
family business that

[[Page 5182]]

is transferred next year, and there is an estate tax applied to it, 
people should understand it is because the then-majority decided last 
year, when they wanted to ram this fiscal policy through the Senate, 
that they were not really quite as interested in family farms and small 
businesses as they were in those who have millions and billions of 
dollars of assets.
  Incidentally, this country has one-half of the world's billionaires. 
Good for us and good for them. There is nothing wrong with being that 
successful. But if somebody in this country has $6 billion or $8 
billion, I guarantee you a substantial amount of that has never been 
taxed. It represents growth appreciation on assets over time, and there 
is nothing at all wrong, in my judgment, in asking that at least some 
of that--just some of it--be put back into this country's schools, or 
invested in the country's kids, and in this country's future.
  But that is not what the Republicans wanted to have done. They 
wanted, at all costs, to protect this, and they did it at the expense 
of having a total exemption for transfers of all family farms and all 
family businesses, effective immediately in 2003. That is what we could 
have had.
  I ask the Senator from Illinois if he recalls that debate and what 
the real priorities were for the other side of the aisle?
  Mr. DURBIN. I certainly do. The Senator is correct. After that 
debate, I sent a letter to the two major farm organizations in 
Illinois, the Illinois Farm Bureau and the Farmers Union. I said: You 
don't have to name names, but can you give me an example of somebody 
who lost a family farm because of the estate tax? They could not come 
up with one in my State.
  I readily concede that there are sacrifices that have to be made to 
pay the estate tax. But the doom and gloom stories we hear from them 
are stories you have heard over and over. With the Senator's amendment, 
if they were worried about family farms or family businesses, they 
would have jumped all over his amendment. But it is not; it is about 
the people who are at the highest end of the spectrum, who have an 
appreciation of stock, or the appreciation of some capital asset and 
they finally face taxation for the first time. That isn't unfair. 
Families and businesses across America pay their fair share of taxes. 
Why do we want to exempt the wealthiest in our society at the expense 
of tax benefits that would help with the cost of health insurance, care 
for the cost of college education, and deal with prescription drugs? 
Those are the areas I think, frankly, in which the vast majority of 
Americans would applaud us for dealing with the problems they face.
  Mr. DORGAN. I have one additional question. We ended up with the 
worst of possible worlds last year. Those who said they supported a 
repeal of the estate taxes to help businesses and farms would not 
support the amendment that would have repealed it for family businesses 
and family farms next year. That was more than confusing.
  No. 2, the bill that was finally completed said let's repeal the 
estate tax and we will ratchet it up until it is finally repealed in 
2010. So if you are going to die, you have to die in 2010 to take full 
advantage of this because in 2011, the estate tax kicks back in. I 
think historians and policy analysts will look at that and say what on 
earth could they have been thinking? Who could have constructed 
something that bizarre?
  Mr. DURBIN. I had a group in my office that does financial planning, 
and they said they are cautioning clients not to walk by any open 
windows above the fourth floor in the year 2010 because that is the 
year when we have the estate tax repeal and it reinstates in 2011. It 
is a bizarre tax policy. If you will remember correctly, we were told 
by the administration that went ahead with the tax break that the 
reason we could do that was because they projected surpluses of $5.2 
trillion over the next 10 years. And with all this money, the obvious 
question they asked was: Why should the Government keep the people's 
money? Let's give it back to them. Some us who lived through the 
deficit years said we should be more careful in how we make these 
decisions. But they went ahead and passed the tax cut.
  But a year later, they said: We made a mistake; it is not going to be 
a $5.2 trillion surplus over the next 10 years. It is going to be $1.2 
trillion. What happens with the $4 trillion? Three things happened to 
it: The recession continued, an unexpected war took place; but for 40 
percent of it, it was a direct result of that tax cut decision. That, 
to me, was the wrong thing to do. It is not cautious or prudent. We 
will pay for it if we are not careful.
  Mr. REID. Will the Senator yield for a question?
  Mr. DURBIN. I will be happy to yield.
  Mr. REID. Mr. President, I was in the Chamber--I stepped out but 
still listened to the Senator from Illinois and the Senator from North 
Dakota--when the Senator from Texas spoke. I have the greatest respect 
for him. He has a Ph.D. in economics. I know how versed he is in 
economic issues, and he has a long history of being a Member of the 
House and Senate.
  It is my understanding the Senator from Illinois was presiding when 
the Senator from Texas gave his remarks; is that correct?
  Mr. DURBIN. That is correct.
  Mr. REID. Did the Senator from Illinois hear the Senator from Texas 
say--and I am paraphrasing but not very much--that he believes the most 
important issue before the Congress today is the estate tax issue?
  Mr. DURBIN. I believe that is accurate.
  Mr. REID. I am sure he does not mean that, and I am sure he will let 
us know if I am paraphrasing him improperly. I have to think--and I 
would like the Senator from Illinois to acknowledge--that prescription 
drug benefits for seniors may be more important than repealing the 
estate tax or making it permanent. We have already changed it. 
Something dealing with the Patients' Bill of Rights would also be 
something we should do.
  Going from one end of the spectrum where people have billions of 
dollars to the other end of the spectrum where people have nothing, 
does the Senator from Illinois think it is also important to raise the 
minimum wage for people who are struggling? I say to the Senator from 
Illinois that 60 percent--I remind the Senator, and I am sure he knows 
this--60 percent of the people who draw minimum wage are women, and for 
40 percent of those women, that is the only money they get for 
themselves and their families. Speaking for myself, I am more concerned 
about that than whether Bill Gates is going to pay taxes when he passes 
away.
  There are other issues, of course, that are of stronger importance to 
the people of Nevada than the estate tax. Last year, the people who 
actually paid estate taxes in Nevada were fewer in number than the 
fingers on your hands.
  Mr. DURBIN. I say to the Senator, he reminds me, come September we 
are either going to celebrate the fifth or sixth anniversary since we 
last increased the minimum wage to $5.15 an hour. Imagine what that 
translates into if you are working at $5.15. Double that if you are 
working two jobs. Say you worked 80 hours a week at $5.15 an hour. What 
a glorious life you would lead.
  The Senator from Nevada comes back to the point I was trying to make 
earlier. Whether you are talking about the cost of health insurance, 
the cost of college education, prescription drugs in Medicare, or 
minimum wage, those issues certainly are higher priorities to this 
Senator and to most of the people I represent than whether or not 
people who are worth literally millions and millions of dollars are 
going to get a tax break.
  The Senator from Texas is entitled to his point of view. I respect 
him for being very honest about it. But I hope this Senate comes down 
to some face-to-face votes, some real votes on real issues that mean 
something to families across Nevada and Illinois.
  Mr. REID. Will the Senator yield for one more point?
  The Senator is aware that the majority of the Democrats in the Senate 
have agreed to change the estate tax to increase the amount--this is a 
floor, I

[[Page 5183]]

should say. The Senator from North Dakota is in the Chamber. He offered 
an amendment that I supported which would have increased it, as I 
recall, to about $4 million and also exempted family-owned businesses.
  I think that everyone knows, hearing this colloquy among the three of 
us, that we support changing the estate tax. It is not as if we are 
totally opposed to changing it. Does the Senator from Illinois agree 
that we think it should be done incrementally and not eliminated 
completely?
  Mr. DURBIN. The Senator is correct. We made that point over and over 
with the amendment of the Senator from North Dakota and others, that we 
do want to increase the exemption, which means fewer estates even than 
those paying today would be eligible or covered by it, and second, for 
family farms and family businesses.
  I said to a group of small businessmen who came to visit me last 
week: Don't you think that is a reasonable way to go?
  One of them said: No, Senator, I have to tell you, I think this is a 
moral issue; it's a moral issue; we should eliminate the estate tax as 
a moral issue.
  I am not an arbiter of morality; I just ran for political office. If 
we are going to stack things against moral relevance, I would certainly 
put in that list increasing the minimum wage for millions of Americans; 
providing health insurance for people, 39 million who have none and 
more losing it every day; paying for college education expenses and 
prescription drugs for the elderly. Those are certainly moral issues, 
too, and if we are going to make a choice, the Senator from Texas made 
it clear what his choice would be: the estate tax.
  For the rest of us, there are other issues of equal moral heft that 
we ought to be considering before we move to the estate tax issue. I 
hope we get a chance to during the course of this session. It is 
important during the course of this budget debate that we talk about 
issues that mean something to families, small businesses, and family 
farmers across America.
  Mr. DORGAN. Will the Senator yield for one additional question?
  Mr. DURBIN. I will yield.
  Mr. DORGAN. I indicated to the Senator from Nevada that if there is 
to be a vote on the estate tax issue in the coming days--and I guess it 
may be with respect to the tax provisions dealing with the energy bill, 
I will want the opportunity to offer a second-degree amendment or at 
least offer essentially the same amendment we considered last year, and 
that amendment will draw a distinction. The distinction is this: If my 
amendment is adopted, then effective in 2003, no transfer or passage of 
any family business or family farm, regardless of size, to qualified 
heirs will have an estate tax obligation attached to it. None. It will 
be completely exempt next year.
  There is nothing under the minority party's proposal that would 
immediately exempt family businesses from the estate tax. It will be 
another 7 years or so before they are totally exempt.
  My amendment says, yes, let's exempt them, and do it immediately. My 
amendment also provides for a higher threshold exemption on all other 
estates. And I do not intend to agree to an unanimous consent agreement 
on this issue unless I have an opportunity to offer that as an 
amendment as well.
  Warren Buffett has been here a couple of times in the last year or so 
to visit with us. He is the world's second richest man. He said to us: 
What can people be thinking about, getting rid of the estate tax? I do 
not support getting rid of the estate tax. This is the world's second 
richest man. He said you ought not do that; it does not make any sense.
  Bill Gates' father came to Congress and said: Don't get rid of the 
estate tax completely. There are people who have billions of dollars 
who ought to pay some basic estate tax because they have never paid 
taxes on those assets, and that is the majority of those assets for the 
largest estates.
  When they pass, obviously a significant part ought to go to their 
heirs, but a significant part ought to be available to invest back into 
this country's future, especially education, health care, and other 
critical areas.
  I think the proper way to deal with this issue is to recognize there 
is merit to the question of whether we want to interrupt the transfer 
of a family business to other family members. The answer from us is, 
no, we should not interrupt that transfer. If mom and dad want to pass 
the business along to the kids to run, I do not care how big the 
business, let's not saddle them with an estate tax obligation.
  The fact is, the amendment I offered last year would have exempted 
all of them completely next year. We can do that. I would like an 
opportunity to vote on that again, if we are going to vote on exempting 
all estates forever from the estate tax. I think we ought to have a 
vote on the amendment I offered last year.
  I thank the Senator for yielding.
  Mr. DURBIN. I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent to speak as in 
morning business for 6 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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