[Congressional Record (Bound Edition), Volume 149 (2003), Part 10]
[Senate]
[Pages 13179-13198]
[From the U.S. Government Publishing Office, www.gpo.gov]




 JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT, 2003--CONFERENCE REPORT

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
proceed to the consideration of the conference report to accompany H.R. 
2, which the clerk will report.
  The legislative clerk read as follows:

       The Committee of Conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     2), to provide for reconciliation pursuant to section 201 of 
     the concurrent resolution on the budget for fiscal year 2004, 
     having met, have agreed that the House recede from its 
     disagreement to the amendment of the Senate, and agree to the 
     same with an amendment, signed by a majority of the conferees 
     on the part of both Houses.

  The Senate proceeded to consider the conference report.
  (The conference report is printed in the Record of May 22, 2003)
  The PRESIDENT pro tempore. Under the previous order, there is 1 hour 
of debate.
  The Senator from Nevada is recognized.
  Mr. REID. Mr. President, the only thing I want to say is that there 
is a limited amount of time. If people are not here to use their time, 
they just don't get that time. The two managers are here. As I 
indicated late last night, the order was entered for a certain amount 
of time for individual Senators. If they are not here, they will not be 
able to use that time later on today.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume.
  I would like to refer to the capital gains provisions of the 
compromise bill. I discussed last night the benefits of seeing capital 
gains reduced to 15 percent, and 5 percent for low-income families and 
individuals. But I also want to emphasize the simplification that we 
are bringing to the capital gains rates. While we still have the 1-year 
division between short-term and long-term capital gains, we have 
eliminated the 5-year holding period and the 18-percent rate.
  It is a small but very important step in actually eliminating lots of 
lines and lots of calculations that taxpayers face in their annual 
returns. The Joint Tax Committee has stated that there is much need for 
simplification of capital gains. The Joint Tax Committee notes that 
Congress has received continual testimony that capital gains is a 
source of enormous complexity. So in this compromise, we make a very 
good start on an important source of complexity in the Tax Code.
  Let me make clear for my colleagues that for many middle-and low-
income families, we make capital gains as simple as possible. At the 
end of the time period of this bill, middle- and low-income families 
will pay zero capital gains. Of course, it doesn't get much simpler 
than that because zero brings it down to nothing.
  I now would like to deal with the issue of corporate governance that 
was a significant part of the Senate bill.
  The Senate bill contained several major provisions that seek to put 
an end to the Enron abuses and corporate shell games that we have all 
learned so much about recently. These con artists who had keys to the 
executive washrooms have devastated the lives of millions of workers 
and shareholders.
  I am proud to have worked closely with my colleague, Senator Baucus, 
on so many of these provisions with the goal of addressing and 
reforming corporate governance. While I very much wish we could have 
seen these reforms incorporated in the House-Senate conference 
committee, let me be very clear that the snake oil salesmen should not 
be celebrating. I intend to continue to work very hard to press to have 
these provisions incorporated into other tax legislation and ultimately 
placed into the statute books.
  For example, some of the critical corporate tax shelter provisions 
that were in the Senate bill are already included in the Charitable 
Giving Act--what we call the CARE Act--because these are used for 
``pay-fors'' in this legislation. The CARE Act will soon go to 
conference with the House.
  In addition, I expect us to soon revisit provisions regarding 
corporate inversions where corporations set up overseas offices, 
basically simply a file drawer. They do this simply to escape taxation.

[[Page 13180]]

  Other legislation that I expect we will have a chance to consider 
again would include the Baucus-Grassley provisions dealing with fines 
and penalties--ending the loopholes that allow Wall Street firms to 
escape the real costs of their own wrongdoing.
  I am very proud of the bipartisan efforts of the Senate Finance 
Committee to shut down corporate tax shelters and promote proper 
corporate governance.
  I apologize to my colleagues if it is immodest. But I suggest the 
legislation contained in the Senate finance bill probably represents 
the most sweeping tax reforms in a generation to seek to clean up 
corporations and shut down the pin-striped con artists.
  I will continue to push for these needed reforms, and I expect that 
we will have step-by-step success in stopping corporate shelters and 
providing greater protection to the shareholders and workers.
  I yield the floor and reserve my time.
  The PRESIDENT pro tempore. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield 10 minutes to the Senator from 
Minnesota, Mr. Dayton.
  The PRESIDENT pro tempore. The Chair recognizes the Senator from 
Minnesota for 10 minutes.
  Mr. DAYTON. Thank you, Mr. President. I thank my colleague from 
Montana.
  Mr. President, this tax bill is one of the most dangerous, 
destructive, and dishonorable acts of Government that I have ever seen. 
It is a shameful looting of the Federal Treasury by the rich and 
powerful in America--compliments of their friends in Congress. It uses 
every trick in the budget book to line the pockets of the upper class. 
It cuts the top tax rates immediately, retroactively, and permanently. 
It lowers the top rate by almost twice as much as the next three. That 
gives the most rate reduction to people who are making over $370,000 a 
year, only half of that rate reduction to people making over $150,000 a 
year, and no rate reduction at all to people in the bottom two 
brackets--the 10 and 15 percent rates. There is just a tweaking of the 
bottom 10-percent bracket, which provides $100 a year to couples and 
$50 a year to individuals. That is also the only change to a tax 
bracket which is temporary. The top rate cuts are all permanent.
  So let me repeat. An individual with an annual income of less than 
$35,000 gets a tax cut of $50 a year. A married couple, without 
dependents, with an annual income of less than $50,000 gets a tax cut 
of $100. A person with an annual income of over $1 million receives a 
tax cut averaging over $93,000 in the first year alone.
  Now, one of the very few good provisions in the bill is an increase 
in the child tax credit of $400 per child. That is the one provision of 
any real benefit to middle-income families. But the conference report 
drops the Senate provision to improve the part of the child tax credit 
going to families making $10,000 to $30,000 a year. There evidently was 
not enough room in this $350 billion tax giveaway to help them. They 
get nothing so the rich get more.
  The conferees also threw out the Senate's elimination of tax 
avoidance loopholes, as the chairman of the Finance Committee just 
described, and he deserves great credit for making the best effort 
possible, along with his Senate conferees, to keep these good Senate 
provisions in the final report but they did not make it.
  So Americans working overseas are continued to be allowed to pay no 
taxes on their first $80,000 of income--$80,000 tax free off the top, 
regardless of expenses or circumstances. They kept the loopholes 
allowing many corporations to move offshore and pay little or no taxes 
on their income.
  You see how perverse this tax bill is. Every part of it is carefully 
constructed to give as much as possible to the rich and as little as 
possible to everyone else.
  According to the Brookings Institution Tax Policy Center, over half 
of all American households will get a tax cut of $100 or less. The 
households in the middle-income range will get tax cuts averaging $217, 
and households with incomes above $1 million will get tax cuts 
averaging $93,500 a year.
  It is like the White House is having a big banquet for the gobbling 
up of America and everybody is invited--except there is one menu for 
the rich of America and there is another one for the rest of America. 
The rich start with oysters on the half shells. After they are done, 
the rest get the shells. Then the rich are served prime rib and filet 
mignon. The rest get Hamburger Helper. The rich wash it down with Dom 
Perignon champagne, and the rest with Boone's Farm. Then the rest are 
asked to leave before dessert because it is too rich for them.
  Dessert is a dividends and capital gains tax cut. The unearned income 
of the rich and super-rich is to be taxed at only 15 percent rather 
than between 20 and 35 percent, although, in fact, many of the rich and 
super-rich will pay even less than that.
  Yesterday's Wall Street Journal had a headline: ``Some Investors 
Could Cut Tax to Zero or Close.'' Ronald Pearlman, a tax law professor 
at Georgetown University, is quoted in the Wall Street Journal as 
saying of the conference report:

       I guarantee it produces very, very low tax rates, possibly 
     even zero.

  So the wealthiest Americans will pay little or no personal income 
taxes. This tax bill ends this country's progressive Tax Code, and it 
replaces it with a perverse Tax Code.
  It was said earlier that lower and lower-middle income taxpayers are 
going to get a zero-percent rate on their dividends and capital gains--
for all three of them who can use it. While we are at it, why don't we 
eliminate their taxes on private jets, ski chalets, and gifts of over 
$500,000?
  Most lower income or middle-income taxpayers have their dividends in 
tax-free accounts today. There is no additional benefit to them. Very 
few of them have capital gains of any sizable amount to benefit from 
this reduction. These are reductions targeted right toward the rich and 
the super-rich, the wealthiest 5 percent, the wealthiest 1 percent of 
Americans and their unearned income, the income they did not work for 
every day--get out of bed, go to work, punch a clock, work, come out, 
and go home to their families--they pay at a lower rate on their 
unearned income than working Americans pay on their earned income.
  There is something wrong here--very wrong here. This conference 
report is also dishonest. It is intentionally deceptive. It was 
required to be limited to a cost of $350 billion. That is what the 
Senate said: $350 billion; that meant of reduced revenues over 10 
years. Well, evidently that was not nearly enough for the House 
conferees to feed the greed of everyone lined up at the public trough 
over there. So the conferees and the White House officials decided to 
cheat on the rules, not just a little but a lot.
  They created these fictions, transparently ridiculous pretenses, that 
these big tax cuts would take effect there, run for 2 or 3 years, and 
then stop--end entirely.
  Well, I guarantee you--because everyone here knows--Congress will act 
next year to make those new tax cuts permanent, just as this tax bill 
that we are passing today--I expect we will--contains an additional tax 
cost of $1.3 trillion over the next 10 years. That is the cost during 
that time of making tax cuts in the 2001 tax bill--the one 2 years go--
permanent. If and when these new tax cuts that are in this bill today 
are made permanent, then their 10-year cost will be another $1 
trillion.
  Where will that extra $2.3 trillion come from? From raiding the 
surplus of the Social Security trust fund for the next 10 years and 
then so-called ``borrowing'' the rest of it. But ``borrowing'' isn't 
really the right term, because we have no intention of paying it all 
back ourselves. If we did, we would not be behaving this way. No, most 
of our borrowing will be paid by the generation who are children today 
and by generations yet unborn.
  Borrowing money from future generations without their knowledge or 
their consent--reducing their future incomes and standards of living--
is not borrowing. There are a lot of people now in American prisons who 
are doing serious prison time for that kind of borrowing.

[[Page 13181]]

  This is a tax bill that will cost about $2.3 trillion during the next 
10 years that we do not have, so the rich and the super-rich can have 
their taxes reduced or eliminated. No wonder we can't get a copy of it. 
I have not seen a copy. I couldn't get a copy last night of the 
conference report. They don't want anybody to see it. They shouldn't. 
It shouldn't be passed, either.
  When I arrived in the Senate almost 2\1/2\ years ago, I was so 
optimistic that we would make lives better throughout America by 
sharing our abundance. President Clinton and Congress, at that time, 
with an expanding economy, produced the first budget surplus in the on-
budget account in 40 years, and the surpluses were projected to 
continue for each of the next 10 years.
  The other big fund of the Federal Government, the Social Security 
Trust Fund, was also expected to run sizeable surpluses for the next 
decade. What a great opportunity. There could be prescription drug 
coverage for seniors, the long-promised Federal share of 40 percent 
funding for special education, and more important work, and still be 
fiscally responsible. Now it has all been thrown away--or given away--
to those who do not need it and kept away from those who do.
  This year's combined Federal budget deficit will be around $400 
billion, even though the Social Security Trust Fund will be running a 
$160 billion surplus. That means the non-Social Security account of the 
Federal Government, the so-called on-budget account, which is almost 
all the rest of the Federal Government's operations, will run a deficit 
of about $550 billion--after running a surplus just 3 years ago.
  The PRESIDENT pro tempore. The Senator from Minnesota has used his 10 
minutes.
  Mr. DAYTON. Mr. President, I ask unanimous consent that I be given 1 
minute more.
  The PRESIDENT pro tempore. Is there objection?
  Without objection, it is so ordered.
  Mr. DAYTON. Thank you, Mr. President.
  In fiscal year 2000, the Federal on-budget revenues, which come 
almost entirely from personal and corporate income taxes, from estate 
taxes, capital gains taxes, and excise taxes, totaled 101 percent of 
expenditures. This year, they will scarcely cover two-thirds of 
expenditures.
  The tax base of the Federal Government is being destroyed. Who will 
tell the American people? It is hard for anyone to discern the truth 
from all of the conflicting words and numbers; but the American people 
must learn the truth. They also must act, because the looting of 
America will not stop until Americans stop it.
  It is not too late. It is almost, but not quite, too late.
  I yield the floor.
  The PRESIDENT pro tempore. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield 5 minutes to the Senator from 
Texas.
  The PRESIDENT pro tempore. The Senator from Texas is recognized for 5 
minutes.
  Mrs. HUTCHISON. Mr. President, I thank the distinguished chairman of 
the committee for a job well done. This has been difficult. When I hear 
people talking about the tax bill and saying it is really amazing that 
we sunset some of these taxes and then bring them back--no one wanted 
to do that. The reason we have to sunset some of these taxes is that we 
had to work within an artificial constraint of $350 billion. That is 
why we have sunsets. What we certainly hope to do is not to sunset 
these tax cuts, the tax relief for hard-working American families, but 
instead to allow these to go forward. We will have to pass new 
legislation to do it.
  Even with these modest tax cuts, we are going to spur the economy. 
People seem to forget that the purpose of this bill is to stimulate the 
economy. Eighty percent of the benefit of lowering the top rate to 35 
percent goes to small businesses, and small businesses are going to 
reap the benefits. Small business is the job creator of America. It is 
small business we want to spur to create jobs. We want to put people 
back to work. The purpose of the legislation is to put people back to 
work and, in addition, to bring a little equity into the system.
  Why in the world would we have a penalty on marriage? Why would a 
couple in Abilene, TX, who make $65,000 a year pay $1,000 more in taxes 
just because they got married? We go a long way toward eliminating the 
marriage penalty tax with this bill, and we are going to do everything 
we can to keep that in place from now on. There should not be a penalty 
for marriage. We should treat everyone equally. The marriage penalty 
bill was mine. It is a part of this legislation. I am going to do 
everything in my power to keep it forever, doubling the standard 
deduction and doubling the 15 percent bracket when people get married. 
That is for the lowest income and moderate-income people.
  We are making a giant leap for child tax credits, from $600 to 
$1,000, because it is our families who are suffering so much today. We 
are going to do everything in our power to make the child tax credit 
absolutely permanent.
  I want to discuss the State aid package because as we speak this 
morning, the Texas Legislature is in the last days of its regular 
session. They meet every other year for 6 months. They are in the last 
days of that session, and they are grappling with over $500 million. I 
spoke to Lt. Gov. David Dewhurst yesterday. He and the Speaker of the 
House, Tom Craddick, are working diligently to cut the budget, to try 
to be fair, try not to cut services too much.
  Help is on the way. My State of Texas is going to receive more than 
$1.2 billion in aid over the next 2 years. Under this proposal we are 
going to pass today, more than $510 million will go for Medicaid help. 
That is one of the biggest problems my State and many others have. $710 
million will go in block grants for essential government services so 
they will be able to put this money where it is most needed--$510 
million for Medicaid, $710 million in block grants. And it is going to 
be this year and next year. I hope this will resolve the problems of my 
State, as it has done as much as it can right now. The legislature is 
grappling with it. We are going to help my State and every State in 
America.
  We understand the hard times because the Federal Government is 
feeling it, too. We have increased national defense responsibilities, 
increased homeland security, and our States have as well. So help is on 
the way.
  I am very pleased to have been part of the group who worked on the 
State aid package to try to help. I have been reading the Texas papers. 
I see the problems we face.
  The committee did an outstanding job. I commend the House. I commend 
the President of the United States for his leadership. The President 
didn't just sit on his laurels after doing a great job in Iraq, a 
wonderful job protecting the young men and women of our country; he 
said: We are going to put people back to work. The President deserves 
credit. The Senate and House deserve credit. We will put people back to 
work in this country.
  The PRESIDING OFFICER (Mr. Bennett). Who yields time?
  Mr. BAUCUS. Mr. President, I yield 10 minutes to the Senator from 
North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I thank the ranking member.
  Mr. President, this bill I call the policy of the three Ds. This is a 
policy of debt, deficits, and decline.
  This policy is reckless and irresponsible as fiscal policy. It will 
hurt, not help, economic growth and it is totally unfair. In terms of 
irresponsibility, nothing says it better than this chart.
  Two years ago, the President told us we would virtually pay off the 
debt of this country by 2008. Now instead we see, by adopting his 
policy, we will have a debt of over $5 trillion by 2008. That is just 
the beginning of the story because that is the publicly held debt. The 
gross debt of the United States is skyrocketing as well, from over $6 
trillion at the end of this year to $12 trillion at the end of this 
budget period,

[[Page 13182]]

and all of this occurs at the worst possible time. We are about to see 
a demographic time-bomb hit this country called the baby boom 
generation.
  This chart shows the Medicare and Social Security trust funds and the 
cost of the tax cuts. What it shows is that when the trust fund goes 
cash negative in the next decade as the baby boomers retire, at that 
very time the cost of these tax cuts explodes, driving us deep into 
deficits and debt at levels that are utterly unsustainable.
  The irony of this package is that it is looting the Social Security 
trust fund of virtually every dime over the next 10 years to pay for 
these tax cuts. Of the $2.7 trillion in surpluses in Social Security 
over the next decade, this policy takes $2.698 trillion to pay for tax 
cuts and other expenses--again, at the worst possible time.
  The news from the Treasury Department is that things are getting much 
worse. Already this year, revenue is running $100 billion below 
forecast. If that continues, we will have the lowest revenue as a 
percentage of gross domestic product since 1959. Two years ago, the 
President justified the tax cuts on the basis that revenue was high as 
a percentage of GDP. Now it is low, and yet his answer is the same.
  On this very day when our colleagues on the other side are pushing a 
tax plan that, without gimmicks, would cost $1 trillion, they are also 
advocating nearly a $1 trillion increase in the national debt--much 
higher than the last increase in the national debt of $450 billion. 
This is the biggest increase in the national debt in our history--all 
at the same time they are advocating a tax cut which they say will cost 
$350 billion but which we have already heard from colleagues in the 
Chamber is disguised in its true cost. It will cost up to $1 trillion 
if the gimmicks are eliminated.
  It is ineffective as stimulus because very little of this plan is 
effective this year. Only $55 billion is effective this year. That is 
about 16 percent of the advertised cost. It is only about 5 percent of 
the real cost if the gimmicks are eliminated.
  This plan is grossly unfair. Those who earn over $1 million get a 
$93,000 tax break this year on average. Those in the middle income 
range get $217. Our colleagues on the other side will say: The rich pay 
more in taxes, so they should get more of a tax break. They don't pay 
that much more. This is what the wealthiest among us pay in terms of 
all Federal taxes. They pay 23 percent. But under this plan, they get 
38 percent of the benefit. It is a pretty good investment for them. 
And, unfortunately, unfair to the vast majority of Americans. Our 
colleagues say it is a growth plan, a jobs plan. No, it is not. This is 
not a jobs-and-growth plan. In fact, the people who have been hired by 
the White House and the CBO to do that kind of analysis tell us this 
plan is worse than doing nothing after 2004. You get a little bit of a 
bump in 2003 and 2004--just a little bit--one-half of 1 percent of GDP, 
which is about half as much as you would get with a well-designed 
stimulus package.
  But the outyear effect is negative because it is all borrowed money. 
Here are what the economists are telling us. Ten Nobel laureates:

       The tax cut proposed by President Bush is not the answer to 
     our problems.

  It is not just 10 Nobel laureates. It is the Joint Committee on 
Taxation saying:

       The simulations indicate that eventually the effect of the 
     increasing deficit will outweigh the positive effects of the 
     tax policy. . . .

  Mr. President, this thing is so loaded with gimmicks that it is a 
now-you-see-it-now-you-don't tax policy.
  On dividends, it goes from 38.6 percent down to 15 percent. It stays 
there for 6 years and then jumps up to 35 percent. There is no 
consistency. The same on small business exemptions. That goes from 
$25,000 to $100,000 in 3 years and then back down to $25,000. It's the 
same thing on the 10 percent bracket. It wanders around and goes down 
to nothing in 2011, 2012, 2013--all to hide the true cost of this plan. 
Here is the child tax credit. It goes up to $1,000 for 2 years. Then it 
goes back to $700 for 4 years, then up to $800, then up to $1,000, and 
then back down to $500 for the last 3 years.
  Mr. President, this gives credibility a bad name.
  Marriage penalty. For 2 years, it is at $9,500 to eliminate the 
marriage penalty, and it drops down to $8,265, giving people a big tax 
increase in the third year. Then it goes back up to $9,500 in 2009 and 
in 2010, and then it plunges to $7,950.
  Even a mother could not love this child. This is a bad plan--bad for 
the economy, bad for the fiscal future of the country. It is going to 
weaken America, not strengthen it.
  I urge my colleagues to think twice. People are going to be held 
accountable for this vote. This is a scandal in the making. We are 
going to read that there are perverse results from this tax policy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume. I want to respond to the statements just made because it 
brings up the issue of the Federal debt.
  We have heard from the other side that we are unconcerned about the 
Federal debt, as if they are concerned about it. I want to remind my 
colleagues--particularly those on the other side of the aisle--of how 
many amendments we had during the budget debate and during the omnibus 
appropriations bill debate back in January where there was amendment 
after amendment after amendment after amendment on the other side of 
the aisle to spend more money--spend more money.
  When it came to the budget, there was amendment after amendment after 
amendment to take money away from the part of the budget of giving 
authority for tax relief and reducing that amount of money. Did it go 
against the bottom line? No. They took the money they wanted to take 
away from tax relief and spent it someplace else.
  So don't give me this sort of lesson that they are concerned about 
the deficit and we are unconcerned about the deficit. If they were 
concerned about the deficit and they wanted to cut the amount of money 
we are going to give for tax relief and put it against the bottom line, 
then I would believe them. But it is just the opposite. When they want 
to spend it someplace else, the bottom line stays the same, the bottom 
line of the budget is not reduced.
  The problem here is they don't want any tax relief because they want 
to spend it. They think they know better how to spend it than the 
taxpayers. It isn't going to do as much economic good if the 535 
members of Congress decide how to spend it. If the people back home 
spend it, it is going to turn over more times in the economy and create 
more jobs.
  They think the American taxpayers are undertaxed and that is why we 
have a budget deficit. The American people are not undertaxed, and it 
is not undertaxation that is the cause of the deficit. The cause of the 
deficit is the overspending, and that overspending is best exemplified 
by amendment after amendment. Two times this year we have had those 
vote-aramas, with amendment after amendment to spend more money.
  This is about giving money back to the American taxpayers. If we are 
worried about the deficit, we will express that worry by spending less.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, let me take on the spending argument 
because I have heard it over and over, and it is the biggest canard 
offered on this floor. We have heard before that on our side we offered 
$500 billion of amendments on the supplemental. We did not. They have 
taken 1-year amendments that were offered singly and accumulated them 
and made them 10-year amendments. We offered $32 billion of amendments 
separately. They were not offered as a package.
  Interestingly enough, what our Republican colleagues did is they went 
into conference committee--which they excluded us from--and they added 
$60 billion in spending. Who are the big spenders? Let's set the record 
straight.

[[Page 13183]]

On the budget resolution, we did offer a series of amendments to do 
things such as fund the war, which wasn't in the budget, and to fund 
homeland security, which was inadequately funded in the budget. But we 
offset every one of those amendments. We paid for them, and the overall 
budget we offered was $1.2 trillion less in debt than the President's 
budget plan.
  Let's talk about who is serious about fiscal responsibility. Who 
offered the serious plans to reduce the growth of deficits and debt? I 
say to my friends, they told America 2 years ago they had a plan to pay 
off virtually all of the debt by 2008. Do you know what we see now? We 
have adopted their plan and, instead of paying off the debt, it is 
going to be $5.2 trillion of publicly held debt by 2008.
  The gross debt of the U.S. is going to double during this budget 
period--at the worst possible time, right before the baby boomers 
retire. The outcome is as clear as it can be; as clear as it can be. We 
have record deficits now. The President's budget increases spending by 
$600 billion above the baseline, cuts revenue by $1.6 trillion. There 
can only be one result: deeper and deeper deficits and debt, and at the 
worst possible time, right before the baby boomers retire.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, he just admitted I was right. He said 
every time they took money away from our tax cut allotment in the 
budget, they took it to offset spending someplace else. That is exactly 
my point. They never did take any money away from it to put against the 
bottom line. They took it away because they wanted to spend it 
someplace else. They want to continue that money coming into 
Washington. They want more money to spend. I will take them seriously 
when they want to reduce the amount of money in the budget for tax cuts 
and put it against the bottom line.
  Mr. CONRAD. Will the Senator yield for a question? Mr. President, may 
I have 30 seconds.
  Mr. BAUCUS. I yield 30 seconds more to the Senator from North Dakota.
  Mr. CONRAD. Mr. President, facts are stubborn things, I say to the 
chairman of the Finance Committee. The budget we offered on our side 
did exactly what you were challenging us to do. We had $1.2 trillion 
less in deficits in our plan than the plan offered on your side. You 
said you want to cut back on the tax cuts, bring it to the bottom line. 
That is what we did. As a result, we would have had $1.2 trillion less 
in deficit if our plan had been adopted.
  Mr. KYL. Mr. President, I rise today to express my support for H.R. 
2, the Jobs and Growth Tax Relief Reconciliation Act of 2003.
  Former President Ronald Reagan often said, ``If you want more of 
something, subsidize it. If you want less of it, tax it.'' In recent 
polls, the American people have consistently said they want more job 
creation and more economic growth. This legislation, which President 
Bush is expected to sign into law this weekend, is specifically 
tailored to achieve these very important goals--by reducing taxes in 
the right way, it will enable businesses to create jobs and it will 
spur greater economic growth. It will also help American families keep 
more of their hard-earned money to spend or save, as they see fit.
  One of the most important things the legislation does is accelerate 
the tax rate cuts already scheduled to take effect. In 2001, Congress 
passed a law that set in motion a series of income tax rate reductions 
that were scheduled to be phased in over the next several years. 
Because of the slow phase-in, the 2001 tax cuts had a muted impact on 
the U.S. economy and taxpayers felt little benefit. The bill we pass 
today will make all of those rate reductions effective this year. 
Taxpayers will see their withholding adjusted almost immediately and 
will begin reaping the benefits right away.
  A key component of this provision is that it brings the top tax rate 
down to 35 percent--the same rate that corporations pay. While 
opponents claim this will only benefit wealthy taxpayers, I suggest 
that they look at what kind of taxpayers fall into the top bracket. The 
overwhelming majority--nearly 80 percent--of taxpayers in the top 
bracket have small business income. Small businesses, which are pass-
through entities that are taxed at individual rates, are responsible 
for the creation of at least half of all jobs in the economy; reducing 
their tax burden will help them expand and create more jobs. Fairness 
and sound economics dictate that we should not tax small businesses at 
a higher rate than we tax big corporations. This bill fixes this so 
that the top small business rate will be the same as the top corporate 
rate.
  Our bill also significantly reduces the taxes individuals pay on 
dividends they receive from corporations. In order to change investment 
behavior--and we know that the ongoing economic troubles are almost 
exclusively related to a collapse in business investment, not to a 
problem of consumer demand--taxpayers must see a meaningful and 
permanent reduction in rates at the margins. The bill we pass today 
does that.
  Under current law, a corporation pays taxes on its earnings, usually 
at a rate of 35 percent, and its shareholders will pay ordinary income 
rates--currently, the top rate is 38.6 percent, on any dividends 
distributed by the corporation. President Bush said we should end this 
double taxation by eliminating entirely the tax on individuals. I 
fought hard for the original Senate bill that would have done this, and 
I still believe that is the best tax and economic policy. However, the 
conferees from the House were unwilling to agree. The compromise we 
settled on will reduce the individual tax rate for dividends to 15 
percent--a significant improvement over current law. I will continue to 
work to eliminate the double tax on dividends.
  The bill we pass today also reduces the capital gains rate from 20 
percent to 15 percent, the same rate we will now apply to dividends. I 
believe this is also good policy and I hope we can work to eliminate 
the tax on capital gains too. The dividend and capital gains tax relief 
should boost stock values significantly and should make it much less 
costly for businesses to expand and create jobs. Nearly 420,000 Arizona 
taxpayers will benefit from the dividends and capital gains tax relief.
  This legislation also includes a number of provisions designed to 
provide much-needed tax relief to American families. It increases the 
child tax credit to $1,000 per child, with a good portion of the tax 
benefits being sent to families as early as this summer. It also 
provides additional relief from the marriage penalty. In Arizona alone, 
nearly 450,000 families will benefit from the child credit increase and 
more than 600,000 will benefit from the marriage penalty relief.
  As I have said, I believe this is a very good bill that will do much 
to encourage job creation and economic growth, but I believe it could 
have been better. If the House had been willing to accept some offsets, 
we could have paid for the $20 billion in temporary State aid this bill 
provides. I also believe we should have held firm to the Senate 
position and eliminated the double tax on dividends. Regardless, I am 
very proud of the business, individual and family tax relief we have 
provided in this bill.
  The PRESIDING OFFICER. Who yields time?
  Mr. GRASSLEY. Mr. President, I yield 5 minutes to the Senator from 
Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, on occasion it sounds as if we are 
redebating the budget. That is not what we are debating. We are 
debating a growth package. The fact is, last year we did not have a 
budget. This year we do have a budget. This year we have a tax bill to 
help grow the economy.
  Some of my colleagues on the Democratic side offered a tax bill as 
well. It was $152 billion. This tax bill is $316 billion. It is not 
even $350 billion. I keep hearing it is $350 billion, but there is 
about $34 billion in spending. One of the amendments passed with 97 
votes. It did not have my vote.
  My point is, it is a $316 billion tax cut over 10 years. Over those 
10 years, we are going to have revenues of about $25 trillion, $26 
trillion. We did load it upfront because we want to have as

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much economic impact as we possibly can. The economy is very soft, and 
we wanted to grow the economy. We did things to help encourage 
investments and jobs. We were taxing capital investment far too much. 
We tax dividends higher than any country in the world. That is absurd.
  Basically, we are cutting the dividend tax a little bit more than 
half. We did not do as well, in my opinion, as we did in the Senate. 
That is part of the compromise. We took part of the House provision. We 
are going to tax capital gains at 15 percent and tax dividends at 15 
percent. I think there is common sense in taxing both at that level.
  I heard someone say there is nothing in here for low-income people. 
That is not true. A couple who have two kids get $800 additional in 
child credit. If they have a combined income of $56,000, they get 
another $1,200 in marriage penalty relief. That is $2,000. So if 
someone says that is nothing, that may mean their tax bracket, one, 
does not exceed 15 percent and also, percentagewise, it is probably 
well over half their tax liability. I just make those points.
  We also accelerated the rates, as we should. I keep hearing this is a 
tax cut for the wealthy. The maximum tax rate in 1992 was 31 percent. 
When we are done with this, the maximum tax rate is going to be 35 
percent--still significantly higher, still about 13 percent higher than 
it was in 1991. We hear all this demagoguery of class warfare and 
people trying to play on other people. I disagree.
  The State aid program is $20 billion. I want to make sure everybody 
understands that this is a temporary program--I want that in the Record 
for--for the States. I have a feeling States may be coming a year from 
now saying: We need this to be extended, either the FMAP portion or 
assistance going directly to the States.
  All persons who sponsored this and were critical for getting it in 
this bill said it is temporary. It is temporary. It shall not be 
extended. Everyone agreed to that--House and Senate. The House did not 
want it in. Many on this side did not want it in. We agreed to have it 
in as a temporary program. I wanted to allude to that. Finally, I 
compliment Senator Grassley for his leadership because, without his 
leadership, we would not have had this bill. We might not have had a 
budget. Frankly, we have a budget, and we have a bill. Many people are 
throwing rocks and stones saying this is terrible. We do have a budget, 
and we are trying to do a growth package. We are doing a growth package 
just about double what the Democrats proposed, except the Democrats in 
their growth package proposed almost all spending. I think three-
fourths is spending. This package has real incentives for growth, 
investment, and jobs. Let's help the economy. The economy is far too 
soft. We want to encourage the economy to grow. I think this proposal 
will do that. Again, I thank my colleague from Iowa for his leadership 
in making that happen. I also thank our leader, Senator Frist. This has 
been a challenging process to get both the budget and reconciliation 
through. We did the budget on time, almost in record time, and this 
reconciliation bill is the earliest I have seen Congress act. We should 
act because the economy is soft now. It needs assistance.
  Mr. President, I yield the floor.
  Mrs. BOXER. Mr. President, this bill is called the ``Jobs and Growth 
Tax Relief Reconciliation Act.'' That name is wrong. This bill is not 
about creating jobs and stimulating economic growth. It is about 
helping the elite few with large tax cuts, while burdening the majority 
of Americans with a huge debt.
  Fairness is an American value. And this bill is far from fair.
  Those making $1 million per year will get a $93,000 tax cut--more 
than twice the annual income of the typical working family. Meanwhile, 
53 percent of Americans will get less than $100. The average tax cut in 
2003 for those in the middle of the income spectrum will be $217. And 
married couples with two children and incomes between $10,000 and 
$21,000 receive no tax cut at all.
  To make matters worse, the marriage penalty relief that was in this 
bill--something that would have helped most working families--was 
scaled back in order to provide larger tax cuts on dividends and 
capital gains--something that helps only the elite few. Only about 25 
percent of Americans receive taxable dividends. And, according to the 
Center on Budget and Policy Priorities, 39 percent of the benefits of 
that initiative would go to millionaires; another 44 percent would go 
to the top 10 percent of taxpayers; and only 17 percent of the benefit 
would go to the bottom 89 percent of taxpayers.
  If most Americans are not getting tax relief in this bill, what are 
most Americans getting? Debt. This bill is fiscally irresponsible. The 
federal budget deficit stands at $400 billion--the largest deficit 
ever. And our national debt is spiraling upward. In fact, later today, 
the Senate will vote on a bill to increase the debt limit by nearly $1 
trillion.
  These numbers sound abstract. But they have an impact on all 
Americans. Because of the higher long-term interest rates that will 
result, economists have estimated that the rising deficits and debts 
will, by 2012, take $1000 every year out of the pockets of working 
Americans.
  And, the Republican leadership has indicated that they intend to come 
back and extend the tax cuts that are sunset in this bill. If those 
provisions are extended, the cost through 2013 will be between $807 
billion and $1.06 trillion--even more deficit and even greater debt.
  This robs Social Security and Medicare surpluses and borrows from our 
children's future. And it denies us the resources we need to defend our 
homeland from terrorists and educate our children.
  In these bad economic times--times of high unemployment, slow growth, 
and fragile consumer confidence--our first priority should be to 
stimulate the economy. That is why I believe we need a tax and growth 
bill. The problem is, this bill does not do it.
  In fact, the one provision in the Senate-passed bill that would have 
provided a big boost to our economy--the Ensign-Boxer amendment--was 
taken out of the bill.
  Our amendment would have lowered the tax rate, for one year only, on 
the earnings of the foreign subsidiaries of American companies--if 
those earnings were brought back to the United States and invested in 
jobs and the economy. Current official estimates conclude that between 
$140 and $300 billion in domestic foreign subsidiary income would have 
been brought back into the American economy during the one-year period. 
These funds would have helped create American jobs and American 
opportunities with billions of dollars currently left overseas.
  But that provision, even though it had broad bipartisan support and 
passed the Senate 75-25, was stripped from the bill. The one provision 
that would have done the most to stimulate the economy was dropped from 
the bill.
  I am also disappointed that this bill drops my amendment to require 
those who fail to pay the child support they owe, to add the amount 
they owe to their taxable income. It was the morally right thing to do.
  The conferees also failed to close the business tax loophole for 
giant Sport Utility Vehicles (SUVs). In fact, this bill quadruples that 
loophole. Under this bill, small businesses will be able to deduct up 
to $100,000 of the cost of these huge passenger vehicles in one year at 
least through 2005. Smaller SUVs and cars are limited to a deduction of 
$7,660 in the first year, and $4,900 in the second year after the 
purchase. This cap is not changed in the bill. But the SUV cap is. As a 
result, people who do not need a giant SUV for business purposes will 
buy giant SUVs to take advantage of the much larger tax break.
  We should scrap this bill and start over. We should pass a bill that 
would cut taxes for every working American, providing an average 
benefit of over $1,600 to a family of four making $50,000 a year. We 
should pass a bill that would provide real assistance to the 8.8 
million Americans who are currently unemployed. We should accelerate 
the refundability of the child tax credit, accelerate the elimination 
of the marriage penalty, and extend and expand

[[Page 13185]]

unemployment insurance for those looking for work, including the one 
million people who have already exhausted their benefits.
  We should pass a bill that really sparks economic growth. It should 
include the Ensign-Boxer Invest in the U.S.A. proposal. It should, as 
the Democratic plan did, assist small businesses with their health care 
expenses by providing a 50 percent tax credit in 2003. And very 
important for California, it should provide $40 billion in immediate 
aid to state and local governments.
  That would be a good bill to stimulate the economy, provide help to 
the vast majority of working Americans, and not plunge this nation 
deeper into debt or plunder the Social Security surpluses. That is a 
bill we should pass.
  This bill before us should be defeated.
  Mr. ROCKEFELLER. I have said from the beginning of this debate that 
my guiding principle would be the best interests of the people of West 
Virginia. I cannot support the deal that has been reached because it is 
so clearly designed to benefit the elite members of our society at the 
expense of average taxpayers in West Virginia and across the Nation. 
Proposals that could have stimulated the economy and helped working 
families got short-changed to make room for enormous tax cuts for 
wealthy investors. I have little hope that this bill will stimulate 
economic growth; on the other hand, our national debt will be 
guaranteed to grow if we pass the bill.
  I would also like to comment briefly on the process that has brought 
us to this point. I am extremely disappointed that this deal was struck 
behind closed doors in an entirely partisan manner. Since it adds 
hundreds of billions of dollars to our national debt, it affects every 
American now and for the next generation. Whenever we are considering 
something of such tremendous importance, the process ought to be 
bipartisan and inclusive. This is not how Americans expect us to 
conduct business.
  For 2 years, I have fought to ensure adequate fiscal relief to States 
that are struggling with crippling budget deficits. I am pleased that 
this bill provides $20 billion in State aid. Our most vulnerable 
citizens are at risk when States cut Medicaid and other services. And 
any effort that we make to stimulate economic growth would be futile if 
States are forced to cut spending and increase taxes. Yet this 
legislation still falls well short of what 80 Senators voted for during 
debate on the budget resolution earlier this year. I am disappointed 
that we did not fulfill our commitment to $30 billion in State aid.
  If we were truly interested in stimulating economic growth and 
creating jobs we would have not only provided more aid to States, we 
would have focused tax relief on working families who are the most 
likely to immediately spend any tax cut. But tax cuts that help working 
families got squeezed to make room for more tax cuts for wealthy 
investors. The proponents of this bill may talk a lot about the 
acceleration of the child tax credit, marriage penalty relief, and the 
expansion of the 10 percent bracket. But all of these provisions are 
set to expire after next year, and they pale in comparison to the new 
tax breaks provided to millionaire stockholders.
  I fought to expand the child tax credit to serve more families, and 
to provide a greater benefit to those families who currently qualify 
for only a partial credit. I am disappointed that no such provisions 
are included in this final bill. While I am pleased that the size of 
the child tax credit increases from $600 to $1,000, albeit for only the 
next 2 years, I am still worried about the 130,000 children in West 
Virginia who will see no benefit from this increase. We should be doing 
more to help our neediest families.
  I am also disappointed that we are spending $35 billion, 10 percent 
of the cost of the bill, to reduce the highest marginal income tax 
rate. Only Americans with more than $312,000 of annual income are 
affected by the highest rate. That is less than 2 percent of our 
taxpayers nationwide, and in my State of West Virginia it is less than 
1 percent of taxpayers. The income tax cut that had the most potential 
to help hard-working people in my State is the expansion of the 10 
percent bracket. But this provision, like so many other good ideas, was 
reduced in order to make room for other things. The expansion of the 10 
percent bracket expires after next year, while the income tax cuts for 
the wealthiest few stay in place much longer. I cannot condone such 
misplaced priorities.
  The most expensive part of this bill is the tax cuts for investors, 
estimated to cost more than $150 billion. These tax cuts are the least 
likely to help average Americans. While many Americans today are 
invested in the stock market, they typically hold these assets in 
retirement accounts that already enjoy preferential tax treatment. Only 
one-quarter of America's taxpayers will get any benefit from tax 
reductions on dividends or capital gains. And for the vast majority, 
the benefit will be very small. So why then does it cost so much? 
Because the wealthy few will receive enormous tax cuts. More than 40 
percent of all dividend income is claimed by the top 2 percent of 
taxpayers. Capital gains are even more concentrated among wealthy 
Americans. I cannot justify huge cuts in dividends and capital gains 
taxes when the benefits to average Americans are so small.
  Too many important proposals have been completely left out of this 
package. Despite the fact that more than 8 million Americans are 
currently out of work, many of them for extended periods of time, this 
bill provides no assistance for the unemployed. Incentives for 
investment in the construction of new schools or the deployment of 
broadband services--proposals that could have created new jobs 
immediately--are completely absent. For a bill euphemistically referred 
to as a ``Jobs and Growth Package'' there is very little here that will 
create jobs or growth.
  Finally, this bill cannot be justified in the contest of our 
Government's current fiscal situation. Later today, Congress will be 
asked to increase the debt limit by almost $1 trillion, an 
unprecedented increase. Yet we are about to approve a tax package that 
will increase the deficit by $350 billion over the next 10 years--more 
when interest expenses are included. If this legislation really had the 
potential to help working families and reinvigorate our economy, we 
could justify increasing deficits. But instead we have short-changed 
the most important provisions to make room for $150 billion in tax cuts 
to investors. It is unconscionable to ask the next generation of 
Americans to foot the bill for this legislation. I cannot support it.
  Mr. KENNEDY. Mr. President, this conference report reflects the real 
priorities of the Republican Party. It cuts back tax relief for working 
families in order to expand tax breaks for the wealthiest taxpayers. 
The child credit and marriage penalty relief were both reduced so that 
more money could be spent on dividend and capital gains tax cuts. As a 
result of this backroom Republican deal, an average family of four will 
face a tax increase of $850 in 2005, right after the election; while 
tax breaks for the wealthy continue for additional years. The bill 
employs so many gimmicks to help the rich that even the Wall Street 
Journal called it ``the Great Tax Shelter Act'' of 2003. No wonder this 
legislation was put together behind closed doors and is being rushed 
through Congress with little time for scrutiny. The Republican leaders 
who authored it know that this bill could not survive in the light of 
day. Clearly, their priorities are not the American people's 
priorities.
  The Bush administration apparently believes that the biggest problem 
in today's economy is that the rich are not rich enough. Republicans 
think that if you give tax breaks to the wealthiest taxpayers, they 
will invest more and the economy will grow. It is called ``trickle-
down'' economics. The problem with this theory is that the wealthy may 
not use the money in ways that create jobs and expand production. If 
there is no demand because consumers are not buying, companies will not 
produce more. They will just wait until the economic climate improves.

[[Page 13186]]

  Democrats believe that tax relief and public resources should go to 
America's working families. They are the ones who are struggling most 
in this brutal economy, and they will quickly spend the money. That 
will create a demand which is needed to get the economy moving again.
  Two very different approaches to stimulating the economy. Republicans 
keep making the same mistake. If ``trickle-down'' economics worked, the 
economy would not be stagnating today. In 2001, at President Bush's 
insistence, Congress passed one of the largest tax cuts in history, and 
wealthy taxpayers got the lion's share of the tax benefits. America has 
lost more than two and a half million jobs since the first Bush tax cut 
passed. The Republican response is more of the same. This conference 
report provides more of the same. But the American people want a new 
approach.
  Over 400 respected economists--including 10 Nobel laureates--say the 
Bush plan is the wrong way to go. Unfortunately, the President has 
repeatedly rejected the pragmatic advice of mainstream economists, and 
opted instead for an ideologically rigid and ineffective strategy.
  His single-minded commitment to ever larger tax cuts for the wealthy 
as the cure for every economic ailment has made a bad situation worse. 
The administration has ignored remedies that would provide a 
significant stimulus this year, while implementing policies that will 
undermine our future economic strength. As a result, the economy 
continues to stagnate, and the number of families facing hardship 
continues to grow.
  Unemployment is still on the rise. It climbed to 6.0 percent in 
April. There are now 8.8 million men and women unemployed across 
America. The economy has lost more than half a million jobs in just the 
past 3 months, and there is no end in sight. In the absence of an 
effective stimulus from the Federal Government, the economy is not 
likely to improve quickly.
  Behind such disturbing statistics are people who need our help. A 
strong economy allows working men and women to have greater control 
over their lives, and more opportunity to pursue their personal dreams. 
A stagnate economy takes much of that control out of their hands, 
leaving families vulnerable to circumstances they cannot control.
  Across America, in the last 2 years, workers have lost their job 
security. As layoffs mount, they live in fear of being the next to be 
let go. There are 2.7 million fewer private sector jobs in America 
today than there were in January 2001. Those looking for a job are 
finding it increasingly difficult to obtain one. The number of long-
term unemployed has tripled. The average time it takes an unemployed 
worker to find a new job is the longest it has taken in 19 years. Yet 
this bill does nothing to directly help these unemployed men and women 
and their families.
  The pain caused by this destructive wave of economic stagnation is 
not limited to those who have lost their jobs.
  Health insurance is becoming less and less affordable for workers and 
their families across the country. The Congressional Budget Office now 
estimates that over the course of a year, 60 million Americans go 
without health insurance. Nationally, the average cost of health 
insurance is rising at double digit rates--up by 11 percent in 2001 and 
another 12.7 percent in 2002--nearly four times the rate of inflation. 
The health care squeeze on working families is getting tighter and 
tighter.
  Senior citizens who desperately need prescription drug coverage are 
suffering, too. The cost of prescription drugs is escalating at double 
digit rates--increasing an average of 16 percent each year.
  Children who are being asked to do more in school are receiving less 
support. School districts, faced with declining local tax receipts and 
the failure of the Federal Government to provide promised resources, 
have been forced to increase class sizes, cut weeks from school 
calendars, and lay off teachers.
  The cost of higher education is rising beyond the reach of more 
families. The gap between the cost of college tuition and the tuition 
assistance provided by the Federal Government has grown by $1,900 in 
the last 2 years.
  Millions of families have seen their retirement savings seriously 
eroded. The value of savings in 401(k) plans and other defined 
contribution plans has declined by $473 billion in the last 2 years.
  These are the realities American families face today.
  It is imperative that the National Government respond to the growing 
economic crisis. There is much that Government can do to stimulate 
economic growth in the near-term without generating huge deficits that 
will undermine prosperity in the long term. Unfortunately, the Bush 
administration has consistently refused to follow such a course of 
action.
  The Republican plan does not maximize the economic impact in 2003. 
Only 17 percent of the $350 billion cost of their legislation would 
reach the economy this year, when it is needed to jumpstart a sluggish 
economy. We could create many more jobs sooner by better targeting the 
resources provided in the legislation.
  The conference report spends $150 billion reducing dividend and 
capital gains taxes and $35 billion lowering the tax rate on the 
highest incomes. These cuts, which constitute more than half of the 
entire cost of the bill, do not provide effective stimulus and they 
take resources away from proposals that would. It is incredible that 
Republicans could not find the dollars to extend unemployment benefits 
and to provide tax relief for low-income workers, but they could find 
the money to pay for these tax breaks benefitting the wealthiest 
taxpayers.
  According to an analysis by the Urban-Brookings Tax Policy Center, 
the provisions in the conference report would provide an average tax 
cut of $93,500 to taxpayers with an annual income over $1 million. In 
stark contrast, 53 percent of American households would receive a tax 
cut of $100 or less. The Republican conferees plan is even more tilted 
to the wealthiest taxpayers than the original Bush plan.
  The few provisions that benefit middle-class families have been 
limited to just 2 years, while the dividend and capital gains tax cuts 
extend much longer. The conferees also eliminated a Senate provision 
that would have benefitted 11.9 million low-income children and their 
families, one of every six children in the Nation.
  The richest 5 percent of taxpayers would receive 75 percent of the 
tax benefits from the dividend and capital gains tax cuts. All of the 
tax benefits from reducing the tax rate on the top income bracket will 
go to the richest 1 percent of taxpayers. They are certainly not the 
ones who are struggling to make ends meet in the faltering economy. 
They are not the ones who need our help. Nor are they the ones who will 
quickly spend the money they receive, creating an immediate economic 
stimulus.
  The Republican plan is simply not an effective stimulus. The 
reduction of the income tax on corporate dividends, the centerpiece of 
their plan, is one of the least effective forms of stimulus, generating 
less than a dime of stimulus for every dollar of Federal revenue lost.
  A well-designed stimulus plan could generate far more economic 
activity at a small fraction of the cost of the Republican conference 
report. The Senate Democratic plan would inject $125 billion into the 
economy this year, and is designed to maximize the stimulus effect of 
each dollar. That is more than twice as much in 2003 as the conference 
report, and three times as much as the Bush administration's plan.
  Three widely respected economic models all show that the Democratic 
plan would generate substantially more growth in 2003 and create a half 
million more jobs this year than the President's plan.
  One of the few positive provisions in the conference report is the 
$20 billion in assistance to States, $10 billion through the Medicaid 
Program, and $10 billion in general financial aid. The current fiscal 
crisis in the States is the most severe in decades.

[[Page 13187]]

  It is important to remember that more people need to rely on State 
and local programs in an economic downturn. The number of people 
eligible for Medicaid grows substantially in times of recession, and 
many other costs rise as well. Without jobs and without health care, 
families have nowhere else to turn. We have an obligation to make 
certain that the needed resources are available to them. While the $20 
billion of financial assistance to the States is a step in the right 
direction, the level of aid is clearly inadequate. Congress should be 
providing at least double this amount. A number of States will also 
lose significant State tax revenue due to the impact of tax cuts 
contained in the conference report. Thus, the net amount States will 
receive will be below even the $20 billion.
  The Republican authors of the dividend and capital gain tax cuts in 
the conference report intend those tax breaks to be permanent. They 
have repeatedly said so. If not arbitrarily sunsetted after 2008, the 
dividend and capital gains provisions alone would exceed the $350 
billion which is supposed to be the total cost of the entire bill over 
the next 10 years. The real cost of the bill before us is far in excess 
of $350 billion. If all its provisions were extended for the full 
decade, as our Republican colleagues intend, the real cost would be 
closer to $1 trillion.
  The conferees have resorted to this ``sunsetting'' subterfuge in 
order to evade the requirements of the Budget Act. But, what they 
cannot evade is the adverse economic impact their one-trillion-dollar 
raid on the public Treasury would have. It will not stimulate the 
economy. In fact, it could well prolong the recession by leading to an 
increase in long-term interest rates, harming the ability of businesses 
to create new jobs. It will add enormously to the deficit, making it 
much more difficult for us to effectively address the Nation's urgent 
needs in job creation, in education, in health care, and in homeland 
security. Those are the real priorities of the American people. 
Unfortunately, they are obviously not the priorities of the Bush 
administration and the Republican majority.
  An NBC News/Wall Street Journal public opinion survey conducted over 
the past week shows that a substantial majority of the American people 
do not believe these tax cuts are the way to create jobs. By a margin 
of 64 percent to 29 percent, they think there are better ways to 
improve the economy than to cut taxes. Sixty-eight percent believe the 
President's economic policy ``relies too heavily on tax cuts and not 
enough on direct job creation''; and 66 percent believe his plan 
``benefits the wealthy more than average people.'' The American people 
are not being fooled by this bill. They know precisely what it will 
do--benefit the wealthy; and what it will not do--stimulate the 
economy. They also understand that extravagant tax breaks for the rich 
mean that the resources will not be available to address America's real 
needs. By a margin of 55 percent to 36 percent, they would prefer to 
use limited public dollars to help pay for health care than to finance 
a tax cut.
  The conference report which the Senate is about to pass by the 
narrowest of margins does not reflect the priorities of the American 
people. Unfortunately, their voices were unable to penetrate the closed 
room where the Republican leadership wrote this irresponsible bill. If 
a majority of Senators would have the courage to vote no, we could 
defeat it and begin work on a genuine stimulus bill.
  Mr. LEAHY. Mr. President, I rise today to oppose the tax 
reconciliation bill conference report that is being considered by the 
Senate today because this tax cut bill is not fiscally responsible. 
When President Bush entered the White House, our country enjoyed a 
record budget surplus, but the fiscal irresponsibility of this 
administration has quickly turned that surplus into record deficits. 
And now this bill that was cooked up in secret between the White House 
and Congressional Republicans without any input from Congressional 
Democrats will bring our country further into debt, lead to more hard-
working Americans losing their jobs, and put a greater share of the tax 
receipts in the pockets of the Nation's most privileged.
  I voiced several concerns about this tax bill when the Senate voted 
on it last week. Now that the conference report is finished, I have 
even more. First, while I am pleased to see that this bill does contain 
$20 billion in financial assistance to ailing State and local 
governments, I am very concerned that the tax cuts in this bill will 
once again wreak havoc on our already disastrous State budgets around 
the country. In my home State of Vermont, the State legislature stopped 
basing its State income tax on the Federal rates because of the costly 
cuts called for in the 2001 tax bill. Now, Vermont is going to be faced 
with somehow making up an additional $35 million in revenue because of 
the dividends and capital gains rate reductions in this bill. This is a 
very large amount of money for a State whose population is only 
609,000. How will Vermont and the other States possibly make up these 
lost revenues without massive cuts to essential health, education, and 
homeland security services?
  Second, these tax cuts are tilted even more heavily to the very 
wealthy than the tax cuts the President championed in 2001. Just look 
at the rate reductions. For the middle three income brackets in this 
country, rates would drop by 2 percentage points, but the top rate will 
fall by 3.6 percentage points. And according to the Center on Budget 
and Policy Priorities, 80 percent of dividend income goes to households 
with incomes over $100,000. Sadly, this administration has chosen to 
support tax policies where affluent people will reap enormous benefits, 
while working families will receive very little tax relief.
  Third, this plan is riddled with Enron-like tax gimmickry by 
pretending that most of the provisions will sunset or expire at some 
arbitrary date in the future--dates chosen not to make good tax policy, 
but rather to make all the revenue losses fit into the $350 billion 
pot. The income tax rates and business expensing provisions will expire 
in 2006, and the dividends and capital gains rates will expire in 2009. 
By doing so, this bill attempts to jam in as much of the President's 
misguided dividend tax proposal as possible into the Senate's $350 
billion limit at the expense of more reasonable tax reform provisions 
aimed at low- and middle-income working families. It is obvious that 
proponents of these tax cuts have no intention of allowing any of these 
provisions to expire and, in fact, will come back to the floors of the 
House and Senate again and again asking for them to be made permanent. 
Instead of acting in a fiscally responsible manner, they are masking 
from the American people the true, astronomical costs of this bill.
  And fourth, these cuts will push our country deeper in debt. Earlier 
this month, the nonpartisan Congressional Budget Office increased its 
Federal budget deficit projections for fiscal year 2003 from $246 
billion to a record $304 billion. When the Bush administration came 
into office, there was a projected $5.6 trillion 10-year surplus. 
Before this latest irresponsible tax bill, the $5.6 trillion surplus 
had shrunk to $20 billion. If this bill is enacted, that $20 billion 
will become a $1.8 trillion deficit--a fiscal swing in the wrong 
direction of $7.3 trillion in just 2 years.
  Passing another enormous tax cut this year will only amplify this 
trend of growing deficits and add to the economic burdens our children 
and grandchildren will inherit. Increasing deficits will decrease 
national savings and increase long-term interest rates--effectively 
lowering the incomes of working Americans. At the same time the Bush 
administration is pushing for Congress to pass a $1 trillion increase 
in the Federal debt limit--the largest single jump ever--that does not 
account for the $350 billion in additional tax cuts that are part of 
this tax bill. I just do not think we can afford another large tax cut 
at this time until we get our own fiscal house in order.
  Clearly, this tax cut plan is not about growing the economy or 
creating jobs. It is about starving the Government and wooing some 
voters. In fact, leading economists have stated repeatedly that the 
elimination of taxes on

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dividends paid to investors--the centerpiece of the President's tax cut 
proposal--would do very little to spur economic growth or reduce the 
Nation's jobless rate. Even Federal Reserve Chairman Alan Greenspan has 
questioned the long-term implications of the President's proposal by 
stating in testimony before the Senate Banking Committee in February: 
``I am one of the few people who still are not as yet convinced that 
stimulus is a desirable policy at this particular point.''
  In 2001, I voted against the Bush tax cut bill because it was too 
skewed toward the wealthiest Americans and too fiscally irresponsible. 
Since then, we have gone from record surpluses to record deficits, and 
the economy is still floundering. In fact, over 2,200 jobs have been 
lost in Vermont since the beginning of the Bush administration. Passing 
another enormous tax cut this year will only continue this trend and 
increase the economic problems that our children and grandchildren will 
inherit.
  Earlier this year, the President said we should not pass our fiscal 
problems on to future Presidents, Congresses, and generations. I agree 
with him. Unfortunately, this tax cut bill will drive us deeper into 
debt and will do exactly what the President says we should avoid, 
burden our children.
  As I said when this bill passed the Senate, I have two of the world's 
most perfect grandchildren. And while the promise of another tax cut 
sounds great, I am not going to ask my grandchildren and everyone 
else's grandchildren to pay for it. It is not right. It is not fair. 
And it is not the American way.
  Mr. HATCH. Mr. President, I rise to speak in support of the growth 
and jobs tax bill conference report before the Senate today. I first 
wish to congratulate and thank the chairman of the Finance Committee 
and the majority leader for their tireless efforts in working out a 
very difficult compromise. Their hard work made it possible for us to 
vote on this major tax cut legislation today--legislation that will 
make a big difference in the lives of Utahans and Americans across the 
Nation.
  The conference report before us is a major accomplishment, for the 
U.S. economy, for the American people, and for President Bush and Vice 
President Cheney. It is the culmination of months of very hard work 
that began with the President's release of his jobs and growth plan 
late last year. This was a bold and brilliant plan designed to help our 
economy over the next year while also removing long-standing barriers 
to long-term growth.
  At the heart of the plan was one overriding objective--to kick our 
sputtering economic engine into high gear so we could finally shake off 
the listlessness that has lingered since the double whammy when 
recession hit in 2000 and terrorists struck our homeland in September 
2001. Although we have emerged from recession, the recovery has been 
very slow and new job creation has not kept up pace with jobs that have 
been lost.
  I am seeing this in Utah, where our State's economy has been hit 
harder than many by the downturn. My State has a highly educated 
workforce, and we have more high-tech jobs, more commercial 
construction jobs, and more tourism jobs than many other States. Those 
sectors have suffered. Utah's unemployment rate was 5.3 percent last 
month. Compared to the 3 percent unemployment rate we had just a couple 
of years ago, this is unacceptable. Along with the President and many 
of our colleagues, I have been calling for a strong prescription to 
help get our economy, in Utah and across the country, back to its full 
potential.
  To accomplish this, the Bush plan focused on three actions--
accelerating the already enacted but yet to be phased in tax cuts from 
2001, increasing incentives for businesses to invest in productive 
equipment and grow, and addressing the debilitating and unfair effects 
of taxing the profits of corporations twice. I am happy to report that 
all three of these elements are present in the conference report.
  The conference report speeds up the tax rate cuts that Congress, on a 
bipartisan basis, passed just 2 years ago. The small amount of rate 
reduction from the 2001 Tax Act that has already taken effect has 
served to lessen the blow of the recession. These across-the-board rate 
reductions were the right remedy, but their phase-in has been too slow. 
By accelerating the remainder of these cuts, effective this year, we 
can put the full dosage of medicine to work on what remains a sick 
economy.
  This tax bill will cut taxes for practically every American who pays 
income tax. This will provide great assistance to our economy in two 
ways. First, it will put cash into the pockets of American workers 
immediately. Almost as soon as this bill is signed into law by the 
President, the Internal Revenue Service will release new tax 
withholding tables that will reflect the lower tax rates. This means an 
immediate raise in pay for almost every U.S. worker.
  Second, lower tax rates will encourage Americans to work harder, to 
save more, and invest a higher amount of their income. This serves us 
will both in the short run and over the longer term.
  We cannot forget the huge effect these tax rate reductions will have 
on the small businesses of America. It seems that many of our 
colleagues on the other side of the aisle refuse to recognize the fact 
that about 80 percent of small businesses pay taxes at the individual 
tax rates. Rather than being the giveaway to the so-called ``wealthy'' 
that opponents of this tax cut accuse it of being, this is a first-
class jobs creation bill.
  Moreover, the bill before us includes significant tax relief for 
married couples suffering from chronic marriage tax penalties. While we 
still cannot say these unconscionable tax effects are totally 
eliminated from the Internal Revenue Code after the effective date of 
this measure, we are making major strides in this endeavor.
  The acceleration of the child tax credit included in the conference 
report will make a big difference to families in Utah and all across 
America. To families struggling to raise their children, this bill 
spells relief, both immediately and also for 2004.
  The second objective accomplished in the Jobs and Growth Tax Act is 
to spur investment by business entities. Our recent recession was not 
one born of the lack of consumer spending, but of the dearth of 
business investment.
  Last year's economic stimulus bill included a provision that has 
proven effective in increasing business investment--a 30-percent bonus 
depreciation deduction for the first year. The bill before us includes 
a feature that builds on this provision, and increases the incentive to 
50 percent. I have been a strong proponent of bonus depreciation, and 
despite this not being in the Senate version of the bill, I am pleased 
that this provision survived in the conference report.
  And this is not all. One of the most important elements of the bill 
before us is the increase in the amount of new equipment purchased that 
smaller businesses can write off immediately. Not only is the amount of 
investment allowed to be expensed quadrupled under the bill, but larger 
businesses can now take advantage of the incentive. This bipartisan and 
bicamerally supported feature should result in some quick job creation.
  The third objective of President Bush's tax plan was to address the 
onerous and unfair double taxation of corporate dividends. Although the 
dividend provision in the conference report is not the same as that 
envisioned by the President, it is a very significant tax cut that will 
have positive ramifications for the economy and for corporations and 
their shareholders, for years to come.
  The President's original plan called for the elimination of the 
double taxation of corporate dividends by providing an exclusion for 
corporate earnings passed through to shareholders to the extent that 
the corporation paid tax on those earnings. This was a bold and 
laudable goal that would have far-reaching effects on the very nature 
of how corporations are established, operated, and governed in this 
Nation. This was tax reform in the truest sense. And like all real 
reform, it was met with jeers, criticism, and legitimate concerns.

[[Page 13189]]

  I want to congratulate many of my Senate colleagues for achieving the 
difficult task of passing the Senate version of the bill, which 
included the full exclusion of corporate dividends at the individual 
level, albeit for a relatively short time. This was a major legislative 
accomplishment, and Senators Nickles, Kyl, Lott, and many others 
deserve our gratitude, along with Chairman Grassley and the leadership, 
for its attainment.
  The complete elimination of the double tax on dividends should remain 
our long-term goal. It was not achieved in this conference report. The 
political and time constraints placed on the Senate made this 
impossible. However, I want to emphasize that our inability to achieve 
this lofty goal, which has been the objective of policymakers for 
decades, should not overshadow the huge triumph we have achieved in the 
conference report--the very substantial reduction of tax on both 
dividends and capital gains for all taxpayers.
  Investors in this country--and this now includes over half of all 
Americans--will wake up tomorrow to find a far greater reward for their 
investments, whether it be in stocks, bonds, real estate, or other 
productive assets. A basic economic axiom is that if we want more of 
something, we should tax it less. By lowering the tax on the fruits of 
investment, both in the form of capital gains and of dividends, we will 
get more investment. This tax cut on investments will bode well for our 
economy both in the next few months and years, and for decades to come.
  The conference report before us cuts the tax on dividends by more 
than half for taxpayers in the higher tax brackets, and it eventually 
eliminates the tax altogether for those in the lower two brackets. For 
taxes on capital gains, it cuts the top rate by 25 percent for most 
investors, and again, eventually eliminates them for millions of 
taxpayers in the lower tax brackets, who might be just starting out 
with their first investments. This is a huge change, and it will have a 
huge impact on investment in America by lowering the cost of capital 
and giving a huge boost to the stock market.
  We should not underestimate the positive effects these changes will 
have on our economy. When we lowered the maximum capital gains tax rate 
from 28 percent to 20 percent in the 1997 tax act, the effect on the 
stock market, and on receipts to the Treasury, was very significant. In 
fact, a Standard and Poor's DRI study on the effects of the 1997 
capital gains tax cut indicated that 25 percent of the increase in 
stock prices that was enjoyed after 1997 was due to the cut in the 
capital gains tax. Treasury receipts soared from capital gains 
realizations and we were able to balance the Federal budget.
  Moreover, the study showed that the 1997 capital gains tax cut also 
had a significant impact on the lives of average Americans by 
increasing productivity growth, which caused the standard of living to 
rise. There is no reason to think that the reductions on taxes on 
capital gains and dividends included in this bill will not have similar 
effects in 2003 and beyond.
  All in all, we should be very pleased with this bill's dividends and 
capital gains provisions. They will have a very positive effect on 
economic growth and serve as a substantial platform from which to seek 
further progress in the future, even that of the total elimination of 
the double tax on dividends.
  The happiness with which I greet this conference report is not 
complete. It is not perfect, by any means. Like all of my colleagues, I 
suppose, I would have written a different bill.
  For example, I am disappointed that the conference report does not 
include the Medicare geographic equity provisions approved by the 
Senate. These provisions, which I strongly support, would have provided 
more equitable reimbursement rates to Medicare providers in rural 
States.
  However, I am encouraged that the President has signaled his support 
for addressing this matter through the Medicare legislation that the 
Senate will be considering in the next month. To me, it is absolutely 
critical that Medicare beneficiaries in rural States like Utah have 
access to quality health care. In my opinion, the best way to 
accomplish this goal is by passing legislation which ensures that 
Medicare providers in rural areas are fairly compensated. I will 
continue to work with my Senate colleagues on this crucial issue until 
this legislation is signed into law by the President.
  Moreover, there are many other tax provisions that were included in 
the Senate version of the bill that would have made excellent additions 
to this conference report. Among these are provisions supported in an 
amendment on which I was joined by a bipartisan group of our colleagues 
that would have provided significant benefits to small businesses 
operating under subchapter S of the Internal Revenue Code. I hope we 
can find a way to address these important issues in another bill later 
this year.
  In conclusion, the recession that began in 2000 was real, and our 
slow recovery is leaving behind pockets of real suffering, both in Utah 
and across our Nation. But thanks to our President's policies, the 
Federal Reserve's aggressive, preemptive, rate-cutting, and the 
flexibility of our free-market system, our Nation has had unemployment 
rates much lower than in past recessions. But Congress needs to do 
more, and to act now, and this conference report is a vital part of the 
solution.
  If we combine this growth and jobs package with some modest restraint 
on the spending side and some commonsense legal liability reforms, we 
can grow the economy faster over the next year, and we can set the 
stage for another decade of record job growth.
  Again, I thank Chairman Grassley and the Senate leadership for their 
hard work, and I urge my colleagues to support the conference report.
  Mr. LEVIN. Mr. President, I cannot support the fiscally irresponsible 
and unfair tax cut which is before the Senate because it is not what 
our country needs. It is ironic that on the same day that a final vote 
is being taken on this huge tax cut package, the Republican majority 
also is bringing to the floor legislation that would raise the limit on 
the national debt by $984 billion, the largest in our Nation's history.
  This tax cut bill has more deceptions in it than an Enron financial 
statement. It purports to cost only $350 billion over the next 10 
years, but its true costs are masked by multiple ``now you see them, 
now you don't'' gimmicks that will in reality cost up to a trillion 
dollars over the next 10 years. With deficits of over $300 billion 
projected for this year and the next, the last thing we need are huge 
tax cuts that will serve to dig us that much further into the deficit 
ditch. Future generations deserve better.
  Furthermore, this approach will be largely ineffective in providing 
our economy the immediate jumpstart it needs. By giving too much to 
those who need it the least--the average 2003 tax cut for a millionaire 
will be about $93,500; the average 2003 tax cut for someone in the 
middle of the income spectrum will be $217--the bill will be far less 
effective in stimulating the economy than it would be if the tax cuts 
were directed to taxpayers of more modest means who would spend the tax 
cut now. In addition, only 17 percent of this package goes into effect 
in 2003, when we need it, but instead will take place years down the 
road. Our economy is struggling right now. Eight-and-a-half million 
Americans are out of work; 2.7 million private sector jobs have been 
lost since the beginning of this administration. Michigan lost 17,000 
jobs just last month, the most of any State in the country. What we 
need are immediate jobs and relief, not more of the same ``trickle-
down'' policies that have been tried and that failed in the past.
  Expert commentators have pointed out that this bill will make it 
easier for corporate and upper income taxpayers to use tax shelters to 
even further reduce their tax bills. Instead of ending the so-called 
double taxation of dividends, this bill provides those with the means 
to accomplish it a roadmap to no taxation. That's just plain wrong. 
Providing large tax cuts to the wealthy in the hopes that the benefits 
with trickle down to everybody else hasn't worked before, and there's 
little reason to think that it will work now. Following the same 
approach that failed

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time and again just doesn't make sense. Just 2 years ago, President 
Bush was promising that his first massive tax cut of $1.4 trillion 
would jumpstart the economy and create jobs. It didn't.
  Moreover, I am disappointed that the conference report stripped out 
provisions that were included in the Senate-passed bill that would have 
cracked down on corporations who engage in sham transactions involving 
offshore tax havens. Loopholes like these encourage investment 
overseas, not here in America. We should be closing down corporate 
loopholes, not preserving them.
  While I am pleased that this bill contains some funds to assist our 
struggling State and local governments, it does not do nearly enough. 
Our States currently are facing their worst fiscal crisis in over 50 
years, with many being forced to raise taxes or cut vital services like 
Medicaid in order to balance their budgets. Instead of doing all that 
we should to assist them, this bill includes a dividends reduction 
provision that will actually strip States of revenues, something which 
will stimulate neither jobs nor growth.
  I supported and voted for an alternative tax package that was about 
creating jobs now, when we need it, in a way that did not mortgage our 
future.
  The plan I supported was estimated to put more than 1 million people 
back to work by the end of 2004 at a fraction of this bill's costs. It 
would have cut taxes for every taxpaying American, providing a tax cut 
of $1,630 to a family of four through a wage credit, an acceleration of 
the child tax credit, and an elimination of the marriage penalty. I 
would have helped small businesses by providing them with a 50 percent 
tax credit to help employers maintain health coverage for their 
workers, and would have provided large and small companies with 
incentives to invest and create jobs by allowing small businesses to 
immediately write-off more investments and providing bonus depreciation 
to all companies. It also would have provided unemployment benefits for 
nearly 4 million laid-off workers, including those who have already 
exhausted their benefits. What our sagging economy needs right now is 
immediate jobs, growth, and stimulus, and that's what the plan I 
supported offered.
  Instead, what will pass today is a package that is the wrong medicine 
for our ailing economy. It will create fewer jobs than what is needed. 
It will slight middle-class families in favor of the wealthy. And it 
will dramatically increase the deficit and national debt and drive up 
interest rates which will make it more expensive in the future to buy a 
house, pay for college, or pay off credit card debt. This is not what 
Americans need. I cannot support this legislation.
  Ms. SNOWE. Mr. President, I rise today regarding the conference 
agreement on the jobs and growth tax package that is before the Senate.
  I very much regret I am unable to support this final conference 
report, specifically as it relies on artifical ``sunsets'' to mask the 
true size of the tax cuts. Regrettably, it represents neither sound 
fiscal nor economic policies and could balloon Federal budget deficits 
even further. Indeed, at its heart, this is a trillion-dollar tax cut 
masquerading as a $350 billion tax cut, and in keeping with the 
principles I have outlined from the outset of this debate, I cannot 
support it.
  From the beginning, I have stated my concern not only about the size 
but also the content of any tax cut package. Because we need a strong 
stimulus to create jobs and grow the economy--while accomplishing this 
with sound policy and without creating deficits in perpetuity. While I 
am pleased this bill technically adheres to the agreement I reached to 
limit the overall size of the growth package of $350 billion over 10 
years, it shortchanges some of the most stimulative aspects with 
sunsets that could lead to larger Federal deficits.
  Even proponents of the package acknowledge that they do not expect 
the tax cuts to expire or sunset as anticipated, so this package will 
likely grow to a true 10-year cost of at least $650 billion or even $1 
trillion. In other words, with the sunsets, it can be said this is more 
like $350 billion over 2 years. And indeed, nonpartisan public policy 
organizations like the Tax Policy Center at the Brookings Institution, 
and the Center for Budget and Policy Priorities, have estimated the 
overall 10-year cost of the tax cut legislation ranging from $659 
billion to more than $1 trillion.
  At a time when we are facing historically high budget deficits 
expected to exceed $400 billion this year alone--the largest in 
history--this tax cut may grow deficits to levels economists fear will 
be unsustainable. As Federal Reserve Chairman Alan Greenspan said again 
just this week, ``deficits do matter'', and could reduce future 
economic growth.
  Furthermore, I have made a priority of providing the type of short-
term economic boost needed to encourage job creation and spur growth in 
the economy. I have based my approach to this package on the 
stimulative portions of the President's jobs and growth package, which 
totaled $329 billion, and fiscal relief for States and local 
communities, which totaled $20 billion.
  Moreover, the conference package reduces the size and impact of 
proposals such as acceleration of the child tax credit, marriage 
penalty relief, and the duration of proposals to spur investment by 
small business, with hidden costs of between $319 billion and $709 
billion if the tax cuts were extended for the life of the bill.
  I would also note for the record that the conference agreement 
eliminates the refundable portion of the child tax credit that I 
sponsored along with Senator Lincoln that extends the reach of the tax 
package to all full-time working families. The elimination of this 
provision, estimated to cost about $4 billion over the life of the 
bill, will exclude about 12 million children nationwide, and 40,000 
children in Maine, who would otherwise benefit from the legislation.
  I have made clear from the start that I agree with President Bush's 
goal of passing a stimulus plan to encourage growth in the economy and 
create jobs. I have also discussed my concern that creating 
unsustainable, long-term deficits would seriously inhibit our ability 
to address pressing domestic challenges--such as strengthening Social 
Security and Medicare--as well as subject future generations to the 
corrosive effects of the higher interests rates that result from 
deficits.
  As a result, I joined with Senators Voinovich, Baucus, and Breaux in 
signing a letter before consideration of the budget resolution to limit 
the size of the tax package. In that letter, we stated our belief that 
``our nation would benefit from an economic growth package that would 
effectively and immediately create jobs and encourage investment.'' But 
we also expressed our belief that ``any growth package that is enacted 
through reconciliation this year must be limited to $350 billion in 
deficit financing over 10 years and any tax cuts beyond this level must 
be offset.'' This has been a critical guiding principle for me during 
this process.
  That is why I supported the strong stimulus plan I helped craft in 
the Senate Finance Committee, which incorporated--within the $350 
billion 10-year framework--all of the stimulative aspects of the 
President's growth package in their entirety, provided significant 
dividend tax relief that would have reached all investors, and 
eliminated the double tax on dividends for 84.7 percent of all 
taxpayers.
  Senator Gordon Smith and I were also able to secure within that 
Finance Committee package a measure that conveyed $20 billion in fiscal 
relief to States and local communities--and I am disappointed that this 
conference report limits this relief to States only, ignoring the needs 
of our municipalities. Under the conference report, the $20 billion is 
divided equally between the Federal Medicaid Assistance Percentage, or 
``FMAP'', and $10 billion in flexible grants to State governments.
  As I have stated in the past, State fiscal relief is crucial to 
stimulating the economy--as 46 of the 50 States, including Maine, are 
facing budget shortfalls due to lower than predicted revenues because 
of the depressed economy and September 11; increased costs associated 
with Federal mandates; and, increasing health care costs. There is no

[[Page 13191]]

question the Federal Government must provide fiscal relief--and this 
will go a long way toward stimulating growth in the economy. Yet I 
remain distressed that conferees chose to omit aid for local 
governments.
  Finally, this legislation will quadruple the amount a small business 
can expense, from $25,00 to $100,000. As Chair of the Senate Committee 
on Small Business, I certainly support this. However, regrettably, this 
legislation before us will also sunset this provision after just 3 
years. I am disappointed there are those who chose to tap this 
stimulative measure to finance long-term changes to law.
  Mr. President, in conclusion, I would like to be able to say I 
support this package--I would like to vote for it, but I am unable, as 
it runs counter to the principles I have laid out during this entire 
process in terms of the size of the cuts and the content of the 
package. Therefore, I will not be supporting this conference report.
  Mr. McCAIN. Mr. President, I am extremely disappointed for our brave 
military men and women that the conferees for the Jobs and Growth Tax 
Relief Reconciliation Act of 2003 decided to omit the Senate-passed 
Armed Forces Tax Fairness Act of 2003 from the conference report.
  I offered an amendment to the tax bill that would add the Armed 
Forces Tax Fairness Act of 2003, which has been previously passed by 
the Senate. The amendment was accepted by unanimous consent. Since this 
legislation has already passed numerous times in the Senate, I believed 
that the conferees would include this important legislation for our 
military in the conference report without hesitation. But again, 
politics ruled the day.
  Despite the recent successful war in Iraq, which highlighted the 
bravery and sacrifice of our military, the conferees provided nothing 
for them in this so-called growth bill. The only thing growing will be 
the tax breaks for the wealthiest citizens of this country. And in a 
time where we are also facing growing deficits and must also pay for 
the cost of the war, what the conferees did in the interest of 
``getting a deal'' was the height of irresponsibility.
  What the conferees denied was much-needed tax relief for our men and 
women in uniform whose sacrifice and commitment are the foundation upon 
which the freedom we all enjoy has been built. How they can deny these 
committed men and women who defend our country simple fairness is 
beyond understanding.
  One of the provisions in the legislation that the conferees dismissed 
from inclusion in the conference report is what is popularly known as 
the Military Homeowners Equity Act. This legislation would allow 
service members, who are away on extended active duty, to qualify for 
the same tax relief on the profit generated when they sell their main 
residence as other Americans. Secretary of State Colin Powell fully 
supports this legislation, and this legislation enjoys overwhelming 
support by the senior uniformed leadership--the Joint Chiefs of Staff--
as well as outgoing Office of Management and Budget Director Mitch 
Daniels, the 31-member associations of The Military Coalition, the 
American Foreign Service Association, and the American Bar Association.
  The average American citizen participates in our Nation's growth 
through home ownership. Appreciation in the value of a home allows 
everyday Americans to participate in our country's prosperity. 
Fortunately, the Taxpayer Relief Act of 1997 recognized this and 
provided this break to lessen the amount of tax most Americans will pay 
on the profit they make when they sell their homes. Unfortunately, the 
1997 home sale provision unintentionally discourages home ownership 
among service members and Foreign Service officers.
  What we are doing is not creating a new tax benefit. We are merely 
modifying current law to include the time members of the military are 
away from home on active duty when calculating the number of years the 
homeowners has lived in their primary residence. In short, this bill is 
narrowly tailored to remedy a specific dilemma.
  The Taxpayer Relief Act of 1997 delivered sweeping tax relief to 
millions of Americans through a wide variety of important tax changes 
that affect individuals, families, investors, and businesses. It was 
also one of the most complex tax laws enacted in recent history.
  As with any complex legislation, there are winners and losers. But in 
this instance, there are unintended losers: members of the military and 
Foreign Services.
  The 1997 act gives taxpayers who sell their principal residence a 
much-needed tax break. Prior to the 1997 act, taxpayers received a one-
time exclusion on the profit they made when they sold their principal 
residence, but the taxpayer had to be at least 55 years old and live in 
the residence for 2 of the 5 years preceding the sale. This provision 
primarily benefited elderly taxpayers while not providing any relief to 
younger taxpayers and their families.
  Fortunately, the 1997 act addressed this issue. Under this law, 
taxpayers who sell their principal residence on or after May 7, 1997, 
are not taxed on the first $250,000 of profit from the sale, joint 
filers are not taxed on the first $500,000 of profit they make from 
selling their principal residence. The taxpayer must meet two 
requirements to qualify for this tax relief. The taxpayer must, one, 
own the home for at least 2 of the 5 years preceding the sale, and, 
two, live in the home as their main home for at least 2 years of the 
last 5 years.
  The bipartisan cooperation that resulted in this much-needed form of 
tax relief is commendable. The home sales provision sounds great, and 
it is. Unfortunately, the second part of this eligibility test 
unintentionally and unfairly prohibits many service men and women who 
are deployed overseas from qualifying for this beneficial tax relief.
  Constant travel across the United States and abroad is inherent in 
the military and Foreign Service. Nonetheless, some service members and 
Foreign Service officers choose to purchase a home in a certain local, 
even though they will not live there much of the time. Under the new 
law, if they do not have a spouse who resides in the house during their 
absence, they will not qualify for the full benefit of the new home 
sales provision because no one ``lives'' in the home for the required 
period of time. The law is prejudiced against families who serve our 
Nation abroad. They would not qualify for the home sales exclusion 
because neither spouse ``lives'' in the house for enough time to 
qualify for the exclusion.
  This bill simply remedies an inequality in the 1997 law. The bill 
amends the Internal Revenue Code so that members of the military and 
Foreign Service will be considered to be using their house as their 
main residence for any period that they are assigned overseas in the 
execution of their duties. In short, they will be deemed to be using 
their house as their main home, even if they are stationed in Iraq, 
Afghanistan, Bosnia, the Persian Gulf, in the ``no man's land,'' 
commonly called the DMZ between North and South Korea, or anywhere else 
they are assigned.
  In the wake of September 11, our Armed Forces are now deployed to an 
unprecedented number of locations. They are away from their primary 
homes, protecting and furthering the freedoms we Americans hold so 
dear. We cannot afford to discourage military service by penalizing 
military personnel with higher taxes merely because they are doing 
their job. Military service entails sacrifice, such as long periods of 
time away from friends and family and the constant threat of 
mobilization into hostile territory. We must not use the Tax Code to 
heap additional burdens upon our women and men in uniform.
  The Taxpayers' Relief Act of 1997 was designed to provide sweeping 
tax relief to all Americans, including those who serve this country 
abroad. It it true that there are winners and losers in any tax code, 
but this inequity was unintended. Enacting this narrowly tailored 
remedy to grant equal tax relief to the members of our military and 
Foreign Services restores fairness and consistency to our increasingly 
complex Tax Code.

[[Page 13192]]

  Mr. President, the case is clear. The conferees should have included 
the Armed Forces Tax Fairness Act of 2003 in the conference report for 
this tax relief bill. If they can look into the eyes of all the men and 
women in our military who have committed themselves to the defense of 
this country in Iraq and elsewhere around the world, and justify how 
they spent billions of Federal dollars to cut taxes for our Nation's 
wealthiest at their expense, then the process is clearly broken. And 
that is a disgrace for which they are solely responsible.
  Mr. DODD. Mr. President, I rise today to express my opposition to the 
conference report on the tax cut legislation that the Senate just 
considered.
  I find it regrettable that we were forced to speed through debate on 
the tax cut bill last week, and were once again forced to hurry through 
this conference report. This is probably the most important bill that 
we will be debating and voting on this year. Its repercussions will be 
felt for years to come, and yet it seems that very little thought has 
really been given to it.
  Regrettably, I could not in good faith support this Reconciliation in 
its current form for three reasons.
  First, it will be ineffective in reviving the economy now.
  Second, it is irresponsible insofar as it adds tremendously to the 
national debt for no compelling purpose.
  Third, it is unfair to working families across the country insofar as 
it drains resources from investments in education and health care to 
fund tax breaks that overwhelmingly benefit the most affluent.
  I will discuss these points in turn.
  First, the resolution we have before us fails to effectively address 
the needs of our country. Instead of investing in a stronger economy 
for the future, the conference agreement provides little assistance and 
stimulus to our struggling economy now.
  In the nearly 2\1/2\ years since the President has come into office, 
our nation has suffered a dramatic decline. We went from unparalleled 
job creation, economic growth, and opportunity to skyrocketing deficits 
and national debt, high unemployment, and uncertainty about the future.
  Contrary to the claims of its proponents, it is by no means certain 
this conference agreement will create jobs or provide millions of 
working families with the relief they need. What is certain, however, 
is that it will drastically increase the national debt, and severely 
weaken key national priorities including homeland security, education, 
and health care.
  According to Economy.com, the massive deficits that will be caused by 
the administration's tax cut will decrease gross domestic product by 
0.25 percent annually beginning in 2005. GDP will be lower by 1.0 
percent in 2013 than it would be without the Bush plan. The result is a 
loss of 750,000 jobs by 2013 according to Mark Zandi, a well-respected, 
non-partisan economist at Economy.com.
  The administration's policies are not considered to be ineffective on 
a partisan basis, they are considered to be ineffective on a bipartisan 
basis, as well.
  Republican Senators have voiced concern about the ineffectiveness and 
irresponsibleness of this proposal.
  The Chairman of the Federal Reserve has said that these large tax 
cuts, if not paid for by offsetting cuts in spending, will drive us 
deeper into deficit and that such high deficits and debt will actually 
hurt our long-term economic growth.
  Other respected conservative economists have also warned us about the 
direction we are taking. For instance, AEI economist Kevin Hasset 
stated that the proposal, by cutting taxes in one year and then raising 
them in another, ``is one of the most patently absurd tax policies ever 
proposed,'' Similarly, Robert Bixby of the Concord Coalition said that 
the tax plan passed by the Senate just keeps ``building one gimmick on 
top of another gimmick.''
  However, this administration continues to turn a deaf ear to their 
warnings, as it pursues its discredited economic theories.
  Second, this conference agreement is irresponsible.
  Two years ago, economists projected record surpluses; now they 
forecast record deficits. Recently the Congressional Budget Office 
raised its estimate of the deficit this year to more than $300 billion. 
This is the largest federal deficit ever in the history of our country. 
And it does not include the tax cut that is before us.
  It is a fact that high deficits mean an increase in long-term 
interest rates on small business loans, families' mortgages, and 
education loans. These deficits therefore act as a hidden tax on 
working people.
  Also the cost of all of the President's tax cuts and the deficits 
will explode just as baby boomers start to retire. Over the next ten 
years, more than $2 trillion will be raided from Social Security in 
order to pay for the President's tax cuts and spending plans. The 
Social Security surplus is going to be consumed.
  Last month, Congressional Budget Office Director Douglas Holtz-Eakin 
said that the retirement of the baby boomers will drive spending on 
Social Security, Medicare and Medicaid alone from 8 percent of the 
economy's output today to 14 percent in 2030, and to 21 percent by 
2075. When you also consider national defense, homeland security, 
education, health care, and other vital national priorities, you are 
left with a fiscal breakdown. But again, the administration is ignoring 
these warnings.
  At the very time the President is asking for massive tax reductions, 
he is also asking for the largest debt limit increase in the history of 
the United States. He is seeking an increase of $984 billion. The 
President has dug this economy into a debt hole. He needs to stop 
digging. Yet, instead, he is reaching for a bigger shovel.
  From coast to coast, states are facing the most serious fiscal crisis 
since World War II. States are in need of fiscal relief now. In 
Connecticut, we know that all too well. While there is a State relief 
package in the conference agreement, the overall agreement is going to 
hurt States not help them since this legislation will mean less 
resources for Connecticut and other States to invest in infrastructure, 
education, homeland security, and health care for needy children and 
the elderly.
  Americans all over the country have expressed their opinions in poll 
after poll. They believe that we should not be passing a massive tax 
cut if it means cutting Medicare, if it means cutting social security, 
and if it means cutting education. This conference agreement ignores 
the concerns of the American people.
  Third, this tax bill is unfair to working families.
  Yesterday's Wall Street Journal had an article that says that through 
the President's tax proposal, some affluent investors may be able to 
avoid paying almost any taxes. Their tax bill would be almost near 
zero. This is unfair to middle-class Americans.
  It is bad enough that we are going to force our children and 
grandchildren to shoulder the costs of this tax cut.
  It is bad enough that this costly and irresponsible tax cut will 
bring about an average tax cut of $93,500 to tax filers who earn more 
than $1 million, while those households in the middle of the income 
spectrum, which includes the average family in Connecticut, would 
receive a tax cut of about $217.
  It is bad enough that according to an analysis done by the Tax Policy 
Center, 36 percent of all U.S. households would receive no tax cut 
whatsoever in 2003 under the conference agreement, and 53 percent of 
households would receive a tax cut of $100 or less.
  This bill also fails to address a crisis affecting Americans and 
small businesses--the burden of the high costs of health insurance. In 
the past year alone, health care premiums for businesses have risen 
more than 13 percent. This is extremely burdensome for small 
businesses, which employ 50 percent of the workers in this country. The 
Democratic alternative to the tax bill, which did not pass, provided 
small businesses with a 50 percent tax credit in 2003 to help pay their 
share of insurance premiums. This conference agreement that is before 
us contains nothing to assist small businesses that are

[[Page 13193]]

struggling to keep their employees insured during these times when cash 
is tight and health care costs are rising.
  In order to fit the massive tax breaks for the most privileged into 
the $350 billion limit that was agreed upon, the marriage penalty 
relief and the child tax credit increase will expire next year, which 
means a tax increase of $850 for a family of four with an income of 
$40,000 in 2005. Also, the small business expensing and bonus 
depreciation provisions, which would encourage business investments and 
provide them with needed relief, will also expire. This is essentially 
increasing taxes on small business owners.
  In closing, I believe that the conference agreement before the Senate 
fails the test of common sense. It also fails the test of common 
decency. At a time of war, at a time of economic stagnation, at a time 
of rising national debt, and of rising national concern about how we 
will educate America's children and care for the health needs of our 
people, one might expect our national leaders to pursue policies 
calling for shared sacrifice to achieve shared benefits. Regrettably, 
that is not the case. This administration has a clear vision: to 
benefit the privileged few even if it means sacrificing the hopes and 
aspirations of the rest of the people. We can do better as a Senate, 
and do better for our country.


                       ceo signature legislation

  Mr. MILLER. Mr. President, as you know I have had a longstanding 
interest in an issue that requires chief executive officers to sign 
their company's tax returns. My amendment has been made part of the 
corporate inversion provisions as well as the CARE Act. I am hopeful to 
have this provision enacted into law because I believe that if Joe 
Sixpack is required to sign his tax return for his family and sign the 
oath that says ``Under penalties of perjury, I declare that I have 
examined this return and accompanying schedules and statements and to 
the best of my knowledge and belief they are true, correct and 
complete'', why shouldn't Josepheus Chardonnay be required to sign that 
same oath for his big corporation?
  I understand my CEO provision came into the current tax bill when the 
underlying corporate shelter language was included and that it has been 
taken out at the same time that the corporate inversion language was 
taken out of the tax bill.
  I would just like to reiterate that I am still interested in getting 
this CEO signature provision enacted into law. I think it is an 
important tool for improving corporate accountability. I would like to 
ask my colleague Senator Grassley if we may continue to work with the 
Committee on Finance to get this amendment enacted in either the CARE 
Act or the next best legislative opportunity.
  Mr. GRASSLEY. Mr. President, I am very much aware of Senator Miller's 
interest in this provision. As you know, the Finance Committee has 
supported his provision by including it in two separate pieces of 
legislation that our committee considered this year. We had hoped to 
include it in this bill, even if the corporate shelter language was not 
included. Unfortunately, this measure has a negligible revenue effect 
and could possibly violate the Byrd rule. Accordingly, we were obliged 
to remove it from the bill. I give Senator Miller my commitment, 
however, that we will continue to work with him on opportunities to get 
this amendment enacted into law this year. I would also add that I 
discussed this provision with Mr. Thomas, the chairman of the House 
Ways and Means Committee, and his staff, and they indicated a 
willingness to examine and explore the measure in conferences on future 
bills.
  Mr. MILLER. I thank the Senator and look forward to having this 
measure brought back to the Senate floor before the end of this year.


                  Child Care Funding Within State Aid

  Mr. HATCH. Mr. President, the Senator from Iowa has shown remarkable 
leadership abilities by stewarding through the Senate a tremendous 
economic stimulus bill, the Jobs and Growth Tax Relief Reconciliation 
Act of 2003. I recognize this was no easy task and I want to compliment 
the Senator on his hard work and successful negotiations in getting the 
bill through a difficult conference with the House. The Nation and the 
economy will benefit from this great work.
  I understand the final version of this bill we are considering today 
contains $20 billion for State aid, with $10 billion of that aid going 
to States to help them pay for a state's essential government services. 
I believe the States will be very grateful for Congress' willingness to 
provide these funds.
  Although the bill clearly says that States may spend these funds on 
``essential government services,'' I believe that the States would 
appreciate some clarification as to the definition of ``essential 
government services.'' I refer specifically to whether these funds may 
be used to pay for child care. In my home State of Utah, there is a 
great need for child care funding to help parents in or near poverty 
have a safe place for their children to stay while they work to provide 
money for their families. However, I believe this need is not a Utah-
specific issue, but a nationwide problem that needs to be addressed.
  I understand the distinguished Senate Finance Committee chairman has 
a long history of supporting initiatives which not only help children, 
but help families who may be on the cusp of self-sufficiency and I 
thank you for your efforts in this regard.
  To this end, I would just like to clarify for the record that it is 
the intent of Congress to include child care expenses as an acceptable 
expense under the ``essential government services'' clause in the 
legislation, ensuring that States may use the $10 billion provided in 
the bill for child care expenses?
  Mr. GRASSLEY. I would say that as my good friend, the Senator from 
Utah, knows, the Jobs and Growth Tax Relief Reconciliation Act of 2003 
is first and foremost an economic stimulus bill. The most effective aid 
the Federal Government can give to States or individuals is a healthy 
economy with a robust job market. Without jobs, families with children 
won't need child care services and won't have any way to pay the family 
bills.
  I thank the good chairman of the Judiciary Committee and understand 
his concern over the State aid portion of the legislation. We have 
tried to provide as much leeway as possible to the States. However, it 
would be impossible to list all of the acceptable activities for which 
a state could use his money. Therefore, the Congress has broadly 
defined the allowable activities for which States could spend their 
temporary fiscal relief dollars.
  Therefore, my answer to the question posed to me from the Senator 
from Utah is yes. We did intend for child care expenses to be included 
as an element of ``essential government services'' provided that a 
state is currently operating a child care program and expenditures for 
child care were permitted under the most recently approved budget for 
the State.
  Mr. HATCH. I am very appreciative to the Senator from Iowa for this 
clarification. I know it will be very helpful to those families who 
rely on these services. I thank the distinguished Finance Chairman for 
his time.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield myself 5 minutes.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, as this debate on the budget 
reconciliation bill comes to a close, I congratulate the chairman of 
the Finance Committee, Chuck Grassley. He has done a very good job with 
a very difficult task. For him, the race has not been easy. Even though 
some may not have thought it possible, he has come to the finish line 
today.
  In some ways, the conference report has responded to the debate in 
the Senate. For example, the conference report did move roughly three-
fifths of the benefits of the package into the first 2 years. That is 
clearly more stimulative than the structure of the bill that went to 
conference.
  I also wish to commend Senator Grassley, Senator Voinovich, and 
Senator Snowe for doing what they

[[Page 13194]]

could to restrain the total size of the bill. Senator Voinovich kept 
his promise and forced the conferees to keep the conference report, on 
its face, within the $350 billion Senate agreement.
  Unfortunately, this tax bill busts through the $350 billion with a 
series of gimmicks to hide the true cost of the bill. In this time of 
increasing deficits, we must live within limits. This conference report 
fails to do so. Instead, it uses a series of sunsets to shoehorn large 
tax cuts into a small budget window. In the words of a conservative tax 
cut advocate, Stephen Moore, ``It's bigger than it looks.''
  The conferees have designed a tax cut that is one big yo-yo. Now you 
see it, now you don't. Child credit is increased for 2003 and 2004. 
Then it is taken away. Part of the marriage penalty is eliminated for 
2003 and 2004, and then the penalty comes back. The 10-percent tax 
bracket is expanded for 2003. Then it reverts back. Even the dividend 
tax cut disappears after 2008. If accounting gimmicks and financial 
statement manipulations were intolerable for corporate America, then 
why not for the Congress?
  Further, this conference report is not fair to working Americans or 
to our military personnel. The benefits of this bill are skewed heavily 
to the elite. One of the beauties of America is that we work to treat 
people equally, but this bill does not treat all Americans alike. We 
are not being brought together as Americans.
  The bill lowers the rate for dividends, it lowers the tax on capital 
gains, and it increases the tax on 1.6 million more Americans by 
forcing them into the alternative minimum tax in 2005. The bill says it 
is a priority to ensure that only the people who pay full freight are 
those hard-working Americans who earn their income in wages.
  The bill that returned from conference also stripped out provisions 
to provide tax relief for those serving our country in the armed 
services--those serving in Iraq, Afghanistan, and across the globe.
  This conference report does less than it could to rebuild the 
American economy. It misdirects its tax breaks to those more likely to 
save them and less likely to spend them immediately.
  The bill increases the budget deficit and lays the bill at the door 
of our children and our grandchildren, it fails to follow in the 
American tradition of fairness, and the bill is simply not structured 
to be effective in rebuilding the American economy.
  This week, Alan Greenspan expressed his dismay at the lack of budget 
discipline in Washington, especially with the failure to take seriously 
the significant budget problems looming because of the aging and baby 
boom generations. In his words, ``The silence is deafening.'' I will 
not be part of that silence.
  I urge Senators to consider what they are doing today. I urge my 
colleagues to vote against this conference report.
  I reserve the remainder of my time, Mr. President.
  Mr. GRASSLEY. Mr. President, I yield 1 minute to the Senator from 
Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I thank the chairman and the ranking 
member for the hard work they have done. We can go into great details. 
We have been doing that for weeks. The point is, we have a problem with 
the economy. Our purpose here is to do something to stimulate that 
economy. This bill will do that.
  We have been through all the details. We have been through it in 
committee. We have been through it on the floor. We have been through 
it on the conference committee. Now we are back. It is time to do 
something to create jobs in this country. This bill will do it.
  I thank the leadership for their help.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Iowa.
  Mr. GRASSLEY. I yield myself such time as I might consume.
  As we wind down debate on this bill, it is very important that I give 
appropriate thank-yous to people who have worked so hard on putting 
this bill together. I am talking about the staff of the Finance 
Committee and the Joint staff, both Republican and Democrat: Chief tax 
counsel, Mark Prater; chief of staff, Kolan Davis; Ed McClellan, Dean 
Zerbe, Christy Mistr, Diann Howland, Elizabeth Paris, and Brad Cannon; 
members of the health staff of the Finance Committee: Colin Rosky, 
Jennifer Bell; members from the Budget Committee staff: Chief of staff, 
Hazen Marshall; Cheri Reidy, Beth Felder, and Rachel Jones; Staff of 
Majority Leader Frist and Assistant Majority Leader McConnell, 
including Lee Rawls, Eric Ueland, Rohit Kumar, Bill Hoagland, and Mike 
Solon.
  All of the staff of the Joint Committee on Taxation worked through 
the night on many occasions. As one who was caught in the crossfire on 
this bill, I can appreciate when they take the heat from both sides on 
revenue estimates.
  I would especially like to thank George Yin, Mary Schmitt, and Bernie 
Schmitt of the Joint Tax Committee. I wish more of the participants in 
the tax legislative process realized how tough the Joint Tax's job is; 
conferee staff, including Evan Liddiard and Garett Jones with Senator 
Hatch's office; Laura O'Neill with Senator Lott's office; Lisa Wolski 
and Lawrence Willcox of Senator Kyl's staff.
  Senate legislative counsel, these folks, of course, are true legal 
wizards who do excellent work under amazing pressure. This group 
includes Jim Fransen, Mark Mathiesen, and Ruth Ernst. Then a team of 
people who worked on the State aid issue so much: Ted Totman, Steve 
Robinson, Becky Shipp, Leah Kegler, Michaela Sims, and Amy Tejra with 
Ben Nelson's staff, and Michael Bopp with Senator Collins; Treasury 
Department staff, including Pam Olson, Greg Jenner, J.T. Young, and 
Drew Lyon; the administration staff, including Ziad Odjakli, O. Jack 
Lee, Christine Burgeson, Candi Wolff, and David Hobbs.
  Finally, I would like to thank Senator Baucus's Finance Committee 
staff who assisted in the creation of a better product during times 
when we were able to work collaboratively: Jeff Forbes, Bill Dauster, 
Russ Sullivan, Matt Jones, Pat Heck, Anita Horn-Rizek, Liz Liebschutz, 
and Jonathan Selib. I really appreciate all of that.
  I am very pleased with the bill that is before us today. We have 
given the country some very good tax relief and investment incentives. 
But there is one provision in the bill that I intend to change, and 
that is to let the inverters of the world know they better be on 
notice, as far as I am concerned.
  The new 15 percent tax rate applies to dividends paid by foreign 
corporations to their U.S. shareholders. That is good policy.
  What is not good policy is when those dividends are paid by a phony 
foreign shell corporation created by a U.S. corporate inversion. In an 
inversion, a U.S. corporation pretends to move its headquarters to a 
phony shell corporation that is nothing more than a folder in a filing 
cabinet or a post box in a tax haven. With this phony tax haven parent 
corporation in place, the U.S. company is positioned to rip its taxable 
income out of the United States through artificial interest payments to 
the tax haven shell, which are legally deductible on its U.S. return. 
This structure also allows the corporate inverter to move U.S. assets 
offshore and outside the reach of the IRS on a tax-free basis.
  I question whether it is proper to allow a tax cut for dividends from 
a corporate inversion. The House blocked my efforts to insert this ban 
in today's legislation. Because the President wanted the Jobs & Growth 
bill on his desk by Memorial Day, I chose not to block the legislation 
over this issue.
  I acknowledge that it is the shareholders who would be denied the 
rate reduction, and not the corporate management that engineered the 
inversion. But an inversion requires shareholder consent. Usually 
around 60 percent must approve of the inversion. So do not let it be 
said that all shareholders are innocent bystanders in an inversion. 
Those who disapprove of the transaction are always free to sell their 
shares.

[[Page 13195]]

  We should not give a tax cut that benefits an inversion, and I will 
continue to examine this issue and hopefully put a stop to it.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I commend the chairman for raising this 
issue at conference. It is a very serious issue; that is, whether 
corporations that invert should enjoy the privileges of some of the 
provisions of the bill about to be passed and soon signed by the 
President.
  I say to my good friend that I want to work with the chairman in 
defining what the proper way is to deal with dividends paid by 
corporations who invert. I hope to find a good solid solution.
  I yield back the remainder of my time.
  Mr. GRASSLEY. Mr. President, how much time remains on my side?
  The PRESIDING OFFICER. The chairman and the ranking member have both 
consumed all of their time.
  The Democratic leader.
  Mr. DASCHLE. Mr. President, I know we are about to vote. Prior to the 
time we cast our vote, I wanted to make some final comments on this 
bill. We have been debating this issue now for several months. Above 
and beyond anything else, economists from virtually all philosophical 
backgrounds have urged us to be responsible. They have said if you are 
going to do anything regarding fiscal policy, make sure you do not make 
the problem worse. They advised us to be immediate, make sure we have 
the greatest impact immediately.
  Finally, they said whatever you do, make sure you attempt to be 
effective. There are a lot of ways to cut taxes. Some are effective in 
stimulating the economy and others are not.
  I firmly believe this bill fails on all counts. What is more 
remarkable is that this bill represents, in my view, a strategy that 
was employed just 2 years ago, with disastrous results. In the name of 
economic stimulus, the administration demanded that we pass a tax bill 
to stimulate jobs 2 years ago, and the result, of course, is now 
obvious to us all: 2.7 million jobs have been lost since 2001.
  Economy.com, one of the prestigious analytical firms that has looked 
at this bill, predicts this bill might create 600,000 jobs for 2004, 
but then, according to Economy.com, we could see the loss of 750,000 
jobs as a result of the passage of this bill during the next 9 years.
  Not only is this bill grossly ineffective, I believe it is 
irresponsible, unfair, and duplicitous. First, it is irresponsible 
because the money for this plan comes directly from Social Security. 
How many businesses would borrow from pension funds to pay a dividend? 
Yet that is exactly what this bill does. It borrows the money to pay 
out tax cuts in large measure just as pension funds would be borrowed 
to pay a dividend.
  It is irresponsible because we are cutting taxes by approximately 
$800 billion, if there were no sunset, with a $400 billion deficit this 
year. It is irresponsible because just as we pass this bill, we will be 
asked to vote on a debt limit increase of $984 billion sometime later 
today. It is irresponsible because this tax cut means less investment 
in education, less investment in homeland security, less investment in 
prescription drug coverage.
  Second, this bill is remarkably unfair. It is steeply tilted against 
the middle class and toward the elite few but provides little or no 
benefit to the vast majority of Americans. A typical South Dakotan, 
according to all the analyses I have seen, would receive less than $100 
when this bill passes.
  Finally, this bill is duplicitous. The gimmickry in this bill has 
enough sleight-of-hand budget tricks to make an Enron accountant blush. 
Economists say the now-you-see-it, now-you-don't kind of tax cut is the 
worst kind. What they want is stability. What they want is certainty. 
What they want is an absolute assurance that they are not going to see 
changes year in and year out with the Tax Code. That is exactly what 
this Tax Code does. I believe our colleagues did the tax equivalent of 
a triple back flip off the high dive and they belly-flopped. It is a 
belly flop we will all feel.
  Americans have said in poll after poll we ought to be very careful 
about passing tax breaks if it means cutting Medicare; that they oppose 
new tax breaks if it means cutting Social Security; that we ought not 
have new tax breaks if it means cutting homeland security; that we 
should not see new tax breaks if it means cutting education. This bill 
turns its back on the American people. That is why I will vote no.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Mr. President, I take this opportunity prior to this 
important, significant vote to thank and congratulate the chairman of 
the Finance Committee, Chairman Chuck Grassley, and his staff on the 
tremendous work they have done over the past several days but really 
over the past 30 days to bring the Senate to this conclusion in 3 
minutes or so. I also thank the ranking member and his staff and 
especially the staff of the Joint Tax Committee for the long hours and 
work they have devoted to legislation that is straightforward in what 
it accomplishes, to create jobs and grow the economy, which is quite 
complex when you look at the moving parts where we have had to marry 
the House bill with the Senate bill.
  In many ways, in large part because of a number of discussions that 
seem a long time ago, it was just 2 weeks ago the Finance Committee met 
its instructions under this year's budget resolution to report a tax 
reconciliation bill to the Senate, a bill complying with this year's 
budget instructions to craft an economic tax stimulus bill. That was 
just 2 weeks ago. It was just 1 week ago last night that the full 
Senate passed and sent to conference a revised tax reconciliation bill.
  We are here this morning with an opportunity to pass and send to the 
President a bill that will provide immediate relief to millions of 
American families, businesses and, indeed, States. And it will create 
jobs.
  Economists say again and again our economy in this country is like a 
great ship that cannot be turned around quickly, but while our economy 
today is moving in the right direction and it does not need to be 
turned all the way around, it clearly needs to pick up pace. We need to 
stoke those boilers in that ship, that ship being the economy, in order 
to create those jobs.
  Of the $350 billion stimulus and growth provided in the bill before 
the Senate this morning, nearly 60 percent, or $200 billion of this tax 
and fiscal relief is provided this year and next. It is immediate. It 
is short-term stimulus to grow the economy and jobs. I add that this is 
more stimulus in the first few years than either the President's 
original proposal or the House bill or the Senate bill. This is a major 
stoking of those boilers in that economy, in that ship of the economy.
  In a few moments I believe we will pass what is the third largest tax 
relief package in history. This is a great victory for the American 
people. Why? We talk about the big numbers and I talked about the $350 
billion, but the wonderful thing is it boils down to greater job 
security for people who may be listening at this moment, people who are 
looking for jobs or want jobs. It elevates that sense of security for 
them. Why? Because it creates jobs. It grows the economy. It means if 
you do not have a job and you wake up and open the newspaper and you 
are looking through those classified ads, you are more likely to get a 
job after passage of this bill. It means if you have a job today but 
you feel insecure about it because the economy is not moving quite as 
fast or quite as quickly, it is more likely you will be able to keep 
that job and it will be with you long term and you do not have to worry 
every morning when you wake up about losing that job. The bill 
stimulates the economy and it stimulates job creation. What we have 
been able to fashion after a lot of negotiation, a lot of compromise on 
both sides of the aisle and in this body, with the other body, and in 
addressing the President's initial proposal, is a bill that does it 
now; it moves the stimulus up to now when people want it.

[[Page 13196]]

  If you are a schoolteacher, you will this year have more money to 
spend on your children's clothes or you will be able to make those 
mortgage payments a little bit easier than you did 6 months ago or last 
year. If you are a mom and dad and you have three children, it means 
you will receive $3,000 this year. You will receive $3,000, if you have 
3 children, in child tax credits to spend on their needs. Maybe you 
will be able to buy them each that computer they need, that they 
deserve, to stay in tune with what we can provide in education today.
  Twenty-five million Americans will receive this child tax credit this 
year, now, with passage of this bill. If a policeman and a teacher are 
married and are unfairly paying more in taxes--you are paying more in 
taxes because you are married than if you were not married--relief is 
on the way when we pass this bill.
  As we all know, most jobs--probably 70 percent or 80 percent is the 
figure we use--most jobs are created by small businesses. That is a 
fact. It is not the large corporations that provide jobs; it is the 
small businesses. It is the small businesses where ideas arise, where 
innovation takes place, where capital is consumed, is invested, where 
expansion takes place, and jobs are created. They are the engines of 
economic growth and will be in this bill we will pass in a few moments. 
The small businesses are directly and specifically stimulated in terms 
of growth, investment, and expansion. They will hire more people, they 
will create more jobs.
  With passage of this bill, if you have a job, no matter what the job 
is, whether it is a low-paying job or a high-paying job, you will be 
better off. Your family will be better off. You will have more money. 
Our Government is simply saying, We trust you with the money you earn. 
We are saying, once again, It is your money. We are saying, You are the 
best steward of the resources that you earn, to save, to invest, to 
spend on your family, on your small business. Today, after the 
President signs this bill that was passed by the House last night and 
will be passed by the Senate today--and you can say this to every 
single American--you will have more money and will pay less in taxes.
  In closing, I thank the President of the United States and the Vice 
President. The President has shown remarkable leadership in putting 
forth this jobs-and-growth package, in promoting it in every step long 
the way. True leadership.
  I also thank the Vice President, our own leader in the Senate, who 
has worked literally nonstop over the last several days to help us 
marry the original House proposal with that Senate proposal. We thank 
them for their leadership.
  Indeed, this bill accomplishes the goals we all share in this body; 
that is, to move America forward, to grow the economy, and to create 
jobs and job security for all Americans. Now let's move to pass this 
bill that will, indeed, benefit all Americans.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the conference report accompanying 
H.R. 2.
  The clerk will call the roll.
  The legislative clerk called the roll.
  The yeas and nays resulted--yeas 50, nays 50, as follows:

                      [Rollcall Vote No. 196 Leg.]

                                YEAS--50

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chambliss
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeWine
     Dole
     Domenici
     Ensign
     Enzi
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner

                                NAYS--50

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCain
     Mikulski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Stabenow
     Wyden
  The VICE PRESIDENT. On this vote, the yeas are 50, the nays are 50. 
The Senate being equally divided, the Vice President votes in the 
affirmative, and the conference report to accompanying H.R. 2, to 
provide for reconciliation pursuant to section 201 of the concurrent 
resolution on the budget for fiscal year 2004, is agreed to.
  Mr. GRASSLEY. I move to reconsider the vote.
  Mrs. HUTCHISON. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The VICE PRESIDENT. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, before we turn to the debt limit bill, I 
just have a couple of remarks to make.
  Putting this tax bill together that was just passed has been a 
difficult task and made more difficult by the politics involved. 
Nonetheless, the Finance Committee staff--both Democrats and 
Republicans--worked very well together, I think in a bipartisan 
fashion, to help get us where we are.
  I thank the Finance Committee staff for their counsel and for their 
hard work. They spent many long hours on this legislation.
  I appreciate the cooperation we received from the Republican staff, 
particularly Kolan Davis, Ted Totman, Mark Prater, Christy Mistr, Ed 
McClellan, Elizabeth Paris, Diann Howland, and Dean Zerbe.
  I also thank my staff for their hard work and dedication, including 
Jeff Forbes, Russ Sullivan, Bill Dauster, Matt Jones, Liz Liebschutz, 
Patrick Heck, Anita Horn Rizek, Jonathan Selib, Lara Birkes, Liz 
Fowler, Alan Cohen, Tom Klouda, and Kate Kirchgraber.
  I also thank our dedicated fellows: Alisa Blum, Mark Kirbabas, Rhonda 
Sinkfield, and Renee Johnson.
  Finally, I thank our intern, Mike Wiedrick, who joined the Finance 
Committee the week of the markup of this bill and did not miss a step.
  Particularly, I thank the staff of the Joint Committee on Taxation 
for their invaluable service. They worked very hard under very 
difficult circumstances. I know I speak for all Members in commending 
them.
  Mr. KOHL. Mr. President, the Senate voted today on a so-called ``jobs 
and growth'' package. I voted against this package, Mr. President, 
because I'm still looking for the part of the package that will result 
in jobs and economic growth. In fact, I would like to take this 
opportunity to explain to my colleagues, and the people of Wisconsin, 
what exactly it is that I have found in this package, and what it's 
lacking.
  As I look through the conference report before us, I have found 
proposals that fall far short of helping to boost our economy and 
creating jobs for the American people. The cost of this package, which 
is much higher than estimated due to the gimmick of sunsetting 
provisions, will only increase our already record-setting debt. As 
great an economic authority as Alan Greenspan has made it clear that 
growing debt and increasing interest rates will do nothing to create 
jobs or benefit the economy. In fact, just the opposite will result.
  In addition, this package includes provisions that will 
overwhelmingly benefit the wealthy, again to the detriment of the 
economy and the jobless. How do you create consumer demand by giving 
money to those least likely to spend it? How do you create jobs by 
rewarding those who are so rich they obviously have high paying jobs or 
don't even need them?
  Those are a few of the provisions that are included in this bill. 
What is not included? There is not enough money going to help the 
States out of their fiscal crises. My State of Wisconsin is facing a 
budget gap of nearly $300 million. How can I vote for a package that

[[Page 13197]]

does so little to close that? While I support the meager amount that 
was included in the final bill, I am disappointed when I compare it to 
what we could and should have done. In addition, I strongly oppose the 
dividend tax provisions that, in States such as Wisconsin, which tie 
their definition of taxable income to the federal definition, will suck 
back over half of the state aid the bill includes. Our struggling 
States don't need that kind of legerdemain--sending a small, temporary 
cash infusion while enacting a long-term erosion in their tax base.
  In addition, I am equally disappointed that many of the provisions 
that would have actually helped middle and lower class families will 
sunset after 2004, providing little or no benefit to the families who 
need it the most. The bill drops a Senate provision to accelerate a 
component of the child tax credit that would have directly benefited 
working families across the country. The bill does not have real relief 
from the alternative minimum tax, a provision that will increasingly 
affect middle class families over the coming years. Finally, in the 
long list of examples of what this bill lacks, several of the loopholes 
that would have been closed under the Senate bill have been left out of 
the conference report, allowing companies to continue to use a myriad 
of tax shelters.
  As I review what is in this bill, and what isn't, I am confident that 
the majority of the people of Wisconsin will not benefit from what we 
have done here today. It is for their interests that I have to work, 
and I cannot in good conscience support a bill that will not benefit 
them.
  Mrs. FEINSTEIN. Mr. President, I rise in strong opposition to the 
final version of the reconciliation bill, which has emerged from 
conference committee.
  Last week I came to this floor to express my opposition to the tax 
cut which emerged from the Senate. And I believe that the bill which 
passed the House was no better. Unfortunately, this conference report 
has even less to recommend it than either of those bills.
  This bill will add an additional $350 billion to our deficit over the 
next 5 years, all of which will be paid for by future generations of 
taxpayers. Even worse, it contains so many sunsets and phase-outs that 
it makes a mockery of our tax code.
  Some provisions last only through the end of next year and others 
phase out in each subsequent year, until the whole tax cut is finished 
by the end of 2008. This bill is a patchwork quilt of temporary cuts 
and provides neither short-term stimulus nor long-term structural tax 
relief. Indeed, all it provides is a great deal of uncertainty to the 
average American taxpayer.
  Rather than view the reluctance of the Senate to pass a large tax cut 
as a sign of concern over our historic federal budget deficits, the 
conferees used a grab-bag of tricks to stuff a $1.1 trillion tax cut 
into a $350 billion package. Many of those cuts are likely to become 
permanent, which will further increase deficits and the federal debt.
  Quite frankly, I am not fooled by this sleight of hand, and I am sure 
that the average American will not be either.
  By lowering tax rates on both dividends and capital gains, the 
Conferees ensured that this bill is even more regressive than the 
President's original proposal, because capital gains income is skewed 
even more to the wealthiest Americans than dividend income.
  Between now and 2006, the period during which the majority of the tax 
cuts are in effect, 54 percent of the tax cuts will go to the 5 percent 
of Americans who earn over $150,000 annually. The top one percent of 
Americans, who earn an average of just over $1 million annually, will 
take away 37 percent of the tax cuts.
  In those areas that count most, this bill provides very little 
relief. It provides $20 billion in state aid, which is a start, but 
which is much less than the $40 billion which is required to have a 
meaningful impact on state budget deficits, which in many cases have 
reached crisis proportions.
  At the same time, this bill strips out a provision in the Senate-
passed bill which would accelerate the refundability of the Child Tax 
Credit for families earning $10,000 to $30,000 per year. In fact, 29 
percent of married and head of household filers will receive no tax cut 
in 2003 under the bill, while higher-earning families will receive a 
$400 rebate check this year.
  And this bill preserves the most regressive portion of the tax cut--
the cut to taxes on dividends and capital gains--through 2008, while 
cuts targeted at middle income families, such as marriage penalty 
relief, are only provided for 2 years.
  Mr. President, this tax cut makes no sense--no sense at all. It 
provides little benefit to those taxpayers who are likely to generate 
new consumer demand, and instead boosts the income of wealthy taxpayers 
who will spend little if any of it on goods or services.
  Keep in mind that the 2001 tax cuts are only now coming into full 
effect. In June of 2001, I voted in favor of a $1.35 trillion tax cut, 
which remains the largest tax cut in history. That tax cut will return 
$300 billion to American taxpayers by the end of next year, and will 
provide $90 billion in tax relief this year alone.
  The top 1 percent of taxpayers, who will receive 37 percent of the 
benefits included in the Reconciliation bill, are already scheduled to 
receive an average of $11,300 in tax relief this year.
  There is simply no reason to add another tax cut on top of what was 
already the largest cut in history, particularly when every dollar in 
tax cuts must be paid for by new debt.
  Gross Federal debt currently stands at $6.7 trillion. If the 
provisions in this tax cut are permanently extended, as this 
Administration intends, then our federal debt will rise to $12 trillion 
by the end of the decade.
  The President claimed that any deficits created by his fiscal policy 
would be ``small and short-term.'' It does not take an accountant to 
understand that the deficits now projected by the Congressional Budget 
Office are neither small, nor short-term, and, in fact, will not fall 
below $300 billion before 2013, if the Social Security surplus is 
excluded.
  Our on-budget deficit in 2003 alone will exceed $500 billion. That 
means that nearly one-quarter of our $2.2 trillion in gross Federal 
spending is financed through deficit spending. There is nothing 
cyclical about a deficit of one-quarter of your total spending--rather, 
it is a structural deficit that cannot be sustained.
  Deficits of the magnitude we are now incurring will drive up long-
term interest rates and stifle economic growth.
  If you or I were to walk into a bank and ask for a loan, and we told 
our bank officer that we expected to earn $30,000 per year for the next 
decade, but spend $40,000 per year over the same period, we would be 
laughed out of the building. But that is exactly what our Federal 
Government is now planning to do.
  This is unconscionable, and this is why I have voted against this tax 
bill.
  The fact that, later today, we must vote to increase the Federal debt 
limit stands as a clear indication of the very grave fiscal straits in 
which we now find ourselves.
  It has taken just 2 years to squander our hard won budget surplus, 
and we are forced to vote to increase the debt limit because this 
administration, along with this Congress, are placing irresponsible tax 
cuts ahead of fiscal discipline and common sense.
  In this year's State of the Union message, President Bush stated: 
``We will not deny, we will not ignore, we will not pass along our 
problems to other Congresses, to other presidents, and other 
generations.''
  Well, Mr. President, by voting to increase our debt limit, we are now 
handling an additional $984 billion dollar debt as our gift to those 
future generations.
  This is why I am voting for an amendment offered by Senator Baucus 
that would increase the Federal debt limit by $350 billion, an amount 
which will ease the current pressure on our Treasury but force us to 
review our fiscal policy within the next 9 months.
  This, to me, is the prudent course given our current fiscal straits. 
To increase the debt limit by $984 billion all at once is to write 
ourselves a 2 year free pass at the expense of regular review. It is, 
without question, the wrong thing to do.

[[Page 13198]]


  Mr. FRIST. Mr. President, putting this bill together has been a 
challenging task. Many Senators have played important roles in this 
legislation but it could not have been done without the contributions 
of our staff. Without the aid of these individuals, the work of this 
institution would be impossible to accomplish. I would like to 
recognize the hard work and dedication of those staff members whose 
contributions to this legislation have been critical and without whom 
we would not have been able to pass this very important bill.
  On the Finance Committee, I want to recognize the contributions of 
Chairman Grassley's staff. On the tax side, I want to especially thank 
the committee's chief tax counsel, Mark Prater, the committee's staff 
director Kolan Davis as well as Ed McClellan, Dean Zerbe, Christy 
Mistr, Diann Howland, Elizabeth Paris, and Brad Cannon. I also want to 
thank Ted Totman, Steve Robinson, Leah Kegler, and Becky Shipp for 
their work on the State aid provisions.
  I would also like to acknowledge the contributions of Chairman 
Nickles' Budget Committee staff, including Rachel Jones, Hazen 
Marshall, Beth Felder, and Cheri Reidy. I should also thank Lisa Wolski 
and Lawrence Willcox of Senator Kyl's staff, whose efforts were 
integral to the success of this bill.
  Also integral to our efforts was the work of the entire staff of the 
Joint Committee on Taxation and the Senate Legislative Counsel's 
office. Specifically, George Yin, Mary Schmitt, and Bernie Schmitt of 
the Joint Committee and Jim Fransen, Mark Mathiesen, and Ruth Ernst at 
Legislative Counsel. They have all put in long hours to help bring this 
bill to completion.
  I would also like to acknowledge the efforts of those individuals 
from the administration, all of whom dedicated significant time and 
effort to this bill. From the White House, I would like to thank Ziad 
Ojakli and Christine Burgeson from the Legislative Affairs Office and 
Pam Olson, J.T. Young, John Kelly, and Greg Jenner from the Department 
of Treasury. Without their efforts and cooperation, this bill could not 
have come to pass.
  Finally, I would like to thank my staff and Senator McConnell's staff 
for their work in getting both a bill and then a conference report 
through the Senate in just over a week's time. From Senator McConnell's 
office, I would like to especially thank Kyle Simmons and Michael 
Solon. From my office, I would like to thank Lee Rawls, Eric Ueland, 
Bill Hoagland, and Rohit Kumar.
  These staff members have worked diligently and largely in anonymity. 
Given all that they have done in service to their country, I think it 
is appropriate to recognize their work publicly so the rest of the 
country knows, as we all know, how well we are served by our staff.
  The VICE PRESIDENT. The Democratic leader.

                          ____________________