[Congressional Record (Bound Edition), Volume 158 (2012), Part 12]
[Senate]
[Pages 16573-16574]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE FISCAL CLIFF

  Mr. BARRASSO. Mr. President, I rise to talk about the fiscal cliff 
the country will face on January 4. We are beyond the point of the 
election, and there is 4 weeks until the date of the fiscal cliff. As 
Republicans have been pointing out on this floor, Congress must act 
soon to take on the numerous expiring tax provisions and the sequester. 
I believe President Obama must provide leadership in those efforts. I 
have seen very little so far.
  Last week I came to the floor to speak about the fiscal cliff and 
some of the concerns I continue to have and hear about as I travel to 
Wyoming just about every weekend. I just got back from there a few days 
ago, and people are very concerned about the direction of the country 
and what may happen to all Americans on January 1.
  Last week on the floor, I spoke about the President's proposal to 
raise taxes on people making more than $200,000 a year. In terms of 
spending next year, that tax increase would pay for just 6.8 days of 
what Washington will spend. So the whole proposal the President 
continues to make is basically enough to fund the government for not 52 
weeks but 1 week alone. The tax increases President Obama is now trying 
to push through will really do almost nothing to reduce our national 
deficit and nothing to reduce our national debt.
  The White House and Democrats in the Senate are focused only on tax 
hikes while they continue to ignore the real drivers of our debt, which 
are the out-of-control entitlement programs of Social Security, 
Medicare, and Medicaid. Until we find a way to do meaningful 
entitlement reform, no amount of tax revenue will be able to match the 
increase in entitlement spending.
  Well, instead of leading the conversation, the President continues in 
his campaign mode, going around the country to try to sell his tax 
hikes. The President and the Democrats in Congress are willing to go 
over the fiscal cliff in order to get those tax hikes. Rather than 
negotiate in good faith, they are willing to try to spend their time 
trying to convince the American people that it is someone else's fault. 
Going over the fiscal cliff will mean another recession, and this one 
is squarely on the shoulders of President Obama. It will mean 
unemployment spiking back up over 9 percent. It will also mean a whole 
host of tax increases even beyond the higher tax rates Washington 
Democrats want so badly. Americans are also facing big increases on the 
death tax and the alternative minimum tax, also known as the AMT. Both 
of these taxes will go up January 1 unless Democrats work with 
Republicans and take action to stop the increases that are already 
scheduled to occur.
  Now, there is bipartisan agreement that these taxes should not be 
raised. There is bipartisan agreement that these taxes will do great 
damage to middle-class families, family businesses, and family farms. 
Any effort to stop these harmful tax increases is being held up by the 
President's insistence on raising tax rates--not just raising more 
revenue through tax reform

[[Page 16574]]

and economic growth but specifically raising tax rates.
  Let's take a look at the death tax. Today this tax, also known as the 
estate tax, is set up at a top rate of 35 percent, with an exception 
for the first $5.1 million in the estate's value. Well, those are the 
levels that Congress set and the President agreed to in 2010. There was 
a Republican House of Representatives, a Democratic Senate, as well as 
a Democratic President in the White House. That was in 2010. Those 
levels are now set to jump dramatically to a top rate of 55 percent, 
with an exemption for just the first $1 million. Now, $1 million sounds 
like a lot of money until we start looking at a situation of family-
owned businesses and family farms. For instance, farmers and ranchers 
have a lot of assets, such as land, buildings, and livestock. Those 
things are worth a lot of money for the purposes of calculating the 
value of someone's estate, but they are not liquid assets--they cannot 
just spend a tractor.
  Once a mom or dad dies in the farm family, the IRS wants the death 
tax paid within 9 months. The tax is calculated on those big valuations 
for the farm or ranch property and has to be paid in cash. Often, the 
only way for a family to pay the tax is to start selling off parts of 
the farm. Families who have farmed for generations are forced to make 
life-changing decisions regarding their future, and they have to do it 
very quickly. They may have to sell land or livestock at a time when 
prices are low because the tax bill is due immediately. If we don't act 
in Congress, this tax is going to hit more family farms, and it will 
hit them much harder, taking a much larger portion of the farm just to 
pay the taxes.
  When we take a look at this chart, talk about crushed by the death 
tax in terms of the number of small businesses and the number of family 
farms that will be hit under the estate tax in 2012 as opposed to what 
is going to happen in 2013, it is a huge increase in 2013 as they find 
a different way to calculate the death tax, and the same is true with 
family farms. So the number of family farms that will be hit by this 
death tax will jump from just under 100--the current limits--to about 
2,400 farms next year. That is an enormous increase and an enormous 
burden on those farm families.
  The same thing holds true for other small family businesses, such as 
the local restaurant, the grocery on the corner, or the local auto body 
shop. Again, these are small businesses that may have assets that are 
worth a lot but are not easily turned into cash to pay a tax bill.
  Where I live in Casper, WY, most of the businesses we have are small 
businesses, such as the drycleaner, the florist, the car wash. A lot of 
those small businesses are run by families. Maybe it has been in the 
family for a couple of generations, and they want to pass their 
business down to the next generation, but when Washington comes looking 
to take its 55-percent cut, which is what is going to happen on January 
1, that business will be forced to sell off assets or maybe just sell 
out entirely.
  When we look at the chart again, we can see that under the limits we 
negotiated in 2010, just 200 small business estates are hurt by the 
death tax. Starting next year, it jumps to about 2,700 small 
businesses. Just like with family farms, we are not talking about big, 
faceless corporations. We are not talking about what happens when the 
founders of Walmart die. We are talking about what happens when the 
owner of a small family business dies. If these death tax increases go 
into effect, a lot of the sons and daughters are not going to be able 
to keep the family business their parents worked so hard to build and 
pass along. Democrats and Republicans agree this would be a terrible 
blow to a family farm or to a small family business.
  There is so much we talk about when it comes to uncertainty, and just 
the uncertainty about what is going to happen next year under the death 
tax is very stressful for many families across the country who are 
running their own small businesses and their own small farms or 
ranches. At the very least, we should extend the current limits worked 
out in the 2010 compromise. President Obama should not be holding up 
that commonsense solution so he can satisfy his left-based agenda for 
unrealistically insisting on raising tax rates.
  The other tax increase that is set to hit American families very hard 
very soon is the alternative minimum tax. The Presiding Officer will 
recall the AMT tax was created in 1969 and that occurred when some 
discovered there were 155 people all across the country--only 155 
people--who had made a lot of money but didn't pay any taxes on it, and 
we know why. It was because of various tax loopholes. Congress could 
have done something to close those loopholes but, instead, Congress 
created a whole separate tax scheme. Then, to make matters worse, they 
didn't index the income limits for inflation. So Congress comes along 
every year and enacts a patch to keep the tax from hitting the middle 
class. The problem is we still have done nothing to patch the AMT for 
this year.
  I have another chart about the millions of people who will owe the 
AMT come next April. In 2011, 3 million people paid the AMT. It was 
designed because of 155 people who didn't pay taxes. Now we will have 
31 million Americans who will be hit by the tax for the tax year 2012 
if nothing is done to patch the problem. So if we don't do something 
soon, the AMT will hit an additional 28 million taxpayers this year for 
a total of $92 billion. That is the extra tax American families face 
when they file their 2012 taxes by April 15 of next year. These aren't 
the privileged few who are taking advantage of special loopholes the 
tax was intended to catch. These are 28 million taxpayers who normally 
never have to deal with the AMT. It is going to hit middle-class 
families in every State, more than 31 million taxpayers total across 
the country.
  We can debate whether it was ever a good idea to enact the AMT a 
number of years ago, but we certainly should all agree the AMT is about 
to hit a whole lot of people who should never have had to worry about 
it in the first place. Those people are going to have to pay the IRS an 
average of $3,200 more in taxes--that is what the IRS is going to 
expect--by April 15. Most of these people have no idea they are going 
to get caught in this AMT trap, and they have no idea how big a check 
they are going to have to write. These are middle-class, hard-working 
families who will get hit by additional taxes. Why? Because we can't 
take the simple step of patching the AMT as we always do.
  Again, there is bipartisan agreement that we need to enact this 
patch, but it is being held up as part of the fiscal cliff 
negotiations.
  The President has made his offer. He wants to increase taxes, add 
more stimulus spending, ignore the entitlement spending that is the 
true driver of our debt, and hold campaign-style rallies around the 
country to try to convince people it is not his fault if we go over the 
fiscal cliff. President Obama clearly enjoys campaigning, but the 
election is over. It is time for him to stop campaigning and to start 
leading. This means giving up his stubborn insistence on raising tax 
rates and instead focusing on raising revenue through tax reform and 
economic growth. It means doing something on these fundamental issues 
of tax policy that both sides agree on. That way American families will 
not get hit with these massive tax increases.
  Thank you, and I yield the floor.
  The PRESIDING OFFICER (Mrs. Shaheen). The Senator from Missouri.

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