Christopher Dodd

Mr. DODD

Mr. DODD. I thank my colleague for those comments. Out of those 10,000 votes he cast, by far, there were many more good ones. I appreciate his comments this evening. Mr. President, I stood in that debate. I remember the debate well. When you compare this week's debate to that debate of 20 years ago when we had something like 115 or 116 amendments, maybe more, they were fully debated amendments. We had the give and take, back and forth over the wisdom or demerits of the various proposals. That is not what has taken place here today. Imagine what it looks like to the American public as they watched these last couple of days. We were placed in a situation of allowing only 20 hours of debate under a reconciliation process that never contemplated that a tax cut proposal would be a part of it. Reconciliation was used and designed to reduce deficits, not to add to them. So by choosing the limitation of 20 hours, you have then forced Members of this body to offer votes in what they call a vote-arama; that is, no time for debate, just offer the amendment and vote. So it has been tremendously distressing for Members who believe this bill needs to be modified substantially before it would enjoy the kind of truly broad bipartisan support of which the chairman of the committee speaks. That has not occurred. So we have had 20 hours of debate, that is it, on a bill of such magnitude and such significance that will crowd out our ability to invest intelligently in the needs of this country. Let me just briefly describe this tax bill. More than one-third of a $4 trillion tax cut over the next 10 years will go primarily to the top 1 percent of income earners in America. The second one-third goes to the top 9 percent of income earners in America. But if you are in the 15-percent tax bracket, you get no relief. Of all the brackets that exist that is the one that gets no tax cut at all. Mr. President, that is 72 million middle-income Americans. So if you are watching this evening or listening to this discussion and you fall into that category, this tax debate has nothing to do with you. Two-thirds of this tax debate involves the top 9 percent of income earners in America. As a result of wasting $4 trillion, here are the things we are deciding are of less significance, just so you know. Most Americans were working today probably did not have the chance to tune into this debate. So let me just review for them what happened. These are some of the amendments that this body considered today. This is what some of these amendments asked: Can we reduce the size of this tax cut for the most affluent Americans by 1 percentage point in order to fund a prescription drug benefit for the millions of seniors in this country who are being swamped by the cost of prescription drugs? This body said: No, we think providing a tax cut for the top 1 percent of income earners is of a higher priority than providing the prescription drug benefit for Americans. We asked how about doing something to protect Social Security and Medicare, because as my colleague from Delaware just absolutely correctly pointed out, the baby boom generation retires when the very worst aspects of this bill kick in. This body said no. This bill is like a time-release capsule. You have all heard of time- release medicines. You take the medication, and nothing happens in the first 5 hours, or very little happens. Then, in the second 5 hours, the time release produces the kind of benefits that would attack whatever problem you are suffering from. That is what this tax bill is. The first 5 years are relatively modest, in terms of their impact. It is when the second 5 years kick in, that this tax cut becomes overwhelming in its impact on our budget. That is exactly the time that you will have an overwhelming majority of baby boomers retiring and who will need Social Security and Medicare. It is not by accident that this tax bill was written that way. It was designed specifically to create the train wreck between the retiring baby boom generation and this tax cut. This is not coincidental. This is what we have been trying to say over and over, with 1 minute discussions of these amendments. It is not the fault of the American public. How do you get to understand the impact of an amendment when you only have 60 seconds to describe the long-term effects of it? Consider, if you will, the full funding for the Elementary and Secondary Education Act. We have debated over and over the importance of full funding for elementary and secondary education. Mr. President, I ask unanimous consent to proceed for an additional 10 minutes.

Mr. DODD. I thank the Chair. Mr. President, to continue with these charts behind me, I mentioned the rate cut for 72 million Americans, from 15 to 14 percent. We cut the top rate of income earners at the very top of the income brackets of America, and every bracket on down, except the lowest one, which affects 72 million Americans. You go on down the list. College tuition deductibility: The Senator from New York, Mr. Schumer, suggested, why not provide deductibility of the high cost of college tuition? That amendment was rejected. You go on down the list. Immediate marriage penalty relief: How often have we heard about the penalties of the marriage penalty tax? We want to provide immediate relief for that. We are told no. So offering these amendments during the day in this Chamber is not dilatory. These are not amendments that are designed to stall at all. Twenty hours of debate on a bill of this size, of this importance, is inadequate. This is not the House of Representatives. This is not some chamber in which just a handful, if you will, even a slight majority, should be able to dictate entirely what they will at the expense of those who have other points of view--even if it were only one. But when the points of view reflect almost 50 percent of this body, shouldn't those points of view be taken into consideration? We have been told repeatedly throughout consideration of this bill that we have to get this done. I don't disagree. But I don't think that we should rush action on this important legislation without taking thoughtful consideration of its potential impact on the future health and growth of our economy. I do not think that is quite right. Some of the most important debates we have had in this Chamber have been lengthy. They have been unfettered with time constraints on offering amendments over a 60-second period. We had a debate a few weeks ago on campaign finance reform. It took 2 weeks. Most Members, I think, recognize it as one of the better debates in this Chamber. We did not do it in 20 hours. We did it in 2 weeks. We have had debates in the past on any number of issues that have taken days. That is the unique nature of this body. That is the role of the Senate: not to act as some body where it is only a question of getting it done as fast as you can. This is the middle of May. It is not the end of the session. We have had a new administration in town for 16 weeks. This is a bill that we are considering that will have impacts for 10 years. So when Members bring up these alternative ideas of fair and fiscally responsible tax cuts, the answer has been no. When we say, Social Security reform and debt reduction are important, the answer has been no. When we say we want to take care of spending caps, veterans benefits, middle-class tax benefits, the answer has been no. That is not being frivolous. That is not being petulant. That is not being people who are in a tantrum, as someone said today. This is not about Democrats and Republicans. It is not a battle about the Presidency and the Senate Democrats here. It is about the American public. They are the ones who will live with the circumstances and the decisions that we make in this body over the next few days for many, many years to come. They are the ones who we have to keep in mind as we draft this legislation. There is no argument about having a tax cut. There is room in this surplus for a tax cut. But there ought to be room, as well, to reduce the national debt. We pay $220 billion a year in interest payments on the national debt. Think how many classrooms could be built, how many people who could be made healthy, how many houses could be constructed, how many water systems or sewage systems could be repaired or built with the $220 billion that goes to interest payments on the national debt. It does not construct anything. It does not help anybody. All it does is pay down on our financial obligations. There is a great risk with the adoption of this tax proposal that we will be back in red ink and in debt again. Interest rates will begin to climb just as we saw in the 1980s. As those interest rates go up, the cost of an automobile, the cost of a home, the cost of a child going on to college, goes up. Then remember this debate and remember what this body did. This body has acted in a way, in my view, that is irresponsible and unmindful of the cost to this society. That is why it is important for us to take some time and think about what we are doing, and offer some alternative ideas that can improve the quality of life for people. So when it comes to prescription drugs, the Patients' Bill of Rights, elementary and secondary education, Medicare, Social Security, the infrastructure of this country, the defense needs of America, the environmental needs of America, there will be no room in the budget of the United States if this tax proposal is adopted. I am alone in this Senate Chamber this evening, with the exception of the Presiding Officer. It is late. It has been a long day. I am tired, as my colleagues are. But I wanted to take these few minutes to review, as I said, what occurred here today and yesterday because I think it is so fundamentally and profoundly important. My hope is that people might speak up in the remaining 24 or 48 hours that we have before we vote on final passage of this bill and leave for the recess. I hope that people can express themselves and ask their Members to think twice before they adopt a $4 trillion tax cut, the effects of which are cloudy at best, and is predicted by many to have dire consequences 10 years down the road. Who can say in 10 years what the economy will look like? There is an energy crisis looming on the horizon. What will be the impact of that on this economy? We are told the administration wants to increase defense spending by as much as $100 billion or $200 billion. What is the impact of that on this economy? And here we are adopting a $4 trillion tax cut. All of these events are coming together, and yet we are also told we need to invest in education, in health care, and the infrastructure of America. But where are the resources going to come from? It just doesn't add up. The math isn't there. We are told under the Elementary and Secondary Education Act that we are going to have a math test for every third, fourth, fifth, sixth, seventh and eighth grader. I suggest we need a math test here because these numbers don't add up. A third, fourth, fifth or sixth grader would tell you that: Add these numbers, and they don't produce a balanced budget or a surplus. They put this country in great economic peril. That is why I take the floor this evening, to express my outrage and concern about what we are doing: 20 hours of debate, and then a vote-a- rama with 1 minute to describe or offer some explanation of an amendment that might make a difference on prescription drugs, on education, on Medicare, on middle-income Americans, 1 minute. These amendments and these votes will not be forgotten. They will not be forgotten. It has been said by philosophers that those who fail to remember the mistakes of history are doomed to repeat them, or words to that effect. Not unlike Cassandra of mythological note, for those of us who were here 20 years ago, I beg and beseech my colleagues who are relatively new: We don't tell you these things out of some sense of nostalgia. Twenty years ago, I heard the same arguments being made about the wisdom of a tax cut that was too big, too excessive. The overwhelming majority of our colleagues in the Senate and in the other Chamber disregarded those warnings and voted for a tax proposal that ultimately put this economy in a tailspin. As the Senator from Delaware has noted, it has only been during the last few years that we have recovered from it. I deplore what is occurring here. I plead with my colleagues: Modify this tax cut proposal. There is room for a decent, strong tax cut that would provide benefits to almost all Americans while also providing room to pay down the debt and to invest in the needed investments of our country in education and health care and the infrastructure of America, to mention just three. There ought to be room to do all three of those things. Adopting a tax cut that is too big is not unlike adopting a spending program that is too big. Imagine what we would be saying here today if someone were talking about a spending program of $4 trillion over the next 10 years. We would be saying: How do you know whether or not we can afford it 10 years from now? What will the economic conditions be in America 10 years from now? It would be foolish to commit the resources of this country without having some idea of what the economic circumstances would be in our Nation. Is it any less foolish to commit ourselves to a $4 trillion tax cut unknowing of what the economic circumstances will be 2, 3, 4, or 5 years from now? The answer is obvious. For those reasons, I hope Americans across this country will raise their voices, will let Members know how they feel about this proposal, will express their worry that we may be adopting a proposal that will cause this country serious harm. I apologize for taking a few minutes this evening, but we have not had time today to engage in debate. All we have had is 1 minute to offer amendments. There are now recorded votes on where people stand on the issue of health care, education, Medicare, Social Security, transportation, and a variety of other issues about which the American public cares. For those reasons, I urge my colleagues to rethink this proposal. It is only May. Step back, rethink this, develop a truly bipartisan proposal. Come back and ask us to rethink how we might fashion a proposal that would provide tax cuts for Americans as well as leave room for the other necessities of this Nation: Its defense needs, its educational needs, its health care needs. Those needs contribute to the long-term security of America as well. Leaving them to be crowded out, as we are on this day in May, this early on in this new century, is a mistake of historic proportions. I yield the floor.

Mr. DODD. I will be happy to yield.

Mr. DODD. Mr. President, I know the hour is late. I am deeply appreciative of the floor staff of this body. They worked late last night and late again today. We started some 12 hours ago, so I will try to keep these remarks relatively brief, if I can. It has been a little frustrating for this Member, and I suspect others over the past day or so, as we have dealt with what arguably would be the most significant piece of legislation we are likely to deal with for the next decade. And that legislation is the tax bill that is before us. So I wanted to take a few minutes to review the bidding, if I could, over what has happened over the last couple of days. I'd like to review where we are and why there are so many of us who have expressed our concerns about the direction of this legislation, its substance, and its priorities. It is not that those of us here object to a tax cut. In fact, the overwhelming majority of Democrats and Republicans support a tax cut. That is not the issue. The issue is the makeup of this tax cut. The issue is the fairness of it, its distribution, and its size. And one of the most significant issues is the inability to predict with any certainty what economic conditions will look like 5 years from now, 3 years from now, let alone 10 years from now, where much of this bill is backloaded and when the effects of it will be felt the most. I want to spend a few minutes and just go over, if I could, some of the amendments we have considered today. First of all, let me point out that it has been said by some that we have had stalling amendments--27 amendments considered today, 17 yesterday, 3 the day before. We had a total of 20 hours of debate on this bill, less than 1 calendar day of actual debate on this bill. You were allowed to have 1 minute to explain an amendment and 1 minute to rebut that amendment. So as we have considered some 47 amendments over the last 3 days, there has hardly been the kind of deliberative debate one normally associates with the U.S. Senate. There has been this abbreviated, truncated approach because that is all you are allocated under a reconciliation bill that gives you 20 hours: 20 hours to debate what arguably may be the single most important piece of economic legislation that this or succeeding Congresses will deal with for the coming decade or beyond. Twenty hours, less than 1 day. I am one of a handful of people in this Chamber who was present 20 years ago. I see my friend from Delaware in the Chamber. He was present in the Chamber 20 years ago when we considered a tax cut of equal magnitude but of far less divisiveness. In fact, I think there were 10 or 11 of us who voted against that tax bill for the reasons that it would contribute to expanding the size of the national debt; would result in consumers paying higher interest rates for automobiles, for college loans, for homes; that we would end up in the red ink; and that our Nation would suffer economically. At least back in 1981 we had 12 days of debate--not 20 hours. We had 12 days of debate on that bill.

Mr. DODD. That is right.

Mr. DODD. I thank my colleague. Mr. President, if I may, I ask unanimous consent for 10 minutes at this point to complete my thoughts.

Mr. DODD

Mr. DODD. Mr. President, let me quickly get to the heart of what this amendment does, and I will give some explanation of the specifics of it. This amendment is designed to reduce the amount of the tax cut at the top rate by a relatively small amount--about 1.6 percent--using those resources to do two things and, in addition to that, also modifying the repeal of the estate tax. By doing those two things, reducing the top rate by less of an amount, by 1.6 percent rather than the 3 points, and by having a modification of the estate tax, we take those resources and apply them to paying down more of the national debt. Fifty percent goes to that, and 50 percent goes to nontransportation infrastructure--the water systems, sewage systems, the electrical, and all the things that go on every day that are necessary for our cities, communities, and States to work. We have done very little about investing in the physical infrastructure of America. You cannot go back to your respective States and talk to a mayor or a Governor and they won't tell you that one of their major problems is dealing with the nontransportation infrastructure needs. Almost on a daily basis, when you pick up any paper in America, you will read where another gas main, water main, sewage main has burst or broken, hasn't been replaced in years, schools are literally falling apart--kids go off to school every day to schools built decades ago. Obviously, there are transportation needs. Those are dealt with in other places. This is nontransportation infrastructure and debt reduction. That is what I want to do with this modest change in the tax bill that is in front of us. There are two things that I think are absolutely critical if we are going to succeed in the coming years economically. Presently, we pay between $220 billion and $225 billion a year in interest payments. Let me repeat that--between $220 billion and $225 billion a year in interest payments. An interest payment doesn't build anything, doesn't make anyone healthier, doesn't provide a Pell grant to go on to higher education, doesn't build a school, a road--it does nothing. All it is is interest payments on the national debt that we have accumulated, the bulk of which was accumulated in the 1980s and early 1990s--in excess of $3 trillion or $4 trillion. Mr. President, $200 billion a year--even with the surplus--is going in that direction. Certainly, we all ought to agree as Americans that one of our major goals ought to be to bring that debt down. I understand there is a good argument for not eliminating it altogether, and I will accept that. But nobody can convince me that paying $220 billion a year out of taxpayer money to go to interest payments at the expense of other things we need makes much sense. I think we ought to modify the tax cut for the most affluent Americans by 1.6 percentage points--that is all, 1.6. You still get a good tax cut here. But by a 1.6 point cut, and using those resources to help pay down that debt, and then by modifying the repeal of the estate tax, which only affects 49,000 Americans --modifying that to help rebuild or try to contribute to the infrastructure needs of our country. How bad are the infrastructure needs? Interest costs on the debt, by the way, are $220 billion a year. Over the next 10 years, that is $1.5 trillion, if we do nothing, if we just accept the present level of debt. Let's assume the economy runs pretty smoothly out here, with no new increases but no real debt. That is $1.5 trillion in debt, according to the Congressional Research Service, if we do nothing to increase our indebtedness. In 2001, interest payments on the debt were 11.2 percent of the budget and 2.1 percent of the GDP. According to the Society of Civil Engineers, the condition of America's infrastructure receives a failing grade of D plus. They go down the list in terms of roads, bridges, transit, aviation, schools, drinking water, wastewater, dams, solid waste, hazardous waste, navigable waterways, energy--all the way down are Ds, flunking. They estimate that over the next 5 years, just to put it in working condition--not replace--would be $1.3 trillion to bring the Nation's infrastructure into a C or C+ condition. We are doing almost nothing about it. As we are talking about a tax cut--and I think there is room for it-- can we not modify this tax cut by a modest amount to help reduce the debt and invest in the infrastructure needs of America? That is not a complicated question--just modify it, not eliminate it. I am not talking about taking the tax cut off the table, but instead of reducing the top rate from 39 percent to 36 percent, how about just bringing it down 1.6 points? By the way, I come from the most affluent State in the country on a per capita income basis--Connecticut. If you repeal the Federal estate tax, it affects about 980 people in my State of 3.5 million people. That is 980 people in my State, and 49,000 nationally. So just modifying the estate tax and reducing the size of the tax cut for the most affluent Americans, I can make a huge dent in the national debt of this country and I can invest in the infrastructure needs that we are told, by every objective analysis, are in desperate need of repair. That is what this amendment is designed to do, very simply--bring down that debt, reduce those interest payments, and invest in the infrastructure. Are we asking so much? In fact, I suggest that if we asked the most affluent Americans whether or not they would be willing to take a more modest tax cut--not to eliminate the tax cut, but a more modest tax cut--in order to bring down the national debt and to invest in the infrastructure, water systems, and sewage systems that are falling apart in our country, they would say you ought to do that. I don't know why it is we think that the most affluent people would be opposed to doing some of these things. Yet to hear some of the speeches on the floor of this Chamber, that even a modest reduction in the size of the tax cut for the top 1 percent of income earners, people making $300,000 or $400,000 a year, a slight reduction in their tax cut is absolutely unacceptable, even when it means cutting into that $220 billion a year that goes for interest payments. When I think of what I can do with $220 billion for schools, roads, and other things that our country needs. I have a great fear, of course, that we are going to see this proposal in front of us cause an increase in the national debt. If that happens, of course, then interest rates on cars, homes, and other consumer goods will go up, and that is an awful tax increase. When interest payments on those consumer goods rise, that is a tax increase. We have seen that happen in the past. We are not unfamiliar with rising interest rate costs and what they can do to people's ability to provide for their families, for businesses to grow and expand and hire more people to compete in the global marketplace. I have great concern that because of what we are doing with this tax cut proposal--crowding out our ability to do these other things, such as paying down the debt and investing in the infrastructure needs of our country--that we are going to look back and rue the day. I am 1 of 10 people who was in this Chamber 20 years ago when a similar tax cut proposal was being made, a more modest one. Ten of us said: We are fearful that if we adopt this tax cut proposal, this country is going to witness an increase in its indebtedness, it is going to see interest rates climb, and hard-working people are going to see the cost of everything they need go up. There are only 3 of us left today in this Chamber who were part of that group of 10 who voted against that tax cut in 1981-1982. I do not know of many people who would not like to have that vote back, if they could. I do not need to spell out what happened during the mid-1980s and early 1990s. Our national debt went from under $1 trillion to in excess of $3 trillion, almost $4 trillion. Interest rates went up to the ceiling, the economy went dead, flat in the water, and it was not until 1990 and 1993 that we began to come out of it, we began to see our economy grow and expand again as a result of some very courageous votes taken in this Chamber and the other Chamber. I do not want to see us go back to recreate the mistake we did 20 years ago. I have a great fear that is about what we are going to do in the next 12 hours or less. I do not fault the managing Members for the job they have had to do in the Finance Committee, but this is being done awfully quickly. It is only the middle of May, and we are jamming through this tax cut proposal even before we are being told what the defense numbers are going to be. We have an energy crisis looming on the horizon. Thomas Friedman of the New York Times called it the ``perfect storm.'' We have this tax cut proposal, as much as a $150 billion to $200 billion increase in defense spending, and an energy crisis looming and we are charging ahead unmindful of the implications of these proposals and what they could do to the economy of this country and the pocketbooks of average Americans. This amendment does not correct all of that, but it does moderate it to some degree. It says that paying down the national debt ought to be a priority; if not paying all of it down, pay some of it down. This should not be a Democratic idea or a Republican idea to reduce $220 billion in interest payments each year. Can anyone tell me when an economy has grown in this country when its infrastructure was collapsing? We cannot point to a single period in our history when our basic infrastructure was falling apart and our economy grew. There is a relationship between interest payments on the debt and infrastructure. The reason I am combining these two in this amendment is because both are absolutely critical to economic growth. If debt is too big, either personally or nationally, then we will not be able to afford the things we need for our families or as a nation. If our infrastructure is collapsing and falling apart, our economy does not grow. By reducing the tax cut for the most affluent Americans by a small amount, I do not eliminate the national debt, and I do not provide for all the infrastructure needs, but we do some of the things. If my colleagues do not think this amendment has value, they can call their Governor, Democrat or Republican, and ask them whether or not they think infrastructure costs are serious in their respective States. I am looking at some numbers from my State of Connecticut. Infrastructure facts: 58 percent of Connecticut schools have at least one inadequate building feature, 68 percent of the schools have at least one unsatisfactory environmental feature. Connecticut's drinking water infrastructure needs $1.35 billion over the next 20 years. Connecticut is a small State. There are 11 State-determined deficient dams in the State of Connecticut. Again, my colleagues can call their home States, and I am sure they will get similar numbers across the country about what is happening to the basic infrastructure of our Nation and our inability, as a result of what we are about to do with this tax cut, to pay for these costs. By the way, when fully implemented, this tax cut is not $1.35 trillion. It will cost $4 trillion. I draw the attention of my colleagues to the lead editorial in the New York Times over the weekend about the cost of this tax bill we are about to adopt, and those exploding costs will kick in just as the baby boomers retire, and just as Social Security and Medicare will be placed under extraordinary new strains. This amendment makes a commitment to debt reduction, and while I believe it is modest, it also seeks a commitment to that other important priority: our national infrastructure. It is a well-known fact that our country's schools, our water, and wastewater systems, our telecommunications connections are in dire need of attention. Let me give some examples. Nearly three-quarters of our schools are over 30 years old. The average age of our schools is 42 years. That means schools go back almost to the mid part of the last century. Fourteen million children attend school every day in buildings that are unsafe. Fourteen million kids go to unsafe schools every day. The American Society of Civil Engineers issued a report card on our Nation's school infrastructure and gave it a failing grade. Our water and wastewater systems need nearly $23 billion more each year. Water and wastewater alone need $23 billion a year for the next 20 years-- there is nothing here for that; nothing--in order to replace aging and failing pipes and to meet the environmental and public health standards in the Clean Water and Safe Drinking Water Acts. Federal contributions have dropped 75 percent in real terms since 1980. We used to be a better partner with our States and communities in picking up these costs. We have now left the scene, pretty much departed entirely. So while providing a tax cut on one level, who do we think is going to pick up the cost of these items at the local level since we do not contribute much anymore? Local property tax, local sales tax, and local income tax will go up. We will provide Americans with a few bucks here, but we will take the money out of another pocket at the State and local level because the Governors and mayors are going to have to pick up these costs because we are not doing it. The Federal Government represents only about 10 percent of the total capital outlays for water and wastewater infrastructure. That is how much in 20 years we have declined in our participation. The architects of this bill would prefer we not pay anything. That is what they want. Clean water, obviously, affects the environment, public health, and the economy. Clean water supports a $50 billion recreational industry, $300 billion in coastal tourism, $45 billion in annual commercial fishing, and a shellfishing industry. And we all know the Internet has dramatically altered how we live, work, gathering information, and we are all aware of the increasing importance of being digitally connected. While access has increased for all groups, there still exists a gap, or digital divide, between those Americans with access to technology and those without. Race, income, education, age, and location are all factors related to the level of Internet connectivity. As to the means to deploy this technology, once again, however, the infrastructure needed to extend access is lagging, desperately lagging in certain areas and among certain groups in this country. By reducing this tax cut, decreasing modestly for the most affluent, we can make a difference on closing the digital divide to see to it that every child in America will have the opportunity to access this modern technology that they will need to be productive citizens. Wastewater and telecommunications, are these not priorities issues as well? Don't they deserve the attention of this body? As we are about to give a tax cut of this magnitude, can we not modify it even slightly to make a difference for the people who would benefit as a result of improved water, wastewater, telecommunications, and schools? Does that not make America richer and wealthier, more solid as a nation in the years to come? Why crowd out everything here so that instead of the 75 percent we used to contribute to our local communities, we are down to 10, 9, 8, 5, and down to 1 percent? Rural communities fall behind cities' and urban areas' broadband penetration, at only 7.3 percent for rural parts of America. This is not just cities we are talking about; rural communities suffer terribly. Large gaps in Internet access still remain among ethnic groups. The Internet has become a necessity. It will become even more so in the years ahead. If we don't make investments in the basic infrastructure, we will rue the day, in my view. The importance of our commitment to our Nation's infrastructure is highlighted by a recent visit I had with mayors from 60 of my cities. One mayor said it best when he said a cut in Federal taxes equals an increase in local taxes. Municipal governments are straining to find the resources for water treatment and school repairs. He asked, are we going to ignore what is happening in our communities for a huge tax cut for those who can afford it the most? In the tax bill before the Senate, everyone gets tax relief. I am not changing that. I especially appreciate what the most affluent have done since 1993 in contributing to reducing our Nation's debt. They should get tax relief. I don't join those who say there ought to be no tax relief for affluent Americans. They contribute. I suspect were they here in this Chamber and asked the question of whether or not to reduce the national debt and invest in the infrastructure of America by taking a modest tax cut, most affluent Americans would say: Do it, do it. The reason the wealthiest 1 percent of Americans pay more in taxes relative to other income groups is not that tax rates have increased, but rather that their before-tax incomes have increased by nearly 50 percent between 1992 and 1998 as a result of wise decisions we made to reduce debt and to increase opportunity in this country. At the same time their incomes have risen dramatically, the overall Federal tax burden has dropped substantially. The bipartisan 1997 tax bill cut taxes on capital gains from investments, a major source of income for wealthy Americans. So the top 1 percent have seen a drop in their average overall tax rates. The top 400 wealthiest taxpayers, for instance, have seen a decrease in the average tax rates from 29 percent in 1993 to 22 percent in 1998--again, primarily as a result of the cut in the capital gains tax rates. I reject the argument, further, that the affluent are ready to riot over their taxes. I think the affluent are responsible citizens. I think they will be the first to say they live in the most wonderful nation on the face of this planet. Many came from poor families and created their wealth through hard work and sweat, ingenuity, and smarts. They tell you what they hope more for this country than anything else is to see to it that others have a similar opportunity. I don't think they are about to riot. They want to see the country well managed, well run. They want to see its economic policies reflect the kind of society that gives people that opportunity. When schools are falling apart, with 42 percent of schools being built more than 30 or 40 years ago, when our water and wastewater systems are falling apart, when we have to write a check each year for $220 billion in interest payments, affluent, responsible Americans would say, bring down that national debt and invest in the infrastructure of America. Yes, they will give you a tax cut, as well, in addition to what is being received in the cuts of the capital gains taxes. I hope to adopt this amendment. I mentioned earlier the estate tax. I don't disagree we need estate tax relief. But to eliminate it entirely? What that costs over 10 years of this bill is $660 billion a year, for 49,000 Americans. That is who gets saved by this--the 49,000 most affluent Americans. The difference over 10 years is $660 billion. Can we not just modify the estate tax, reduce the size of the tax cut by a very small amount, and make a huge difference in the national debt of the country and the infrastructure needs? Mr. President, 49,000 Americans, 980 in my State alone--that is it-- out of 3.5 million people who will benefit with the complete repeal of the estate tax. And we can't find the resources, we can't modify that to make the difference? In Connecticut, 980 people resulted in estate tax liability out of 3.5 million. I hope my colleagues will consider this amendment as a modest change in the proposal. I add my friend and colleague from Nevada, Senator Reid, as a cosponsor of this amendment. This is modest change in the amount of tax rates for the most affluent, through modifying the estate tax repeal and investing those resources in bringing down that national debt and investing in the nontransportation infrastructure needs of America, is what this is about. We will not have the economy grow if the national debt goes climbing up again and if the infrastructure is falling apart. That is why I put these two issues together. In the absence of both of these, good infrastructure and reducing debt, both personally as well as nationally, it is hard to imagine how this economy will see a brighter day if we adopt this bill without these provisions added to it. I withhold the remainder of my time.

Mr. DODD. Mr. President, I send my amendment to the desk.

Mr. DODD. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. DODD. Mr. President, I suggest the absence of a quorum.

Mr. DODD. Mr. President, the Senator from Vermont has laid this out very clearly. I hope our colleagues will find the wisdom to support this. I know the Senator from Iowa and the Senator from Montana wrestled very hard. They have been good supporters on many of these issues over the years. Here is something where just a modest change in the rates can make a huge difference to people. I am not talking about the poorest people, although some of them are, but people who are earning about $40,000, $50,000, or $60,000 a year. You have two children, and it is costing them $17,000 or $18,000 a year for child care. That is a huge whack out of gross income. To provide some increase to defray these costs is a great advantage and a great help to these people. We urge our colleagues on both sides of the aisle to be supportive of this very fair, thoughtful, modest amendment. I thank my colleague for offering it.

Mr. DODD. First of all, I commend my colleague from Vermont for offering this amendment. I am delighted to be his principal cosponsor. This is an issue we have worked on together for as many years as we have been in the Senate. My colleague from Utah, Senator Hatch, and many others have helped us develop the Child Care and Development Block Grant program. I note that the Presiding Officer has more than a passing awareness and knowledge of the subject matter of this amendment and has been involved in the question himself when he was in the other body as well as support here. What we are changing with this amendment are three things that pertain to the Dependent Care Tax Credit or, DCTC under current law. We have not changed, in 20 years, the amount of annual eligible expenses for child care against which the dependent care tax credit is based. That is what we are talking about in this amendment. Under current law, eligible expenses for child care are capped at $2,400 for families with one child and $4,800 for families with two children each year. We want to raise the cap on these expenses from the present level of $2,400 for a single child up to $3,000. For families with more than one child, the cap on annual child care expenses would be increased from $4,800 to $6,000. That would be for two children. So we are increasing the amount of child care expenses that would be used as the base against which the dependent care tax credit is calculated from $2,400 to $3,000 for families with one child; and $4,800 to $6,000 for families with two children. But then we do something else. Under current law, a family can only take a percentage of eligible expenses capped by law as their dependent care tax credit. We have talked already about the amount of eligible expenses that we would be increasing under this amendment. But, also in this amendment, we would increase the percentage that is applied to the capped amount of eligible expenses to calculate the credit. Under current law, the lowest income families can only take 30 percent of $2,400 in eligible expenses for one child or 30 percent of $4,800 for two children. That's the maximum credit allowed under the DCTC. The amount of expenses as well as the percentage of eligible expenses have not been changed in 20 years. What our amendment does is increase the percentage of eligible costs for the lowest income families from 30 percent to 50 percent. If you make from $10,000 to $30,000, you get a maximum of a 50-percent credit. If you make in excess of $30,000, that percentage declines as income rises until it reaches 20 percent. Even the most affluent family in the country can claim 20 percent of allowable eligible expenses for child care under the dependent care tax credit. Then, lastly, we index to inflation the child care expense thresholds, the annual child care expenses against which the credit is based, because over the last 20 years there have been no increases at all. Obviously, the cost goes up for child care and related expenses, so we will be back at this again. So why not index it, as we have in so many other areas of the Tax Code? That is all this amendment does. There is no refundability in this amendment. I regret that, but we did not include refundability. So very briefly, again, what we do is we increase the amount of eligible expenses under the dependent care credit that a family can take into consideration in calculating their dependent care tax credit. In the case of a single child, the child care expense threshold would increase from $2,400 to $3,000; in the case of two children, the child care expense threshold would increase from $4,800 to $6,000. You can talk to any family in the country, and they will tell you about the cost of child care. Today it is not uncommon to have child care costs reach $10,000 a year per child. On average, child care expenses both in urban and rural areas are between $6,000 and $10,000 a year. That has gone up considerably in 20 years. Twenty years ago, the cost of child care hovered around $1,500 to $2,000, in some cases $3,000 or more. In 20 years, those costs have just gone up through the ceiling. Today, in some of the poorer areas, good child care can cost as much as $10,000 or more a year. Needless to say, if you are a family, say, making $40,000, $50,000, $60,000, with two kids, obviously, when you are spending as much as $6,000 to $20,000 for child care for those two children--before you pay rent, before you pay a mortgage, before you put food on the table, clothes and the rest--obviously, that is an extraordinary amount of expense. So by raising the child care annual expense threshold from $2,400 to $3,000 in the case of one child, and $4,800 to $6,000 in the case of two children, and then increasing the percentage applied to the child care expense base from 30 percent to 50 percent--in the case of the poorest people--with a sliding scale that drops to 20 percent for the most affluent Americans, we think we are going to provide some needed assistance to people who are burdened by high child care costs. For everyone, just like under current law, the amount of allowable expenses would be the same. But, for those families who are low income and moderate income earners, they would be able to take a larger credit than current law--because, both the amount of allowable eligible expenses and the percentage applied to that base would be increased. How do we pay for it? We drop the top income tax rate by whatever number it needs, maybe 1 point, maybe even less than 1 point to pick this cost up. So we are still providing a tax break for the most affluent Americans. But one of the most significant costs that Americans face is for dependent care, and they need this help. The Senator from Vermont has laid out--I am, again, preaching to the choir when I speak to the Presiding Officer and the chairman of the committee. They know in the case of Iowa, and in the case of Kansas, there are a lot of hard working folks out there, single parents raising kids. This is not a choice. This is not a case where someone is sitting there and saying they think they will go to work or won't go to work. This is a case where people actually have no other choice. So we are providing some real relief. I say, with all due respect to the managing members of this bill, the chairman of the committee, we have done something clearly in this bill on the per child tax credit, and I appreciate that. But the dependent care tax credit has not changed. There has been no change in 20 years. It may be 20 years again. It has been nearly 20 years since the last time we dealt comprehensively with the Tax Code. It could be another 20 years before we have a chance to fix it. So what we are suggesting in this proposal--as the chairman of the HELP Committee pointed out, is that millions of families struggle with child care costs every week. The need for child care assistance is great. Some 65 percent of mothers with children under the age of 6, and 78 percent of mothers with children between the ages of 6 and 13, are working today. Nearly 60 percent of mothers with infants are working. This is not a question of whether or not a need exists. The need is clearly there. If you do the math on this, a single parent earning $30,000, who has a 1-year-old child and a 3-year-old child, would be spending as much as half of her gross income on dependent child care expenses. The present dependent care tax credit helps, but it is no real match for the reality of the child care market. Under current law, the maximum credit a family can claim is $720 for one child for 1 year--30 percent of $2,400, and $1,400 for two--30 percent of $4,800. That is not insignificant, but it is not enough to make a family's $8,000 child care bill more affordable. Our amendment would also index the thresholds for child care expenses for inflation. That is just common sense. Over the years, most of the basic tax provisions affecting tax liability have been indexed for inflation. The personal exemption, the standard deduction, tax brackets for low-income families, the earned-income tax credit, all have been indexed. By indexing the child care expense thresholds under the dependent care tax credit, we would ensure that the credit keeps up with market realities. Within the context of the overall provisions of this tax cut proposal, we can afford it. We have not increased the child care expense thresholds themselves a dime, let alone indexed them for inflation, over the past 20 years. So again, by raising the child care expense thresholds, and then raising the percentage of eligible expenses a family can take in calculating its dependent care tax credit, we will provide some real relief for families with high day care costs. For example, the maximum credit for a family with one child would increase from 30 percent of $2,400 or $720 to 50 percent of $3,000 or $1,500. The maximum credit for a family with two children would increase from 30 percent of $4,800 or $1,440 to 50 percent of $6,000 or $3,000. These changes will really help low and moderate income families where every dollar counts. In view of the costs of child care expenses, we think this is an affordable amendment, one that makes sense and provides real relief for working people. There are no income eligibility caps on the dependent care tax credit, so even the most affluent families can claim as much as 20 percent of allowable dependent care costs. For these reasons, we urge our colleagues to support this very modest amendment--it is not that expensive--and to reduce the top rate just a fraction to pick up this cost. We think this is something that would make this tax bill a far better proposal. With that, Mr. President, I yield back whatever time I may not have consumed to the distinguished Senator from Vermont.

Mr. DODD. Mr. President, very briefly, what this amendment does is to try to provide some resources for reducing the level of the national debt. We are spending $220 billion a year in interest payments on the debt, a number that is vastly in excess of what it ought to be. We also believe, in addition to reducing the debt, in providing resources for nontransportation infrastructure needs--water, wastewater systems, sewage systems, schools. We are told that some $23 billion a year for the next 20 years every year will be needed just to repair water and wastewater treatment facilities in the United States. My amendment takes the rate reductions for the top income earners from 39.6 to 38. And it also modifies the estate tax to accommodate reducing that national debt and providing resources for the infrastructure needs of this country. You are never going to have economic growth if you continue to have debt amounting to the levels we do and if you don't invest in the basic infrastructure of this country. For those reasons, I urge adoption of the amendment.

Mr. DODD. I ask for the yeas and nays.

Mr. DODD. Mr. President, the Joint Committee on Taxation estimated that the House version, H.R. 8, would cost $186 billion between 2002 and 2011, less than one-third of the 10-year cost they estimated for immediate repeal, $662 billion--the Joint Committee on Taxation.

Mr. DODD. I ask unanimous consent for 30 seconds.

Mr. DODD. Will my colleague yield?

Mr. DODD. In the 3 minutes, I want to make a couple of corrections to some of the statements made about the estate tax. First, I will tell the Senate exactly how many people paid the estate tax liability: 49,870 people had, in 1999, Federal estate tax liability. That is 2 percent of the adult deaths in the country. When it comes to family farms, the New York Times recently reported that an Iowa State University economist had not been able to find a single documented example, not a single documented example of a family farm lost to the estate tax. Nor could the American Farm Bureau Federation find one example, not one. So when I hear these nostalgic, mythical arguments about the family farm losing out to the estate tax, that is what it is. It is mythology, unless you are the King Ranch in Texas maybe. The idea that small family farms lose is just not borne out by the statistics or facts. The fact is, there is a significant revenue loss. My colleagues may not want to talk about it, but this bill also backloads the estate tax. It doesn't become fully effective until 2011. This hides the true cost of estate tax repeal. If you want to vote for $662 billion in tax breaks for 49,000 people, then vote against the amendment. But then you explain that the next time we try to fix the water system or a sewer system or repair a school or reduce the national debt. The family farmer suffered? Name one. The Farm Bureau couldn't name one. The New York Times couldn't find one. Iowa State University couldn't find one. This is a joke that is going on here. It is ridiculous. Listen to some of the most affluent Americans. Listen to George Soros, who talked about the estate tax and how ridiculous this is. Listen to Warren Buffett, Bill Gates, John Kluge, they will tell you this is a myth, that it is ridiculous talking about death taxes, $662 billion over 10 years. That is real money. That is money that could make a difference in paying down the debt, in investing in the infrastructure of America. By taking the top rate down, instead of to 36 percent but to 38 percent, is that really an outrageous request to make for a modest investment in a downpayment on reducing the national debt and investing in the nontransportation infrastructure of America? I don't think so, Bill Gates doesn't think so, George Soros doesn't think so, Warren Buffett doesn't think so, John Kluge doesn't think so. I hope the amendment will be adopted. Maybe we will have a little more balance in this bill. But repealing the estate tax to affect a fraction of the population in this country, some of the most affluent people in the land--to their credit, some of the most affluent people think this is wrong. Mr. President, I ask for the yeas and nays on the amendment.

Mr. DODD. Mr. President, may I inquire how much time remains?

Mr. DODD. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. DODD

Mr. DODD. Mr. President, to underscore the point, we have voted now on several occasions over the past number of weeks for full funding of title I, full funding of the IDEA, special education. What we are saying is it is going to be difficult to meet those obligations unless we provide room in the budget. The only way to do that is by reducing the tax cut a marginal amount so those costs can be met. That is what the amendment of the Senator from Massachusetts does. We urge its adoption.

Mr. DODD

Mr. DODD. Reserving the right to object, I ask for 30 minutes on Monday.

Mr. DODD. This is a modest amendment. We can't do enough with the ESEA bill. I wish we could to make up the difference. This small little piece, when we so value education and those who commit themselves to this, to say there is a small line here for $250, that we are going to provide some relief to you for doing what you are doing, for those reasons I am a cosponsor and applaud my friend from Maine and my friend from Virginia for their eloquence and their support of this modest proposal. (Mr. ENZI assumed the Chair.)

Mr. DODD. I thank the distinguished ranking member of the Finance Committee. I commend our colleague from Maine. I know my friend from Montana will appreciate these remarks. I also thank my friend from Virginia who, once again, has enlightened us with a little history on the importance of a provision such as this. From a personal standpoint, we all have personal stories. My older sister Carol is a teacher, has been for 35 years. She has taught over the last 15 years or so in the public schools of Connecticut. I was telling my friend from Maine, the author of the amendment, who is so committed to education, almost on a yearly basis I go with my sister to literally buy from Home Depot and other places the planks to make the little bookcases in her classroom, literally buy pencils, paper, and other items. I say this coming from the most affluent State in the country on a per capita income basis. She teaches in the city of Hartford which has had serious problems. They do not have the resources, and she goes and buys them out of her own pocket each year. This is not some abstract idea. I have literally gone with her to do this. I was shocked when I first discovered it. I couldn't believe she was actually doing it. I thought there must be some pool of resources that would allow for the accommodation of things such as pencils and boards and toilet paper, literally, for classrooms in a public school in the United States of America. I was stunned to discover she literally dipped into her own pocket each year to buy the supplies.

Mr. DODD. Mr. President, is there any time remaining?