Byron Dorgan

Mr. DORGAN

Mr. DORGAN. Mr. President, I will explain what this amendment is. If on the floor of the Senate we are discussing a reconciliation bill that carries reductions in taxation, especially, in this circumstance, the elimination of the marriage tax penalty, I want to have considered several other pieces of tax law that I think are long overdue for consideration. This particular amendment combines four ideas. One, we have a current problem with virtually all farmers in this country who are receiving income from their conservation reserve program acres. The Internal Revenue Service has now decided that income is from self-employment and therefore subject to self-employment tax. That is one of the goofiest interpretations of tax law I have ever heard, but nonetheless that is the IRS's position. They have the opportunity to make it stick unless we tell them that is not what we intended; that is not the way the law ought to be read. That is not the way Congress intended it, so we will legislate to tell the IRS how they ought to view this issue. It is clear that the conservation reserve program, for which the Federal Government gives payments to farmers for the retirement of certain acreage into conservation, is not self-employment income and therefore subject to self-employment taxes. Yet that is exactly the way the IRS has ruled. All farmers across this country are going to get caught in this web. We must fix it. That is one provision. The second is a provision that applies to expensing opportunities for small business. Under current law, small businesses can generally expense or immediately deduct up to $20,000 of the cost of equipment and other items. This maximum amount will increase to $25,000 over the next several years. I propose that we allow, under those expensing provisions, opportunities for small businesses to fix up their storefronts on Main Streets. Many of our small towns desperately need reinvestment in the storefronts on Main Street. They are 50, 60, 70 years old. Yet when they do that these days, small businesses find they must depreciate the costs of those investments over 39 years for tax purposes. They ought to be able to expense that under the expensing provisions. My proposal would allow that to happen. The third proposal in this amendment fixes a problem with the issue of capital gains exclusions. If you are in a town someplace and you sell a home, you know there is an exclusion of up to $500,000 on all capital gains on the sale of that home. If you go out of town 15 miles and run a family farm someplace, your house has zero value except that value to which it inures to the farm you are farming. So if you sell that house, you sell it for almost nothing. The only value that home has is the ability for somebody to live in that home and operate farm equipment around that farmstead. The fact is, when farmers sell their home and their home quarter, they are not able to take advantage of the capital gains exclusion that the folks in town are taking advantage of when they sell their home. I would fix that in this legislation, as well, to give farmers that opportunity. Fourth, my amendment provides for the full deductibility immediately of health insurance costs for the self-employed. There is no excuse in this country to have a business on one side of Main Street be able to deduct only a fraction of their health insurance costs as a business expense and a corporation across the street that can deduct 100 percent of that as a business expense. That is not fair. Both parties have been working to try to bridge that gap. All of us have talked about that-- Republicans and Democrats--for some long while. We are making progress in closing the gap. Well, let's not just make progress, let's just close it and say self-employed will be treated exactly the same as large corporations. If you have health insurance costs for your employees in a business, it is a business expense and it ought to be fully deductible, and it ought to be fully deductible right now. Those are the four provisions I have offered to this reconciliation bill, and I hope for its consideration next week. As I conclude, we are not talking about tax issues. We have, according to economists, some good years ahead of us. The best economists in this country can't see beyond a few months. God bless them, and I don't mean to speak ill of them when I talk about economists this way. As I have said, I actually taught economics for a couple of years in college, but I was able to overcome that experience and go on to other things. Economists can't see very far into the future. They just can't. Adam Smith, one of the great economists, of course, in modern history, they say, used to get lost walking home; he could not find his home. God bless his memory as well. We are told now by economists today--the best in the country--that the next 10 years is likely to bring unprecedented economic growth, with 10 years of surpluses. I don't have any idea whether that will be the case. I hope it is. It would be terrific. But I don't know, nor do economists. The year before the last recession in this country, 35 of the 40 leading economists predicted the next year would be a year of continued economic growth. So 35 of the 40 leading economists had no idea what would happen in the next year. The same is true with respect to the future that we now discuss. We don't know what is going to happen. If we are fortunate enough to have continued, recurring budget surpluses, then we ought to begin this discussion about tax reductions. Yes, I think there is room for some tax cuts, but the question is, What kind and who benefits from them? We ought to begin the discussion about tax cuts relative to other issues: Reducing the Federal debt, providing a prescription drug program under Medicare, and a range of other needs in this country, including our investment in education, which represents our real future. We can do all of these things this month and in September and in the first half of October, before this Congress finishes its work. I think, in many ways, there are more common interests among Members of the Senate than most people realize. We can accomplish a lot of things together, and we ought to do more of that in the coming months. I hope to work on this range of issues. We are talking about the estate tax and the marriage tax penalty which, combined in the second 10 years, cost about $1 trillion in lost revenue. We have to evaluate this relative to other needs and interests--the needs, especially, of working families. It is true that we have had a wonderful economy and a robust bit of economic growth. But it is also true that some people have not benefited so much in this economy. We need to worry about them as well. Having said all of that, I look forward to the coming several months. I know this is an election year, a political year. But this country has much to be thankful for, and there is much to be gained by having an aggressive, robust debate about the future, the projected surplus, about our tax system, the needs in the Medicare program, prescription drug prices, and a whole range of issues that are important to most families. When they sit around their supper tables in this country, families are asking these basic questions: What kind of a job do I have? What kind of income do I get paid? Do I have security in my job? What kind of health care do I have for my kids? Do my parents get adequate health care? Do we live in a safe neighborhood? What about the issue of crime? All of those issues are important. Do we send our kids to a good school? When our kids walk through the door of the school, are we proud of the classroom and the teachers? Are we committing enough resources to make sure the kids are getting the best education they can get? Those are the issues that people are concerned about and that ought to be the center of our discussion in the coming 3 and a half or 4 months, before America makes political choices once again in this election. Mr. President, I yield the floor.

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

Mr. DORGAN

Mr. DORGAN. How does H.R. 4391 differ from S. 1755?

Mr. DORGAN

Mr. DORGAN. Yes.

Mr. DORGAN. Mr. President, I sat here in wonder at the description just offered by a couple of Senators about this proposal to repeal the estate tax. It is a proposal that is dressed with language saying that this is to help family farmers and small businesses. Yet when you remove the disguise, what you have are people pulling uphill a bag of goodies for the largest estates and the wealthiest people in this country. Clarence Darrow, at the end of his life and long career in law, once said, ``I have long suffered from being misunderstood.'' Then he said, ``I may have suffered more had I been understood.'' This proposal by the Republicans is going to suffer by being understood in this debate and by the American people. Let's understand what it is. First of all, we all agree that we ought to essentially repeal the estate tax for small businesses and family farms. We all agree on that. In fact, as the Senator from New York said, the New York Times article today says: Two prominent experts in estate taxes said yesterday that the Democrats were offering a much better deal to small business owners and farmers, because the relief under their bill would be immediate and the estate tax would be eliminated for nearly all of them. ``The fact is that the Democrats are making the better offer''--and I am a Republican saying that--``said Sanford Schlesinger of the law firm of Kaye, Scholer, Fierman, Hays, and Handler of New York.'' What the Democrats offer is a much better deal. It repeals the estate tax for all family farms and small businesses. Put that offer on the table. We repeal it more quickly. What is left is that the Republicans have decided they insist on repealing the estate tax for the wealthiest families in this country--$300 billion to $400 billion for additional tax relief for the wealthiest estates here in America. That is what they insist upon. What else could we do with this? They insist that money be used to give tax relief to the wealthiest in this country. Well, we could probably reduce the Federal debt. Would that be better than giving tax relief to somebody who dies and leaves a $1 billion estate? The heirs will only get $700 million or $800 million, and there will be money paid on an estate tax on the estate. Perhaps that money could be used to reduce the Federal debt. Would that be a gift to America's children? I think so. Perhaps it can go to the prescription drug benefit in the Medicare program. How about using the money for that? Would that be more important than easing the tax burdens on the largest estates in the country? I believe so. A series of things that would be a better use of those funds ought to be debated today. A USA Today editorial says: But behind the caterwauling about the death tax, the truth is quite different. Most people will never be affected by inheritance taxes: 98 percent of all estates aren't big enough to be liable. Even among the elite 2 percent, very few are farmers and small business folks. But there are better ways to spend $50 million a year than handing it to the heirs of the wealthiest people in the country. Take your pick: Middle class tax cut, improved health benefits for seniors, or paying down the national debt, for starters. Those are the choices. The Republican side of the aisle says, no, let's not just repeal the estate tax on small business and family farms, let's repeal it on the wealthiest estates in America and claim that what we are trying to do is protect farmers and small business people. Well, I don't think they appreciate being used that way. Farmers and small business people don't appreciate being used by someone who wants to take the $300 billion or $400 billion in tax relief that will accrue to the wealthiest American families and be told that somehow this is really for farmers and small businesses. The New York Times article today says something else: There is one reason that the American Farm Bureau Federation and the NFIB, National Federation of Independent Business, are not supporting the Democratic plan. Despite the fact that it is better for family farmers and small business, one reason may be that leading the call for the repeal of the tax, the two organizations representing merchants and farmers have done little to tell their members about the Democratic plan. Interviews this week with a half dozen people whom the two organizations offered as spokespeople on the estate tax showed that only one of them had any awareness or understanding of the Democratic plan. Here you have two organizations--the American Farm Bureau Federation and the NFIB--running around Washington saying they represent farmers and family businesses, and they are supporting the wrong program. They are supporting a repeal proposal that is less advantageous for family farmers and small businesses. And they tell their folks back home that they are doing their business. Nonsense. You have two competing plans. Both of them would repeal the estate tax for family farms and small businesses. But the Republican plan says we must go further and we must give $300 billion to $400 billion in additional tax cuts in the next 10 years and make sure those tax cuts go to the wealthiest estates in America. We say that is not the right set of priorities for this country. I have heard this out-of-breath discussion. The folks who talk about disguising public policy and debate around here are absolutely correct. You can't disguise what you are doing here in terms of a large tax cut for the wealthiest American estates by saying this goes to family farmers and small business. It doesn't. The proposal we offer is the one that will exempt family farms and small business. The proposal they offer is the one that will give hundreds of billions of dollars to the largest estates in America--$250 billion in tax benefits to the 400 wealthiest families in America. Is that the priority? It is for them. It is not for us. There are other needs and interests: prescription drugs for Medicare; as I have mentioned, paying down the Federal debt; tax relief for middle-income families. There are so many things that are so important that we could do in public policy here today. Instead, we are debating a plan that says, let us at this time and in this place provide the largest tax cut in history to the wealthiest estates in America. That doesn't make sense, no matter how you debate it.

Mr. DORGAN

Mr. DORGAN. Mr. President, I begin by complimenting Senator Slade Gorton and Senator Robert Byrd, the chairman and the ranking member of the subcommittee that brings this legislation to the floor. The Interior appropriations bill is a very important piece of legislation, but it faces the classic problem of trying to meet unlimited needs with limited resources. Senator Gorton and Senator Byrd had a very difficult task, but they have done quite a remarkable job and have certainly earned my compliments and I hope the compliments of my colleagues for the job they have done. I wish to speak for a few moments, however, about a very difficult problem that is encountered by a group of Americans who suffer some of the highest unemployment rates, some of the most difficult health problems, and the most difficult challenges of any Americans. I'm speaking of Native Americans. We have in North Dakota four Indian reservations. I frequently visit these reservations and meet with the tribal chairs, men, women, and children who live there. The conditions in some cases on these reservations are very much like those of a Third World country. The unmet health care needs are devastating. The unemployment rates in some cases are as high as 50, 60, and 70 percent because these areas are so remote and there are simply no jobs. And the quality of education regrettably is not up to the standards it should be. As I talk about these problems today, I want to point out that this bill, for the first time, makes some significant steps in the right direction. This is an important moment. This appropriations bill does make some important progress in dealing with the issues of Indian health care and Indian education. Yet there is so much left to do. The people in America who live in Indian country have the highest rates of poverty in our country. Over 30 percent of Native Americans live in poverty. The unemployment rate on Indian reservations in North Dakota averages 55 percent. Compare that to the unemployment rate of around 4 percent in the United States as a whole. To help address the problems that Native Americans face, President Clinton recommended a $1.2 billion increase, government-wide, for priority health care, education, economic development, and other infrastructure needs in Indian country. I am particularly pleased about the President's recommendations in some key areas, including the $300 million he proposed for BIA school replacement and repair. This is $167 million more than the current level, the largest ever single year investment in BIA school infrastructure. The President's budget also proposes a $200 million, or 10-percent, increase in the Indian health services budget. The increased funding levels in the Senate bill, even though they represent significant progress under difficult circumstances, still fall significantly short of both the President's budget request and what we need to do. Unfortunately, the House-passed Interior bill is far, far worse. We are going to fall short once again of meeting the actual needs of Native Americans. Let me talk for a moment about the health care needs in Indian country. A Native American living on the reservation is 12 times more likely to have diabetes than the average American--not double or triple or quadruple but 12 times more likely to have diabetes--and 3 times more likely to die from diabetes. An American Indian is five times more likely to die from tuberculosis, four times more likely to die from chronic liver disease, 3 times more likely to die in an accident, especially an automobile accident, and nearly twice as likely to commit suicide. I recently visited the Indian Health Service hospital in Fort Yates, ND. I have here a picture of that hospital. It has been around for a long while. It doesn't have an emergency room. The folks who use that hospital don't have access to an operating room, and they therefore can't deliver babies because they don't have an operating room. The emergency room is in the midst of the waiting rooms, so when an emergency occurs, everyone in the waiting room has to clear out. It is not visible in this picture, but there is a little old trailer house where the dentist practices. The 1 dentist practicing in that trailer serves 5,000 people. Now this dentist is no doubt providing the best service that he can given the circumstances he has to work in, but just imagine the kind of dental care that is provided by 1 dentist for 5,000 people. Do you think that dentist is constructing difficult bridges or other complicated treatments for teeth that are in trouble, or is he more likely pulling teeth? This is at Fort Yates, ND, on the Standing Rock Indian Reservation. The current funding for the Indian Health Service is about 43 percent less per capita than health care spending for the U.S. population generally. The Indian Health Service spends about $1,400 per patient, compared to the national per capita amount per patient of $3,200. Let me also talk for a moment about education on the reservations. Again, I appreciate the leadership of Senator Gorton and Senator Byrd in providing $276 million for BIA school replacement and repair in this coming fiscal year. The Federal government has a trust responsibility to provide an education to Indian children. This is not a luxury or some discretionary choice. We have a trust responsibility to Indian children, just as we have a responsibility to provide for an education for the children of our military personnel residing on or near military bases. The Federal government runs the Department of Defense school system. We also have a trust responsibility to run the school system through the BIA. We have not done that very well. We are woefully short of the funds that are needed to keep these schools up to standard. Even with the funding increases in the Senate bill, there will continue to be a nearly $700 million backlog in repair and replacement of BIA schools. The GAO says the schools that are serving these Indian children are among the poorest schools in the Nation. Yes, that is among all schools, even those in the inner-cities, where they also have a lot of problems. But the worst school facilities in the Nation are those on the Indian reservations. This is a picture of a school on the Turtle Mountain Reservation. This happens to be the Ojibwa Indian School. This is a fundamentally unsafe school, as many health and safety investigations have found. One day, my fear is that something awful will happen at that school and people will say, How did that happen? It will happen because nobody paid attention to the warnings. This is a picture of the fire escape. Notice, it is a wooden fire escape, which is rather unusual--a fire escape made of wood. This is clearly a fire code violation. The children of the Ojibwa school are attending classes in trailers that have been constructed because the main school building is over 100 years old and has been condemned. So the kids are now put in the mobile units and are required to scurry back and forth, up and down these stairs, in the dead of winter in North Dakota, with temperatures at 30 below zero and with the wind blowing. The people who have inspected these facilities from time to time have found all kinds of problems with them. This wooden fire escape is simply one of many. This is a picture of the plumbing at the school in Marty, SD, the Marty Indian School. Take a look at that plumbing. See if you want to take a drink of the water from those pipes. Or take a look at this rusted radiator. Not exactly the modern radiator needed to keep the students warm in the dead of a South Dakota winter. Or, to return to another picture of the Ojibwa school, where the ground beneath the gymnasium is giving way. For safety purposes they have put up plywood, and that plywood is all that separates children from danger as the ground gives way under the corner of the gymnasium. We have to do much better than this. We can and should do better than this. We have a responsibility to these kids. I have come to the floor many times and talked about these needs. I know I am repetitive, and I know people say that they have heard it all before. But frankly, a lot of these people don't have much of a voice in this appropriations process. A little third grader, Rosie Two Bears, once asked me: Mr. Senator, are you going to build me a new school? I realize I can't build Rosie a new school even though she desperately needs one. She goes to a school that is terribly inadequate. Rosie goes to a school with sewer gas coming up through the floors of one classroom, which they had to evacuate once or twice a week. She goes to a school in which there are 150 students with 1 water fountain and 2 toilets, a school with no playground. The fact is, we can do better than that. This bill makes some significant improvements in health and education. For that, I commend all the folks involved. On the Appropriations Committee, I tried to make even more improvements, and I'm glad I was able to do that marginally in the area of tribal college funding. However, I come to the floor to say we have to do better. The superintendent of the Wahpeton Indian school, Joyce Burr, told me a while ago about a little girl attending that school. Many of these kids are sent to that school from around the country, and they come from troubled backgrounds, many without much of a family or home to go back to. Joyce told me the little girl came to her near Christmastime, when the school was going to close during the 2 week holiday at Christmas and the children would be sent back to their reservations, to their families. This little girl, a third or fourth grader, went to the superintendent and said: I would like to stay over at the school during the Christmas break. I know the school isn't going to be opened, but I promise if you let me stay here I won't eat very much. She had no place to go, so she was asking if she could stay at the school all alone over the Christmas break, promising, ``If you let me do that I won't eat much.'' We must do much better for these children. On the other end of the education spectrum, with respect to tribal colleges, I want to say we are starting to make some progress there, for which I am very grateful. The tribal colleges represent an extension of educational opportunity and a way out of poverty. I went to a tribal college graduation once and met the oldest graduate in the graduating class. She was 42 or 43 years old, with four children, whose husband had left her. She was cleaning the toilets and the hallways at the tribal college and decided she was going to try and improve her lot in life by attending the college. The day I was there, she graduated. I can hardly describe the smile on her face that day. This woman decided, with grim determination: I am going to graduate from this college. I know I am cleaning the hallways and bathrooms, but I want to do more than that. Through grit and determination, the help of relatives and scholarships, and because the tribal college was right there, guess what--the day I showed up to give the graduation speech, this proud woman graduated from college. Good for her. Or the instance of Loretta. Loretta had dropped out of school. She was an unwed teenaged mother. Now she is a doctor, a Ph.D., a real expert on education who eventually went on to teach at a tribal college for awhile. She did that by herself, but she did it because we put in place a system of tribal colleges that give people like Loretta the opportunity to go to school and get a college education. That is why tribal colleges are so important. Frankly, we contribute only about half as much per student at tribal colleges as we do to other colleges around the rest of the country. We need to do better than that. I am pleased to say this piece of legislation starts down that road. Let me conclude where I began. I am here because I am pleased we are making progress. These are important, critical issues. We cannot ignore the circumstances that exist on Indian reservations. It is easy enough for some people to say that this is the way Indians want to live. That is not the case at all. These are Americans who are beset by poverty, lack of opportunity, lack of jobs, a bad health care system, and a crumbling education system that we must improve. I believe we are taking the first steps in this legislation to do that. For that, I commend my colleagues who brought this bill to the floor --Senator Gorton and Senator Byrd. I say to them, I will be back again next year, as we continue our work in the Appropriations Committee, saying that we have done a lot, we have made some first important steps and thanks for that. But let's continue to try to address these education and health care needs on our reservations for Indian Americans. Let's try to do even more in the coming fiscal year. I yield the floor.

Mr. DORGAN. I am happy to yield to the Senator. Amendment No. 3774, Withdrawn

Mr. DORGAN

Mr. DORGAN. I respectfully say that the Senator from Oklahoma is not accurate when he says that his side is willing to entertain amendments; I do not see a problem here; let's bring it on and have amendments and a discussion. That is exactly what the majority leader has denied. That is exactly what the majority leader said he will not allow to happen on the floor of the Senate. If the Senator from Oklahoma is speaking for the majority leader on this issue, I say get the Democratic leader on the line, make an agreement, and let's have this issue on the floor where some amendments can be offered and votes taken, and we will see how people feel about the estate tax. The Senator from Oklahoma is not accurate in leaving the impression that this has been a reasonable circumstance here and they are willing to entertain all kinds of amendments. That is not the case at all. In fact, our side has offered a reasonable number of amendments with time agreements, and the majority leader has said no, and that is the fact.

Mr. DORGAN. I am happy to yield to the Senator.

Mr. DORGAN. Mr. President, I will comment briefly on the remarks made by the majority leader a few moments ago on the subject of the estate tax. First of all, the question of repealing the estate tax or changing the estate tax is an important issue, but it is not an issue that is important to the exclusion of all other issues. The majority leader takes the position that the estate tax ought to be repealed completely so those in this country who die and leave $100 million in assets or $500 million in assets or $1 billion in assets, who now pay some estate tax, will be tax free. That is what ``repeal'' means. I happen to believe we ought to change the estate tax to provide a significant exemption so that no small business and no family farm gets caught in the estate tax. I don't want people to try to leave the family farm or the small business to their children, only to discover there will be a crippling estate tax to pay. So I say, let's get rid of that situation. Let's provide an exemption--$8, $10 million--that takes care of the vast majority of cases. But how about those folks who leave half a billion dollars or $1 billion? Do we really want to repeal the estate tax on that kind of estate? There are other and competing needs for the revenue involved. For example, we could pay down the Federal debt; we could provide a larger tax credit for college tuition; we could invest in elementary and secondary education; we could provide tax relief to middle-income families rather than to the wealthiest estates in the country. I happen to believe we should change the estate tax, but I don't believe we ought to repeal the estate tax for the largest estates. The majority leader says the problem is with the Democratic side of the Senate. No, the problem is that yesterday the majority leader came to the floor of the Senate and tried to pass the repeal of the estate tax by unanimous consent. No debate, no discussion, no amendments, $750 billion of tax cuts in the second decade after repeal--$750 billion in tax cuts by unanimous consent, without any debate, and without any amendments. That is what he tried to do yesterday. We objected to that. Yesterday we proposed that he bring up this measure under a regular order. The majority leader objected to that. Democratic leaders proposed that the majority leader bring the bill up and allow 6, 8, or 10 amendments, with time agreements. But the majority leader has objected to that. His position is: I want my way or no way. I want to bring it up and repeal all of the estate tax, which would mean generous tax cuts for the wealthiest estates in this country. If we don't do it his way, we were told, we won't have an opportunity to offer any amendments. That is the majority leader's position. The people elected to the Senate on this side of the aisle will not be able to offer amendments. He says in effect, ``We have an idea, we intend to push that idea, we demand a vote on that idea, and, by the way, you, Senators, don't have any right to offer amendments.'' That is the majority leader's position. That is not a position that is acceptable to me. It is not the way the Senate ought to work. There is something called a regular order.

Mr. DORGAN. I say to the Senator from Oklahoma, there is nothing partisan in my intent to correct the impression left by the Senator from Oklahoma. I was simply saying that proposals have been made on the specific number of amendments and time agreements by our side and the majority leader has rejected them. The Senator from Oklahoma seemed to suggest they are willing to entertain this, that, and the other thing; they are very reasonable; they will accept amendments. I was simply trying to correct a misimpression. I did not intend to be partisan. This is an important issue. There are differences in how we view the issue. I happen to think we should change the estate tax so no small business or family farm ever gets caught in its web. We can do that. An $8 million or $10 million exemption would mean that virtually no family farm or small business ever would get caught in the web of the estate tax. But I do not happen to believe we should totally exempt the largest estates in this country from the estate tax. That is the difference. Let's debate that difference and have amendments on the choices and make judgments as a Senate. It is not my intent ever to be partisan about this issue, but I want the right information to be given, and the right information is that we offered limited amendments and limited time agreements, and they were rejected.

Mr. DORGAN. Do I have time remaining on the 2 minutes?

Mr. DORGAN. Can I take 30 seconds?

Mr. DORGAN

Mr. DORGAN. Mr. President, I listened with interest to the discussion by the Senator from Delaware. This is an issue brought to the floor of the Senate by those folks who believe that the estate tax ought to be repealed over the next 10 years--that it ought to be phased in and repealed completely. They call it a death tax. There are some things we agree with and other things on which we don't agree. Let me discuss an area of agreement. I think most Members of Congress believe the estate tax ought to be reformed in a manner that prevents a small business or family farm that is being passed from the parents to the children from having some sort of crippling estate tax apply to that transfer. I think almost all Members agree that should not happen. We want to encourage the transfer of a family farm and a small business to the children. We want to encourage parents giving their family farm or small business to their children to operate and keep that small business open. To do that, we ought to provide a specific exemption for family farms and small businesses. We provide such an exemption now in current law, but it is not high enough. We ought to make it high enough so no family farm or small business gets caught in this web. I propose $10 million. In fact, I cosponsored a piece of legislation authored by the Senator from Oklahoma a couple of years ago that had a $10 million ceiling in it with respect to the estate tax applied to a family farm or small business. We can increase the exemption so as to make sure no one has to worry about the interruption of the operation of a farm or small business. That is not rocket science. We can do that. That is not the issue here. We want to offer an amendment to do that. If we ever get the estate tax repeal bill on the floor, we will offer an amendment that would say, ``Let's not repeal it; let's instead provide a substantial increase in the exemption so family farms and small businesses are not hit with an estate tax.'' So that question is off the table. The question now is, will some sort of estate tax remain? In the newspaper this morning there is a story about a fellow worth about $900 million, a big investor-type from New York. I will not use his name. He is using his personal money to spend $20 million on television advertising between now and the November election on the issue of education, particularly the issue of vouchers with respect to education. It is his right to do that. Here is a person who amassed a fortune of $900 million, according to the newspaper, a terrific amount of money. He is just short of a billionaire. If that person at some point should die--and of course, everyone does--and that person's son or daughter gets an inheritance of $500 million because of the estate tax, who will stand on the floor and say shame on Congress for taking away part of that estate through an estate tax. The question is, Are there some in this country at the upper scale of income and wealth whom we should expect to be able to pay an estate tax? They have lived in this wonderful country, enjoyed the bounty of being an American, been able to become a millionaire, a billionaire. The wealthiest 400 people, according to Forbes magazine, would get a $250 billion tax windfall in estate tax reductions under the proposal for complete repeal. There were 309 billionaires in the United States in 1999. More than one half of the billionaires in the world live in the United States. That is not a bad thing. That is a good thing. That is wonderful. What a great economy. What a great place to live and work and invest. However, we have in this country a tax on estates. The majority has proposed eliminating the tax altogether, repealing it completely. According to the Treasury Department, when fully phased in, in the second 10 years, this would reduce federal revenues by $750 billion. We on the other hand have proposed to make changes in the estate tax to provide a sufficient exemption so that no family farm or small business is caught in the web of estate taxes. But we also believe that we ought to retain the revenue from some of the largest estates currently taxed in order to evaluate other possible uses for that revenue. Incidentally, the motion to proceed to this is a debate about proceeding to this or something else. Is total repeal of the estate tax the only thing that represents a priority in Congress? How else might we use this money, $250 billion, that under the present proposal would go to the wealthiest 400 people in our country? How else might we use that $250 billion? What about giving it to working families in the form of a tax break, an increased tax credit for college tuition to help parents send their kids to school? That seems reasonable to me. Or what about the possibility of using part of it to help pay down the Federal debt? During tough times, if we have run the Federal debt up to $5.7 trillion, how about during good times paying it down again? Perhaps we could use part of this revenue to pay down the debt. Or what about the proposition to use part of this revenue to provide a prescription drug benefit for those who are on Medicare? Those Americans who reach their senior years and have the lowest incomes of their lives are now discovering that the miracle drugs they need to extend and improve their lives are not available to them all too often because they cannot afford them. The drugs are priced out of reach. Senior citizens have told me in hearings that when they go to the grocery store they go to the back of the store first because that is where they sell the prescription drugs. That is where the pharmacy is. They must go to the back of the grocery store to buy their prescription drugs to deal with their diabetes and their heart trouble and arthritis because only then will they know, after they have paid for the prescription drugs they need, only then will they know how much money they have to buy food. Only then will they know how much money they have left to eat. What about using some of that estate tax revenue to provide a prescription drug benefit for the Medicare program rather than $250 billion for the richest 400 Americans? The majority party has said: We intend to demand the repeal of the estate tax by bringing a bill to the floor, and we don't want to mess around with your amendments. In fact, the narrow crevice here in the Senate on relevancy would say it is not relevant for my colleague, the Senator from Illinois, to offer an amendment and say we are debating the repeal of $250 billion of tax obligation to the wealthiest 400 Americans, so I have another idea on what we ought to do with that $250 billion. I propose we use it to provide a prescription drug benefit in the Medicare program. It would only require part of that revenue. But that is his idea. Under the narrow rules of the Senate, the majority says that is not relevant. We are not within the relevancy rules of the Senate, so we have no right to offer that idea. We have no right to offer that amendment. We will and should have a longer and expanded debate about this issue. If we have the opportunity to offer amendments and have up-or- down votes on issues, we will have an opportunity to take away, forever, the proposition that small businesses or family farms are going to be caught with an estate tax. We will offer an amendment that provides a threshold beyond which no family farms or small businesses will be ever threatened by an estate tax. That is not going to be the issue. The issue is much narrower than that. It is, Should we give up the revenue derived from an estate tax applied to the wealthiest estates in America? Should we give up revenue that could be used for other things, including reducing the Federal debt, providing middle-income tax relief, providing prescription drug benefits, or other urgent needs, or should we only decide our priority for the $250 billion is to relieve the tax burden on the estate of the wealthiest Americans? That is the question. The question we are dealing with this morning is a motion to proceed to this issue. Proceed to what? Proceed to the estate tax repeal. Shall we proceed to debate the estate tax repeal? I have another idea. How about proceeding to debate the issue of prescription drugs in the Medicare program? That is a bigger priority for me at the moment. Let's get that done. We have a very limited time between now and the middle of October when this Congress will complete its work. Let's proceed to do a Patients' Bill of Rights that gives real protection to patients in the health care system. Let's enact one that would say to a patient: You have a right to understand every option for your medical treatment--not just the cheapest --every option for your medical treatment; you have a right to that. Some say we have debated that. Yes, we debated it and passed a patients' bill of goods, not a Patients' Bill of Rights. It is a hollow vessel. Let's get that back to the floor. Let's have a vigorous and aggressive debate. Let's have a discussion about the issues we have raised. Let's have a discussion about the woman who was hiking in the Shenandoah mountains and fell off a 40-foot cliff and was taken to an emergency room with a concussion in a coma and multiple broken bones. After substantial medical treatment, she survived, only to be told by her HMO: We are not going to cover your emergency room treatment because you did not get prior approval to go to the emergency room. This is a woman who was hauled in on a gurney in a coma and did not have prior approval for emergency room treatment. Let's talk about that. Let's talk about a young boy named Ethan whose physical therapy was cut off. He was born with cerebral palsy, and it was judged by a managed care physician, or a managed care accountant, perhaps, that he had only a 50-percent chance of walking by age 5 and that was ``insignificant": Therefore, the HMO said, we won't cover the rehabilitation therapy. Think about that. A 50-percent chance of walking by age 5 for young Ethan was deemed ``insignificant'' and so the HMO wouldn't cover his rehabilitation therapy. Let's talk about that. Pass a motion to proceed to a Patients' Bill of Rights, and we will talk about these cases and these issues. Let's talk about the young boy who died at the age 16. Senator Reid and I had a hearing in Nevada. The young boy's mother told the tragic story. As she took her seat, she was crying and was holding aloft a large color picture of her 16-year-old son who had died, having been denied the treatment he needed to fight his cancer by the managed care organization. She said with tears in her eyes, holding a picture of her son aloft: My son looked at me and said: Mom, how can they do this to a kid? Let's have a motion to proceed to talk about those issues. That is a priority with me. This question of a motion to proceed is a question about what is important, what are our priorities. I say bring a Patients' Bill of Rights and have an aggressive, full debate. That issue has been in conference, and the conference has not moved a bit. The last time I mentioned that one of my colleagues protested: Oh, we have made a lot of progress. Month after month there has been no progress at all. When I heard that, I told him at least glaciers move an inch or two a year. There is no evidence that conference is alive. On a Patients' Bill of Rights, nothing is happening. But, boy, take the estate tax repeal, just give some people around here a whiff of providing some big tax cuts to the wealthiest Americans and, all of a sudden, it is as if they had an industrial strength Vitamin B-12 shot. There is nothing but scurrying around this Chamber. Boy, are they excited. We are excited about some other things. In fact, there are plenty of ideas for middle-income-tax relief. If we want to talk about tax cuts, we should be cautious because economists really do not have the foggiest idea what is going to happen 2, 4, 6, 10 years from now. They just do not know. We have been through a period in which we think this economy will never go into reverse; we think the business cycle has been repealed. It has not. We are going to go through periods of contraction, and we are going to continue to have economic conditions that we cannot predict. So we ought to be cautious about predictions of large, unrelenting surpluses. Nonetheless, if we have surpluses in the future that are as generous as now predicted, it is perfectly reasonable for us to be talking about some targeted tax cuts that will make a real difference in the lives of people. There are plenty of such areas; repealing the estate tax for the wealthiest Americans does not rank high among them. Yes, getting rid of the estate tax for family farms and small business does rank high. We are prepared to offer that amendment. If our amendment is adopted, we are not going to have the interruption of a family farm or small business when it passes from parents to children. As I indicated earlier, there are 309 billionaires in this country. More than one-half of the billionaires--that is with a B--more than one-half of the billionaires in the world live in the United States. Good for us and good for them. I am as delighted as I can be with all that success. Many of them believe as I do that their estate ought to bear some estate tax when they die, and that estate tax, which we now receive, can be used for some other productive investments. Some have an idea--incidentally, I have worked on it some as well. My colleague from Nebraska has worked on a proposal called KidSave, which would invest in supplementary savings accounts for children. In fact, we could develop a proposal which I have worked on that would in which the largest estates bearing an estate tax would help provide a modest pool of savings for every baby born in this country who then could access those savings upon, for example, the completion of high school. What a wonderful incentive it would be to say to people that if they pay attention and do their homework and graduate from high school, a reward will be waiting for them. There are all kinds of ideas. But the only idea that moves around this Chamber is an idea on that side of the aisle that says we must repeal the entire estate tax and we must do it through a vote on this issue in this Chamber and we must do it by denying the minority the opportunity to offer any significant amendments.

Mr. DORGAN. I will be happy to yield.

Mr. DORGAN. Of course, I yield, without losing my right to the floor.

Mr. DORGAN. Mr. President, the Senator from Illinois is correct. Let me give you another piece of information. The largest 374 estates would get an average tax cut of $12.8 million. The largest 1,062 of the estates in this country--about five-hundredths of 1 percent of the estates--would get an estimated average tax cut of $7 million each. The point isn't to say that having made money in this country is wrong or you should be penalized for it. That is not my point. My point is not that. This is a wonderful place in which some people do very well. Many of them who do very well do so because they work day and night. They have a certain genius --and good for them. There are others, however, as all of us know, who are fortunate to inherit a substantial amount of money --and good for them as well. But our proposition is simple enough; that on those largest estates in this country--I am talking about the very largest estates--should there not be the retention of some basic estate tax to create some revenue that can be used then to invest in the future of this country, invest in its children, invest in its family farmers, invest in our senior citizens? Because we now receive that revenue. If we decide to repeal that revenue, the question is, measured against what? Is this the most important, or are there other areas that are more important? That is what we ought to be discussing. That is why the motion to proceed, I think, is the place to discuss this. We have on a postcloture motion a number of hours within which we can discuss this issue. I hope my colleagues will also take some time. I know it is popular to say: You know something, this is a death tax. The reason they say that is they have pollsters who poll the words, and they have discovered that if they use the words ``death tax,'' it is a kind of pejorative that allows people to believe: Well, OK, let's repeal the death tax. It is much more than that. It is a tax on a decedent's estate that applies at certain levels and at certain times. I would agree with the majority party, if they say the exemption isn't high enough. It should be much, much higher. We want to make it much higher. But I would not agree, and do not agree, if they say: Let us repeal the estate tax burden on the largest estates in this country. Again, let me say that there are many who have amassed very substantial estates who believe we should not repeal the estate tax burden. Incidentally, a substantial amount of charitable giving in this country is stimulated by the presence of an estate tax. I would not use that to justify its presence, but I would say that one additional result of a total repeal for the largest estates will, I think, have a very significant impact on foundations and charities in this country. But we are going to have a very substantial discussion as we move along. This is a very important issue dealing with a lot of revenue. I must say, it is interesting that the issue is brought to the floor of the Senate without even going to the Finance Committee. I would expect the chairman and ranking member of the Finance Committee would express great concern about that. This is an issue that has just bypassed the Finance Committee, just being brought right to the floor of the Senate, with no hearings, no discussions, no markup in the Finance Committee. It is also a circumstance where the majority leader has indicated he wants to bring this up, but he does not want people to offer amendments really. And if they are to offer amendments, he wants them to be relevant with respect to the decision of relevancy in the Senate, not with respect to what is relevant or nonrelevant about the subjects that are on the floor of the Senate. For example, if the proposal is to substantially cut revenue by exempting the largest estates in this country from any estate tax burden, if that is the proposal, it would not be relevant in the Senate to say: I have another idea. Why don't we retain the tax burden on the largest estates, exempt the tax burden on the other estates, and then, instead of costing the extra $50 or $60 billion for the first 10 years and substantially move over the next 10 years, let's use that difference to provide a middle-income tax break, or let's use that difference to provide a larger tax credit for college tuition to send your children to college. Let's use that difference to provide a benefit of prescription drugs in the Medicare program. Let's use that difference to pay down the Federal debt that now exists at around $5.7 trillion--all of those ideas would be out of order and considered, under the arcane Senate rules, as nonrelevant.

Mr. DORGAN. I am happy to yield.

Mr. DORGAN. I think the Senator from California is right. I was thinking also about the alternatives. We have had a lot of discussion and will have, I assume, a great deal more discussion on the ability to pass a family farm on to the children, and I certainly support that. I want to have an exemption that will prevent the estate tax from snaring in its web the passage of the family farm from parents to children. I will say to my friends who raise these issues, if you want to help family farmers, we have an amendment that will enable you to do that. But then you go further and say: We want to provide the richest 400 people in America a $250 billion tax break during the second 10 years. That is triple the amount of money each year that we now spend on the farm program. We have this Freedom to Farm bill which is just devastating family farmers. Grain prices have collapsed. They have been collapsed for a long time. Perhaps we could take just a third of the amount of money they want to give in tax relief to the wealthiest estates in America-- just a third of it--and say: Let's have a farm program that really keeps family farmers on the farm. It is not a priority for some. See, that is the problem. It would be nice, for example--just in terms of what people think priorities are--if we could all go to an auction sale at some point. Arlo Schmidt, an auctioneer in North Dakota --he is a wonderful auctioneer--told me about a young boy about 8 years old who came up and grabbed him by the leg at the end of an auction sale. This boy was the son of a farmer whose machinery and land were being sold. This little boy grabbed the auctioneer around his thigh and, with tears in his eyes, looked up at him, pointed at him, and said: You sold my dad's tractor. This little boy was very angry. He said: You sold my dad's tractor. Arlo said: I patted him on the shoulder and tried to calm him down a little bit. This was after the action was over. His dad's equipment was gone, and so on. The little boy had none of this calming. The little boy, with tears in his eyes, said: I wanted to drive that tractor when I got big. The point is, we have a lot of things happening in this country that relate to family values and our economy and to what kind of country we are. One of them I care a lot about, because I come from a farm State, is the health of our family farmers and their ability to make a decent living. For those who would come to the Senate and say, let's get rid of the entire estate tax, I would say, regarding the wealthiest estates in our country, for you to flex your muscles and exert your energy to lift the burden of the estate tax from estates worth $1 billion, I do not understand it. I do not understand it when we have so many other needs, such as the need for income tax relief for middle-income families --not the wealthy estates--the need to enact a family farm program so the farmers have a decent chance to make a living, the need to adopt a Patients' Bill of Rights, the need to include a prescription drug benefit in the Medicare program--and do it soon. There are so many needs, and what you have done is elevate the need for lifting the burden of the estate tax on the largest estates in our country, saying: That is job No. 1. That is our priority.

Mr. DORGAN. Mr. President, I appreciate the Senator from South Dakota yielding. Since the Senator from New Hampshire wants to discuss the meaning of the term ``relevant,'' as the Senator from New Hampshire knows, the rules of the Senate have words that are used and interpreted in very narrow and unique ways. The term ``relevant'' has a very narrow meaning here in the Senate by which we make a judgment about which amendments might be in order. But the term ``relevant'' is not related to common sense, in the Senate at least. Let me give an example. On the issue we were talking about this morning, the estate tax repeal proposed by our friends on the other side of the aisle, the Forbes 400 wealthiest Americans would benefit to the tune of $250 billion in 10 years. Now, if one says, as they propose, let's give a $250 billion tax exemption to the 400 wealthiest Americans as identified in Forbes magazine, and if we say, we have another idea for that tax repeal--instead of giving that tax relief to the 400 wealthiest Americans, let us instead give it to middle-income families with an enlarged tax credit for tuition so they can send their kids to college; or let us widen the 15-percent bracket to enable more families to take advantage of that low rate; or let us enact a prescription drug benefit for people who need prescription drug coverage--in short, if we propose a different way to use that revenue that in our view would be more effective and more important, we are told that is not relevant. You can't offer that, we hear. That is not relevant. Of course it is relevant. My colleague just talked about common sense. Someone once described common sense as genius dressed in work clothes. There is no common sense on the issue of relevancy with respect to the Senate rules. Yet that is exactly the shield behind which they want to hide on these issues. We have a right to offer amendments. We have a right to offer amendments that relate to the subject at hand. The proposal by the majority side is to prevent us from that opportunity. Our reaction to that is, ``Nonsense.'' We have a right to do that. We have an absolute right to do that, as Members of the Senate.

Mr. DORGAN

Mr. DORGAN. No, Mr. President.

Mr. DORGAN. Mr. President, the facts are not very evident with respect to this debate in most cases. I thought it would be useful to quote from an interesting publication, the ``Farm and Ranch Guide''--it is a well-known publication to most farmers and ranchers--an article by Alan Guebert, ``A Tax Break for the Rich Courtesy of Family Farmers'' is its title. He points out that in 1997, according to Internal Revenue Service data, 1.9 percent of the more than 2 million Americans who died paid any estate tax at all; only 1.9 percent paid any estate tax at all. As skinny as that slice was, an even skinnier 2,400 estates paid almost 50 percent of all estate taxes . . . His point was, there are not many estates that are subject to an estate tax. I believe we ought to enact a generous exemption for family farms and small businesses so that no family farms or small businesses will be caught in the web of an estate tax. It is not as if this is a riveting debate, of course. The estate tax is a complicated issue. It can be highly emotional. As we see in the Senate today, it is not going to keep people glued to their seats. I suggest, however, the purpose of taxation is to pay for things we do in this country together. We build roads together because it doesn't make sense for each of us to build a road separately. We build schools because it makes sense that we do that together. We provide for a common defense. It requires taxes to pay for all this. It is what we do as Americans. I probably shouldn't name particular cities, but go mail a letter in some cities around the world and see how quickly that letter moves. Go drive on some roads in rural Honduras and see how well your tires hold up. Go take a look at some of the services in other parts of the world and then evaluate what your tax dollar buys in this country. That is part of our investment in America. Some say that the payment of taxes is something we don't like very much--I think all of us share that feeling--so let's relieve that burden. They come to the floor with a plan. The plan is in writing and says, what we want to do is relieve the burden of the estate tax. We say: That's all right. Let us relieve the burden so that nobody of ordinary means is going to have to pay an estate tax. They say: No, that is not what we mean. Our idea is more than that. Our idea is, we want to remove the estate tax from everybody, including the largest estates in the country. So they say: our idea is to reduce the amount of revenue the Government has and to do it by relieving the burden of the estates tax on the largest estates. We say: Well, that is an idea, but here is another idea. If we are talking about $250 billion in 10 years of tax relief, why go just to 400 of the wealthiest Americans? Why not provide some of that to the rest of the American folks? How about to working families? How about some relief from the high payroll taxes people pay? How about some more relief from the cost of sending kids to college? We have some ideas. But we are told: Your ideas don't matter. We are going to deal only with our own ideas, and those are ones that would benefit the upper-income folks. But we want to put clothes on it to disguise it a little because we know it doesn't sell very well to talk about providing tax relief to billionaires. We are going to disguise it to make it look different and call it tax relief for family farmers and small businesses. But we support such relief. Let's do that right now. In fact, perhaps the Senator from Nevada could put forth a unanimous consent request. We can legislate like they do--don't go to the committees, don't have markups; just bring it to the floor and put forth a unanimous consent request. They have done that on the estate tax. Yesterday, they did it on the H-1B proposal. Perhaps we can say we support eliminating the estate tax for small businesses and family farmers and do it their way. That is not a good way to legislate, but let's try that. Then we can get that off the table so all that remains is the question, Are we going to provide a very substantial amount of tax relief to those 400 or so estates that represent the largest accumulation of wealth in the country? If that is the priority, what is it measured against--against the other priorities? Is it the most appropriate? Is it the most logical thing to do? Or are there other uses of that revenue that would make more sense for this country? In summary, that is something that I think will be subject to a substantial amount of debate in the coming weeks. I wish to close where I began and say that there is a profound difference that exists between many of us and the majority party on the subject of whether the largest estates in this country should be relieved of the burden of paying an estate tax. I think there is a better use for those funds than tax relief for billionaires. On the other hand, there is no difference between us on whether we ought to make a quantum leap and provide a very significant exemption for the transfer of family farms or small businesses. And for a dramatic and substantial increase in the unified exemption from the current roughly $675,000 level, I would support taking that to the $4 million level for a husband and wife. I think we can do that. There certainly should be agreement on that. We can take that step, and what is left is an idea to relieve the rest of the burden by some of the majority, and other ideas that we would have for the use of those funds, including middle-income tax relief. Let's have that debate. It seems to me that would be the simple way of proceeding. I wanted to make some of those points. I appreciate my colleagues who are also going to make some points in the postcloture discussion. Then we should have this debate, with amendments. I think time agreements could be developed, and I think at the end of the debate we would see where the votes are in the Senate on this issue. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Isn't it a fact, more than reforming the estate tax, that the Senator from Illinois and the Senator from North Dakota and others would say let's effectively repeal the estate tax for estates up to $8 million for small businesses or family farms? In fact, the Senator from Illinois is saying let's repeal the estate tax to that level. But he doesn't want to go the next step as proposed by the majority party of saying no, that is important to do, but let's do something that is even more important. Let's make sure the repeal of the estate tax burden applies to people who leave estates of hundreds of millions of dollars. Is that a priority? It seems to me that it ought to be measured against a range of other things that we ought to do. I just make the point that I always smile a little when I hear these pejoratives about big spenders. It is sort of yesterday's news. It so happens that folks standing on this side of this Chamber are the ones who cast the tough votes that put this country back on track of getting rid of the burgeoning Federal deficits a few years ago when there was well over $300 billion in Federal deficits, and now, of course, to balance the budget. We cast the tough votes to do that. I don't need to hear much from people about who the big spenders are. We put this country back on track. There are those who insist the largest estates in America should be relieved of their estate tax burdens and are suggesting that those of us who believe there are other alternatives that might be more appropriate--more middle-income tax relief, or other things--are called big spenders. I think that is yesterday's language in a wornout discussion.

Mr. DORGAN. Mr. President, I was interested in the discussion offered by the Senator from Illinois. In fact, I was interested in the discussion earlier by the Senator from Arizona, Mr. Kyl, who was complaining about some comments I made earlier in the day. As I understand the Senator from Illinois, he indicated earlier--and I did earlier today as well--that he would support an amendment that would effectively say we will repeal the estate tax for all small businesses and family farms up to $8 million. So there is no disagreement in this Chamber on that. We will repeal the estate tax for those estates up to $8 million. The difference is the majority party says that is not enough. We want to repeal the estate tax for estates over $8 million as well. The Senator from Illinois seems to be saying, as I said this morning, that the loss of revenue by repealing the estate tax for the wealthiest estates in this country is something that ought to be measured against other alternatives, such as providing a tax cut for middle-income people, for example, or a range of investments that might be made to strengthen this country. The Senator from Arizona, I noted, was saying: Well, people who think like that are big-spending liberals. Who are the real big spenders? They are the folks who say: You know, we ought to spend money by deciding that a $1 billion estate should be relieved of the burden of having any estate tax at all, and decide that relieving an estate tax burden from the largest estates in this country is more important than investment in education, it is more important than a middle-income tax cut, it is more important than paying down the Federal debt. Who are the big spenders, I ask the Senator from Illinois?

Mr. DORGAN. Mr. President, I wonder if the Senator from Illinois will yield.