Russell Feingold

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, I reserve the remainder of my time.

Mr. FEINGOLD. Mr. President, this is a very simple amendment. It limits the estate tax repeal for estates over $100 million. As I mentioned earlier on the floor, this debate is about priorities. In particular, it is a debate about where we should devote our resources. This amendment provides a clear, easily definable choice. Many Members have indicated that reforming the estate tax, especially for small businesses and farms, should be a priority of the body. I am sympathetic to that goal. Let's face it, Mr. President. This bill goes much further than addressing that targeted concern. As it rests now, the bill leaps far beyond any commonsense definition of modest estates and provides massive tax relief to the extremely wealthy, even to multimillionaires. How can anyone suggest that providing such massive tax relief to multimillionaires should be among our highest priorities? They seem to be doing very well. There are millions of Americans who have more pressing needs. Fiscal prudence dictates that we exercise restraint in considering the disposition of projected budget surpluses. First and foremost, of course, these surpluses may never materialize. But even granting or assuming they do, there are many competing needs for this limited pot of money. Providing a massive tax cut to estates of over $100 million is not the best, highest use of the projected surplus. When we increase spending, we are implementing policies that benefit some while increasing the fiscal burden on everyone else. We are engaged, of course, in a zero sum enterprise. There is limited money. Milton Friedman's famous quote is: Of course, there is no free lunch. This is true of tax cuts as well. Every time we lower our tax rate or create a new tax loophole, the tax burden on everyone else increases. Specific tax cuts or spending increases come with a price. They come at the expense of other tax cuts or spending increases or they come at the expense of a higher national debt. Way too often, as we do our work, the choices we weigh are heartbreakingly difficult. They truly are. This is not one of those cases though. It may make some sense to increase the current exemption on estates, but it makes no sense at all to repeal the estate tax for the handful of estates over $100 million. Mr. President, surely the supporters of estate tax cuts must agree that eliminating the estate tax on the handful of estates of over $100 million is not our highest priority, or anywhere close to it. It is not even in the ballpark. When I first ran for the Senate back in 1992, the central issue of my campaign was reducing and, hopefully, eliminating the Federal budget deficit --the result of a decade-long binge of self- indulgent fiscal policies. When I came into office, the deficit stood at about $340 billion. Today, we hope to have a balanced budget for the second year in a row. That, of course, is a remarkable achievement. It came, in large part, because of the tough choices we made in 1993 and, to a lesser extent, in 1997. Nobody can credibly argue that our greatly improved budget position, as well as the sustained economic growth we have experienced, are not, in part, the result of the tough choices we made. I think it would be tragic if Congress now squandered all that has been achieved to appease a handful of enormously wealthy interests-- interests, it should be noted, that have been the greatest beneficiaries of our strong economy and, thus, of the fiscal responsibility shown in 1993. This last point bears some emphasis because so often the tax cuts we have seen proposed by the majority have the immediate effect of benefiting the very well off in our society, while in fact the policy that most benefits the well-to-do is fiscal restraint, not politically appealing tax policies. Let's exercise just a little bit of restraint. It is a very modest proposal that we just cut this thing off at a $100 million estate. I hope my colleagues will consider adopting this amendment. I ask for the yeas and nays.

Mr. FEINGOLD. Mr. President, I certainly thank the Senator from Indiana and the Senator from Illinois. I am delighted to be part of this effort, as three States in the Midwest link together to fight for this long-term care issue. As the Senator from Illinois indicated, this debate all day and throughout this week has been about priorities. By moving this bill, the majority has made clear that its highest priority is to grant tax breaks to the wealthiest 2 percent of the population. But there are other priorities that I think are more important than that. Yes, some sensible reforms are in order to the estate tax for middle- income Americans and to address the special needs of small businesses and farmers. But we can do that and, by cutting back on the Republican plans tax cuts for the very wealthiest, still have money left over for other pressing needs. One of our Nation's most pressing unmet needs is the acute and growing demand for help with long-term care. As our country's population ages and as Americans live longer lives, we face a major long-term care challenge in the decades to come. And I do not think we are meeting it as a country. I think we talk about Medicare, we talk about Social Security--and those are critical--but this is really the third major piece that we are not adequately addressing. Today, one in eight Americans are over the age of 65. By 2030, one in five will be. Today, 4 million Americans are over 85 years old. By 2030, more than twice as many--9 million Americans--will be. And already today, 54 million Americans--one in five--live with some kind of disability. One in ten copes with a severe disability. The job of helping people with disabilities to deal the life falls heavily on the family. Four out of five primary helpers are relatives, and nearly half of these primary helpers live with the person with a disability. And the burden on the family is not just emotional, but also financial. More than three-quarters of Americans age 22 to 64 with disabilities receive no public assistance. The fact is, our Nation has no comprehensive long-term care system. Rather, patients and their families struggle through a fragmented, uncoordinated, and costly labyrinth. Millions of vulnerable Americans cannot get the care they need. They cannot afford it, they do not qualify for the limited public funding available, or they simply cannot find the services they need. Whenever people have a choice, they would rather get the long-term care they need in their own homes. If they can't get care at home, people want care as much like home as possible, in places like assisted living facilities. Nearly 4 out of 5 older Americans who need long-term care live in the community, and most receive no paid services. This amendment would take one small, concrete step to help them out. Much more than this step is needed. But let us at least take this step. I urge my Colleagues to support the amendment. What the Bayh-Durbin-Feingold amendment and the other cosponsors are trying to do and say is that instead of having this very narrow priority for the very wealthiest Americans, what we have to do is address a true crisis that will only get worse and to do something to assist people with these very difficult costs. I thank the Senator from Indiana for the time and especially for his leadership on this issue.

Mr. FEINGOLD. Mr. President, as we on this side of the aisle have made clear, this debate is about priorities. The majority has made clear that its highest priority is to expand tax breaks for the wealthiest 2 percent of the population. Yes some sensible reforms are in order to the estate tax, and the Democratic alternative, which our amendment incorporates, would make those. But shouldn't our first and highest priority for using our surplus be extending the life of Social Security? Our amendment would do that, as well. Thirdly, our amendment would make much-needed improvements in Social Security benefits for widows and those who take time out of the workforce to raise their children. As President Kennedy said in his 1962 state of the Union address, ``[T]he time to repair the roof is when the sun is shining,'' This year, the Social Security Trust Fund is taking in nearly $100 billion more in payroll tax revenues that it pays out in Social Security benefits, building up assets. It will continue to do so for pretty much the entire decade. But then, in the next decade, as the baby boom generation begins to retire in numbers, that cash surplus will shrink. Starting in 2015, the cost of Social Security benefits is projected to exceed payroll tax revenues. Under current projections, this annual cash deficit will grow so that by 2036, Social Security will pay out a trillion dollars more in benefits that it takes in in payroll taxes. By 2037, the Trust Fund will have consumed all of its assets. We as a Nation have made a promise to workers that Social Security will be there for them when they retire. Our Nation's commitment to Social Security will not go away. We should start planning for that future. The Social Security Trustees released their last annual actuarial report at the end of March. That report indicated that to maintain solvency of the Social Security Trust Fund for 75 years, we need to take actions equivalent to raising payroll tax receipts by 1.89 percent of payroll or making equivalent cuts in benefits. In 2037, annual Social Security tax revenues will be sufficient to cover 72 percent of annual expenditures. The Trustees' report sounds a warning: We can fix the Social Security program so that it will remain solvent for 75 years if we make changes now in either taxes or benefits equivalent to less than 2 percent of our payroll taxes. But if we wait until 2037, we would need the equivalent of a 28 percent cut in benefits to set the program right. Put another way, if we wait until the trust funds run out of assets in 2037, we will need to make changes equal to an increase in the payroll tax rate of 5.4 percentage points, to set the program right. The choice is clear: Small changes now or big changes later. That's why Social Security reform is important, and why it is important now. And that's why President Clinton was right when in his 1998 State of the Union Address, he said, ``What should we do with this projected surplus? I have a simple four-word answer; Save Social Security first.'' That's why it doesn't make sense to enact either tax cuts or spending measures that would spend the non-Social Security surplus before we've addressed Social Security for the long run. Before we enter into new obligations, we need to make sure that we have the resources to meet the commitments we already have. The complete repeal of the estate tax before us today would head in the opposite direction. It could cost $750 billion a decade, when it if fully phased in. These costs would begin to hit most heavily in the decade after 2011, just when the baby boom generation will begin to retire in large numbers, just when the financial pressures on Social Security will begin to mount. It would be irresponsible to enact a tax cut of this size before doing anything about Social Security. Before the Senate passes major tax cuts like the one pending today, the Senate should do first things first. And that's what this amendment does. I urge my colleagues to support it.

Mr. FEINGOLD. Mr. President, in listening to the Senator from Oklahoma, you would think I were up here proposing for the first time in American history that we implement an estate tax or that perhaps it was something created in the heart of the 1960s as an extreme, liberal idea, and that finally the Republican majority were going to eliminate it. That isn't the truth at all. The fact is, as I understand it, this kind of tax has been around for about a hundred years. When the Senator from Oklahoma condemns the idea of having some kind of limitation on a tax that has been there for decades and decades, in fact, I voted for it, and I assume the Senator from Oklahoma, on a number of occasions, voted for increasing the exemption. He has not taken the position in the past that it must be completely eliminated; otherwise, it is not worth increasing the exemption. That is all this amendment does. It goes awfully high. My amendment says we are going to completely eliminate the estate tax in estates of up to $100 million. In other words, this gentleman that the Senator from Oklahoma is concerned about leaving the United States, under my proposal, would have the first $100 million of his estate exempted. If he is going to take off after the first $100 million is exempted, I really question his business judgment. He has to leave the United States because somehow he is going to be taxed over $100 million? Let's face it--and I hate to use this term--but when you start talking about over $100 million and having to pay some kind of tax, just as people have always had to pay in this country, the word ``greed'' comes to mind rather than ``business judgment.'' There is no need in the pressure of this society to provide an exemption to the estate tax on over $100 million. It would be absolutely clear. Under my amendment, up to $100 million is still covered. Why in the world can't people at that level at least help us out a little bit? Under current law, they are not getting this break anywhere near this level. But I am suggesting once we hit this extreme level, the real extreme idea here is to have no estate tax at all. That is the point. The question is, What should the exemption level be? I am suggesting there is number up in the stratosphere. It is just absurd to provide this kind of benefit. I would suggest that almost any average American you would ask would say, sure, if somebody is at that level, it is reasonable and fair to say they ought to pay some estate tax. That is all this amendment tries to do. I reserve the remainder of my time.

Mr. FEINGOLD. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. FEINGOLD

Mr. FEINGOLD. Thank you, Mr. President.

Mr. FEINGOLD. Mr. President, I would like to ask unanimous consent, in a moment, to modify my amendment, the Feingold amendment to the estate tax bill. When I make this request, the purpose is to address a concern the Senator from Oklahoma raised about unintended implications of the amendment. The amendment was supposed to be a simple amendment having to do with limiting the estate tax exemption of $100 million. He has raised a legitimate point with regard to an unintended consequence. In the spirit of trying to get to the core of the matter, I ask I be able to modify my amendment. My intent was not to impose an additional capital gains tax on estates of greater than $100 million. My intent was to keep the current law rule that permits a step-up in basis. I hope the Senator from Oklahoma in good faith will understand that that was our purpose and that the amendment could be offered in that spirit. Mr. President, I ask unanimous consent, notwithstanding the fact that this is not the pending business, that I be allowed to modify my amendment and to send a modification to the desk.

Mr. FEINGOLD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

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

Mr. FEINGOLD

Mr. FEINGOLD. Mr. President, I yield back the remainder of my time.

Mr. FEINGOLD. Mr. President, I don't know how much more I will debate this. I want to respond to the point about the study and analysis that the Senator from Colorado appears to rely on most exclusively. That analysis was done prior to the time the Russian Duma approved START II. This is an example. It is not looking at the present relationship we have and our goals with regard to Russia and the future negotiations, not only with regard to what is going on now, but with START III. The whole point is that we have to look at current realities, look at what we have--372 missiles--and their capacity, and our goals as to what message we want to send to Russia as we negotiate what is hoped to be a reduction in the nuclear arsenals. I think it is simply not only an unwise expenditure, but also an attitude that does not reflect what we are trying to accomplish with regard to our negotiations with Russia. I reserve the remainder of my time.

Mr. FEINGOLD. Mr. President, I appreciate the opportunity to debate this with the Senator from Colorado. I will clear up a couple of factual points before I make a few general statements. First, as I understand it, the question of termination costs will not be a problem that will be absorbed because of this amendment, because any unexpended funds can be used for purposes of the termination costs. I don't think that is a major objection. Secondly, I believe the Senator suggested this would have some impact on missiles already in production. That is not the case. That is not the way our amendment is drafted. That is not what it will do. The most important point is that the Senator from Colorado indicates that these missiles are a key ingredient in our national defense. Let's assume that is the case. The fact is, we already have 372 of these missiles. I believe the burden is on those asking for this additional funding to show that that is not enough. Assuming it is a key ingredient, do we really need more than 372? Do we really need these additional 53 missiles? As I indicated earlier, we have 2,976 warheads based on our current 372 missiles, and that is the equivalent of 25,760 Hiroshimas per submarine. I think the burden is on those wanting to spend this additional money to show that we need a stronger deterrent than that. The Senator from Colorado suggested adverse impacts on deterrence if we don't do these additional 12. After 25,760 Hiroshimas per submarine, we need additional deterrence? I didn't hear a single statement from the Senator from Colorado suggesting exactly what the real adverse impacts are of just not doing these additional missiles. I suggest the money is desperately needed not only in general but, even within the defense budget, for the people who serve our country, their pay, their conditions, their housing, readiness, including that of the National Guard, for example. In my State, the people in the National Guard desperately need these resources, for example, for inventory, for training. They are very strapped. They are now taking a great deal of responsibility for our standing Army. To me, the priorities are wrong. We have more than adequate deterrence with these 372 missiles. I suggest the case has not been made, as it must be, by those who want to make the expenditure for these additional missiles. I reserve the remainder of my time.

Mr. FEINGOLD. I reserve the remainder of my time.

Mr. FEINGOLD. Mr. President, quite simply, this amendment will terminate the future production of the Navy's Trident II missile. I am pleased to be joined in this effort by the Senator from Iowa, Mr. Harkin, the Senator from Minnesota, Mr. Wellstone, and the Senator from Oregon, Mr. Wyden. I have made it a priority to seek to eliminate unnecessary Government spending. To the occasional consternation of some in this Chamber and elsewhere, I have come to the floor time and time again to try to scale back or terminate costly Federal programs, many of which have outlived their usefulness. In my view, the Trident II program is just the kind of cold war relic that we can and should eliminate. The Trident II, also called the D-5, is the Navy's submarine-launched ballistic missile. It was designed specifically to be a first-strike strategic missile that would attack targets inside the Soviet Union from waters off the continental United States. By halting further production of the Trident II missile, we would save American taxpayers more than $460 million in fiscal year 2001 alone, and according to the CBO, we would save $2.6 billion over the next 10 years, from 2001 to 2010. The Navy now has in its arsenal 372 Trident II missiles, and has requested funding this year for an additional 12. The legislation currently before this body includes more than $430 million for those additional 12 missiles. It also authorizes an additional $28.8 million for advanced procurement for still more Trident II missiles that the Navy hopes to purchase in future years. Let me be clear. My amendment would halt production of additional Trident II missiles. It does not in any way prevent the Navy from operating or maintaining its current arsenal of 372 Trident II missiles. I would like to take a moment to talk about the Trident II, its predecessor, the Trident I, and the reasons why I believe this Trident II program should be terminated. The Trident II is deployed aboard the Navy's fleet of 18 Ohio-class submarines. Ten of these subs are equipped with Trident II missiles. The oldest eight subs in the fleet are equipped with the older Trident I, or C-4, missile. The Navy is already moving toward downsizing its Trident fleet from 18 to 14 in order to comply with the provisions of the START II treaty. Some observers suggest simply retiring the four oldest Ohio-class submarines in order to achieve that goal. Others support converting those subs, which carry the older Trident I missle, to carry conventional missiles. The CBO estimates that this conversion alone would cost about $3.3 billion over 10 years. That leaves four other submarines that are equipped with the older Trident I missiles. The Navy wants to backfit those four subs to carry newer Trident II missiles. The Navy's current goal is to have 14 submarines with 24 Trident II missiles each, for a total of 336 missiles, with a number of additional missiles for testing purposes. The CBO estimates that a total of 425 missiles would be required to fully arm 14 submarines and have sufficient missiles also for testing. That would mean the purchase of at least 53 more missiles. We already have 372 Trident II missiles--more than enough to fully arm the 10 existing Trident II submarines and to maintain an inventory for testing. So why do we need 12 more? Why do we need to spend the taxpayers' money on advanced procurement to buy even more missiles in future years? And why do we need to backfit the aging remains of the Trident I fleet at all? Ten fully-equipped Trident II submarines are more than capable of being an effective deterrent against the moth-balled Russian submarine fleet and against the ballistic missile aspirations of rogue states, including China and North Korea. And the aging Trident I subs won't outlast the Trident I missiles they currently carry, let alone the additional Trident II missiles the Navy wants to build for them to the tune of about $40 million per missile. The CBO has recommended terminating the further production of the Trident II missile, which would save $2.6 billion over the next 10 years, and retiring all eight of the Trident I submarines, which would save an additional $2.3 billion over the next 10 years, for a total savings of $4.9 billion. I do recognize that there is still a potential threat from rogue states and from independent operators who seek to acquire ballistic missiles and other weapons of mass destruction. I also recognize that our submarine fleet and our arsenal of strategic nuclear weapons still have an important role to pay in warding off these threats. Their role, however, has diminished dramatically from what it was at the time of the cold war. Our missile procurement decisions should really reflect that change and it should reflect the realities of the post-cold-war world. Our existing inventory of 372 Trident II missiles is far superior to any other country on the globe. And each of these missiles contains eight independently targetable nuclear warheads, for a total of 192 warheads per submarine. The 372 missiles currently in the Navy's inventory contain 2,976 warheads. Each warhead packs between 300 to 450 kilotons of explosive power. For a comparison--which is really quite striking--the first atomic bomb that the United States dropped on Hiroshima generated 15 kilotons of force. Let's do the math for just one fully-equipped Trident II submarine. Each warhead can generate up to 450 kilotons of force. Each missile has eight warheads, and each submarine has 24 missiles. That equals 86.4 megatons of force per submarine. That is the equivalent of 5,760 Hiroshimas. Let me say that again: the power of 5,760 Hiroshimas on just one submarine. The Navy currently has 10 such submarines, and they want to backfit another four with these devastating weapons. It is hard to imagine why we need to procure more of these weapons when those we already have could destroy the Earth many times over. And it is especially hard to comprehend why we need more Trident II missiles when we take into account the fact that the Trident II is only one of the several types of ballistic missiles the Department of Defense has in its arsenal. The world is changing. Earlier this year, the Russian Duma ratified the START II treaty, a move that seemed highly unlikely just 1 year ago. And Russia has also ratified the Comprehensive Nuclear Test Ban Treaty, something that this body regrettably failed to do last fall. I cannot understand the need for more Trident II missiles at a time when the Governments of the United States and Russia are in negotiations to implement START II and are also discussing a framework for START III. These agreements call for reductions in our nuclear arsenal, not increases. To spend scarce resources on building more missiles now is short sighted and could seriously undermine our efforts to negotiate further arms reductions with Russia. The debate on the underlying legislation is one about priorities. We should stop spending taxpayer dollars on defense programs that have unfortunately survived the cold war and should instead concentrate on military readiness and better pay and benefits for our men and women in uniform. So I urge my colleagues to support this sensible amendment, which has been endorsed by Taxpayers for Common Sense, the Center for Defense Information, the Peace Action Education Fund, the Union of Concerned Scientists, the Council for a Liveable World, Physicians for Social Responsibility, and the 20/20 Vision Education Fund. Mr. President, I ask for the yeas and nays on my amendment.

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

Mr. FEINGOLD. Mr. President, I call up amendment No. 3759 and ask for its immediate consideration.

Mr. FEINGOLD

Mr. FEINGOLD. All of us who work on the issue with him consider him our commander, in effect. We, of course, are well aware not only of the fact that he worked so hard on this issue for years before his Presidential campaign, but he is also doing a tremendous job of channeling enthusiasm from his campaign into actually getting things done on campaign finance on the floor. That is how the 527s got through. Thanks to my colleagues from the other side of the aisle, about whom we often have to talk in less than positive terms on the campaign finance issue, almost every one of them supported us at least on that issue. We are hoping that will lead to a momentum to actually ban soft money and go beyond that. I thank the Senator from Nevada for his questions. To conclude, we will vote on priorities. We will vote on which is putting first things first: paying down the debt to help Social Security and Medicare or cutting taxes for the super-wealthy. We will afford the majority a number of opportunities to let us know how wealthy one has to be before even the majority considers one superwealthy. As I said earlier, I am looking forward to offering an amendment that would simply maintain the estate tax on estates of $20 million or more, and preserve those funds to pay down the debt to help Social Security and Medicare. But if that amendment should not succeed, then I look forward to offering an amendment that would simply maintain the estate tax on estates of $100 million or more, and preserve those funds to pay down the debt to help Social Security and Medicare. If the majority does not consider estates of $20 million to be the super-wealthy, then perhaps they will agree that those worth $100 million are superwealthy. If that amendment should not succeed, then I could have another that would maintain the estate tax on estates of a billion dollars or more, and preserve those funds to pay down the debt to help Social Security and Medicare. If the majority does not consider estates of $20 million to be the superwealthy, and does not consider estates of $100 million to be superwealthy, then perhaps they will agree that those worth a billion dollars deserve the title ``superwealthy.'' Ironically, some will then charge us on this side of the aisle with holding up the estate tax bill. But it is not we, but the majority who are thwarting the enactment of estate tax relief by clinging to their extreme repeal plan. The choice for the majority is clear: The majority can persist in the political exercise of advancing the extreme bill that we are considering today. Or they can enact fiscally-responsible estate tax reform with overwhelming bipartisan majorities. The opportunity is theirs to take, or to squander.

Mr. FEINGOLD. I was not aware it was quite that bad. I knew it had been very little. It came straight through from the House, as I understand.

Mr. FEINGOLD. I thank the Senator from Nevada. That kind of encouragement is helpful because it is sometimes a lonely issue. What I have found most effective in talking to people, if you mention the issue of campaign finance reform in general, to use that term, or in the abstract, it is clear to people you are trying to do something that is important. But if you want to make it concrete for them, you have to show the connection between all that money and particular bills coming through here that really don't belong here. This is a great example, the estate tax. The idea that we give this huge tax break to a very few people when there are all these other priorities raises the question in people's minds: Why would elected officials do such a thing? I believe part of the answer is there is just too much money behind this bill.

Mr. FEINGOLD. Over 5 million.

Mr. FEINGOLD. I certainly know that the Senator from Nevada talks to me about this issue every chance he gets. I appreciate it. He has been one of the persons who has made it possible for us to raise this issue on the Senate floor. I appreciate the opportunity to occasionally come to the floor and point out, when we are on a particular bill, all the big soft money contributions that are behind some of these bills. It is part of the story that the public needs to know.

Mr. FEINGOLD. I will yield.

Mr. FEINGOLD. Mr. President, as you know, this is one of those days that you actually look forward to when you are running for the Senate. I had an opportunity to be on the floor for virtually the entire debate today concerning the estate tax. It is actually a very welcome debate. But let me be clear. Democrats, as well as Republicans, welcome the opportunity to eliminate the estate tax for middle-income Americans and families who own small businesses and family farms. We, on this side of the aisle, believe that we can completely abolish the estate tax for the overwhelming majority of American families who this tax affects at a fraction of the cost of the Republican proposal. Why is that? It is because, unfortunately, the Republican proposal focuses so much of the revenue that is available on the superwealthy. When Senators give examples, as they have done today, they are often using one kind of example that the Democratic alternative would take care of, but their proposal actually spends great amounts of revenue on people who are actually not in the same position as the families which various Senators have described. For example, the Senator from Montana, Senator Burns, came out and very appropriately referred to the various Wisconsin farmers, dairy farmers, hog farmers, and feed farmers. He said this was the purpose of the repeal of the estate tax. But the fact is, you don't need to completely repeal the estate tax for everyone in the United States of America in order to take care of the problem of every family farmer in Wisconsin with regard to the estate tax. In fact, most of them don't face an estate tax at all given the exemptions under current law. So this notion that somehow the Democrats are against taking care of the problems of farmers who are land rich and cash poor is simply untrue. It is not the Democratic position. In fact, it is just the opposite. Senator Grams of Minnesota comes out and gives the example of the family from Idaho that faces a $3.3 million tax burden on the estate tax. He fails to point out that, under the Conrad-Moynihan proposal, that family would get at least substantial estate tax relief, and, we believe, although we would have to check it, perhaps a complete exemption from the estate tax. So the very example that the Senators from the other side of the aisle have used do not support their point. Those examples would be taken care of, I believe, under the Conrad- Moynihan proposal. It is really a bit of a bait-and-switch approach. You come out and give the very appropriate examples of families who may need some estate tax relief, but the actual proposal spends a great deal of available revenue in this country on folks who, frankly, are not as desperately in need of this kind of relief. This debate is very welcome because it gives us a chance to talk about what is most important. This motion to proceed allows us an opportunity to actually contrast the majority's priorities with those of the American people. This is a thread that has gone through the comments today of many of us on our side of the aisle--Senator Dorgan of North Dakota, to Senator Wellstone, to Senator Boxer. They pointed out that this is a great chance to talk about what the priorities are for the American people. That is another thing I imagined I would have a chance to do when I came to the Senate. We like to deal in specific subjects and try to give a little expertise and show that we know something specific. But there are also days when we come out and, say, take this subject and that subject and compare them and see what is the most important thing for the American people. Fortunately, the debate today has allowed that opportunity. By moving to this bill and by trying to pass this bill the way it is written with not just sensible estate tax reform but massive tax cuts for the extremely wealthy, the majority makes clear that it favors tax cuts for the very wealthy above anything else. No, the majority's priorities are not those of working Americans. Let me begin by discussing the estate tax, and why the majority's plan to completely repeal the estate tax is wrong. To begin with, the estate tax affects only the wealthiest property holders. In 1997, only 42,901 estates paid the tax. That is the wealthiest 1.9 percent. People are already exempt from the tax in 98 out of 100 cases. Let me repeat that. Already, under current law, 98 out of 100 cases are completely exempt from the Federal estate tax. This year individual estates up to $675,000 are exempt from taxation, and each spouse in a couple can claim that $675,000 exemption. So a couple can already, under current law, effectively exempt $1.35 million from the tax. To add to that, Congress has already enacted useful expansions of the exemption that have not yet taken effect. By 2006, individual estates up to $1 million will be exempt and, therefore, couples will be able to exempt $2 million in tax. Had those exemptions been in effect in 1997, more than 44 percent of the estates that paid tax--remembering that most of them didn't pay tax in the first place anyway at that point--those still paying tax in 1997 would have been completely exempt. In 1997, Congress also raised the exemption for family farms and small businesses, the ones that the Senators on the other side of the aisle have cited needing relief. In 1997, we raised the exemption for the family farm and small businesses to $1.3 million for an individual and $2.6 million for a couple. Small businesses and farms can also exclude part of the value of real property used in their operations. Those very few businesses and farms that are still subject to tax can pay it in installments over 14 years at below market interest rates. In 1997, Congress went a long way toward making the estate tax less of a burden. Already in 1997, the superwealthy were paying most of the estate tax. The wealthiest 1 in 1,000 with estates larger than $5 million paid half the estate tax that year. That is why the Republican idea--and this is the Republican idea not to cut the estate tax, as they will say when they are giving their example--the Republican idea is to repeal the estate tax completely. That is tilted too heavily to the very wealthy. The Republican estate tax repeal would give the wealthiest 2,400 estates, the ones that now pay half the estate tax, an average tax cut just on the estate tax of $3.4 million each. Remember, we are talking about a situation where 98 out of 100 people get zero, nothing, from this estate tax cut. Last month, Forbes magazine estimated that Mr. Bill Gates is personally worth about $60 billion. If, heaven forbid, Mr. and Mrs. Gates were to pass away and the Republican bill was fully in effect, if they otherwise would have paid the same average effective tax rate that the largest estates paid in 1997, then, believe it or not, this bill would give Bill Gates' heirs alone, just for those people in that family inheriting the money, an $8.4 billion tax break; $8.4 billion in revenue that we currently collect would go to this one family. Think of how hard we worked on this Senate floor in bill after bill to find savings in deficit reductions that would somehow come together to reach that large figure, $8.4 billion. Think of how hard we debated programs and tax cuts that cost much less than $8.4 billion. Is the $8.4 billion tax cut for the family of Bill Gates the highest and best use of whatever budget surplus we may have? That is why Democrats can eliminate the estate tax for the vast majority of estates at a fraction of the cost. As I noted, 44 percent of estates that paid tax in 1997 would have been completely exempt from tax if the exemption were raised to $1 million. Fully 85 percent of the estates would have paid no tax if the exemption had been raised to $2.5 million. Senators Conrad and Moynihan have been working on a proposal that will eliminate the estate tax for most people for whom it would apply today, and to do so for substantially less cost than the majority's bill. I think the Democratic alternative is a good substitute. We ought to pass it. We ought to send it to the President for his signature. If the majority fails to adopt that reasonable amendment, however, we will have others. One of the reasons I welcome this debate is because I am looking forward to offering an amendment that will try something else, that will simply maintain the estate tax on estates of $20 million or more. We are talking about estates of $20 million. We are certainly no longer talking about upper-middle-income families. We are talking about estates of $20 million. I don't think we are talking anymore about small businesses the way most people understand that term. In 1997, there were only 329 estates in the country that amounted to more than $20 million. But those 329 estates are worth $25 billion. We are talking about estates that average $75 million each. The majority's estate tax bill gives the heirs of estates such as those 329 multimillionaire estates a tax cut that averages $10.5 million each. I am looking forward to this debate to see if the majority can at least keep itself from giving this massive tax cut, averaging $10.5 million each, to the wealthiest 1 in 10,000. We will see. The point of amendments such as these is that an estate tax for the superwealthy does, in fact, serve some important social purposes. Yes, some sensible reforms are in order to increase the exemption to the estate tax for middle-income Americans, and certainly to address the special needs of small businesses and farmers. But the majority's position is too extreme. We live in a time of an increasing concentration of wealth. Last September, the Wall Street Journal reported in 1997 the Nation's wealthiest 10 percent owned 73 percent of the Nation's net worth. That is up from 68 percent in 1983. With the stock market boom of the 1990s, the wealthiest have done very well, indeed. Those who hold this great wealth are in a better position to shoulder some of the costs of our society. An estate tax for the superwealthy makes them help out. It is ironic, just when the very wealthiest are doing as well as they have since the gilded age, the Republicans decide that the very wealthy deserve--and what we most need to do--is another tax break. An estate tax for the superwealthy also serves as a backstop to the income tax, ensuring that some income on which income tax is deferred or avoided is ultimately subject to at least some tax. For example, because the income tax law steps up the basis of per capita gains on the value of a piece of property at the time of inheritance, no one pays income tax on capital gains that an individual built up on property the individual owns at the time of death, and, therefore, the estate tax provides the worthwhile social purpose, I believe, that the superwealthy have to at least make up for some of that. I think there is a worthy point that has been debated a little bit in the last hour. An estate tax for the superwealthy does encourage charitable giving as Senator Boxer from California pointed out. A complete repeal of the estate tax would land a devastating blow on colleges, churches, museums, and other charitable institutions that rely on donors to leave gifts. The majority's repeal of the estate could well reduce charitable gifts and bequests by $6 billion annually. The majority bill would be immensely expensive. The Joint Committee on Taxation projects that the majority bill would cost $105 billion over 10 years. Because the bill is phased in slowly over 10 years, its cost would actually explode even more in the second 10 years. When fully phased in, the bill would cost at least $50 billion a year, or more than $500 billion a decade. In fact, the Treasury Department says the figure would be about $750 billion over the decade. Are tax cuts for the superwealthy the first place that we as a Nation want to spend more than half a trillion or three-quarters of a trillion dollars of the surplus? Yes, it is true; some of the speakers on the other side have said America's economy is still strong. The Nation is enjoying the longest economic expansion in its history. Unemployment is at lowest in three decades, and home ownership is at the highest rate on record at 67 percent. Several causes contributed to the current economic expansion, and it cannot be denied that a key contributor to our booming economy has been the Government's fiscal responsibility since 1993. I am very proud of that, as are many Members. The first tough vote I took was to support the President's deficit reduction plan in 1993. It worked, and it worked very well. This responsible fiscal policy means that the Government has borrowed less from the public than it otherwise would have, and will have paid down $300 billion in publicly-debt held by October of this year. The Government no longer crowds out private borrowers from the credit market. The Government no longer bids up the price of borrowing--that is, interest rates--to finance its huge debt. Because of our fiscal responsibility, interest rates are, so far, lower than they otherwise would be. Because of our fiscal responsibility, millions of American have saved money on their mortgages, car loans, and student loans. Because of our fiscal responsibility, businesses large and small have found it easier to invest and spur yet more new growth. Massive tax cuts like the one before us today I think pose the greatest single threat to that responsible fiscal policy, and to the strong economy to which it has contributed. It is no secret and it has been essentially admitted to by the previous speaker, the Senator from Minnesota: The majority intends to pass--in one bill after another--a massive tax cut plan reminiscent of the early 1980s. The majority leader said as much in a Republican radio address over the recess. After rattling off a series of tax cuts, the majority leader said, ``Put all this together and we call it `First Things First' '' I think it is supremely ironic that the majority leader chose to use those exact words, ``first things first,'' for in so doing, he echoed what President Clinton said in his 1998 State of the Union Address, when he said, ``What should we do with this projected surplus? I have a simple four-word answer: Save Social Security first.'' That is, after all, what this debate is about: What should come first? As I and other Democrats have said, and demonstrated by our votes, we support estate tax reform for middle-income Americans, small businesses, and family farmers. But as we debate what ``first things'' should come first, shouldn't we remember our commitments to Social Security and Medicare? In the decade of 2011 to 2020, just as the costs of the bill before us today will begin to explode, the baby boom generation will begin to retire in numbers. Social Security's trustees project that, starting in 2015, the cost of Social Security benefits will exceed payroll tax revenues. Under the trustees' projections, this annual cash deficit will continue to grow. By 2037, the Social Security trust fund will have consumed all of its assets. Similarly, by 2025, the Medicare Hospital Insurance Trust Fund will have consumed all of its assets. I almost hesitate to say this, but when I look at the young people in front of me who work so hard for us every day, they are the ones who will not get their Social Security if we are not responsible, if we do not make sure we put first things first. According to the trustees, we can fix the Social Security program so that it will remain solvent for 75 years if we make changes now in either taxes or benefits equivalent to less than 2 percent of our payroll taxes. But if we wait until 2037, we will need to make changes equal to an increase in the payroll tax rate of 5.4 percentage points. We have a choice of small changes now or big changes later. That is why it makes sense to see to our long-term obligations for Social Security and Medicare before we enact either tax cuts or yes, spending measures that would spend whatever that surplus might be. Before we enter into new obligations, we need to steward the people's resources to meet the commitments we already have. I will tell you, when I think of Social Security, the generations that come after us, that is commitment No. 1. Which is putting first things first: saving Social Security and Medicare or cutting estate taxes for the very rich? As part of updating Medicare for the 21st century, we have to ensure that our elderly have access to lifesaving prescription drugs. Three out of five Medicare beneficiaries make do without dependable prescription drug coverage. We on this side of the aisle believe that it is a priority to create a voluntary Medicare prescription drug benefit that is accessible and affordable for all beneficiaries. Which is putting first things first: helping provide needed medications for our elderly or cutting estate taxes for the very wealthy? We on this side of the aisle believe that one of our Nation's most pressing unmet needs is the acute and growing demand for help with long-term care. I have worked on this issue more than any other issue in my 18 years in public office. Our Nation's population is aging: Today, 4 million Americans are over 85 years old. By 2030, more than twice as many--9 million Americans--will be. Already today, 54 million Americans--one in five--live with some kind of disability. One in ten copes with a severe disability. In four out of five cases, a family member serves as that disabled person's primary helper, and, believe me, serves under a heavy burden in doing so. If the majority allows us to offer amendments, I will join with others on this side of the aisle in an amendment that will take some of the money that the majority would use to cut taxes for the superwealthy and use it to help make tax benefits available to these hard-working and financially strapped helpers. Again, which is putting first things first: helping people to provide long-term care for elderly and disabled family members or cutting estate taxes for the very wealthy? It seems that more and more these days, we see legislation like that before us today that benefits the very wealthy. At the same time, Senators feel increasing pressure to raise larger and larger sums of money from wealthy contributors. Observers could be forgiven for linking the two phenomena. Observers could reasonably wonder whether the contact Senators increasingly have with wealthy contributors could perhaps lead Senators increasingly to continually believe that the problems of the very wealthy are the problems to which we must respond first. The problem has only become worse with the large amounts of soft money being raised to get around the campaign finance laws. As the Supreme Court concluded in its decision this January in Nixon v. Shrink Missouri Government PAC: ``[T]here is little reason to doubt that sometimes large contributions will work actual corruption of our political system, and no reason to question the existence of a corresponding suspicion among voters.'' A number of us believe that it continues to be a matter of great urgency to stop this corrupting influence of soft money in our elections. We feel that in order to get our priorities right, we need to get our house in order. Although it was undeniably a good thing to reform disclosure of contributions by organizations that do business under section 527 of the tax code, as we just did, that is by no means enough. Those of us fighting for campaign finance reform will forego no opportunity to offer an amendment to ban corrupting soft money once and for all. On that point, as we all know, only the tiniest fraction of the American people will be affected by this tax legislation before us today. But the American people also understand that those wealthy enough to be subject to estate taxes tend to have great political power. Those wealthy interests are able to make unlimited political contributions, and they are represented in Washington by influential lobbyists that have pushed hard to get this bill to the floor. The estate tax is one of those issues where political money seems to have an impact on the legislative outcome. That is why I want to quickly Call the Bankroll on some of the interests behind this bill, to give my colleagues and the public a sense of the huge amount of money at stake here. I talked about taxes, but now I am talking about political contributions. Take for instance the National Federation of Independent Business. Repeal of the inheritance tax is one of the federation's top priorities, and the federation is considered one of the most powerful organizations in town. They have the might of PAC and soft money contributions behind them. NFIB's PAC has given more than $441,000 in PAC money through June 1 of this election cycle, according to the Center for Responsive Politics. That is on top of the incredible $1.2 million in PAC contributions NFIB doled out during the 1997-1998 election cycle. NFIB has also given soft money during the first 18 months of the current election cycle--just over $30,000 so far. Then there is the Food Marketing Institute, which represents supermarkets, and has also made a powerful push to bring this bill to the floor. Behind that push was the weight of significant PAC and soft money contributions, which I am sure is not a surprise to anybody. Through June 1st of this election cycle, the Food Marketing Institute has given more than $241,000 in PAC donations to candidates, after it made more than a half million in PAC donations during the previous cycle. FMI is also an active soft money donor, with more than $156,000 in soft money to the parties since the beginning of this cycle through June 1st of this year. On top of these wealthy associations, there are countless wealthy individuals who want to see the estate tax repealed. They are that tiny fraction of Americans who would benefit by the difference between the Republican approach and the more modest and appropriate Democratic approach. These folks want an end to the estate tax, and they are also able to give unlimited soft money to the political parties to get their point across. Then there is the most interesting player in the push to repeal the estate tax--the mystery donors. That is right, we don't know who is funding one of the major efforts to end the so-called death tax. We don't know because the group paying for it is one of those secretive 527 groups. The group is called The Committee for New American Leadership, and was founded, I am told, by former House Speaker Newt Gingrich. The committee, identified in news reports as a 527 ``stealth PAC,'' has been very busy pushing for the repeal of the estate tax, but nobody knows who is footing the bill for those efforts. As I stand here today, these mystery donors are having a lot to say about what gets debated in the Senate, and we have no way of really knowing who they are, or how much they gave. But thankfully, all of that may be changing. Thanks to the passage of the 527 disclosure bill, which the President almost immediately signed into law, from here on in we will know a lot more about who is writing the check to the Committee for New American Leadership, and the donors to every other stealth PAC that hid behind a tax loophole to evade public scrutiny. So, reformers won a victory with passage of the 527 disclosure bill, and we are just getting started. We are going to keep pushing until we address the other gaping loopholes in the campaign finance law that allow wealthy interests spend unlimited amounts of money to push for bills like this one, which serve the interests of the wealthy few at the expense of most Americans. Mr. President, again, to return to the central question, I ask: Which is putting first things first: ensuring honest elections, or cutting estate taxes for the very wealthy? The majority shows by proceeding to this bill that it wants to help out those who have benefitted most in the latest economic boom. But the week before last, the business group the Conference Board released a report that said: Working full-time and year-round is, for more and more Americans, not enough. The report, called ``Does a Rising Tide Lift All Boats?'' finds that Americans holding full-time jobs in the 1990s were just as likely to fall into poverty as Americans working full-time in the 1980s, and more likely to fall into poverty than full-time workers were in the 1970s. As The Wall Street Journal reported, economists attribute the problem in part to the erosion of the value of the minimum wage, which was in today's dollars worth about $7 in 1969, compared with the current minimum wage of $5.15 an hour. We on this side of the aisle believe that it is a priority to enact an increase in the income of working Americans making the minimum wage. The majority appears to believe that a tax cut for the very wealthy should be addressed first. So which is putting first things first: enacting a raise for working people making the minimum wage, or cutting estate taxes for the very wealthy? Even if we chose to confine ourselves strictly to cut taxes, should our highest priority for tax cuts be the very wealthiest 2 percent of the population? The majority shows by proceeding to this bill that it favors tax cuts for the super-wealthy before tax cuts for anyone else. We on this side of the aisle believe that it is a priority to cut taxes for working families struggling to stay out of poverty--families who have some of the highest marginal tax rates in our tax system. The majority's bill would give tax cuts to fewer than 43,000 upper-income taxpayers a year. In contrast, the President's proposal to expand the Earned Income Tax Credit to reward work and family would provide tax relief for 7 million working families, providing up to $1,155 in additional tax relief a family. Among other things, the President's EITC proposal would increase benefits for working families with three or more children. The poverty rate for children in these larger families remains a stunning 29 percent, more than double the poverty rate among children in smaller families. A decade ago, a bipartisan group of Wisconsin State legislators enacted a substantially larger State EITC for families with three or more children, and it has helped to lift thousands of Wisconsin families from poverty. Which is putting first things first: helping the kids in 7 million working families keep out of poverty, or cutting estate taxes for the children who stand to inherit from the very wealthy? This Senator believes that it is a priority to simplify taxes and free people from paying income taxes altogether. One way to do this would be to expand the standard deduction. That would reduce tax liability for millions of working Americans. If the majority ever gives us a chance to offer amendments, I intend to offer such an amendment on tax legislation this year. Right now, 7 in 10 taxpayers take the standard deduction instead of itemizing. Expanding the standard deduction would make it worthwhile for even more Americans to use that easier method and avoid the difficult and cumbersome itemization forms. As well, expanding the standard deduction would free millions of middle-income working Americans from having any income tax liability at all. So again, which is putting first things first: freeing millions of middle-income Americans from the income tax, or cutting estate taxes for the very wealthy? Simplifying taxes generally should be a priority. Some have proposed that modest investors in mutual funds should be exempted from filling out the complicated capital gains schedule. Some have suggested streamlining the complicated child credit. Some have proposed further simplifying the Nanny Tax by raising the threshold for filing. These modest steps would relieve millions of middle-income taxpayers from needlessly complex and time-consuming tax forms, but they would also cost money. So which is putting first things first: simplifying income taxes for millions of middle-income taxpayers, or, again, cutting estate taxes for a few hundred of the very wealthy? Senators on both sides of the aisle believe that we should repeal the telephone tax for residential users. Pretty much everyone pays the telephone tax. Mr. President, 94 percent of American households have telephone service. And remember, fewer than 2 percent, even under current law, pay the estate tax. If the majority allows us to offer amendments, I will join with others on this side of the aisle in an amendment that will take some of the money that the majority would use to cut taxes for the super-wealthy and use it to repeal the telephone tax for residential users. Now, the majority also wants to eliminate the telephone tax for businesses, which is just a tax cut for people who own stock in those businesses--not the most progressive of tax cuts--but cutting taxes on residential telephone users is among the more progressive tax cuts that one could imagine this Congress passing. But the schedule betrays the majority's priorities. Which is putting first things first: repealing a residential telephone tax that nearly everyone pays, or repealing estate taxes that only very wealthiest 2 percent pay? Senators on both sides of the aisle believe that it is a priority to help working American families to save. The President's proposal last year to encourage retirement savings through what he called USA Accounts made some sense. Similarly, this year, Vice President Gore's new Retirement Savings Plus accounts--voluntary, tax-free personal savings accounts separate from Social Security but with a Government match--are also a pretty good idea. Both USA Accounts and Retirement Savings Plus would help millions of middle-income Americans to save and build resources for retirement. So again, when you look at that issue, which is putting first thing first: helping working American families to save, or cutting estate taxes for the very wealthy? As I said at the outset, this is really a welcome debate. Because the majority's desire to increase tax breaks for the very wealthy paints so stark a contrast to the many ways by which Senators on this side of the aisle really do want to help working Americans. This is not an example of class warfare. To point out what is going on, that is not what this is at all. In fact, what is class warfare is to maintain taxes on the vast majority of working Americans while cutting taxes only for the very wealthy Americans. I have taken some time on this occasion to contrast the majority's priorities with those of the American people because the majority leader has made all too clear that he does not intend to allow a fair and full debate of this estate tax bill. I have made this case on the motion to proceed rather than waiting for the bill itself because, if the majority leader follows what has become his regular practice, he will, in all likelihood, file cloture on the bill as soon as we get to it. Mr. President, I have said this before at much greater length, but I will say it again--others have said it better--this is not how the Senate was meant to work. This is the place where the Government was intended to consider policies fully and fairly. The majority leader's all-too-rapid resort to cloture deprives Senators from debating priorities such as those I have discussed today, and so many more. That is why I have taken time during this debate on the motion to proceed, which is not where we normally have this sort of debate, to warn, before the majority leader files his cloture motion, against the dangers of invoking cloture on the estate tax bill. This is a major bill. If enacted, it would take more than half a trillion dollars, maybe three-quarters of a trillion dollars a decade that would otherwise have gone to paying down the debt and put it in the hands of the very few wealthiest members of society. It would be neither fitting nor appropriate to effect the transfer of more than half a trillion dollars without a full and fair debate. And that is why we must debate this motion fully today. For if there is a remedy for the majority leader's abuse of the cloture process, it is a more rigorous use of the cloture process when it is abused. New York's Governor Al Smith said in 1933, ``All the ills of democracy can be cured by more democracy.'' To paraphrase Governor Smith, the cure for not honoring the spirit of the Senate's rules is to honor the Senate's rules to the letter. Thus, if the majority lseader wants all the benefits of the cloture rule, then he will have to bear all the costs of the cloture rule, as well. If the majority leader lays down a cloture motion, he should be prepared to have the full 30 hours of debate on the matter on which the Senate invokes cloture. If the Senate invokes cloture, it should expect to have to remain on the matter on which has invoked cloture. Let's cut to the chase. The majority is moving to this complete repeal of the estate tax at least in part as a purely political gesture. The Administration has stated in so many words that the President would veto this bill. The majority apparently wants the veto and the issue more than it wants a good law that would eliminate estate taxes for the overwhelming majority of those who pay it. Such a compromise is available if the majority is willing to take it. The majority need only adopt Senator Conrad's and Senator Moynihan's substitute, and we can have meaningful estate tax reform this year. But if the majority does not do so, then we will debate this bill at length and vote on a series of amendments.

Mr. FEINGOLD. We know about some of them, but there are whole categories, such as these 527s, we are not even sure where they came from or exactly how much is being spent.