Phil Gramm

Mr. GRAMM

Mr. GRAMM. Madam President, facts are persistent things. The good thing about fiction is you can always have it the way you want it. If you make it up, it can always be good, if you are for it. It can always be bad, if you are against it. But facts are persistent things. In 1997, recognizing that we had confiscatory taxes on small businesses and family farms upon death but not being willing to repeal the death tax, which our Democrat colleagues are not willing to do--the only vote we are going to have today that would repeal the death tax or would change the death tax, the only one that would go to the President to be signed today is the one I will offer--wanting to get credit for helping without helping, we adopted a provision called 2057. That is the closely held family business exemption. Our colleague says: We will expand it so it will cover every small business, every family farm. It has been in effect for 5 years. How many farmers and ranchers do you think have qualified for this protection in 5 years? In 5 years that this provision of law has been in effect, only 33 farm and ranch families have qualified. This bill that is being offered as an alternative to the real repeal of the death tax is not about 33 families. It is about protecting 40 Senators by giving them a fig leaf when they vote against repeal of the death tax. The plain truth is in 5 years of being in effect, this provision has afforded relief to 33 farmers and ranchers. And why? It is 17 pages of single-spaced requirements. It gives the government a lien against your property for 10 years. It sets up requirements like ownership of assets for at least 8 years, when if you are growing chickens, they don't live 8 years. The bottom line is, this is absolutely unworkable and meaningless except for fewer taxpayers than we are going to have Senators vote against repeal of the death tax. I go back and make my point: Our colleagues know this is an issue that Americans care about. They desperately want to spend the money we are collecting by making people sell their farms, sell their businesses upon the death of the founder in order to give the government 55 cents out of every dollar they have accumulated in their lifetime. But rather than repeal the tax so that this absolute tragedy and theft could stop, this outrage could end, they are offering basically a proposal that has proven to be unworkable. When it gets down to the bottom line, the question before us is a very simple one: Do you think it is worth making people sell their business, sell their farm, sell off the product of their life's work to give government 55 cents out of every dollar they have accumulated, even though every dollar they have accumulated they have paid taxes on, so that Government can spend that money? Or do you think it would be better to let people keep the money and eliminate the situation where death is a taxable event? That is the question before us. There is only one real repeal. I have been around the track before. I have seen it. I know what is going to happen here. We are going to have a bunch of people who are going to vote to sustain this point of order so that even though we have a majority who want to repeal the death tax, we won't be able to do it today. But they are going to vote for these proposals where only 33 farmers and ranchers in 5 years have qualified, and they are not outside the 10-year window. They may not end up qualifying. They are going to go back home and say: Look, I wasn't against repealing the death tax. I just was against their repeal of the death tax. There is only one real repeal, and that is the one that passed the House. I yield 5 minutes to the Senator from Colorado.

Mr. GRAMM. And Senator Dorgan?

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

Mr. GRAMM. Mr. President, under the unanimous consent agreement, I raise a 311 budget point of order against the Conrad amendment.

Mr. GRAMM. Madam President, let me remind my colleagues where we are and what we are doing. Last year, we adopted a repeal of the death tax. Under that repeal, we phased up the exemption. We will soon start phasing down the rates, and in 2010 we will actually repeal the death tax. But because of a quirk in the rules of the Senate and the budget process, this death tax snaps back into full force in 2011. Members of the Senate voted to repeal the death tax. They proclaimed they were repealing the death tax. We are here today to really finish that work by simply taking the provisions of law that are in place and in 2010--a year when according to the Congressional Budget Office March estimate we will have a surplus of over $300 billion--we would eliminate the death tax forever rather than having the death tax come back from the grave to prey on working families. That is the provision we are here to debate. We have had offered an amendment which is really not about protecting family farmers. It is not about protecting small businesses. It is about protecting politicians. It is an amendment that makes a nominal change in existing law that still allows the death tax to continue but it claims to give an unlimited exemption to small businesses and to small farmers under a section of law called section 2057. This is a provision that was proposed last year by the opponents of the death tax repeal as an alternative when we voted on repealing the death tax. It is in law today but at a lower level of protection. The point I want to make is, section 2057--which this amendment claims would be expanded to shelter more value in small business and family farms--and all the other special exemptions put together have been used by only 33 taxpayers in the time they have been in effect. In other words, these provisions that supposedly shelter and give small business and family farms special protection are so convoluted, so burdensome, so inefficient that only 33 taxpayers in the years since these provisions have been in effect have found it possible to use this section 2057 to gain the promised relief. So the reality is, if this amendment were adopted, it would provide assistance to 33 known taxpayers but it would provide a figleaf to 40 Senators by allowing them to vote against the repeal of the death tax once and for all. My colleague and cosponsor on this bill is a distinguished attorney, and I want to give him an opportunity to talk about this provision in some detail, but let me basically sum up the arguments we have heard thus far and that we are certainly going to hear today. The first argument we are going to hear is that repealing the death tax is going to cost money, is going to drive up the deficit, and is going to increase debt. I remind my colleagues that under the latest estimates we have, the death tax collects less than 1 percent of the revenues that we collect in the Federal Government. Yesterday, I made reference to two studies, one by our own Joint Economic Committee titled ``The Economics of the Estate Tax,'' and the other by the Institute for Policy Innovation titled ``The Case For Burying the Estate Tax.'' Both of these studies make a very strong case that by forcing small business and family farmers who are trying to protect their families from the death tax to pay these big insurance policies, to hire all these lawyers, to hire all these accountants, and by forcing people to sell off businesses and farms prematurely to try to plan for this tax, we have lowered the efficiency of the economy. The study by our Joint Economic Committee concludes that the level of capital in America is $50 billion lower than it would be without the death tax. The study by the Institute for Policy Innovation concludes that by disrupting economic activity and lowering efficiency, this tax actually collects no net new revenue. Our colleagues say, and we are going to hear it throughout the day in the debate, that, well, we would make it permanent but we cannot afford it; we cannot afford to make it permanent. I remind my colleagues that the amendment I will offer, which is the permanent repeal amendment that passed the House, does not go into effect until 2010. As I noted earlier, in 2010 we are projected to have a surplus of some $300 billion. What those who oppose permanent repeal of the death tax are really saying is they want to spend that money. There is an interesting paradox here. Despite all the talk we had yesterday and will likely hear again today that we simply cannot afford to make the repeal of the death tax permanent and we have to force families to sell off the family business and sell off the family farm and give government 55 cents out of every dollar people have accumulated in their working lifetime in aftertax dollars, that we have to do that because we need the money, I find it interesting that in five different instances over the last 9 months where this Senate has voted to spend more money than we would lose in revenues next year if we made the repeal of the death tax permanent. We spent $14 billion on nonemergency items in the emergency supplemental appropriation that the President did not ask for and that over the next 2 years is some four times as much as repealing the death tax would save families if they got to keep the money. The farm bill next year costs seven times as much as letting people keep the family farm or keep their small business. The energy bill was more expensive than the cost of letting people keep their family farms. The trade bill added new entitlements that cost more over the next 3 years than letting people keep what they have accumulated over a lifetime. Railroad retirement costs 15 times as much next year. The stimulus package that was adopted, the parts that were not asked for by the President, cost more than making the repeal of the death tax permanent next year. Finally, the budget reported on a straight party line vote out of the Budget Committee adds new spending--not requested by the President, not defense related, not related to our security needs in fighting terrorism--of $105.8 billion. In short, on five different occasions in the last 9 months we have voted on the floor of the Senate or in the Budget Committee to add new spending that, when it is added up, is some 15 times more expensive than repealing the death tax permanently, and yet our colleagues who voted for each and every one of these increases in spending now say, well, we could afford to spend all of this money but we cannot afford to stop forcing families to sell off their farms and their businesses and the accumulated value of the life work of their parents. That represents misplaced priorities. We have colleagues who could name 100 taxes that ought to be increased, who could name 40 tax reductions that should be taken back, but they cannot name a single Government program that we could live without or we could reduce. At its root, this issue boils down to one simple choice. We will hear many arguments today, but it comes down to a simple choice. The people who do not want to make the repeal of the death tax permanent believe it is worth forcing people, at the death of their parents, to sell off their life's work to give over half of it to the Government, even though it is all aftertax income. They have already paid taxes on it once. The opponents of making the death tax repeal permanent believe it is worth forcing businesses to liquidate farms, to shut down, equipment to be sold, jobs to be destroyed, because they believe that having that money in Washington so they can spend it is worth it. Those who want to make the death tax repeal permanent do not believe that. Those who want to make the repeal of the death tax permanent believe we would be better off as a nation--we would be richer, freer, happier, and the world would be fairer--if, when families work and save and sacrifice and pay taxes on every dollar they earn in their lifetime and they build up a business, farm, or estate, that their death should not be a taxable event. We will hear a discussion today that says, OK, we are willing to do this for some. We know it is bad for some people, but we want to pick and choose as to who has to pay this death tax. The position of those who want to repeal the death tax permanently is a position that we believe the tax is immoral. We believe it is wrong. We think, whether somebody's estate is worth $700,000, or whether they built a business that has 200 employees and that has tools and capital and land and trucks and equipment worth $10 million, we believe, if they built a business worth $10 million, that destroying that business to bring $5.5 million of that to Washington so we can spend it does not represent a good choice in public policy. After all, it is their money. They built it. They accumulated it. They sweated and saved and sacrificed for it. That ultimately is the issue. We believe it is wrong to tax death. We believe it is wrong when people build up assets and build a business for government to then destroy it. I showed data yesterday indicating more than 70 percent of small businesses that are founded by a family member do not survive into the second generation; 87 percent do not survive into the third generation. According to the NFIB, the No. 1 reason is the death tax. It is time to fix this provision of the Tax Code. We are going to have an opportunity to do that. There will only be one real amendment. There are two amendments that give political cover. There is one amendment I will offer that is exactly the same language the House passed, and if we adopt it, it will go to the President and he will sign it into law. That is the issue. There is one real repeal, as my colleague from Arizona says. I yield the floor.

Mr. GRAMM

Mr. GRAMM. I will yield. I only have a couple of minutes, so do it fast.

Mr. GRAMM. Mr. President, we all understand that the death tax basically says if somebody works a lifetime, they scrimp and save and sacrifice, they plow the money back into their business or their farm or their estate, they do it for their family, and then they die, then their family has to sell their business or sell their farm or sell off their estate to give the government a double taxation of 55 cents out of every dollar they have earned in their lives. It is an absolute outrage. The American people believe that. Today and tomorrow, as we debate this issue, our Democrat colleagues are not going to defend the death tax as such. They are going to try to make a series of points. You are going to get to hear it in the long debate, but since we are waiting for them to come forward with their amendment, I want to make some points early on. They are going to say: OK, it is wrong to make people sell off their life's work, but shouldn't we redistribute wealth? Shouldn't we say that above a certain level we are going to have a death tax? They are basically going to try to appeal to this old class struggle, this old Marxist idea that has been rejected everywhere else in the world but still carries currency in the United States of America. The second thing they will do is say: Look, we wanted to repeal the death tax but we can't afford it. We just can't afford it. Let me remind my colleagues, we don't have to go way back to the railroad retirement debate of last year to see that this is not true. Let's go to last Thursday. Last Thursday this body, the Senate, voted overwhelmingly--and I think almost every Democrat Member of the Senate voted for the bill--to spend $14 billion more than the President requested for nonemergency items in a supplemental appropriation. That's $14 billion more than the President asked for in nonemergency items. That is 4 times what it costs to repeal the death tax next year. So our colleagues today are brokenhearted: You would repeal the death tax and deny the Government that money, and we are so worried. They are worried about the deficit and the debt. Where were they Thursday? Where were they Thursday night? I was here. I raised a point of order against 80 amendments. Where were they? They were willing to spend four times as much this coming year on spending the President didn't ask for in an emergency bill than it would cost to repeal the death tax. On the farm bill, they were willing to spend seven times as much as the cost of repealing the death tax. Now they are worried about the debt. They are worried about the deficit. But last month when we passed this bloated, inflated farm bill, they were willing to spend seven times as much as it would cost this coming year to repeal the death tax. They were not worried then, but they are really worried today. Then there was the energy tax incentive. They weren't worried then. They were willing to spend more on energy tax incentives than it would cost next year to repeal the death tax. Finally, just to add insult to injury, on the budget that was reported on a straight party-line vote out of the Budget Committee, the Democrat majority increased nondefense discretionary spending by a whopping $105.8 billion above the level requested by the President. In other words, when they cast that vote, they could afford $106 billion. That is more than enough to fund the repeal of the death tax for the next 10 years. I know they are upset today. They are very upset about the deficit and the debt. But they are only upset when we are talking about letting people keep more of what they earn. They are never, ever upset when it comes to spending money. They write a budget that spends more money on new discretionary programs than repealing the death tax would cost, but when it is time to let people keep money, they are worried.

Mr. GRAMM. I will be glad to do so. Let my colleague speak.

Mr. GRAMM. Mr. President, let me take a couple of minutes to tell people where we are. We worked out an agreement several weeks ago to debate the permanent repeal of the death tax. I thank the majority leader for agreeing to allow this to happen. We now have a unanimous consent agreement that dictates how the debate will occur. I will go over it so everyone will know exactly what we are doing. Under the unanimous consent agreement, a majority member, a Democrat, will be recognized to offer a first-degree amendment related to the death tax. That amendment, by a majority member, will be subject to two second-degree amendments also offered by majority members. Those two second-degree amendments will be disposed of--either with a point of order, a motion to table, or a vote--and will be accepted or rejected. Then there will be one amendment standing, whether it is amended or not, and it will be voted on. Then I will be recognized to offer a first-degree amendment. It will not be subject to an amendment. I will offer an amendment identical to the permanent repeal of the death tax adopted by the House of Representatives. So if my amendment is be adopted, the bill would again pass the House and the President could sign it into law. If any other amendments should be adopted, we have to have a debate as to whether we would name conferees and we would potentially have to go to conference with the House. That is basically where we are. We are now awaiting the offering of a first-degree amendment. Then that will be subject to two second-degree amendments, offered by the majority. We will vote on each one of them, in order, and then we will vote on the underlying amendment. I assume we would probably get through one vote this afternoon and then we would have three votes tomorrow and we would finish up tomorrow sometime in the mid-early afternoon if all the time is used. I remind my colleagues there are 2 hours on the first second-degree amendment, 2 hours on the second second-degree amendment, 2 hours on the underlying first degree, and then there would be 2 hours on my amendment which would repeal the death tax, in exactly the same form the House has passed, and then there would be a vote on it and we would be finished. That is where we are in terms of the structure of the debate. I wanted everyone to understand exactly where we are. I reserve the remainder of my time.

Mr. GRAMM. I can do it either way. I was going to speak, but if the Senator has a time constraint, I am happy to step aside for 10 minutes.

Mr. GRAMM. I don't mind yielding to my Democratic colleague.

Mr. GRAMM. Mr. President, I first wish to say something that I consider to be positive about our colleague from Minnesota. There are many people who want to take the repeal of the death tax back, but they do not want to own up to why they want to do it. They want to do it because they want to spend the money. The one thing I have always admired about the Senator from Minnesota is that he does not dilute his liberalism with the alloy of hypocrisy. He says exactly what he believes. I think in doing so he not only is true to his conscience but he does the Senate a service by defining exactly what all of this is about. I wish to yield myself 20 minutes of the remaining 50 minutes we have. Let me begin by saying that I think I am a good person to be a leader on this issue in the sense that the only thing I have ever been bequeathed in my life is that my grandmomma's brother, my great-uncle Bill--who was a great checkers player and I guess in the minds of the world since he worked in a cotton mill he may not have been a very important person, but he was an important person to me--but he bequeathed to me a cardboard suitcase full of yellow sports clips from the 1950s. I have often thought that had it been baseball cards I would be a rich man today. So I will never pay a death tax. I hope someday my children and grandchildren will have enough wealth that it would be an issue if we don't repeal it. But I am against the death tax because it is profoundly wrong. I know it is easy to envy what another family achieves. But how can it be right? I am not talking about budgets, I am not talking about dollars, I am talking about right and wrong. People may work a lifetime, they scrimp, they save, they sacrifice, they plow back into their business, they work 12 and 14 hours a day, they accumulate, they build, and they build America while they are building. How can it be right simply because we are greedy and we want their money to make their children sell off the fruits of their life's work to give the Government a 55-percent share of everything they have accumulated during their lifetime simply because they have been successful? It is a question of right and wrong. I will say about the constituents of my State--I can't speak for any other State in the Union--but in my State when I am talking about this issue--whether I am talking to farmhands, or railroad retirees, or rich people in North Dallas--when I talk about it being wrong to make a man or a woman sell off the life's work of their parents to give the Government a double taxation, people stand up and applaud because they are against it. They are flat against it because it is wrong and because it is un-American. It is un-American to do that. By doing it, we prevent accumulation. I would like to refer to two thick studies. I would put them in the Congressional Record, except it would cost a lot of money. So let me refer to them so if people want them they can get them off the Internet. I will save probably $25,000 by not putting these in the Record. There was a study by the Joint Economic Committee, entitled ``The Economics Of The Estate Tax.'' It was published in December of 1998 by the Joint Economic Committee. All of their analyses and numbers boil down to the conclusion that the death tax has reduced by $500 billion the capital stock and the total investment that the Nation has made in job creation. They conclude that we are not raising net revenues by forcing people to destroy small businesses, destroy family farms, and to tear up the bequeath of Americans who have been successful. They argue that it destroys capital and that actually we are not collecting net revenue. I commend this to my colleagues. The second study is a private study that was done by the Institute for Policy Innovation, entitled ``The Case For Burying The Estate Tax.'' They conclude that there are costs to collecting the estate tax. There is a decline in economic efficiency as people sell off their business because they do not want their children to have to deal with the estate tax problem. People buy insurance with money they could be investing in their business, and they do that to try to avoid the estate tax. When you look at all those costs, the Institute for Policy Innovation concludes that on net we are not even collecting any taxes with the death tax. Finally, even if you accept the IRS data as net data--in other words, that we are really losing revenue--when you take into account what it costs to collect the tax, what people spend trying to avoid it, and how it hurts the economy, contrary to all of the debate you have heard from the Democrat side of the aisle, we collected less than one cent out of every dollar of taxes collected in America last year from the death tax. Under the best of circumstances, we are not collecting very much money. Under more likely scenarios, we are not netting any money from the tax. This policy of death tax is driven by collective greed. It is not driven by economics. It makes no sense to make people sell off their business, or destroy their farm, or tear up their life's work. And it hurts the economy to do it. But we continue to do it because of this collective envy that somehow there is something wrong about people accumulating. Let me take the richest man in the world, Bill Gates. They say he is worth $46 billion. But because Bill Gates has $46 billion, I am richer. He changed the life of everybody on this planet with what he did in terms of information technology and the management of data. He created 10 or 100 times that wealth from which we have all benefitted. He is giving over 90 percent of it away. You might say that is a lot of money. Many of our colleagues will say, let us take it, we can spend it. But what moral right do we have to take it? He has already paid taxes on every dollar of it. He is the largest taxpayer in the world. I am not doing this for Bill Gates, but he is the extreme example. The point is that this is not collecting very much money. Interestingly enough, one of the great paradoxes is the substitute that has been offered by Senator Conrad raises the deduction immediately to $3 million over the next 5 years and it would cost $20 billion. The way we phase out the repeal, our repeal over the next 5 years only costs $6.8 billion, and the real cost comes in the 10th year. The incredible paradox is the substitute that is being offered takes money out of the Treasury exactly when we don't have it, and it doesn't take money out in 2010 when we are going to have a surplus, according to the estimates of the Congressional Budget Office projection I have in front of me, of $653 billion. In other words, in trying to prevent us from making the repeal of the death tax permanent, the Senator from North Dakota offers a substitute that actually drives the deficit up in the next 5 years, whereas by phasing out the death tax, the real large cost of our phaseout does not occur until a year where we have about $600 billion of surplus. Why not give it back? The point is, we voted to repeal the death tax. We all celebrated it. We talked about it all over the country. Now we have a quirk in the budget where it comes back in 10 years. Did we mean to repeal it or didn't we? I believe we did. I believe we should. The second line of defense in all this is: But we don't have the money. We just don't have the money. We want to make the death tax repeal permanent, but we don't have the money. The only point I make, and I don't want to be unkind to anybody, but why is this argument about not having money never made when we are spending money? Why is it only made when we are letting people keep more of what they earn? I want to give you five examples. Whether it was good or whether it was bad--and my guess is some of it was good and some of it wasn't good--last Thursday we spent $14 billion more than the President requested on nonemergency items. That is four times the amount it would cost over the next 2 years to make the death tax repeal permanent. So if last Thursday we had enough money to spend $14 billion that the President did not request as an emergency, how come we don't have enough money to make the death tax permanent today? On the farm bill, I voted against the farm bill because I thought it was completely larded. I thought it was abusive in its spending. But how come we had enough money to spend next year on the farm bill that is seven times as much as it would cost next year to make the death tax repeal permanent? We had seven times as much money to spend 3 months ago when we passed that bill, but we don't have one-seventh that amount to be sure that people don't have to sell their farm when their dad dies? It is a matter of priorities. On the energy bill, we had more new tax cuts in that bill for the next year than it would cost to repeal the death tax. The trade bill contains new entitlements, and we had several times as much new spending in that bill that we passed last month as would be required to pay for repealing the death tax. In railroad retirement, we had 15 times as much in the first year as it would take to fund repealing the death tax. And finally, in the stimulus bill, in the amount we spent above the President's request, we could have funded repeal of the death tax over twice over. Here is my point: I am not saying that every one of these things was terrible and there weren't good things in them. I am just saying, here are five examples where we spent multiples of the amount of money that would be required this year for us to repeal the death tax. Nobody who today is saying we just don't have the money said that on any one of those five things I mentioned. I said it, I believe, on each and every one of them. The point is, the people who are saying we don't have enough money to make the repeal of the death tax permanent are the same people who voted to spend all this money. A final point on this issue: The Democrat budget that we voted on last week on the floor and not one Member of the Senate voted for--I guess every Democrat thought it didn't spend enough and every Republican thought it spent too much, but nobody voted for it-- increased spending on the discretionary account. I am not talking about national security items. I am not talking about defense. I am talking about $106 billion more than the President requested. That was more than enough to have funded the repeal of the death tax. The same people who thought we needed that $106 billion of spending now say we can't afford to repeal the death tax. It is a matter of priorities. Many of our colleagues can never afford to let working people keep more of what they earn, but they can always afford to spend the money. That is what this debate is about. It really boils down to this: First, we said we would repeal the death tax. It turns out it is coming back in 10 years. Should we make it permanent or not? Is it not wrong to force people to destroy the life work of their parents to give the Government 55 cents out of every dollar they have ever earned and accumulated even though they paid taxes on every penny of it? Second, are these programs that we want to spend money on so valuable that it is worth tearing up family farms and family businesses and the life's work of our people to pay for it? I don't think so. Finally, we have good, solid studies, including by our own Joint Economic Committee, that suggest we are not even collecting money on these taxes because they make the economy less efficient. So this is really not even about money. This is about collective greed in that we want to redistribute wealth when people die. We don't believe death ought to be a taxable event. That is what it boils down to. Let me sum up, and then I will yield the floor. What is the No. 1 reason that 70 percent of all family businesses do not survive into the second generation? Seventy percent of all small businesses that somebody founded do not survive into a successful operation by their children. Why? According to the National Federation of Independent Business, it is the death tax. Eighty-seven percent of all small businesses fail before they get to the third generation of the family member who started them. Why? The NFIB says the No. 1 reason is the death tax. And finally, 60 percent of all small business owners report that they would create new jobs over the coming year if estate taxes were eliminated. We have businesses that are buying great big insurance policies so their children won't have to sell the business. That money could be going into the business instead of being wasted economically. If you don't want to destroy small businesses, repeal the death tax. My second point: Under the death tax, you are taxed once, you die, and then you are taxed again. Why is it right that you earn a dollar; the Government takes 40 cents out of the dollar; you plow what is left of the aftertax dollar back into your business or your farm; you die; and your children have to sell the business or farm to pay a tax on the 60 cents that you got to keep out of the original dollar? How is that right? It is not right. No. 3, this is simple, it is clever, but it is just the truth, too. It is just the pitiful truth. No one should have to visit the undertaker and the IRS on the same day. It is just not right. So often we debate these things over numbers and budgets and all these other things when this is an issue about right and wrong. This tax is wrong. Finally, repealing the death tax would create jobs. According to an article in the Wall Street Journal, ``The True Cost of Dying,'' on July 28, 1999, they estimate that repealing the death tax would create 200,000 jobs. Now, it is true that some of our colleagues say if we take the tax cut back and we make people sell their farm or their business and give us 55 percent of its value, we can spend it on programs. But are those programs worth 200,000 jobs? I don't think so. So we have before us a proposal that says let's repeal the death tax, but only for a few people. Let's raise the cost now when we have a deficit, but let's not eliminate the tax when we can afford it and when we have a huge surplus. It makes no sense. The plain truth is that a great bulk of the cost of making this tax cut permanent occurs in the year it expires, which is 2010, and by the most recent Congressional Budget Office projections our elimination of the death tax will occur in a year when we will have a surplus of $653 billion. And $335 billion of that will not belong to Social Security. Why should we not repeal the death tax? Is there anything we can spend that money for that would be more valuable? I don't think so. I hope my colleagues will agree. I yield the floor.

Mr. GRAMM. Mr. President, how much time does the Senator from Alabama need?

Mr. GRAMM. If the Senator will yield, let me just reaffirm so everybody knows, I will offer exactly the language that passed the House, repealing the death tax permanently. So if we did it, it would go right to the President, he would sign it into law.

Mr. GRAMM. I yield 10 minutes to the Senator from Alabama.

Mr. GRAMM. Madam President, our dear colleague has a substitute which costs a ``fraction'' of a repeal but it is better. If his amendment sounds too good to be true, it is because it is too good to be true. The first thing he never mentioned was if you are a small business or family farm and you are engaged in any estate planning, and we know that small businesses and family farms spend dollars in estate planning, this completely wipes all that out. I can show figures on a small business, a $10 million small business, the tax would equally be higher next year under his proposal than under ours. But we do not have to get into all this gamesmanship. It really boils down to a simple question. We repeal the death tax for everybody.

Mr. GRAMM. I will be glad to show him. I have someone from the Finance Committee here, the staff person who worked on this. She worked out the example of $10 million, and I will send her over with it so your staff can take a look at it.

Mr. GRAMM. Here is the point. We don't need to get into all this business about ``he did,'' ``he didn't,'' ``he did,'' ``he didn't.'' It boils down to this. We said we repeal the death tax and we repealed it. Only there is a trick: it comes back in 10 years. Senator Kyl and I want to repeal it so it is dead forever. We do not think death ought to be a taxable event. We don't think you ought to have to sell your family's farm, business, or estate to pay tax on money which you have already paid taxes on. The Senator says let's do it for some people but not other people. Let's do it for some Americans but not other Americans. And let's, at the same time, ban all of the procedures whereby every small business in America and every family farm in America is planning for estate taxes to try to minimize their costs. The bottom line is: Are you for a repeal for everybody or are you for a repeal for some of the people? It really boils down to that simple issue. As for this argument about Social Security, I hope everybody understands that we collect a payroll tax for Social Security. The death tax collects less than 1 percent of revenues, and none of that money goes into Social Security. In fact, as I pointed out over and over and over, five times in the last 9 months we have spent cumulatively about 20 times the amount that it would take to repeal the death tax. So, obviously, it is not a question of money. It is a question of priorities. I yield the floor. We are through on our side.

Mr. GRAMM

Mr. GRAMM. Reserving the right to object, I am sorry; I did not hear.

Mr. GRAMM. Will the Senator yield for a unanimous consent request?

Mr. GRAMM. If that unanimous consent request is agreed to, I would go ahead and then make a point of order and the Senator can move to waive it.

Mr. GRAMM. I object.

Mr. GRAMM. I would say we have spoken all day. I think people know what the issue is. This really questions whether everything in the bill is an emergency. It is that simple. As provided in section 205(b) of House Con. Res. 290, I raise a point of order against the emergency designation on the nondefense spending items.

Mr. GRAMM. Mr. President, I ask unanimous consent that I might be recognized for the purpose of making a point of order.

Mr. GRAMM

Mr. GRAMM. If the Senator would yield, I would be happy to listen, but I only have a little bit of time left.