Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY. College education is a good goal, but let the American taxpayers make their own decisions. No tax should be greater than 50 percent. I yield the floor.

Mr. GRASSLEY. Mr. President, while I am waiting to yield some time to Senator Nickles, there is a certain unfairness about the death tax that I will present to my colleagues for consideration. Based on the recent speeches, though, I am not sure it is going to make much difference. You can have two people who, throughout a lifetime, make the same amount of money. They are all taxed when they make it at the income tax levels. You can have this family over here living very conservatively, moderately--you might even say miserly--and leave a big estate. You can also have this family over here that spends their money as quickly as they get it, buying a big boat, a big camper, partying every night, womanizing every night, not leaving one penny to their heirs. This family has been taxed once throughout their lifetime on that money. This family over here has been taxed exactly the same way when it was made, and then, just because they were very careful how they lived, they are going to be taxed again when they die. What is the fairness about that sort of taxation? We ought to reward thrift. We ought to discourage this sort of activity over here where people are living for today and forgetting about tomorrow and reward the people who look to the future and are concerned about their children and grandchildren. It seems to me there ought to be some reward for that. As long as I have been in Congress, my belief is that no American family should be forced to pay up to 60 percent of their savings, their business, or their family farm in taxes when they die. No taxpayer should be visited by the undertaker and the tax collector at the same time. No tax should be greater than 50 percent. I have heard from hundreds of American taxpayers saying that all their lives they had saved for their children and grandchildren's college education. They have worked overtime and saved all their money, and now the death tax is going to take over 50 percent of their savings that was going to pay for other college tuition for relatives. Remember that the 50-percent tax rate starts at $2 million. You can pay a lot of college education on that kind of savings. Let our American taxpayers keep their savings and pay their grandchildren's tuition. Do not steal the American dream from these families that have lived conservatively and worked just as hard as other people who leave nothing and pay taxes once. Remember, a $3 million estate will pay the Government in death taxes over $1 million. That will pay a lot of tuition as well. This amendment will control the lives of Americans by only reducing the death tax to 53 percent. Let American parents and grandparents keep their savings. No tax should be greater than 50 percent. Once again, how much tax is too much for people who want to tax income and estates at a higher rate? It is obvious Senator Schumer thinks that 53 percent on the estate of these people who have not spent all their money and who save it is legitimate. I do not happen to think so. I do not understand how a person who talks about fairness can say that a family who has had good income throughout their lives and has not saved one penny should only be taxed once, and another family that has the same income and paid the same income tax on it as this other family, but because they wanted to live carefully, moderately, miserly, and save their money for whatever they wanted to save it for, they should be taxed again. There ought to be some reward for not living just for today and forgetting about tomorrow. I will vote no on this amendment, and I urge my colleagues to do the same. I need to tell my colleagues that I have received hundreds of phone calls and letters from people who are particularly in the World War II generation. Only this morning we were reminded by Senator Stevens that these World War II veterans are dying by the thousands every day, and they cannot wait 10 years for death tax reform. They tell me they have been morally responsible citizens, and they are angry that the last 40 or 50 years of their savings, having lived carefully and having worked hard, will be stolen. They are angry that the Federal Government will not let them educate their children and grandchildren so they are not forced for yet another generation working 60 hours a week. The World War II generation wants to help their grandchildren stay in the middle class without mountains of debt.

Mr. GRASSLEY. I yield such time as he might want to the Senator from Arizona. What time does the Senator wish to have?

Mr. GRASSLEY. I yield some time off my time to Senator Baucus.

Mr. GRASSLEY. Does the Senator from Montana want me to yield for a minute? Mr. BAUCUS addressed the Chair.

Mr. GRASSLEY. I think we have had discussion enough on this.

Mr. GRASSLEY. Not because of the substance of the bill as much as the process by which this has come together and what that says about the Senate's workings and the bipartisanship that is necessary to getting it done around here.

Mr. GRASSLEY. I hope you respect my right, that we have worked hard to put this together and I want to protect it as much as I can.

Mr. GRASSLEY. I do not think it is perfect.

Mr. GRASSLEY. I will yield for a question. I am not sure I will answer it.

Mr. GRASSLEY. I accept that.

Mr. GRASSLEY. You told me you feel very strongly about it and you told me you thought this through and you are willing to present your view, regardless of the compromises on the other portions of the bill. You have every right to do that.

Mr. GRASSLEY. Do you mind if I reclaim my time?

Mr. GRASSLEY. How many Democrats do you have to have to be bipartisan?

Mr. GRASSLEY. I yield because I need some answers.

Mr. GRASSLEY. Mr. President, I know the Senator from New York wants to help people who need it. We all understand the importance of education. I go back to my opening statement and refer to the process by which this bill was brought about and the balance that is in it. I know the Senator from New York doesn't mean to be selfish. And I don't mean ``selfish'' for the college students he is trying to help, but the Senator is somewhat selfish in what we can do in one bill. For instance, he wants me to consider his point of view in spending more for college tuition. This may even be bipartisan; I don't know whether it will end up partisan or bipartisan. But either way, the Senator is asking us to consider his point of view being presented before the Senate while trying to undo a very carefully crafted, bipartisan compromise that was worked out between people such as Senator Kyl on the one hand and Senator Lincoln on the other dealing with the estate tax. Maybe if you think the super rich in New York don't need anything done about the estate tax, that is perfectly legitimate. Maybe that is not being selfish, if you think about the small businesspeople of America who live moderately throughout their entire working career because they have to pour everything back into the business and they want to leave it to their kids, and we are raising the threshold, raising the unified credit so that doesn't have to happen, and this isn't even talking about doing away with the estate tax 10 years from now. We are only talking about raising unified credit and preserving the small businesses and the small farms, or you might say large businesses and large farms that are affected by it, but you are taking away from that to do what you want. It is carefully crafted politically. It is crafted to look at as many interests as we can. What is ludicrous about the approach is that for the last 2 months during the budget debate the Senator was one who was voting we should not have a $1.6 trillion tax cut, should not have a $1.35 trillion tax cut. I don't know about the $950 billion bill that the Democrats put in, but 12 months ago people of the Senator's party didn't want any tax cuts at all. I hope Members are thanking President Bush that he ran on a program to cut taxes and got elected and he is performing in office the way he ran the campaign, keeping his campaign promise. We wouldn't even have a tax bill before us so that you could do what you want to do for your college students. I wonder if the Senator has thought this through? We have Senator Lincoln on your side, working with Senator Kyl, for a very carefully crafted provision that is in this bill that, quite frankly, was a major problem for your ranking member, Senator Baucus. He didn't want to do as much as I wanted to do in this area or Senator Kyl or Senator Lincoln. But, as a matter of compromise, he went along with this so we could have a bill, a bipartisan bill, and make the process of bipartisanship work. I am a little frustrated about the process. I am not even talking about the merits of your bill. I want to deal with the merits. I wonder if the Senator has thought about the condition in which you put Senator Lincoln and Senator Kyl, how you can intellectually approach this sort of a deal on a $1.3 trillion tax cut, and the Senator didn't even want any tax cuts.

Mr. GRASSLEY. I yield whatever time the Senator wants.

Mr. GRASSLEY. Mr. President, I yield myself such time as I might consume.

Mr. GRASSLEY. Probably not, but we are going to use some time; yes.

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY. Mr. President, I tell the Senator from Illinois that I appreciate his good efforts to address an injustice. This injustice is regarding the victims of the Holocaust. I pledge to work with him on this amendment. I ask that he temporarily set aside the amendment to give us time to consider exactly how to do this.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise in opposition to the Hutchinson amendment. This tax amendment is not appropriate at this time. The pending underlying legislation is not a revenue bill. If this amendment passes, this important bill will be potentially subject to a ``blue slip'' by the House. A ``blue slip'' would in effect kill this bill and the Senate would have to start anew. Therefore, a tax amendment at this time would unnecessarily jeopardize the good work of the Committee on Health, Education, Labor, and Pensions. I would note that this provision regarding private activity bonds for school construction is contained in the Finance Committee bill passed yesterday, and that bill will be taken up tomorrow for consideration. I have had a very long history on this matter of encouraging school construction, and specifically this very language that is contained in the amendment. I am very pleased that I was able to include this school construction bond language in the tax bill and look to hopefully having it signed into law. For these reasons, while I know that the Senator has offered this amendment with the best of intentions, unfortunately, I must respectfully oppose this amendment.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as Chairman of the Senate Caucus on International Narcotics Control, I want to draw attention to our interdiction efforts throughout the Caribbean and Eastern Pacific, commonly referred to as the ``transit zone.'' Although Plan Colombia is our primary counterdrug operation in Colombia and the emphasis in the Andean region, commonly called the ``source zone'', continued interdiction efforts in the transit zone are an important part of our overall ``defense-in- depth'' plan. I have noted for some time, however, that our defense in depth seems more like a defense in doubt. I want to be confident that the United States has a well-thought out, overarching national drug control strategy, involving all components of both supply and demand reduction, including eradication and fumigation, alternate development, trade incentives, interdiction, prevention, treatment, and education. I am very pleased the President is ready to appoint the new Director of the Office of National Drug Control Policy, ONDCP, to assist with reviewing our plans, programs, and strategy. But I am concerned that we lack coherent thinking on our interdiction efforts. I am concerned about rumblings from the Department of Defense, DOD, that it is going to duck and weave on supporting such a plan. I desire our interdiction efforts to be integrated and balanced, both interagency and internationally, as well as between the source zone, transit zone, and arrival zones. We need balance, within the transit zone, between the Caribbean and the Eastern Pacific, as well as balance with in the eastern, central, and western portions of the Caribbean itself. We need to have adequate intelligence community and DOD support for both the source zone and the transit zone. We need to be balanced between our air and maritime interdiction efforts. We need to be equally dynamic and risk adverse as the smuggling organizations are, when route and conveyance shifts are detected. Our counterdrug forces on patrol should also be aware of the terrorism threats that are increasing focused against our country. It is not clear to me that we currently have these things I have outlined. The Senate Drug Caucus is planning an upcoming hearing on the Transit zone on May 15, 2001 to discuss the broader questions of ``What is our transit zone strategy?'' and ``Do we have a balanced approach in the transit zone?'' I hope for a discussion on the current threat, agency capabilities, current shortcomings, the relationship with the source zone and Plan Colombia, the projected future threat, any needed improvements, interagency and international relationships, and DOD and intelligence community support to our transit zone operations. I am especially concerned about reports of aging aircraft and vessels in the both the Customs Service and Coast Guard fleet inventories. I am also particular interested in the countries of Haiti, Jamaica, Cuba, Venezuela, Mexico, and the Bahamas, as well as the Commonwealth of Puerto Rico. Success in the transit zone is so critical for both the United States as well as the many countries throughout the Caribbean, who are so dependent on trade and tourism, and who struggle to avoid the dark influences of the narcotics threat. I want to be sure we are doing our transit zone missions effectively and competently. I appreciate the difficult task of foreign investigations and interdiction, and appreciate the daily efforts of the Customs Service, Coast Guard, Drug Enforcement Administration, Department of Defense, Department of State, and our international allies. The mission is an important one and deserves our serious attention and sustained effort.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the U.S. Postal Service provides a vital and important communication link for the Nation and the citizens of my home state of Iowa. Rural Letter Carriers play a special role and have a proud history as an important link in assuring the delivery of our mail. Rural Carriers first delivered the mail with their own horses and buggies, later with their own motorcycles, and now in their own cars and trucks. They are repsonsible for maintenance and operation of their vehicles in all types of weather and road conditions. In the winter, snow and ice is their enemy, while in the spring, the melting snow and ice causes potholes and washboard roads. In spite of these quite adverse conditions, rural letter carriers daily drive over 3 million miles and serve 24 million American families on over 66,000 routes. Although the mission of rural carriers has not changed since the horse and buggy days, the amount of mail they deliver has changed dramatically. As the Nation's mail volume has increased throughout the years, the Postal Service is now delivering more than 200 billion pieces of mail a year. The average carrier delivers about 2,300 pieces of mail a day to about 500 addresses. Most recently, e-commerce has changed the type of mail rural carriers deliver. This fact was confirmed in a recent GAO study entitled ``U.S. Postal Service: Challenges to Sustaining Performance Improvements Remain Formidable on the Brink of the 21st Century,'' dated October 21, 1999. As this report explains, the Postal Service expects declines in its core business, which is essentially letter mail, in the coming years. The growth of e-mail on the Internet, electronic communications, and electronic commerce has the potential to substantially affect the Post Service's mail volume. First-Class mail has always been the bread and butter of the Postal Service's revenue, but the amount of revenue from First-Class letters is declining. E-commerce is providing the Postal Service with another opportunity to increase another part of its business. That's because what individuals and companies order over the Internet must be delivered, sometimes by the Postal Service and often by rural carriers. Currently, the Postal Service has about 33 percent percent of the parcel business. Carriers are not delivering larger volumes of business mail, parcels, and priority mail packages. But, more parcel business will mean more cargo capacity will be necessary in postal delivery vehicles, especially in those owned and operated by rural letter carriers. When delivering greeting cards or bills, or packages ordered over the Internet, Rural Letter Carriers use vehicles they currently purchase, operate and maintain. In exchange, they receive a reimbursement from the Postal Service. This reimbursement is called an Equipment Maintenance Allowance (EMA). Congress recognizes that providing a personal vehicle to deliver the U.S. Mail is not typical vehicle use. So, when a rural carrier is ready to sell such a vehicle, it's going to have little trade-in value because of the typically high mileage, extraorindary wear and tear, and the fact that it is probably right- hand drive. Therefore, Congress intended to exempt the EMA allowance from taxation in 1988 through a specific provision for rural mail carriers in the Technical and Miscellaneous Revenue Act of 1988. That provision allowed an employee of the U.S. Postal Service who was involved in the collection and delivery of mail on a rural route, to compute their business use mileage deduction as 150 percent of the standard mileage rate for all business use mileage. As an alternative, rural carrier taxpayers could elect to utilize the actual expense method, business portion of actual operation and maintenance of the vehicle, plus depreciation. If EMA exceeded the allowable vehicle expense deductions, the excess was subject to tax. If EMA fell short of the allowable vehicle expenses, a deduction was allowed only to the extent that the sum of the shortfall and all other miscellaneous itemized deductions exceeded two percent of the taxpayer's adjusted gross income. The Taxpayer Relief Act of 1997 further simplified the tax returns of rural letter carriers. That Act permitted the EMA income and expenses ``to wash,'' so that neither income nor expenses would have to be reported on a rural letter carrier's return. That simplified taxes for approximately 120,000 taxpayers, but the provision eliminated the option of filing the actual expense method for employee business vehicle expenses. The lack of this option, combined with the dramatic changes the Internet is having on the mail, specifically on rural carriers and their vehicles, is a problem I believe Congress can and must address. The mail mix is changing and already Postal Service management has, understandably, encouraged rural carriers to purchase larger right-hand drive vehicles, such as Sports Utility Vehicles, SUVs, to handle the increase in parcel loads. Large SUVs are much more expensive than traditional vehicles, so without the ability to use the actual expense method and depreciation, rural carriers must use their salaries to cover vehicle expenses. Additionally, the Postal Service has placed 11,000 postal vehicles on rural routes, which means those carriers receive no EMA. These developments have created a situation that is contrary to the historical congressional intent of using reimbursement to fund the government service of delivering mail, and also has created an inequitable tax situation for rural carriers. If actual business expenses exceed the EMA, a deduction for those expenses should be allowed. To correct this inequity, I am introducing a bill today that reinstates the ability of a rural letter carrier to choose between using the actual expense method for computing the deduction allowable for business use of a vehicle, or using the current practice of deducting the reimbursed EMA expenses. Rural carriers perform a necessary and valuable service and face many changes and challenges in this new Internet era. We must make sure that these public servants receive fair and equitable tax treatment as they perform their essential role in fulfilling the Postal Service's mandate of binding the Nation together. I urge my colleagues to join Senators Bingaman, Murkowski, Jeffords, Conrad, Breaux, Rockefeller, Daschle, Baucus, Lincoln and myself in sponsoring this legislation. I ask unanimous consent that the text of the bill be printed in the record.