Judd Gregg

Mr. GREGG

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 Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. That is not a unanimous consent request. That is just a summary of where we are. We are waiting for the formal written document to make it clear that I did not make any mistakes, and pending that, I suggest the absence of a quorum.

Mr. GREGG. It is my understanding, therefore, that for the balance of the evening we will simply participate in general debate on the bill and that tonight no more amendments will be offered to the bill. Tomorrow, as the Senator from Massachusetts has represented, there will be 20 minutes of debate equally divided when we go back to the bill, at which time there will be a vote on the Wellstone amendment, followed by the Senator from Maine, Ms. Collins, offering an amendment.

Mr. GREGG

Mr. GREGG. Mr. President, finally, finally, the American people are going to get some of their money back. The American people have been paying more money into the Federal Government than we need to operate the Government. Over the next 10 years, it is projected they are going to pay $5.6 trillion into the Federal Government that we do not need. But the other side of the aisle does not want to give any of that money back. They do not want to let the American taxpayers keep some of their hard-earned money. No, they want to spend it. They have programs; they have ideas; they have initiatives; they have things on which they have to spend money. There are a lot of good things to spend money on as a government, but one of the best things we can spend money on as a government is the taxpayers, by allowing the taxpayers to keep some of their hard-earned income so they can make decisions with their dollars, so they can make the decisions as to whether or not they want to buy a new car, spend more money on their children's education, improve their home, or save their money. It is about time we return to the American people some of this surplus. I congratulate the President; I congratulate the chairman of this committee; I congratulate the ranking member of the committee, the Senator from Montana, who will soon be the chairman of the committee for pulling forward a bill which is to some extent bipartisan--although, obviously, not a majority on the other side support it--which returns to the American taxpayers their hard-earned income. Hallelujah, it is about time. Let's look at what this tax bill does. For people in the lowest rates, they get the highest percentage cut, from 15 percent down to 10 percent. For people who don't even pay taxes today but have families and have issues with raising their children, they are going to receive a direct payment. Not an income tax refund, because they are not paying income taxes, but a direct payment to assist them in raising their children, a child tax credit. This is a bill which is directed at the middle-class Americans-- Americans who are working hard every day to make ends meet, some of them in a low enough tax bracket so they don't pay taxes but still they need assistance; Americans who know the dollars they are sending to the Federal Government, to some extent, are not needed down here anymore. They are not needed in Washington because Washington has this huge surplus. They are needed at home. Americans across this country need those dollars to manage their family budgets better. The representation was made on the other side of the aisle that we have this huge debt and we need to pay this debt off. Every projection we have says this debt will be paid off by, at a minimum, the year 2011. The public debt of the Federal Government will be zero by the year 2011 and will probably be zero long before then. We will pay down more debt faster than at any time in this country's history while still cutting these taxes. Why? Because the surplus is so large. So this debt argument is a red herring. The argument has been made on the other side that we are not protecting Social Security with these funds. That is totally inaccurate. The fact is, the Social Security trust fund is running a $2.5 trillion surplus over this period. Not only can you protect the Social Security trust fund--and it is protected under this proposal-- but we are actually going to be in a position, as a result of those surpluses in the trust fund to, I hope later down the road, allow American citizens who are paying Social Security taxes to save those taxes and actually own the assets which they have in the Social Security trust fund through some sort of personal or individual savings account. The Social Security system is in a very healthy situation. It is getting stronger for the next few years. Regrettably, in the outyears, it has serious problems which need to be addressed. But this tax bill does not in any way negatively impact the surplus of the Social Security trust fund, nor does it impact the surplus of the Medicare trust fund. First off, there is not a surplus in the Medicare trust fund; there is only a surplus in Part A. Part B is running at a deficit. If they merge the two, they run a deficit overall. The fact is, money is in this account; it is there for the purposes of Medicare, and we are talking about a significant increase in Medicare funding so we can fund the prescription drug benefit. After we have done this--paid down the debt, protected the Social Security and Medicare trust funds, after we put in place preserving funds for prescription drugs--we still have a surplus at the Federal Government level because we are running so much more in revenues than we are in expenditures. What do some of my colleague on the other side of the aisle say? They do not want to return the dollars to the American taxpayer but spend it and create more programs. This is not a debate as to whether or not the money is available. It is a debate about what we should do with the money. The President has set the correct course. He has said, when the Federal Government takes in more money than it needs to operate, after it has committed to protecting Social Security, Medicare, and paying down the debt completely, then those dollars should be returned to the American taxpayer because it is their money, not our money. That is the difference. We understand it is the taxpayers' money; it is not Washington's money. I congratulate the leadership of this committee in putting forward a balanced, fair, and appropriate bill, one which will give much needed relief to the taxpayers of this country who for too long have been asked to pay too much. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, today, I am pleased to be joined by Senators Kennedy, DeWine, and Bayh in introducing the Public Safety Employer-Employee Cooperation Act of 2001. This legislation would extend to firefighters and police officers the right to discuss workplace issues with their employers. With the enactment of the Congressional Accountability Act, State and local government employees remain the only sizable segment of workers left in America who do not have the basic right to enter into collective bargaining agreements with their employers. While most States do provide some collective bargaining rights for their public employees, others do not. The lack of collective bargaining rights is especially troublesome in the public safety arena. Firefighters and police officers take seriously their oath to protect the public safety, and as a result, they do not engage in work stoppages or slowdowns. The absence of collective bargaining denies these workers any opportunity to influence the decisions that affect their lives or livelihoods. Studies have shown that communities which promote such cooperation enjoy much more effective and efficient delivery of emergency services. Such cooperation, however, is not possible in the 18 States that do not provide public safety employees with the fundamental right to bargain with their employers. The legislation I am introducing today recognizes the unique situation and obligation of public safety officers. First, we create a special collective bargaining right outside the scope of other Federal labor law and specifically prohibit the use of strikes, work stoppages or other actions that could disrupt the delivery of services. Second, this legislation utilizes the procedures and expertise of the Federal Labor Relations Authority to help resolve disputes between public safety employers and employees. This bill simply requires that each State provide minimum collective bargaining rights to their public safety employees in whatever manner they choose. It outlines certain provisions that must be included in state laws, but leaves the major decisions to the state legislatures. States that already have the minimum collective bargaining protections as outlined in this legislation would be exempt from the Federal statute. And third, the bill specifically prohibits strikes, lockouts, sickouts, work slowdowns or any other job action which will disrupt the delivery of emergency services. Labor-management partnerships, which are built upon bargaining relationships, result in improved public safety. Employer-employee cooperation contains the promise of saving the taxpayer money by enabling workers to give input as to the most efficient way to provide services. In fact, States that currently give firefighters the right to discuss workplace issues actually have lower fire department budgets than states without those laws. The Public Safety Employer-Employee Cooperation act of 2001 will put firefighters and law enforcement officers on equal footing with other employees and provide them with the fundamental right to negotiate with employers over such basic issues as hours, wages, and workplace conditions. I urge its adoption and ask unanimous consent that the text of this bill be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, today, I am pleased to be joined by Senators Kennedy, DeWine, and Bayh in introducing the Public Safety Employer-Employee Cooperation Act of 2001. This legislation would extend to firefighters and police officers the right to discuss workplace issues with their employers. With the enactment of the Congressional Accountability Act, State and local government employees remain the only sizable segment of workers left in America who do not have the basic right to enter into collective bargaining agreements with their employers. While most States do provide some collective bargaining rights for their public employees, others do not. The lack of collective bargaining rights is especially troublesome in the public safety arena. Firefighters and police officers take seriously their oath to protect the public safety, and as a result, they do not engage in work stoppages or slowdowns. The absence of collective bargaining denies these workers any opportunity to influence the decisions that affect their lives or livelihoods. Studies have shown that communities which promote such cooperation enjoy much more effective and efficient delivery of emergency services. Such cooperation, however, is not possible in the 18 States that do not provide public safety employees with the fundamental right to bargain with their employers. The legislation I am introducing today recognizes the unique situation and obligation of public safety officers. First, we create a special collective bargaining right outside the scope of other Federal labor law and specifically prohibit the use of strikes, work stoppages or other actions that could disrupt the delivery of services. Second, this legislation utilizes the procedures and expertise of the Federal Labor Relations Authority to help resolve disputes between public safety employers and employees. This bill simply requires that each State provide minimum collective bargaining rights to their public safety employees in whatever manner they choose. It outlines certain provisions that must be included in state laws, but leaves the major decisions to the state legislatures. States that already have the minimum collective bargaining protections as outlined in this legislation would be exempt from the Federal statute. And third, the bill specifically prohibits strikes, lockouts, sickouts, work slowdowns or any other job action which will disrupt the delivery of emergency services. Labor-management partnerships, which are built upon bargaining relationships, result in improved public safety. Employer-employee cooperation contains the promise of saving the taxpayer money by enabling workers to give input as to the most efficient way to provide services. In fact, States that currently give firefighters the right to discuss workplace issues actually have lower fire department budgets than states without those laws. The Public Safety Employer-Employee Cooperation act of 2001 will put firefighters and law enforcement officers on equal footing with other employees and provide them with the fundamental right to negotiate with employers over such basic issues as hours, wages, and workplace conditions. I urge its adoption and ask unanimous consent that the text of this bill be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, I move to waive the point of order and ask for the yeas and nays.

Mr. GREGG. Mr. President, this amendment would cut the capital gains rate from 20 percent to 15 percent. It is sort of trifecta tax law. We just saw the Preakness run here a couple days ago. If you want a triple winner, this is it. First off, the American taxpayer wins because the majority of American taxpayers presently own stock. A lot of that stock is locked up. They are not able to convert it to cash and reinvest because they have capital gains and they want to pay that tax. This frees up those locked up assets and middle America wins. Secondly, the Federal Government wins. Historically, and on the basis of the projections from the Joint Tax, this will be a revenue winner for the next 3 years and, historically, for the next 10 years. We actually generate more revenue. Why? Because of the fact that economic activity is increased and that economic activity is a taxable event. Today it is not taxable because everybody is sitting on those capital gains. So we are not creating activity, and we are not creating a taxable event. This amendment creates revenue to the Federal Treasury and scores positively for the next 3 years. In my opinion, it scores positively for the next 10 years. The Joint Tax Committee found it to lose $10 billion on a $1.3 trillion bill, obviously a big number but a minor amount in the context of the whole bill. The third winning item of this is that it creates prosperity. When you free up capital, people can take that capital and reinvest it in productive activity, either in small business activity or in the stock market to create capital for people who are entrepreneurs, and entrepreneurs create jobs; they create prosperity. This is a triple winner. It is a benefit to the American taxpayers, especially middle-income taxpayers. It is a benefit to the Federal Government because it generates positive revenue and is a benefit to the economy because it is an engine for prosperity. A motion will be made that it is not germane. I argue it is germane. There are two areas of capital gains in this bill, No. 1, dealing with AMT and, No. 2, dealing with the estate tax. More importantly than that, if my colleagues want to vote on something that is a win-win-win, a trifecta for our Government, our country, and our people, this is it: a capital gains cut from 20 to 15 percent. I hope my colleagues will join me in this vote. I yield back whatever time I have remaining.

Mr. GREGG. I think we can straighten this out. I ask unanimous consent that the Senator from Montana have 3 minutes and I have 3 minutes and we then move to a vote.

Mr. GREGG. Mr. President, I yield 2 minutes to the Senator from Colorado.

Mr. GREGG. Are we now back on my amendment?

Mr. GREGG. Mr. President, I am going to speak, then the Senator from Montana will speak, and then we will yield on this amendment. Mr. President, I want to make a couple points in response. The scoring on this that I am referring to is not dynamic; it is historical. The fact is that the last time we cut the capital gains tax, it was said by Joint Tax that we would lose revenue over an extended period of time. In fact, it turned out that we gained revenue over the extended period of time. In fact, we exceeded the revenues by over $100 billion over the time period of 5 years. Today the amendment I have offered generates positive revenue over the first 3 years, which is the period--2\1/2\ years--when the capital gains cut is in place. And then it has been projected that in the balance of the 10 years, it will lose $10 billion total. Mr. President, $10 billion on a $1.3 trillion bill is a manageable number. The economic benefit that will be generated by cutting the capital gains tax starting June 1 will be huge. It will far exceed any $10 billion that is lost--assuming it were ever lost--because it will mean that there will be a massive infusion of cash into the economy that is today locked down--a massive infusion of investment into the economy that is today locked down. That investment will generate jobs, create entrepreneurship, and generate prosperity. It will benefit, disproportionately, middle-income Americans, who are today heavily invested through their pension funds and through personal activity in the stock market. It will, therefore, be a significant win for the American people and for the Federal Government because we will generate more revenues for the prosperity of our Nation. That is why I think it is a good idea to do it and do it now, and it is certainly not an expensive exercise. I yield back the remainder of my time.

Mr. GREGG. The Senator from Montana has 18 minutes. If we are going to go into a quorum call, I ask that the time be charged to the time of the Senator from Montana.

Mr. GREGG. I ask that any time used during a quorum call be charged against the time of the Senator from Montana.

Mr. GREGG. How much time is remaining?

Mr. GREGG. I yield 10 minutes to the Senator from Arizona.

Mr. GREGG. As was mentioned so appropriately by the Senator from Nebraska, this is no longer a tax issue for the wealthy; this is a tax issue for middle America. Middle America is aggressively investing in the stock market today through their pension plans and also through their individual activity. Reducing the capital gains rate will significantly and positively impact middle America, something this tax bill does not do in the most effective way, in my opinion. More importantly, it will affect them today because it will give them the opportunity--starting next month, if this tax bill passes--to take advantage of a lower tax rate, which will have an immediate impact on their ability to generate profits and gains and take those profits and gains and put them into new investments which will generate new jobs, which will generate more prosperity. It is a win-win situation for us because we generate more prosperity as a result of more economic activity and more investment and we actually generate more revenues for the Federal Government. So I certainly hope, when we get to the point of voting, if there is a motion to repeal this amendment on the issue of germaneness, that will not be brought forward because I might win, and I would not want to undermine the germaneness rules of the Senate by winning that vote. I think it might make more sense, if that motion is going to be made, that it be made on the issue of the cost estimates of this bill. We could waive that motion and, hopefully, be successful. Mr. President, how much time do I have remaining?

Mr. GREGG. Mr. President, I yield myself such time as I may consume. First, I think we have to understand what the capital gains tax cut will do. It will generate prosperity. It will generate capital that is today locked down in investments that are not productive, take that capital, cause people to convert that capital to cash, and reinvest it in other economic activity which will create jobs, create prosperity. Every time we have reduced the capital gains rate in this country, we have seen a flow of revenues into the Federal Treasury also. So not only does it create economic activity in the community at large, and create more investment activity, and thus create more entrepreneurship, and thus create more jobs, it also creates more cash coming into the Federal Treasury. Why is that, you may ask. How can a tax cut actually generate more income? Because, very simply, the income is never realized if the money stays locked down. It never occurs unless you create the tax cut. When you create the tax cut, people have an incentive to go out and convert those capital assets--which today are just sitting there--into cash, and as a result they generate revenue, and that revenue is taxed. As a result, the Treasury gains more money. In fact, we do not have to think of this in theoretical terms anymore. We have a series of events which have shown this to have actually occurred. The last time it was suggested that we cut capital gains rates, it was also suggested those capital gains rates would, again, over a period of time, create a loss to the Treasury. In fact, just the opposite occurred. The estimates were off by $100 billion the last time the capital gains rates were cut. We received $100 billion more of income to the Government than we expected as a result of the capital gains activity during the period from 1997 through 2000. So this year we come forward with a proposal which is a limited capital gains cut, the purpose of which is to energize the economy, create activity, and, as a side bar, it will generate revenues to the Federal Government. It has been scored as a positive generator of revenues to the Federal Government for the first 3 years by the Joint Tax Committee. Unfortunately, when they looked over 10 years, they did not look, I guess, at the historical data because, if they had, they would have seen that historically there is a factual event which shows it continues to generate positive revenues. Instead, they went to some sort of model they used at Joint Tax and came up with the estimate that in 10 years there might be a loss to the Treasury of $10 billion. Remember, this is $10 billion on a $3.5 trillion tax cut. So it is less than 1 percent of the entire event. And even that number is suspect. So the simple fact is, the argument that this is going to lose money for the Treasury cannot be supported, either in the short term, where it will generate cashflow, or in the long term, where we have seen positive cashflow to the Treasury as a result of the capital gains cut that was done in the early 1990s. So that makes no sense. This argument on germaneness also makes no sense. In two places in this bill capital gains are affected. They are affected on the AMT, and they are affected on the estate tax. So clearly capital gains activity is a germane event. But most importantly, we get back to the original point, which is that by cutting capital gains we actually will generate more economic activity in the marketplace, we will give people more cash, more investment assets. They will go out, take risks, create jobs, and thus create prosperity. That should be our goal in the tax cut. Mr. President, I ask unanimous consent that Senator Hagel be added as a cosponsor of this amendment.

Mr. GREGG. Is there someone to speak in opposition?

Mr. GREGG. How much time is remaining and how has it been allocated?

Mr. GREGG

Mr. GREGG. I ask unanimous consent that Senator Allen be added as a cosponsor of my amendment.

Mr. GREGG. Will the Senator from Montana yield so I might add an additional cosponsor?

Mr. GREGG. Mr. President, I yield the floor.

Mr. GREGG. Mr. President, I offer this amendment on behalf of myself, Senators Ensign, Allard, Kyl, and Bunning. This amendment is a capital gains cut over a 2\1/2\-year period. I think there has been a great deal of discussion about the stimulus effect of this tax cut and whether or not this economy, which is beginning to slow, is going to be effectively boosted by the economic activity that will be generated by this tax cut. Clearly, the frontloading of the $85 billion in tax cut assistance into this year is going to be a very positive event. But a capital gains cut has been shown historically to be the most positive unlocker of the economic vitality and energy of the American economy. A capital gains cut frees up the capital of the marketplace that is being locked down because of people concerned about the cost of selling their assets--it frees up that capital to be reinvested in the marketplace and to multiply the economic activity of the country, and to create energy and therefore prosperity in the markets and in our country. This sunsets effective December 31, 2003. The reason this is a 2\1/ 2\-year capital gains rate cut, from 20 percent to 15 percent, is because a 2\1/2\-year rate cut actually generates positive income to the Treasury. For those 2\1/2\ years, money will actually be flowing into the Treasury in a positive way. It is not a tax loser. It is not a revenue loser during that period. In fact, historically, there is very strong evidence--specific evidence--that a capital gains cut is never a revenue loser for the Treasury and, in fact, always generates so much more economic activity than it does in lost revenue that the additional economic activity has historically generated more tax revenues than the revenues that might have been lost as a result of the rate cut. So cutting the capital gains rate is a double winner. It will energize significant economic activity in the marketplace. Therefore, by unlocking assets that have been held down because people have been concerned about having to pay extraordinary taxes to free them up, it will allow people to then take those moneys and reinvest them into the economy, which means you will have more capital out there, more activity, more jobs, and more prosperity. Secondly, it is a winner because it energizes revenue into the Federal Treasury. Therefore, it is positive for us as a Government because we will have those revenues to be used in order to benefit the citizenry through other activity of the Government, whether it happens to be other tax cuts which we can put in place, or ideas such as the one the Senator from New York is trying to pass at this time. So this concept of a capital gains cut makes a great deal of sense, and the reason we have put it under a short timeframe, under a sunsetted provision, is to accomplish it in a way that absolutely guarantees that people are going to take advantage of this opportunity quickly. And that will immediately generate economic activity within the American economy. So I appreciate the support of my fellow Senators, Senators Ensign, Allard, Kyl, and Bunning on this point. I understand we are going to be able to come back to this issue and debate it at some length. At this time, I ask for the yeas and nays on the amendment.

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