Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I thought the yeas and nays had been ordered, but I ask for the yeas and nays.

Mr. KYL. Ten years.

Mr. KYL. Well, Mr. President, might I ask unanimous consent for 15 seconds to make the point that the cost of this is $2.1 billion over 5 years, not the number the chairman indicated.

Mr. KYL. Mr. President, this amendment is very simple. We all know that for individuals, there is a $250,000 exclusion from capital gain when you sell your owner-occupied property. For a couple, it is $500,000. But just like the AMT, it is not indexed for inflation. This amendment indexes that for inflation. That is all it does. Now, to my colleague saying that home values are going down, here are two statistics. I will cite one for the Nation and one for one State. Ten years ago, the median family priced home was $146,000. Today, it is $247,000. That is $100,000. In California, the median price 10 years ago was $186,000, roughly. It was $409,000 in February of this year, an increase of $222,000. The reality is that inflation has caused a tremendous increase in the value of homes, and when they are sold, people are going to have to pay the capital gains tax above $250,000. Could we have order?

Mr. KYL. Mr. President, reserving the right to object, but I will not object, it is my understanding it would be the intention of the majority leader that immediately following the prayer and pledge and the opening of the session, we would begin the votes, that there would not be a long period of leader time taken in speaking by the leaders; is that correct?

Mr. KYL. Mr. President, I appreciate that. We have an estimated cost, but perhaps we should wait until my colleagues get here. I will be happy to discuss that aspect of it as well. With that, if there is no further discussion, then I will be happy to yield the floor. But I certainly hope my colleagues will take a look at this amendment and join me in supporting this amendment for the benefit of homeowners all over the United States of America. Mr. President, I yield the floor.

Mr. KYL. I appreciate that.

Mr. KYL. Will the leader yield for a question?

Mr. KYL. Madam President, I served in the House of Representatives with the Senator from Illinois as well. This isn't the first time he has done something unheard of. I was in the minority in the House of Representatives and on a particular vote--I don't know how many were on the floor, but probably about a dozen altogether--Dick Durbin was in the chair as Presiding Officer. He called the vote--a voice vote. It was supposed to be ``the ayes have it,'' but there were a bunch of Republicans on the floor and, in full-throated voice, we said ``no.'' I think one timid soul said ``aye.'' The Presiding Officer said: ``The nos appear to have it, the nos do have it.'' He called the vote, but not the way his side of the aisle wanted it called. Of course, about 10 minutes later, the appropriate number of people were on the floor and the vote was reversed. So this is not the first time the Senator from Illinois has done something unusual and in a way to move the process along and be fair in it. I always have appreciated that.

Mr. KYL. Mr. President, this amendment is actually very simple, and I think it will be another one of the things that we can do to help promote home ownership and the transfer of property to make it less expensive for people and, frankly, to advance a policy that we should have advanced a long time ago. Most people know under current law they can exclude $250,000--for a married couple it is $500,000--from the capital gains when they sell their principal residence. In other words, even though you may make $250,000 on the value of your home when you sell it, that is excluded from the capital gains that would otherwise have to be paid. You are limited by some requirements. You have to live in the home for 2 years. You have to own and occupy the home in 2 of the previous 5 years from the sale. But you are able to exclude from the capital gains $250,000. The problem is, as we found out with the alternative minimum tax, inflation can drive the value of this exclusion down. So what this amendment does, simply, is index the exclusion for inflation. It is very simple. I cannot imagine it would be controversial. What this would do, of course, is to preserve the value of this deduction that we have all taken advantage of for the future and thereby encourage individuals to purchase a new home. Of course, much of what we are trying to do in this legislation is encourage home ownership but, more than that, encourage people to purchase homes or be able to transact the sale and purchase of a home. There is another point I want to make, and it is important because some people have been caught in an innocent situation with regard to the foreclosures we are concerned about. People do not buy homes, for the most part, to make money. Now, it is true there were speculators in this red hot housing market and, obviously, we are in no mood to bail out speculators. But most people buy a home to raise their family, and they live in the home. This exclusion, of course, requires they live in the home for 2 years out of 5 years before the sale. So we are not talking about the situation where brokers would buy a home and then wait a couple months and flip it and sell it and make a big profit. This is for legitimate folks who bought a home to live in and have their family live in it and then sold it. A large portion of a capital gain on a home is now inflation. That is the hard reality of it. I do not think any of my colleagues believe it should be subject to taxation. Unfortunately, inflation now is around 4 percent. It is growing faster than that. Therefore, for the future I think this is an important amendment as well. So this amendment protects homeowners from unexpected changes in family status, employment, and health. It would help elderly taxpayers who sell their home and choose to move into less expensive housing during their retirement. Frequently, there is a capital gain on their longtime residence, and it would help them avoid having to pay a capital gains tax. It clearly simplifies tax administration and record keeping. It would provide people with a much easier situation for acquiring a home. Mr. President, there are some additional arguments that I could make. Let me cite a couple statistics. Then I am hoping I can perhaps engage some of my colleagues in a discussion to see if there would actually be a need to vote on this amendment or whether we could agree to it. Let me cite a couple statistics. Usually we do not like to get into this much detail, but I think in this case it makes sense. We have seen housing prices now fall from what some call their bubble highs--the value that was driven up so dramatically, and now it has fallen. Alan Greenspan famously called it the froth in the housing market. But housing prices are still much higher than they were in 1997. I think about my State. I think about the Senator from California, her State, and those States where property values appreciated, but a lot of that appreciation is now due to inflation. Here are a couple of interesting stats: The median single-family home price in 1997 was $146,000. A decade later, in 2007, the median home price was $247,200--over $100,000 more in just 10 years. The median home price in California 10 years ago was $186,500, roughly. In February of 2008 it was $409,240--in other words, an increase of $222,750. So, very clearly, there is a huge inflation factor going into the value of these homes, and we are going to have to pay capital gains tax on that above the $250,000 level if we do not index that amount for inflation. So I could go on. I think it is so simple. It is a proposition that I would assume would have support from both sides of the aisle. There is nothing political about this, of course, and it would certainly help a lot of our homeowners at a time when we are searching for ways to do exactly that. So I would pause at this point to see if anyone has any objection or questions about it. I will yield the floor otherwise. But I would love the opportunity to get into a discussion about it and see if there is any concern on anybody's part about it.

Mr. KYL. The following Senators are necessarily absent: the Senator from Kentucky (Mr. Bunning), the Senator from Idaho (Mr. Crapo), the Senator from New Mexico (Mr. Domenici), and the Senator from Arizona (Mr. McCain). Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``yes.''

Mr. KYL. Mr. President, under section 904, I move to waive the Budget Act, and I will ask for the yeas and nays after the presentation by Senator Baucus and myself.

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

Mr. KYL. Mr. President, I ask that amendment No. 4407 be called up. I believe it is at the desk.

Mr. KYL. Mr. President, I ask unanimous consent that the pending amendment be laid aside for the purpose of my offering an amendment.

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

Mr. KYL. The following Senators are necessarily absent: the Senator from Missouri (Mr. Bond) and the Senator from Arizona (Mr. McCain).

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Georgia (Mr. Chambliss) and the Senator from Arizona (Mr. McCain).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Arizona (Mr. McCain).

Mr. KYL

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

Mr. KYL. Mr. President, I ask unanimous consent that I may speak for such time as I might consume.

Mr. KYL

Mr. KYL. Mr. President, in the Senate, we are surrounded by history. The same can be said of the Capitol itself and, of course, of Washington, DC. It is very humbling to think that when we travel around the Nation's Capital, we are following the paths that many great statesmen walked before us. Reflecting on our past can be a source of great pleasure, and it can lead to great insight. Learning about the lives of great Americans--the grand accomplishments and humanizing habits--is both entertaining and educational. Indeed, it is emblazoned in the rotunda in the Library of Congress that ``History is the biography of great men.'' The accomplishments of great Americans give us heights to which to aspire, and their failures give us guidance for our own pursuits. Unfortunately, the pleasure of knowing history escapes many younger Americans. Study after study has shown that our students lack even a rudimentary knowledge of American history. The most recent National Assessment of Education Progress found that elementary, middle, and high school students fall short in terms of what they know about U.S. history. According to the NAEP, the Nation's report card, roughly a third of fourth graders and eighth graders fall below what is deemed a ``basic'' level of proficiency in U.S. history. Our high schoolers fare much worse. More than half of 12th graders fall below the ``basic level.'' The news does not improve as students move on to college. Older students fare poorly as well, even those who attend what are considered our top universities and colleges. A recent survey of college freshmen and seniors revealed that many students are ignorant of what many of us consider basic facts of American history. For instance, only 47 percent of freshmen knew that Yorktown brought the Revolutionary War to an end. Seniors did even worse--only 45 percent knew. Another example: 42 percent of college freshmen could not identify on a multiple-choice test the 25-year period during which Abraham Lincoln was elected President. And another: 15 percent of seniors did not know that the Declaration of Independence denotes the inalienable rights of life, liberty, and the pursuit of happiness. The results are disappointing, to say the least. They reveal that younger Americans have a poor concept of what is necessary for good citizenship. What is the basis for the social compact of Americans? Many younger Americans do not know that our Government was founded on principles and values of innate equality and liberty. We have known about these deficiencies for a long time. Yet very little progress has occurred. This must change if American voters are to be able to evaluate candidates and issues on the basis of American principles and values. It was 13 years ago that the Senate debated the national illiteracy of U.S. history. At that time, the Senate was considering controversial national U.S. history standards. These standards were flawed, neglecting important individuals, ideas, and events for the sake of politically correct subjects. As poor as the standards were, they did respond to what many recognized as a serious and legitimate problem: the Nation's children were not learning U.S. history. As Senator Slade Gorton noted during that debate: The founding truths of this country may have been self- evident to the Founders, but as studies have demonstrated again and again, they are not genetically transmitted. Studies have continued to demonstrate just that. So what to do about it? Most of what we learn about our country we learn in school, but today's curricula does little to interest our students. So says former Secretary of Education William Bennett. In an article in National Review last year, he wrote: It's not our children's fault. . . .Many of our history books are either too tendentious--disseminating a one-sided, politically correct view of history of the greatest nation that ever existed; or, worse, they are boring--providing a watered down, anemic version of a people who have fought wars at home and abroad for the purposes of liberty and equality, conquered deadly diseases, and placed men on the moon. Today's textbooks, say scholars like Bennett, do not relate the drama of our Nation, they are lifeless and boring, and they shy away from conveying the uniqueness and the extraordinary nature of America. Ours is a very special Nation based on what our Founders called ``truths.'' Is it conceivable that our unprecedented freedom, success, and leadership is influenced by these truths and the governmental structures designed to reflect them? You would not know it from some histories. I believe our students would be well served by reading texts such as ``A Patriot's History of the United States.'' I like the way the authors of this book describe their approach to writing a volume of American history. They say: We remain convinced that if the story of America's past is told fairly, the result cannot be anything but a deepened patriotism, a sense of awe at the obstacles overcome, the passion invested, the blood and tears spilled, and the nation that was built. That is the spirit we should convey to our children. And it does not have to be politically correct--just fair. Of course, American history cannot ignore the bad, but it also should not neglect individuals, ideas, and events that inspire. My colleague, Senator Lieberman, had it right in 1995. He said: We do not need sanitized history that only celebrates our triumphs. . . .But we also do not need to give our children a warped and negative view of Western civilization, of American civilization, of the accomplishments, the extraordinary accomplishments and contributions of both. Why is this important today? First, to quote my colleague from Connecticut again: History is important. We learn from it. It tells us who we are, and from our sense of who we are, we help determine who we will be by our actions. It is especially important in an election year, where knowledge of the past can help us evaluate events and candidates of today. It is imperative that in these times Americans understand who we are as Americans. Americans must comprehend the principles and values on which this country was built because we are engaged in a great ideological confrontation with people who are dedicated to destroying us--a confrontation that will be arduous and difficult. The terrorist conflict in which we are engaged is one of values and principles, and future generations cannot act on these values if they are ignorant of American history. When citizens begin to grow ignorant of who they are, one of the first symptoms is a loss of willpower. Learning about our past tells us who we are, and with that knowledge we are equipped to face the challenges and fight the wars we face today and in the future. Indeed, if future generations do not appreciate what we have--why it is so precious, why it needs defending--they will not do the hard things necessary to defend it. In a speech to Harvard University's graduating class of 1978, Alexander Solzhenitsyn confronted the West's weak confrontation of communism. It is probably worth noting here another item in the survey of college students I mentioned earlier. That survey found that about a quarter of freshmen were unable to complete this sentence correctly: ``The major powers at odds with each other in the 'Cold War' were the United States and [blank].'' A quarter of the students could not come up with the name--Soviet Union--and it was a multiple-choice quiz. Solzhenitsyn's speech is particularly instructive even as we face a different ideological threat today. He warned: No weapons, no matter how powerful, can help the West until it overcomes its loss of willpower. Some of the debates we have been having in the Senate raise the question of whether we are there again. Thirty years after Solzhenitsyn, we need to summon willpower for this new conflict. We are engaged in a struggle against a radical ideology whose adherents want to eradicate us. The enemy we are fighting hates us because of our values and our principles, the origins of which are unknown to many young Americans. But a lack of willpower has inhibited our struggle against these global terrorists. Last year, the Senate spent many hours debating whether to withdraw from Iraq before we had completed our mission. We have spent too much time arguing over terrorists' civil rights. Solzhenitsyn, in fact, presaged our current debate in 1978 when he observed: When a government starts an earnest fight against terrorism, public opinion immediately accuses it of violating the terrorist's civil rights. Such accusations are a sign of a lack of will to defeat an implacable enemy. This brings me to a final figure, another Soviet dissident and another witness to the destructive power of dangerous ideologies, like Solzhenitsyn. These are both men who understand the necessity of willpower in the face of evil. A couple of years ago, writing in the journal ``The New Criterion,'' Roger Kimball, in his essay ``After the suicide of the West,'' discussed the insights of the Polish philosopher Leszek Kolakowski, who lived both through the fascism of the Nazis and the communism of the Soviet Empire. He was also active in the Polish Solidarity movement. Kimball paraphrases Kolakowski and illuminates why knowledge of our history is so key for the maintenance of our willpower. Kimball writes: Kolakowski is surely right that our liberal, pluralistic democracy depends for its survival not only on the continued existence of its institutions, but also ``on belief in their value and a widespread will to defend them.'' One can surely question whether the next generation of Americans really believes in the value of our institutions. After all, what is it they have to base their judgment on when they know very little about the institutions themselves? A few years ago, in 2003, the Library of Congress recognized Kolakowski for his intellectual achievements. After receiving his award, he made a speech in which he passionately explained why history is so important and why it is an important matter for discussion. He said: Historical knowledge is crucial to each of us: to schoolchildren and students, to young and to old. We must absorb history as our own, with all its horrors and monstrosities, as well as its beauty and splendor, its cruelties and persecutions, as well as all the magnificent works of the human mind and hand; we must do this if we are to know our proper place in the universe, to know who we are and how we should act. And he goes on: One might ask what is the point of repeating these banalities? The answer is that it is important to keep on repeating them again and again, because these are banalities we often find it convenient to forget; and if we forget them and they fall into oblivion, we will be condemning our culture, that is to say ourselves, to ultimate and irrevocable ruin. Studies of our young people's knowledge of history confirm the wisdom of this observation and raise questions about the risk to our history of falling into oblivion. ``Thankfully, historical amnesia still has a cure,'' Secretary Bill Bennett reminds us. ``Let us begin the regimen now.'' We need a cure, because as long as we suffer from this amnesia, we will be fighting two wars: a war against our enemies who wish to do us harm and a war against our will, the loss of which will let them. The fate of future generations depends on how we answer the enemy's challenge today. To do that, we must clearly understand the values and principles that make us who we are. The truth is no one will fight long, either literally or figuratively, for values and principles he doesn't understand. Americans must know what is worth fighting for, must maintain the willpower to do it, and must apply the lessons of our past to our current threats. So we must find a way to help students understand the values and the principles upon which our Nation is founded. The solution begins at a fundamental level of learning and education. Our students need textbooks that capture the life of history--Bill Bennett suggests a national contest for better history textbooks--and draw young people to the study of our Nation's story. The solution, however, must go beyond changes to curriculum. As a nation, we must learn to embrace our history again and discard the politically correct, relativistic version of our history that has persisted for far too long. We must act now to preserve for future generations what we know to be so important. Let us get about the job. Mr. President, I note the absence of a quorum.

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Arizona (Mr. McCain).

Mr. KYL. The following Senator is necessarily absent: the Senator from Arizona (Mr. McCain).

Mr. KYL. The following Senator is necessarily absent: the Senator from Arizona (Mr. McCain).