Earl Pomeroy

Mr. POMEROY

Mr. POMEROY. Madam Chair, I rise today in support of H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009. I would like to thank Chairman Peterson of the Agriculture Committee for his leadership and work to produce legislation that regulates the futures markets and brings transparency to the dark corners of the financial markets. I would also like to thank Chairman Frank of the Financial Services Committee for his leadership and efforts in crafting the greater overall regulatory package. Madam Chair, the unchecked greed and excesses of Wall Street have brought our economy to its knees, placed hardship on millions of American families and dimmed the prospect of leaving behind a better life for our children. The volatility in the oil prices and the crash of the financial markets were fueled by outrageous short term profits at the expense of our shared long term prosperity. These markets resemble the Wild West, and are void of transparency or effective regulation. Today, Congress has before it a commonsense reform package that will assure the American people that what happened to create the financial meltdown will not happen again. H.R. 4173 would place limits on speculators, preventing them from dominating the markets, and also bring transparency to the markets. The bill will also give regulators the information they need to properly police the markets and the authority to identify and protect against systemic risk. H.R. 4173 protects the economy from irresponsible too-big-to-fail companies like AIG, by creating a responsible mechanism to dissolve them without putting the American tax payer on the hook. It is essential that consumers, farmers, and businesses have access to a reliable source of credit and financing that does not dry up because Wall Street tries to gamble away our future. Madam Chair, the landmark Wall Street Reform and Consumer Protection Act of 2009 puts the interests of consumers, small business and the millions of Americans dependent on their 401Ks for retirement, first. I urge my colleagues to support H.R. 4173.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I yield myself 3 minutes. I want to thank the Speaker, Leader Hoyer, and Chairman Rangel for bringing this bill to the floor today. The purpose of this bill is very straightforward: establish clarity and certainty in the Tax Code for the estate tax while exempting 99.7 percent of the estates in this country from this estate tax altogether. The estate tax has changed 10 times in the last 11 years. Now, this has been a bonanza for the attorneys, the accountants, the planners, but it has been very unfortunate for the American people trying to make reasonable plans for their estates. If recent history is bad, the next 2 years become completely absurd when it comes to the estate tax thanks to a law passed by Congress in 2001, estate tax repeal in 2010 replaced with a new capital gains tax that will impact many more farmers. In fact, for the 6,000 estates estimated to benefit from the tax change next year, 71,000 will find themselves with new tax obligations, this capital gains tax. Additionally, come 2011 the repeal goes away. In this Tax Code they repeal the repeal and we're back at a $1 million level for estates, $2 million joint, a 55 percent rate, the very rate it was in 2001. There's going to be a lot of talk on the other side about how this law should go forward for the benefit of family farms. Let me tell you, the capital gains tax they are proposing for family farms is a catastrophe. Let's say Grandma buys a farm at $100 an acre. It's now worth $2,000 an acre. She deeds it to you. She passes. You acquire the property. You go to sell the farm. You're going to pay capital gains tax under present law on all appreciated value over the $100-an-acre initial acquisition price. That's because under present law carryover basis is substituted for what we have under the existing framework, statutory basis. Here's what the Farm Bureau said about carryover basis when it was considered some time ago, in 1979: carryover basis fosters an insidious bias against farmers and ranchers. And that's precisely what they would create. Look at this. No estates with capital gains tax burden and 71,000 suddenly with capital gains burden under the law if we allow it to go into effect next year. Another byproduct of this bill is to establish certainty once and for all on what the estate tax level is.

Mr. POMEROY. I yield myself an additional 30 seconds. The 2009 level represents an exclusion from estate tax that is 75 percent higher than last year alone, where it went from $2 million up to $3.5 million. This chart shows who pays the tax and who doesn't under the 2009 law. You may not be able to see this little sliver. It's because it represents .25 of 1 percent. The estate tax goes away for 99.75 percent. That is almost perfection, about as close as this body is ever going to get. That's why we should vote for this bill and move it forward. Mr. Speaker, I reserve the balance of my time.

Mr. POMEROY. Mr. Speaker, I just observe that the Tax Policy Center estimates that 100 farms or small businesses are estimated to be impacted by the estate tax under the 2009 levels across the entire country, and CRS has estimated that one-half of 1 percent of those may be in a position of having to liquidate something. I yield 2 minutes to the gentleman from New Jersey (Mr. Pascrell).

Mr. POMEROY. I yield the gentleman an additional 30 seconds.

Mr. POMEROY. Mr. Speaker, I would just observe that the estate tax level last year was $2 million, this year $3.5 million, a 75 percent increase in the exclusion. Now, that is quite an index by anybody's measure. I yield 2 minutes to the gentleman from Massachusetts (Mr. Neal), a member of the Ways and Means Committee.

Mr. POMEROY. I yield the gentleman an additional 30 seconds.

Mr. POMEROY. The bill on the floor would establish the capital gains exclusion at $7 million for a couple. I don't think we've ignored the small guys one bit with this legislation. I yield Mr. Blumenauer of Oregon 2 minutes.

Mr. POMEROY. I yield the gentleman an additional 30 seconds.

Mr. POMEROY. Mr. Speaker, I would reference the earlier notation in the Farm Bureau that carry-over basis establishing this capital gains exposure falls particularly hard on family farms and ranchers. With that, I yield my friend and colleague, Shelley Berkley from Las Vegas, 2 minutes.

Mr. POMEROY. I yield my friend and Ways and Means colleague from North Carolina (Mr. Etheridge) 2 minutes. (Mr. ETHERIDGE asked and was given permission to revise and extend his remarks.)

Mr. POMEROY. I yield the gentleman 30 additional seconds.

Mr. POMEROY. Mr. Speaker, I am pleased to yield 1 minute to our distinguished majority leader, Mr. Hoyer.

Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, let me begin by congratulating my friend, Mr. Brady. He has been entrusted to manage time on the bill. He's done a great job of it. For many years I've had a running debate with Mr. Hulshof who's no longer with us as he did not run for reelection last year. I think Mr. Brady has more than picked up the banner from Mr. Hulshof, and I commend him for a good discussion. I do believe that he begins with a curious point. He attacks the Democrats for budget deficits while advocating a bill that would cost twice as much as the bill on the floor. Repeal of the estate tax would lose roughly half a trillion dollars over the next decade. That is well over double the cost of the bill before the House. Another thing about that bill that you did not hear one speck of discussion on from the Republicans in the debate today is this capital gains tax issue. Let me briefly recount it. Right now, when someone inherits property under an estate, if they go on to sell it, the capital gains is on the value of the asset at the time it was inherited. If we don't act, the law that is on the books brings a different formula--it's called carryover basis. When you inherit property and go to sell it, you pay capital gains on everything over the value of the initial acquisition--the price grandma paid when she got the farm or what have you. The Farm Bureau has called this insidious relative to its impact on farms and small businesses. We make that problem go away, and it needs to go away. I don't think it's right, responding to another point made by my friend, Mr. Brady, to blame Mr. Clinton for the estate tax. President Bush had 8 years of governing after Mr. Clinton. Six of those years Republicans controlled this Chamber. If they needed to do something, they certainly had time to do it. But what they left us is a mess that now needs to be attended to; because to have the estate tax repealed next year, have a capital gains tax come in instead of the estate tax, a capital gains tax that will hit 71,000 taxpayers. While the 6,000 get relief on the estate tax, 71,000 have new capital gains exposure and then have it all go back to the 2002 levels in the year after that; $1 million, $2 million joint, 55 percent rate. It makes no sense. The bill on the floor achieves almost unanimous relief from the estate tax while making the rules very clear: 99.25 percent get excluded from the estate tax. Those estates, joint estates, over $7 million would continue to have the exposure--although they would obviously have the wherewithal to apply to that. The rate 45 percent only applies to assets over the $7 million. So in a taxable estate there is zero tax on the first $7 million, 45 percent over that. On average, that means you have got about an 18 percent rate, not nearly half as had been described by the other side. In closing, I have a quote from a Washington Post editorial talking about this situation in today's paper. It says, ``In one of those fiscal time bombs left from the Bush administration, the estate tax, having gradually dwindled, is set to be eliminated entirely next year-- only to spring back to life, full-force, in 2011. Unless something is done, 2010 will be the year to throw Mama from the train, tax-free. This would be terrible policy, not to mention unkind to Mama.'' So I believe that we need to act. The bill before us is a reasonable resolution of this issue. I urge its adoption. I reserve the balance of my time.

Mr. POMEROY. I yield back the balance of my time.

Mr. POMEROY. Mr. Speaker, I make a point of order under clause 10 of rule XXI. The motion increases the deficit for purposes of that rule.

Mr. POMEROY. Mr. Speaker, I move to table the appeal of the ruling of the Chair.

Mr. POMEROY. Mr. Speaker, I rise in opposition to the motion.

Mr. POMEROY. I commence my comments by offering to yield to the gentleman if he would like to discuss the capital gains tax implications of the motion to recommit.

Mr. POMEROY. Reclaiming my time, that wasn't much of an answer, so let me make it a little more clear. The bill would impose a new capital gains tax obligation. Six thousand people would get estate tax relief if full repeal goes into effect; 71,000 have a new capital gains tax laid upon them because carryover basis is established instead of the step-up basis. In other words, if you inherit Grandma's farm, if Grandma paid $100 an acre for it and it's now worth $2,000 an acre, and you go to sell it, you have capital gains on all appreciated value over $100. That's not how the law works now. How the law works now, if you have property worth $2,000 an acre, that's your basis. There's no capital gains if you would sell it for $2,000 an acre. The Farm Bureau has said this falls particularly insidiously on farms and small businesses, the very people they claim to be helping. The motion to recommit, unfortunately, brings what has been a pretty respectable debate into, I think, some of the same overblown rhetoric that has plagued this issue in the past. The estate tax has changed 10 times in 11 years. Now, isn't it time we provide some certainty to the American people, not just more of the uncertainty that they offer? What's more, it's not just certainty. We make the estate tax go away for 99.75 percent of the people in this country, 99.75 percent. But that's not good enough for them. They'll hold out for that last few tenths of a percent even if it means laying a capital gains tax obligation on 71,000 families to achieve that end. Mr. Speaker, I yield the balance of my time to the gentleman from Florida (Mr. Boyd).

Mr. POMEROY

Mr. POMEROY. Madam Speaker, on October 13, 2009, due to flight delays, I missed rollcall votes Nos. 772, 773, and 774. Had I been present, I would have voted in the following manner: rollcall No: 772-- ``yea''; rollcall No: 773--``yea''; and rollcall No. 774--``yea.''

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise today to express concern with certain provisions of H.R. 3371, the Airline Safety and Pilot Training Improvement Act of 2009. While I strongly support the goal of the bill to increase airline safety and improve pilot training, I am concerned about changing current rules to require an airline pilot to hold an Airline Transport Pilot (ATP) certificate, which necessitates a minimum of 1,500 flight hours. During a hearing in September Tim Brady, dean of Embry-Riddle Aeronautical University's College of Aviation, testified that these added requirements could increase the cost of pilot training fivefold from $40,000 to $200,000. I am concerned that these increased costs could encourage pilots to seek less costly training alternatives and potentially be counter to the bills intended goal, of increasing safety. By dramatically increasing the costs of training we will drive our most qualified potential pilots out of accredited flight schools such as the John D. Odegard School of Aerospace Sciences at the University of North Dakota that have produced exceptional pilots for decades. Graduates of these programs receive high quality flight instruction that is much more valuable than a pilot who might just be racking up straight and level flight time that has no increased educational or safety benefits. The focus on total flight hours rather than the quality of those hours will not provide the increased safety and pilot quality that is the goal of this legislation. It could in practice have the opposite effect, by driving students to undertake low value flying at the expense of high quality directed flight training. I believe that as this legislation moves forward some consideration must be given to Collegiate Aviation Programs that have been accredited by the Aviation Accreditation Board International (AABI). This will help to increase the focus of these requirements on quality of training rather than quantity of flight hours. While I will be voting in favor of this legislation in order to move forward the important process of increasing the safety of commercial aviation, I do so with reservations. Before this legislation becomes law I believe that it is vital that the bill be modified to recognize the tremendous benefits that our nation's accredited flight schools provide.

Mr. POMEROY

Mr. POMEROY. Madam Speaker, I would like to recognize the 20th Air Force as we prepare to celebrate the 50th anniversary of the nation's nuclear Intercontinental Ballistic Missile (ICBM) force. I have had the privilege of working with the Airmen who maintain this critical piece of our nuclear triad throughout my career in Congress and have seen first hand the commitment and dedication of all of those involved in ensuring that this crucial capability remains ready to respond on a moments notice. The history of our ICBM force began in 1954 with the establishment of the Western Development Division. The Western Development Division was responsible for the development of the first generation of underground ICBM's, the Titans, and the above-ground Atlas. This development lead to the initial alert of a nuclear warhead equipped ICBM, an Atlas D, at Vandenberg Air Force Base, California, in October of 1959. Soon after, work began on the Minuteman I missile, a second generation ICBM that would be on alert by the time of the Cuban Missile Crisis in 1962. Within three years the Air Force had replaced all of its first generation ICBM's with Minuteman I and a newer more advanced version, the Minuteman II. The Minuteman II would remain in service for the next 30 years. By the 1970's the Air Force had developed the Minuteman III with the first squadron of Minuteman III missiles at Minot Air Force Base, North Dakota reaching operational status by the end of December 1970. With the threat of the Soviet Union developing and deploying an increasing number of multi-warhead ICBM's the Air Force began to develop a third generation ICBM that would become the Peacekeeper. The Peacekeeper would ultimately be deployed in 1987 at F.E. Warren Air Force Base in Wyoming. For the past 50 years, the ICBM fleet has provided an important nuclear deterrent, which at its peak included more than 1,200 missiles. Today the Air Force has 450 Minuteman III ICBM's on alert in North Dakota, Montana, Wyoming, Colorado and Nebraska. As the Air Force activates Air Force Global Strike Command, a brand-new command committed solely to the nuclear deterrence mission, the 20th Air Force and the ICBM mission will transfer from Air Force Space Command to Air Force Global Strike Command. Madam Speaker, the citizens of the United States have been lucky to have the Airmen of the 20th Air Force diligently working to operate and secure this vital component of our nation's security for the past 50 years. These Airmen have maintained a constant state of vigilance 24 hours a day, seven days a week, performing vital operations, maintenance and security missions across the missile fields in areas that to the untrained eye look just like any other place in America. This is a mission that demands a constant level of alert to respond in an instant should it ever become necessary to employ our arsenal. This constant vigilance has served America so well in the past is poised to continue well into the future. I know my fellow Members of the House of Representatives will join me in congratulating the Air Force's 50 years of commitment to the ICBM mission with the highest standards of performance.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise in support of H.R. 3663, bipartisan legislation that I introduced with Congressmen Zach Space (D-OH) and Lee Terry (R-NE) which will delay implementation of flawed accreditation requirements imposed on America's pharmacies who offer service to Medicare beneficiaries. Starting tomorrow pharmacies will be required to meet new accreditation requirements in order to participate in Medicare's Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS) program. This program ensures that seniors covered under Medicare have access to critical medical supplies and Part B medications. I have heard first hand from pharmacists across my state of North Dakota about the negative impact saddling these new costly and burdensome accreditation requirements will have on seniors' access to supplies and medications that pharmacists provide, especially diabetes testing strips. These local pharmacists have been faced with the tough choice of spending thousands of dollars they do not have to fulfill these accreditation requirements or leave seniors will no affordable access to the critical supplies and medications they need. Both the House and Senate have included in their health care reform proposals important changes to these flawed regulations that will protect seniors' access to their medications and supplies. However, we have not yet been able to complete consideration of this legislation before the October 1st effective date. By enacting H.R. 3663, which provides a three month extension of the DMEPOS accreditation requirement date for pharmacies, we will be providing Congress the additional time it needs to reform these important rules. Doing so will enable seniors to continue receiving valuable health care products at community pharmacies without disruption. H.R. 3663 is important legislation that will protect America's Medicare beneficiaries. Leadership did the right thing bringing this important legislation to the House floor and I urge my colleagues to support it.

Mr. POMEROY

Mr. POMEROY. Madam Chair, I rise today in support of H.R. 3221, important legislation that will provide critical resources for community colleges and expand access to higher education for our nation's students. While I have some remaining concerns with this bill that need to be addressed before enactment, I am voting to move this measure forward in the process because it strengthens our student aid programs while decreasing our federal deficit by $10 billion. H.R. 3221 provides an historic investment in Pell Grants and ensures that interest rates remain low on need-based federal student loans. I am a strong supporter of making college more accessible for everyone, and am pleased that the bill invests $90 million in North Dakota for the Pell Grant program. This increased level of funding means that 17,143 student will be eligible for a Pell Grant award in the 2010-2011 academic year, an increase of 37 percent over the 12,467 North Dakota students eligible in the 2007-2008 school year. And by 2019, the number of students receiving Pell Grants will nearly double from 2007-2008 levels to 21,410. Under this legislation, the maximum Pell Grant scholarship will ultimately reach $6,900 by 2019, representing over a 45 percent increase in the maximum Pell Grant Award over the next 10 years from today's maximum Pell Grant level of $4,731. This is good news for students. However, there are a few issues of remaining concern with H.R. 3221. First, I strongly believe that student loans should be affordable. I have heard concerns from several North Dakota institutions that under the new Direct Perkins loans program, students are required to pay interest accrued on Direct Perkins loans while they are in school. The final proposal of this bill must weigh these concerns with the number of new students who will enter the Perkins loan program as a result of increasing the loan authority of this program. Second, it is important to ensure that rural and rural-serving community colleges receive their fair share of funding from the new Higher Education Federal Assistance for Community College Modernization and Construction program. Rural and rural-serving colleges face unique challenges in providing critical educational opportunities for our nation's rural students, and should receive an appropriate portion of the funding provided under this program. I also believe that the Veterans Resource Officer Grant program should be modified to better ensure that rural and small schools have access to this program. Third, as the only state-owned bank in the country, the Bank of North Dakota should continue to be allowed to provide student loans. The Bank of North Dakota currently serves about 75 percent of North Dakota students and has been a wonderful partner for students and their families. The Bank of North Dakota's service should not be disrupted. This is why I led an amendment that was made in order that ensures that non-profit entities like the Bank of North Dakota can continue to provide valuable student borrower services, including delinquency prevention, default aversion, and loan counseling. In addition, I appreciate Chairman Miller's commitment on the floor to work with me in conference to ensure that this important institution will continue to have a role in federal student lending programs. Having received the Chairman's assurances to work together on these issues in conference, I am going to vote to move this bill forward. I hope by furthering this bill, we can build on its historic investments in the Pell Grant program and strengthen its provisions for North Dakota schools and students.