Tax Revision Act of 2005

Mr. President, it is my understanding that I have 15 minutes, and if I need 5 minutes off of the leader's time, I could have it. Would you please inform me when my 15 minutes are up, and if I need a little bit more time, without asking unanimous consent at that time, to take it off of leader time. Does the Chair understand what I am talking about?

I am going to support the trifecta bill. I want to speak about the bill and around the bill and about the environment that has taken place over the last week.

On a preliminary note, I would like to talk a little bit about the nickname of this bill. Its authors in the House and Senate came up with that nickname. They call it the ``trifecta'' bill.

Many folks know I'm a bit of a frugal person. You'd definitely hear it from my staff. Some might say I am cheap. I would say frugal. Frugal folks tend to be drudges and a bit predictable, but, at the end of the day, frugality tends to mean that you have your house to go home to and a little bit of savings in the bank.

You don't see a lot of frugal folks that take big speculative gambles.

So, when I saw this term ``Trifecta,'' not being much of a gambler, I didn't know what it meant. I asked my staff about it. They explained that it was a horse or dog racing term. It refers to a compound bet. That is, the bettor places a bet on three horses. The bettor indicates which horses will win, place, and show.

I asked my staff about the typical odds on a trifecta in a horse race. They picked the 2006 Kentucky Derby. According to the record, Barbaro was favored to win by 6 to 1 odds, Bluegrass Cat was 30 to 1 odds to win, and Steppenwolfer was 30 to 1 odds to win.

The $2 Trifecta paid $11,418 which is a pay-out of $5,709 per every dollar. Big pay-off. Long odds. So does our trifecta have those kind of odds? The answer is no, but it does require 60 Senators to payoff.

Being a frugal person and a cautious legislator, you can see how I might have problems with trifecta legislative strategy.

I guess I would look at this exercise as that kind of longshot. With Senate votes as horses, let's take a look. At the last race, on a motion to proceed to the House death tax repeal bill, 57 horses came in. So, the bet was to find 3 horses among the horses that ran the other direction and turn them around. As a farmer with some experience with horses, let me say, once they're out of the barn and running around, it's hard to turn them around. Senators can be similar, especially when a vote is highly political.

It looks to me like we may not turn around many of the horses today. I hope I am wrong. If I am right, the bottom line is that we bet on the wrong horses. Maybe we should've taken a bet that was more likely to pay-off.

Now, I want to turn to the substance of the bill before us. What's this trifecta bill all about? There are really three key pieces. The first piece is permanent death tax relief. The second piece deals with expiring tax provisions and some other items, known as the ``trailer bill.''

The last piece is a Federal minimum wage increase.

I am not going to describe the minimum wage piece. It is not in my committee, the Finance Committee's, jurisdiction. It was an add-on by the House. I really have no history with it and feel no reason to explain it, support it, criticize it, or defend it. I will leave that to others.

From a personal standpoint, I have supported minimum wage increases in the past. I'll continue to support them as long as the increase doesn't raise teen unemployment and doesn't hurt small business.

I am going to focus on the first two pieces of the trifecta. That is, the death tax relief and the trailer bill. Those matters are squarely within the Finance Committee's jurisdiction. I have some history with those issues. I care a great deal about the policy in both of those areas. As chairman, I feel a lot of responsibility for the tax policy in these areas.

Let's take a look at death tax relief first. I support repeal. I take it from the vote we had on the motion to proceed to the death tax repeal bill that a majority of the Senate also supports repeal or some sort of significant relief.

I want to make it clear to the people listening, who may not understand how the Senate works, why we need 60 votes. A vast majority of this Senate supports repeal of the death tax, but it won't happen because of the 60-vote requirement.

In this case, I did some checking around on the votes after the cloture motion failed. It became apparent to me, after conversations with members, staff, and interested parties that the bar for getting the 60 votes was pretty high. At first, the impression was kind of fuzzy, but it became clear as the weeks moved on. Several barriers existed for the Republican leadership and Senator Kyl. One, the fact that we were then so close to an election had politicized the issue. The Democratic leadership were becoming invested in blocking a Republican accomplishment. They made it clear to Democratic Senators who might otherwise be willing to work towards good policy that those Senators would face the wrath of the Democratic Caucus.

Moreover, the Democratic leadership exploited the policy positions that Senator Kyl and others considered priorities. Even though Republicans moved, the movement never seemed to be enough. Also, Democrats were focusing on points that they knew the Republican negotiators could not be flexible. It was a troublesome negotiation. Unfortunately, members and staff often heard what they wanted to hear. This pattern only got worse as time went on.

While these negotiations were going on, there was a parallel track developing. The Senate Republican leadership came up with a different plan. The plan was to add the death tax compromise to the pension conference. I counseled against it because I thought the mix of conferees would not be agreeable to it and it would be an awkward position to a broadly bipartisan

bill. Nevertheless, I agreed to consider this maneuver if the proponents could show me a path to 60 votes.

The proponents went against my counsel and did not deliver on the one thing I asked them to do: show me the votes. That plan didn't work because, as I predicted, a majority of the conferees were not supportive of it, and I was one of the conferees who would have supported it.

After 4 months of tough negotiations, none of the senior conferees, all of whom were invested in the pension policy, were keen to the idea either. And here, I am talking about both House and Senate conferees, Republicans and Democrats. The mission was launched and quickly aborted.

Along came plan B. Plan B was the result of my ``wily'' counterpart-- you know, the guy who, according to House colleagues and staff, supposedly ``snookers'' the Senate year in and year out in conferences. My House counterpart, who, like the rest of the conferees, was never on board with the pension plan, raised this plan B with me. Plan B was the idea of combining some new death tax compromise with the trailer bill.

I counseled against this plan. It was clear that pursuing this plan would cause problems with completing the pension conference. Chairman Enzi backed me in this view. Once again, I asked the proponents to show me the path to 60 votes. Once again, they didn't show the path, and then, as you know, they went ahead over my objection.

So we are where we are right now at almost 9 o'clock on Thursday. The process was lousy and offensive, but the substance is good. I will support the bill's death tax relief proposal. I wish this death tax policy would become law. If that does not happen, then we have to think about the next step. We have to keep our eye on the ball. We should be aiming for good death tax policy and for the 60 votes on how to get there.

We have all learned a few things in this painful process.

One, death tax is a unique kind of issue. It is not like other tax issues. It is a moral issue to folks on both sides of the aisle. To be politically palatable, the death tax proposal needs to be either in isolation or proportionate if combined with other tax proposals. Small so-called sweeteners don't get us over the goal line. Holding up popular must-do current law tax provisions also doesn't get us there. Just look at the vote counts in the House on the various bills. Those vote counts show what I am talking about.

So right now, we are stuck. The Democratic leadership is holding back Members from voting their consciences and their State interests. That resistance is there now, and it is very strong. It won't last past the political season. The Democratic caucus will be accountable. If the trifecta bill fails, we will be back, but we won't get anywhere until we are out of the political season. That is the ugly political fact I have to convey to Senators Kyl, Lincoln, and others who have worked in a bipartisan way to get this done.

I took a look in the Tax Code and the recent history of the death tax relief. In the past 20 years, comprehensive death tax relief occurred two times: in 1997, in a bipartisan tax relief bill, and in 2001 on another bipartisan tax relief bill. Both were produced by Finance Committee members with a bipartisan working group and the involvement of the chairman. My judgment is that if the trifecta bill fails, this is the way we are going to have to go again.

Now I turn to the other part of the trifecta, the so-called trailer bill. In this Congress, I have fought long and hard for extension of tax provisions that expired at the end of last year, now 8 months into the expired year. The extension provisions were included in the tax reconciliation bill which passed the Senate in the spring.

Let's consider how we got here on extenders and the trailer package.

Extenders were part of a package deal that I argued for in the Budget Committee. When the Budget Committee met in February and March of last year, I asked for $90 billion. The $90 billion was meant to cover expiring provisions, including capital gains and dividend rates and the hold harmless for the alternative minimum tax. Chairman Gregg agreed to a reconciliation instruction of $70 billion. In committee and on the floor, I defended the reconciliation instruction as part of this plan. Including extenders was a key part of the strategy. It came up a lot in debate. It was a factor in holding the instruction on the floor and in conference.

When the reconciliation bill was marked up in the Finance Committee, the extenders were part of the same package deal. The inclusion of 2 years of extenders on the floor helped us hold the Finance Committee bill together.

When we went to conference, the House brought a year of extenders, no AMT hold harmless, and 2 years of capital gains and dividends. Although we could not get 2 years of capital gains and dividends through this Senate the first time, I knew it was important to the Republican leadership, especially Senator Kyl, and I would even put myself in that category. We could not fit all the pieces together because, in part, the House would not take our anti-tax shelter measures and loophole closers. Something had to drop. That something was what we call the extenders.

Now, because the extenders were part of the plan and we were also into the expired year, I insisted on assurances from Chairman Thomas of the House Ways and Means Committee and also from the bicameral leadership. At that time, I released a statement stating that we would be putting the extenders in the pension conference report. This statement was based on assurances that I had from leaders in both the House and the Senate.

I asked for those assurances to do the right thing from a policy perspective and also a political perspective. From the policy perspective, the taxpayers should be able to rely on the tax legislative process. This should be especially true with respect to the current law expiring provisions that enjoy overwhelming bipartisan support. From a political perspective, I asked for those assurances to defend Republican Senators who would be attacked when the reconciliation conference agreement was announced. Indeed, those attacks did come, and I referred to the assurances in defending the Senators who were under attack.

In addition, several Republican Senators asked me to make sure there was a glidepath to those extenders. For instance, Senator Hutchison raised the State sales tax deductibility extender in a Senate Republican leadership meeting. Republican high-tech coalition members asked for similar assurances.

My interest has always been to accomplish what is possible, not taking chances with widely applicable tax relief measures on which millions of taxpayers are relying. For example, over 12 million Americans benefit from the State sales tax. We have charts up. I am not going to take time to refer to them much, so I hope the audience will look and study them. Over 12 million Americans benefit from the State sales tax deduction. Over 3 million teachers benefit from tax deductions for education expenses. Teachers have prepared for the upcoming school year, and they don't know whether supplies they buy out of their own pocket will be deductible. Over 3.5 million families benefit from the college tuition deduction.

I thank the Chair. I will use a little bit of time off the leader's time.

A week ago, I said some colleagues want to engage in a riverboat gamble involving these popular tax relief provisions by including it with the death tax. They call Chairman Thomas's bill the trifecta bill. I will treat the proponents with more respect than they have treated this chairman and the institution of the Finance Committee. I will support this bill.

The burden is on the proponents of this gambit to produce. But to do that, they are going to have to deal with the realities of the votes in the Senate. People want and should expect that Congress will provide certainty in estate planning. My colleagues have placed all the chips on the table. It is on them to make sure it is a winning hand. If the trifecta bill fails, they need to answer to those millions of Americans who relied on our promise and good will as legislators.

I also have a message for the Democratic leadership. While I am frustrated with my leadership, let me say

that it should also be clear that the Democratic leadership has been more eager to produce press releases than results. The Democratic leadership has been actively and aggressively undermining efforts to reach a deal. This has only served to deny relief from the death tax for America's small business and family farmers. This obstruction has also forced these farmers and small business owners to have to live with continued uncertainty of the current death tax structure. That is not right. The people's business should be done.

The time has come for the Democratic leadership to stop playing politics with family farmers and small business folks and let responsible Democrats work on a fair compromise. It is wrong that the Democratic leadership is preventing Senators from voting their consciences in this manner. Senators should be allowed to put the interests of their constituents first instead of the priorities of the Democratic leadership.

When you cut through all the finger-pointing and the press releases, both sides are to blame that we can't get these extenders done. Both death tax and expiring provisions should be processed in a bipartisan, constructive way. We should be realistic and seek to accomplish the possible. Let's do the people's business.

Mr. President, I will support the bill before us, but should it fail, I will use my best efforts to do what needs to be done. I will stick by my word to the American people and ask those who give their word to keep it with me. Either result would be right for the people. To do neither and not act on extenders would be the wrong thing for the people. That is why we are here to serve the people. We are here to govern.

Mr. President, reserving the right to object, I move that we amend H.R. 4388--it is the extenders, so that everybody knows what I am talking about--with the text of the extenders amendment I offered earlier to the defense bill. In effect, what I am saying is, we are going to try to have a decision made on the protection act. Following the disposition of that, we would go to the pension bill, and my request is that following that we would pass the extenders.

Reserving the right to object, Mr. President. I understand the leader. He told me that earlier today. I told him I would do this. I hope that when we come back, following the completion of the Defense appropriations bill, this will be one of the first things we work on. This is an extremely important piece of legislation. I am disappointed that we were not able to complete this at the conference that was completed a week or so ago. I have no objection to the majority leader's request.

Mr. President, I will be happy to yield 10 minutes to the distinguished minority whip.

Mr. President, I yield 5 minutes to the distinguished Senator from North Dakota, the ranking member of the Budget Committee.

Mr. President, I would say through the chairman to my distinguished friend, that is a net estate; it is not 7 million worth of property.

First of all, I would like to extend my compliments to Charles Grassley, the senior Senator from Iowa, a gentleman farmer who we are so fortunate to have in the Senate. He, in his gentlemanly way, indicated in his speech tonight how terribly upset he was for what happened a week ago. We had this all worked out. The conference was completed. The extenders would have been done. The pension bill would have been passed.

Senator Baucus, who has been a partner with Senator Grassley for a long time, is not here tonight. As we speak, he is in Dover, DE, meeting his brother and his nephew, Philip. Philip is in a casket, having arrived from Iraq where he was killed.

Max Baucus would like to be here, but we are going to have printed in the Record what Max Baucus said:

Political games congressional leaders played with this bill

are not the way to get the job done. I hope that cooler heads

can

prevail and we can work together for sensible reform in the

future.

My distinguished friend, the majority leader, has placed a name on this legislation called the Family Prosperity Act. I suggest that it should be called the Prosperous Family Act. This legislation would only help the prosperous--only the prosperous. This should be called the Prosperous Family Act.

Sunday's Washington Post had a quote from my friend--and I know a friend of the distinguished Presiding Officer--Tennessee Congressman Zach Wamp. In this column he is quoted about why Democrats don't support the bill we are about to vote on. Congressman Wamp said: I know why Democrats are mad. We've outfoxed them.

Again:

I know why you're mad. You have seen us really outfox you.

It is not us, the Democrats, they tried to outfox; it is the American people. There is just one problem with this Republican legislation, this Republican shell game, this trick--the American people will not fall for it. As my colleague, Senator Durbin, said: This is a bet, and a bad one. The American people simply are too smart to be outfoxed. Americans are too smart to be tricked into cutting the wages of 136,000 Nevadans, and more than a million, by far, people in Oregon, Washington, Montana, California, Nevada. Those States, under this so- called Family Prosperity Act, would give less to those families who are struggling, struggling every day. In Nevada there are 136,000 of them. They work for minimum wage. If they work 40 hours a week, 52 weeks a year, they make $10,700, plus some tips in those seven States. But not under this bill. In seven States, the poorest of the poor would get a pay cut. They would get a pay cut so that 8,100 multimillionaires can enjoy almost $800 billion in tax breaks.

Americans are too smart to be tricked into forgoing middle-class tax revenue so America can borrow hundreds of billions of dollars to give tax breaks to the wealthy few. Americans are too smart to accept any more debt and deception from this do-nothing Congress.

Here we are at 9:20, finishing this work session. The Defense bill isn't complete. The pension bill isn't complete. I hope it will be within an hour and a half or so. Middle-class tax relief isn't complete, the so-called extenders. Minimum wage has not been made possible for almost 10 years. Why? Because the majority doesn't believe in it. They don't believe in having a decent standard of living for the poor. Let the free market decide.

But, remember, the people drawing minimum wage are not kids at McDonald's flipping hamburgers. Sixty percent of the people drawing minimum wage are women, and for the vast majority of those women, that is the only money they get for them and their families. Not only do they have a tax cut for those seven States for the poorest of the poor, it is phased in over 3 years.

So the leader has said: OK, you accept this; take this or leave it. If you don't accept this, we are not going to do the extenders and we are not going to do pensions.

We have worked that out. Thank goodness we have been able to do the pensions. And we are certainly not going to do the minimum wage. We knew that. We know they don't like a minimum wage.

But it is a threat, and it is a perfect metaphor for this do-nothing Congress. For the last 19 months, congressional Republicans have done nothing for the people. The little they have done on behalf of special interests and the well connected has made America less safe and the life of the middle class much more difficult.

Look at the record. This Congress will be remembered more for interfering in the Terry Schiavo case than it will for trying to solve America's health care crisis. On every major issue, the Republican Senate has been missing in action.

Look at Iraq. Look at Iraq. Tens of billions of dollars to repair the equipment and machinery our fighting forces use; these gallant men and women--about 2,600 of them having been killed and more than 20,000 wounded, a third of them grievously, and hundreds of billions of dollars more in red ink. What we have said is please change course. But on party-line votes: No.

In fact, the situation is being made worse by rubberstamping President Bush's failed policies and allowing him to stay the course, even as the evidence suggests we desperately need to change course.

It is the same on the economy. We live in a very stressful economic situation. Over the last 6 years, the rich have gotten richer, the poor have gotten poorer, and the middle class is being squeezed. Even the administration admits their policies have failed for working Americans. Listen to what the Secretary of Treasury had to say the day before yesterday, Hank Paulson.

Amid this country's strong economic expansion, many

Americans simply aren't feeling the benefits. . . . Many

aren't seeing significant increases in their take-home pay.

Their increases in wages are being eaten up by high energy

prices and rising health care costs, among others.

The Secretary of Treasury said it. Has the Republican Congress done anything to turn this situation around? No. In fact they are seeking to make matters worse with the Prosperous Family Act--the Prosperous Family Act.

This bill, as I said, will cut the wages of millions of people, most of them in the West. This bill will add to the bankruptcy coming about of our country, as expressed by the ranking member of the Budget Committee, Senator Conrad. It will add almost $1 trillion to the debt-- $1 trillion.

Oh, well, not really. It is $200 billion less than that.

We are told by the other side that with this trifecta--which we have nicknamed the ``defecta''--8,100 of the wealthy and well-off hit the jackpot while millions of working families get $800 billion in debt. It is another example of this do-nothing Congress putting their political interests ahead of America's interests.

We keep hearing from the other side how the Senate needs to repeal the estate tax to preserve and protect small businesses and family farms. That is a myth. Very few small businesses or family farms pay any estate tax.

The State of California is a State of 35 million people. The State of California is the breadbasket of this country. They grow so many things in the Imperial Valley and other places throughout California.

Senator Dianne Feinstein asked the Farm Bureau, which supports repeal of the estate tax: Tell us how many farms were lost by families because of the estate tax.

None. None. Over a 10-year period of time--none.

It is the same with small businesses. In fact, the Small Business Council of America has said that the repeal of the estate tax will actually harm most small business owners because of how it will change the tax benefits they currently receive.

I am all for fixing the estate tax. I have said so. But there is no reason for this fiscal irresponsibility, And it is a virtual repeal.

I talked this morning for a little while about two of the richest men in the world. The richest man in the world, Warren Buffett, he is totally opposed to repealing the estate tax, as well as the Gates family. Pierre Omidyar lives in Las Vegas, NV--Henderson, actually--a rich man, worth over $10 billion. He is a young man. He is the man who invented eBay. The first time I had dinner with him he said: Whatever you do, don't mess around with the estate tax. I owe my country the prosperity that I have.

In fact, I had a conversation yesterday with the head of the Business Roundtable. He said that all he cares about in the trifecta, the Prosperous Family Act--or the ``defecta''--is that we do something to extend the R&D tax credit. That is so important to him, he said. Guess where the R&D tax credit is. It is being held hostage with this, along with some of the other add-ons.

The American people deserve more. It is unimaginable that the Republicans would deny millions of small businesses the research and development tax credit. It is unimaginable the Republicans would deny 15 million workers a $2.10 raise. It is unimaginable they would deny millions of middle-class families tax relief with our extenders. If 8,100 of their wealthy

friends don't get billions of dollars of tax breaks first--nothing.

Soon the Senate will say its last words regarding the estate tax for this session of Congress, I hope. When this vote is completed, I hope we move on to the people's business--I will use leader time right now-- and the majority leader will consider his threat to never bring back middle-class tax relief and the minimum wage back to the floor this session. If he is serious about that threat, it just can't happen, and we will fight this. When the Senate returns in November, Democrats will not go home until the middle-class tax relief package, the extenders, is passed. My friend can make all the threats he wants, but the Senate will not adjourn until hard-working Americans get the help they need. They have to have it. They have waited 19 months. By then it will be longer.

America needs new direction. I began with a quote by Congressman Zach Wamp. Here is another thing Republicans have been saying about their ``defecta'' bill. They have been calling it a win-win.

My friend, the majority whip, Senator McConnell, said: ``There's no risk. It's all reward.''

No risk? Tell that to the millions of workers who have been making $5.15 for the last 10 years on the verge of waiting another year at least.

Win-win? Tell that to the millions of middle-class families and small businesses that will be denied tax relief because Republicans have put their political interests first.

All reward? Republicans have not outfoxed anyone. The American people can see through these political games. I am hopeful that the cloture motion will fail, and I am confident the Republican's cynical approach to dealing with the needs of our country will be rejected.

Mr. President, I ask unanimous consent that Senator Murray be allowed to speak for 2 minutes. Is that OK with the majority leader? I have time left. I know we want to move on.

Mr. President, everyone will be relieved to know I don't have anything to say.

Mr. President, I rise today in strong support of H.R. 5970, the Estate Tax and Extension of Tax Relief Act of 2006. Specifically, I strongly support inclusion of the Surface Mining Control and Reclamation Act Amendments of 2006 in this piece of legislation. This legislation is very important to my home State and to coal-producing States throughout our Nation.

I have been working to fix the Abandoned Mine Land Trust Fund since I was first elected to the Senate in 1996. We have legislation before the Senate to make that happen, and I applaud my colleagues from Pennsylvania and West Virginia for their hard work on this proposal. Senators Santorum, Rockefeller, Specter, and Byrd have helped produce a solid piece of legislation, and I strongly support moving this forward.

For years, reauthorizing the Abandoned Mine Land--AML--Trust Fund has been an issue that pitted the East versus the West. Consensus was never reached on the issue, and the AML Trust Fund continued to be a broken system. Members from the East argued that we needed to send more money to do reclamation, while members from the West argued that we needed to take care of the Federal Government's promise to the States. That promise was made in 1977 with passage of the Surface Mining Control and Reclamation Act, SMCRA.

When SMCRA was passed in 1977, a tax was levied on each ton of coal produced. The purpose of that tax was to reclaim coal mines that had been abandoned before laws existed that required reclamation. Half of that tax was promised to the State where the coal was mined. That money is known as the State share. The other half went to the Federal Government to administer the reclamation program and to send additional funding to the States with the most abandoned coal mines.

It was a simple enough concept. Half of the money was to be sent to the State share, and the other half administers the AML program and goes to States with the largest reclamation needs. Unfortunately, like many things in Washington, while the concept was good, the implementation has been disastrous and the program has not worked as it was intended. For years, States have been shortchanged and reclamation work has not been done. Today, the Federal Government owes States more than $1.2 billion. At the same time, more than $3 billion in reclamation remains unfinished.

When I was named the chairman of the conference committee whose job it was to find a compromise between the House and Senate on pension legislation, I was approached by Senator Santorum who had a proposal. He brought with him a coalition made up of coal companies, the United Mine Workers of America, UMWA, environmental groups and other businesses. Together, they expressed an interest in including an AML Trust Fund reauthorization in the pension conference report.

Where I come from, when something does not work, we work to fix it, and so the idea of fixing the AML program on the pension conference was intriguing. For years, I have worked with the other members of the Wyoming delegation to reauthorize this program, and as chairman of the conference committee, I was in a unique position to make a difference.

After listening to the proposal, I laid out a set of principles that were necessary to gain my support for such a move.

First, I wanted to see the return of the money owed to the States, including the $550 million owed to my State. Because Wyoming is a certified State, I wanted to see that money come from the Federal Government with no strings attached. The legislation we have before us today accomplishes that goal by guaranteeing that Wyoming will receive the money we are owed from the Federal Government in 7 years.

Second, I wanted a guarantee that future monies would be directed to States like Wyoming where significant amounts of coal are produced.

Third, it was important that more money be directed toward reclamation in States where the reclamation work is needed. Those goals are accomplished with the legislation that is included in this bill.

Finally, I wanted to see a reduction on the tax charged to Wyoming's coal companies. Some of the companies in my State do not have the problems associated with abandoned coal mines, nor do they have the orphan miner liability that is held by some companies. Those companies agreed not to fight an extension of the tax if it was reduced, and this legislation includes a slight reduction in the fee.

The priorities of other members are also included in this bill, including provisions that shore up health care for orphan miners who fall into the Combined Benefits Fund. Those priorities include the addition of health care coverage for members who fall into the 1992 fund and the 1993 fund. Although the shoring up of those three funds was not a priority for me, this represents compromise legislation.

The compromise brought all of the major players on board. The coal companies strongly support this bill. The United Mine Workers of America, UMWA, strongly support this bill. Other businesses who had interests in the AML fund strongly support this bill. With all these groups on board, we set out to gain support for this bill.

Senators Santorum and Rockefeller worked hard to bring members from both sides of the aisle on board, and I commend them for their efforts. At the end of the day, we had seven committee chairmen who supported this bill. The chairman and ranking member of the Energy Committee, who have jurisdiction over a portion of the bill, signed a letter to the majority leader asking that it be included in the pension conference. The chairman and ranking member of the Finance Committee, who have jurisdiction over the rest of the bill, expressed support for moving this forward.

As we gained support, we also learned of opposition from members who objected to the cost of the legislation.

They claimed that the bill was too expensive and that the health care coverage for the orphan and widow miners was too good. As a member of the Senate Budget Committee, I want to spend taxpayer dollars appropriately. I want programs to work the way they are intended to work, and this program has not done so.

For my colleagues who have concerns about the cost of the legislation, it is important to remember that a $1.8 billion Federal trust sits in the Federal Treasury. It is important to remember that, although the fee is reduced slightly, we will continue to collect significant income from the fee. It is also important to remember that the Federal Treasury will collect significant revenues from coal production.

For years, we have been using Federal dollars in a way that they were not intended to be used. We have not made progress on the reclamation side, nor have we kept our promise to the States. This legislation corrects that error. It sends significant amounts of money to do reclamation, and it returns the money that was promised to the States.

As for the health care aspect of the bill, it is important to know that the Federal Government already provides funding for some health care. It is provided for with interest from Wyoming and other States' money. The Senators who represent the families who receive this health care continue to make sure the families receive it. Since miners' health care continues to be funded, we needed to find a way to fulfill the promise to the States. This legislation was such a fix.

As more members were brought on board, I worked with my colleagues on the pension conference to include this provision in the final conference report. Much progress was made, and at the end of the day, I included the AML bill that is a part of H.R. 5970 in my chairman's mark for the pension conference. This AML fix fit nicely in a section containing important tax credits, such as a State sales tax deduction from Federal income tax for Wyoming and other States with no income tax.

A last-minute strategy decision by some House members was made to separate the AML bill and the tax credits from the pension portion of the conference report. The House put the AML and the tax credits in a bill that also included the death tax forgiveness and a minimum wage increase. The second bill included many of the pension provisions of the pension conference report. The House then passed the pension bill and the tax credit bill and then adjourned on July 29, 2006, for the August home work period. That is where we stand.

I also take this opportunity to voice my support for the estate tax relief contained in this legislation. While I support a full and permanent repeal of this burdensome and unfair tax, the language contained in H.R. 5970 is a big step forward. Under this legislation, the estate and gift tax exemption will be increased over time to $5 million per person. The elimination of this unjust tax will allow many small, family-owned businesses throughout Wyoming and the Nation to keep their businesses open.

As I have said time and time again, the death tax is fundamentally unfair because it constitutes another layer of taxation. After years of paying State and Federal income taxes and other property taxes while trying to operate a successful business, the family must pay again at the time of death. The land subject to the death tax is the exact same land that the owner has been paying annual property taxes on. Double taxation is not only unfair on a philosophical level, it causes severe financial harm to the small businesses that are the driving force behind our economy. Our tax laws should encourage investment and growth and not stifle small businesses.

In addition to affecting many small businesses, the death tax forces landowners to sell their property to afford paying this tax and avoid passing on the costs to the next generation. Throughout Wyoming, I hear stories of families who are struggling to decide whether to sell part of their farm or ranch or risk leaving their children and grandchildren with this overly burdensome tax. Families should not have to make this impossible choice. In Wyoming, we work hard, in pursuit of the American dream, to create a better life for our children and grandchildren. Yet the death tax punishes this dream and the families who must pick up the pieces after losing a loved one.

There is another hidden cost to this double tax that many people do not consider. The death tax also forces families to spend thousands of dollars on estate planning. By requiring individuals and families to use vital financial resources on estate planning, money is being taken away from the family business, farm, or ranch. Permanently eliminating this tax will move precious financial resources to the business and employees themselves instead of to extensive estate planning costs.

Finally, I would like to briefly address one additional provision in this legislation--the State and local sales tax deduction. H.R. 5970 includes an extension of the State and local sales tax deduction for 2 years. I applaud the extension of this deduction. The ability to deduct State sales tax is an issue of fairness and parity. Under this legislation, taxpayers have the option to deduct their State and local sales tax or their State income tax. Federal taxpayers who reside in a State without an income tax should not be punished and forced to pay additional Federal taxes. Under this extension, taxpayers can choose whether to deduct their State and local sales or income tax.

I intend to vote in favor of the overall package. I strongly support the inclusion of the AML legislation. I am also strongly supportive of the tax extenders and the death tax relief. I hope that my colleagues will see the importance of this legislation and will join me in supporting its passage.

Mr. President, I am deeply concerned about the cynical efforts to tie a much needed boost in the minimum wage to a massive tax cut for the heirs of the wealthiest Americans.

The economic disparities between minimum wage workers and wealthy people whose large estates are subject to the estate tax are so vast that pairing these two measures together defies logic. I am also hard pressed to find a link between either of these issues and the extension of several expiring tax provisions that have been tacked on as well.

No matter how my colleagues in the majority try to dress it up, this is really just another vote on the estate tax. It was less than two months ago that full repeal of the estate tax failed to pass in the Senate. Instead of addressing the pressing problems ordinary Americans face on a range of economic issues, the leadership is back again trying to pass near-elimination of the estate tax.

The estate tax is an important component of our progressive federal tax system, it is the Federal Government's only tax on wealth, and by 2009 less than one-half of one percent of all estates will be subject to the tax. Far from being a ``death tax,'' the tax falls on heirs who seldom had any real role in earning the wealth built up by the estate holder. The decedent's estate pays a portion of the total assets to the Federal Government and the remainder is then passed on to heirs. Capital gains that have built up in the estate tax free are passed on to the heirs on a ``stepped up'' basis, and the heirs are not liable for any income tax on these gains. No tax is levied if the estate passes to a spouse or is donated to charity. The overwhelming majority of estates pay no federal estate tax.

As a matter of fact, the non-partisan Tax Policy Center estimates that only about 8,200 estates would owe any estate tax in 2011 if the 2009 exemption level of $3.5 million were made permanent. Those are the people who would benefit from further cuts in the estate tax and their estimated average tax savings is about $1.3 million--a far cry from the $2.10 hourly wage increase that the Majority has put on the table for minimum wage workers.

A minimum wage hike is long overdue. The Federal minimum wage, which today stands at $5.15 per hour, hasn't been raised since 1997. Since then, inflation has not only wiped out that pay increase but brought the real value of the minimum wage to its lowest level in half a century. Over the past 9 years, the minimum wage has lost one-fifth of its purchasing power.

The majority's plan would increase the minimum wage from $5.15 to $7.25 per hour by the middle of 2009. The Economic Policy Institute estimates that 5.9 million workers would benefit directly from the increase and that the average benefit would be $1,200 per year. Another 7.1 million workers earning somewhat more than $7.25 per hour could benefit indirectly as a ``spillover benefit'' of the minimum wage increase. However, 1.8 million fewer workers would benefit under the Republican proposal because it phases in the increase over a 3-year period rather than the 2-year phase-in under Senator Kennedy's proposal.

Senator Kennedy's minimum wage legislation, which I have cosponsored, also does not contain any poison pills, such as the near-elimination of the estate tax or the egregious roll back of State pay protections for minimum wage workers. Currently, there are seven States that have chosen not to include a tip penalty in their minimum wage laws. Thus, tipped employees in these States earn the full State minimum wage. Under the Republican bill, however, one million tipped employees in these seven States will see a drastic cut in their base pay.

Raising the minimum wage is vital because workers have been left out of the economic growth we have seen so far in this recovery. Strong productivity growth has translated into higher profits for businesses, not more take home pay for workers. The stagnation of earnings in the face of soaring prices for gasoline, home heating, food, health care and college tuition is squeezing workers' paychecks. Just this week, the administration admitted as much. At a speech at Columbia Business School, Treasury Secretary Paulson stated that ``amid this country's strong economic expansion, many Americans simply aren't feeling the benefits. Many aren't seeing significant

increases in their take home pay. Their increases in wages are being eaten up by high energy prices and rising health costs.''

No one who works full time should have to live in poverty, but the current minimum wage isn't enough to bring even a single parent with one child over the poverty line--even if the parent works 40 hours a week, 52 weeks a year. Five million more Americans have fallen into poverty since President Bush took office--37 million Americans are now living in poverty, including 13 million children.

The minimum wage is an important policy tool to lift low-income families out of poverty. Almost two-thirds of those who would benefit are adult workers, and more than a third of these adults are sole breadwinners for their families. This is not pocket change for teenagers, as opponents of the wage floor have argued.

The devastation of Hurricanes Katrina and Rita last September put the national spotlight on the problem of poverty in America. As Senator Grassley, chairman of the Finance Committee, put it last year, ``It's a little unseemly to be talking about eliminating the estate tax at a time when people are suffering.''

While the minimum wage has steadily lost purchasing power over the past 9 years, Federal Reserve data show that over roughly the same period the inflation-adjusted average net worth of the 10 percent families with the greatest wealth increased by almost 40 percent. The wealth of those most likely to have estate tax liability has increased substantially, but the taxes owed on an estate of any given size are lower now than they were in 1997 because of increases in the exclusion and reductions in the tax rate.

The differences in economic circumstances between those at the very top of the income or wealth distribution and those at the bottom are vast and widening. Again, during his address in New York, Treasury Secretary Paulson stressed that ``addressing issues of wage growth and uneven income distribution is a longer-term challenge that we can address.'' And yet, again the rhetoric of this administration does not match its actions. The consideration of this bill before us today is proof that the majority and the administration are not serious about addressing disparities.

Looking at earnings, minimum wage workers make about $206 for a 40- hour week at the current rate of $5.15 per hour. That would put them in the bottom 10 percent of the distribution of usual weekly earnings of full-time workers and these workers have suffered the largest declines over the past 5 years. Those at the upper-income levels are seeing earnings gains but for those at the bottom- and middle-income levels, there is a loss in real earnings since the President took office whereas in the 1990s, when you saw the proverbial picket fence--there were positive gains at every percentile.

Turning to household wealth, an overwhelming majority of households have very little in the way of accumulated wealth and assets and would not be subject to the estate tax. Households in the bottom fifth of the wealth distribution have a median wealth of just $2,000. In contrast, households in the top 10 percent have a median wealth of $1.4 million, which is less than the current estate tax exclusion of $2 million for an individual or $4 million for a married couple. Because half of the households in that wealthiest group have less than the median net worth of the group, most will not owe any estate tax.

The inequity of this proposal is compelling enough, but the budgetary consequences of nearly eliminating the estate tax make it completely unpalatable.

The Center on Budget and Policy Priorities estimates that this estate tax proposal would cost about $600 billion over the 2012-2021 period, or about $750 billion when the associated debt service costs are included. That is about three-quarters of the cost of full repeal, but probably understates the true cost because the latest proposal is not fully effective until 2015.

We are financing near-repeal of the estate tax with debt, because the costs will be paid for with borrowed money. Future generations of taxpayers--minimum wage workers and others who will make significantly less than the heirs of deceased multimillionaires and billionaires-- will have to repay those funds. The drain on the budget would occur at the very time that the baby boom generation enters retirement and rising Social Security and Medicare costs would strain our budget. Secretary Paulson rightfully identified ``reforming entitlement programs, advancing energy security and maintaining and strengthening trade and investment policies that benefit American workers'' as ``longer-term challenges that will face our economy in the years to come.'' However, as we all know these are challenges that we can only meet if we have the resources to do so. Making permanent fiscally irresponsible tax cuts only endanger our abilities to truly address what should be our national priorities.

Raising the minimum wage will increase the likelihood that minimum- wage workers will be paying taxes and drawing on fewer government services. In contrast, virtually eliminating the estate tax will reduce Federal revenues, increase the budget deficit, and put pressure on other government programs that contribute to the economic well-being of lower-income workers, including minimum wage workers.

Today, we are at war and yet there is no sense of the shared sacrifice that has united this country in past conflicts. Ironically, the estate tax was first adopted in the nineteenth century to pay for government shortfalls due to wartime spending. Our military families are making tremendous sacrifices, and too many of them have made the ultimate sacrifice in service to our country. With $320 billion appropriated or pending for Iraq operations to date and more than 2,500 service men and women killed, the human and financial tolls are both more staggering than imagined.

With mounting war costs, the impending retirement of the baby-boom generation and deficits as far as the eye can see, due to the President's irresponsible tax cuts, it is unconscionable to think that we are going to vote again on gutting one of the most progressive taxes on the books.

Putting a minimum wage hike that is so necessary for working families to make ends meet together with an estate tax bill that benefits a few wealthy heirs reveals a warped set of priorities. The same can be said for holding hostage a package of tax extenders that all support. Our focus should be on strengthening the safety net for American families-- whether it's raising the minimum wage or preserving Social Security, pensions, and health insurance coverage.

I have been a consistent supporter of the minimum wage, but this is a cruel juxtaposition of policies which I can not support.

Mr. President, we have had a lot of discussion in terms of what the plans would be. We will be proceeding where we can finish the bills, not the Department of Defense appropriations bill tonight, but in all likelihood the other bills. I will propound the unanimous consent request, and then we will lay out the evening.

Mr. President, I ask unanimous consent that notwithstanding rule XXII, the cloture vote with respect to H.R. 5970, the Family Prosperity Act, occur following 15 minutes for Senator Grassley, 15 minutes for the Democratic manager, and 15 minutes for each leader; provided further that if cloture is not invoked, the Senate then proceed immediately to the consideration of H.R. 4, the pensions bill, and that there be 20 minutes for debate equally divided between the two leaders, with no amendments in order to the bill; further, that following the use or yielding back of debate, the bill be read the third time and the Senate proceed to a vote on passage, with no intervening action or debate; further, that it not be in order to consider any conference report on H.R. 2830 during this Congress.

Reserving the right to object, Mr. President, I have made it clear since the outset that our intention was to address the Family Prosperity Act, which are the three bills, which people have been referring to as the ``trifecta,'' unamended and without any attempt to either separate that and add it to the pensions bill. We will proceed as planned, consistent with the unanimous consent request that I outlined.

I do object.

Mr. President, I will yield to Senator Grassley when he comes. I think that I will go ahead and yield myself time on this bill. We have essentially 30 minutes on either side, of which 15 or 20 minutes of our time will be used by Senator Grassley.

We will be voting shortly on what we are calling the Family Prosperity Act. Heretofore, it has been called the trifecta bill because it addresses three different issues that are critically important to the American people.

Each of these three bills that have been grouped together to become the Family Prosperity Act are important to hard-working Americans, millions of them. One of the three bills is the permanent tax relief bill. Let me say at the outset that this is a compromise bill that has been put together. We attempted earlier to do something that I strongly believe in, which is totally repealing this unfair and wrongful ``death'' tax. We were unable to do that on the floor of the Senate, and after a lot of discussion between Republicans and Democrats, with the leadership, with Senator Kyl on our side and many Democrats, a bill that is a compromise was put together and is very similar to the bill that is in the Family Prosperity Act.

Why is it important? Because this death tax punishes everyday Americans by forcing them to give up their businesses, give up their farms, which their loved ones--dads, moms, and grandparents--have worked hard to pass on to them. It has a direct impact on farming, ranching, construction. All of these bills are labor and capital intensive, but the cost of passing these enterprises on to future generations in one piece is often prohibitive and impossible to do.

About 90 percent of family businesses don't survive that third generation. Even those who do manage to pass on their family businesses are adversely affected. Instead of spending money to innovate and grow the business, people have to pay money either to the Federal Government, to accountants and business people to, in some way, try to lessen the burden they would some day have to pay.

There are a lot of issues that we have addressed in this body. It is time that we act on this one. Again, it is a compromise that we pulled together.

The second aspect of the Family Prosperity Act are some very important tax extenders. There is a list of those that I am sure others will talk about, and one that is of particular interest to me is the sales tax deductibility. In my State of Tennessee, from 1986 to 2004, hard-working Tennesseans were placed at a disadvantage simply because Tennessee was one of seven States that chose to raise revenue primarily through a sales tax instead of an income tax. Thankfully, in 2004, this body, working with President Bush, restored fairness to that Federal tax policy, but that provision expired last year, and more than 64,000 Tennessee families will suffer if that tax relief is not extended. That is just one provision. There are many others.

The research and development tax credit, we know, is absolutely critical to our small businesses, mid-size businesses, and larger businesses in order to grow and to do that research and innovation that prepares them for the future and that creates jobs for the future.

The final piece of the Family Prosperity Act increases the minimum wage. Specifically, it increases it by 40 percent; thus, if we were to pass this bill tonight, the Family Prosperity Act, in the very near term, because it already passed the House, minimum wage workers-- several million people--will have a 40 percent increase that will begin in the very near future. Young workers entering the job market for the first time would have a minimum wage hike that would be welcome.

I see that my colleague, Senator Grassley, is here. At this point, I will be happy to yield to him. He has a statement of 15 to 20 minutes. I yield to him what time is required for his statement.

Yes.

Mr. President, has time been used on our side?

Mr. President, I yield 3 minutes to the Senator from Pennsylvania.

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

Mr. President, I yield 1 minute to the distinguished Senator from Arizona.

Mr. President, how much time remains?

Mr. President, I yield 1 minute using leader time to my distinguished colleague from Kentucky.

Mr. President, in closing, I will be very brief.

In a few moments, we will be voting on the motion to proceed to this very important bill called the Family Prosperity Act. It is called that very specifically for the reasons we have outlined.

There are three very important components: The extension of tax relief--we spoke about it on the floor, key provisions such as the State and local tax deduction affecting the many States, in my State alone, 670,000 Tennessee families; college tuition deduction affecting millions of families; research and development tax credit which stimulates growth, innovation, creativity, and jobs; teachers' classroom expenses deduction, affecting 55,000 teachers.

Secondly, the permanent solution to the death tax challenge that we have today is a compromise. It is not only a compromise that prevents the death rate from escalating to 55 percent and dropping to $1 million in 2011, it is a $5 million exemption per spouse indexed for inflation, and a 15-percent tax rate from $5 million to $25 million.

Thirdly, a minimum wage increase, 40 percent over the next 3 years-- 40 percent.

In summary, an ``aye'' vote is a vote for that permanent death tax relief. An ``aye'' vote is for that extension of tax relief. And an ``aye'' vote is for that 40 percent minimum wage increase.

We have a lot of challenges before us. We have addressed many others in the last 4 weeks. This gives us the opportunity to address an issue that will affect the typical American out their working, their family, that farmer, that small business owner.

I encourage my colleagues to vote aye.

I ask unanimous notwithstanding rule XXII that the mandatory quorum be waived.

Mr. President, I now enter a motion to reconsider the vote by which cloture was not invoked.

Mr. President, the real vote would have been 57 to 41. I switched my vote from ``aye'' to ``no,'' thus the reported vote is 56 to 42.

I want to clarify, very briefly, where we are now. For purely procedural reasons, as leader, I switched my vote to a ``no'' vote to preserve all of my procedural options. As everyone knows, I strongly support cloture and moving to proceed to the three important issues in the Family Prosperity Act. I initially voted ``yes'' on cloture, but by switching to a ``no'' vote, I preserve my right, as leader, to revisit this issue in the future as a package.

The Senate just had a majority vote to move forward to this bill which reforms the onerous death tax, raises the minimum wage for millions of Americans, and provides a number of important tax relief extenders that will expire. Had the Senate invoked cloture, I am confident we could have finished this measure this weekend and presented it to the President in the next couple of days to become the law of the land.

With my switched vote, I preserve the procedural option to bring the bill back as a package. I hope the Democratic Senators will rethink long and hard over the weeks to come before we return for business in September.

Mr. President, finally, just for the record, a number of comments were made just prior to the vote about the tip wage issue. As my colleagues know, I have made it clear to them that is an issue that we would be able to address once on the bill. But we have now been prevented from getting on the bill.

I am confounded. There is no other way to put it.

My colleagues on the other side of the aisle come to this floor, time and again, raving about a ``do nothing'' Congress.

Well, today, just a few minutes ago, we had yet another opportunity to do something--as we have already many times this Congress.

We had the chance to bring three very important issues to the floor for debate: permanent death tax relief, extension of expiring tax provisions, and a minimum wage Increase.

These are issues that matter in the day-to-day lives of our constituents--issues that actually mean something to hard-working Americans.

And yet some of my colleagues decided these issues aren't important enough to debate here on the Senate floor.

This package--it's about securing America's prosperity.

It's about easing the tax burden facing America's families.

It's about helping hard-working Americans tackle an increasing cost of living head on.

And it's about fostering innovation and reinvestment in our homegrown small businesses and farms.

Quite simply, it's vital to the economic security of everyday Americans.

These are challenging issues, and they must be addressed here on the Senate floor.

And as I have said before, these issues must be addressed as a package: permanent death tax relief, tax policy extensions, and a 40- percent increase in the minimum wage.

All three together. All or nothing.

Not bringing this package--the Family Prosperity Act--to the floor is tantamount to saying, ``We don't care about America's economic security.''

And I am deeply ashamed that we, the U.S. Senate, would ever dare send such a message to the American people.