Estate Tax Relief Act of 2009

Mr. Speaker, I yield myself such time as I may consume.

I rise in opposition to this bill.

Can you imagine working your whole life to keep your family farm or to build up a small business, and then when you die Uncle Sam swoops in and takes up as much as half of all you've spent a lifetime working for? That's what the death tax does. It is wrong, it is immoral, and in many ways un-American.

This was brought home to me early in my first term in Congress. I had a family nursery in Texas. They have three nurseries. The parents had created it and built it up. Two of the three kids were working in it that day, and they just sat down with a pen and paper. They showed me the value of their nursery, talked about the death tax, and worked it through. And the bottom line was that if they could take out enough insurance on their parents' deaths, and because they're out of debt, if they could go back to the bank and borrow enough money, they might be able to pay their death tax bill.

Think of what they're saying: If we make enough money off our parents' death and we can borrow enough money, the government might let us keep our family business. The government might let us keep our family business. That's why the death tax is wrong, and that's why it is in many cases, if not all, simply un-American.

Today we have a bill that is the result of hard work by my friend from North Dakota (Mr. Pomeroy), but I object because I believe we can do better.

Some say at the end of the day if this bill passes, it will only impact a few estates. But the truth is, when it passes, still, the number one reason family farms and small businesses will not be passed down to the next generation is the death tax; and the number one reason the fastest growing number of entrepreneurs, women, and minority-owned businesses will not be passed down to the next generation. And this is the first generation of wealth building. It will be the same death tax.

While it is fun to hear them talk about Bill Gates and Donald Trump and George Soros, the people most hurt by this tax are Bill the farmer or Donna the florist or George the funeral director, real people building wealth in our communities who oppose this death tax. These are not the aristocracies that are being referred to in this debate.

We are told that this bill will be permanent and provide certainty. Well, it does create a permanently high tax

rate and a permanently destructive tax rate; 45 percent is simply too high. And because, like the AMT, it is not indexed for inflation, it is certain to ensnare more and more family farms and small businesses in future generations. We have seen this play before. The alternative minimum tax was created to tackle and address only 100-plus of the wealthiest Americans in the United States, but because it wasn't indexed for inflation, today it would impact 24 million middle class Americans. We are going to see that same creep, those same small businesses and middle American families affected by this death tax in future generations.

We are told, and I think sincerely, that this is the best we can do as a Congress. I don't believe it is. I so much appreciate Mr. Pomeroy's efforts. I know a lot of the groups that make up the death tax coalitions that are working to eliminate the death tax or find a reasonable compromise. They appreciate what he is doing as well. But we have to do better. And don't take my word for it. If you listen to the groups most intimately damaged by the death tax, from our Farm Bureau to our National Federation of Independent Businesses, from our grocers and funeral directors, from local newspapers and other groups, they have not given support to this bill because it still leaves intact the third highest death tax rate in the developed world, and it damages them too greatly.

My thought is that rather than place on the floor, as Democrats did, unfortunately, a partisan bill that is supported by none of the groups most affected, that we ought to have offered a bill by the gentlewoman from Nevada (Ms. Berkley) and the gentleman from Alabama (Mr. Davis) and others that has the strong support of 49 national organizations and bipartisan support of the bill. Unfortunately, it was not allowed as an amendment to the bill and it would be ruled out of order as a motion to recommit, so we don't have an opportunity to come together as a Congress on this issue.

At this time, I reserve the balance of my time.

I yield myself 15 seconds.

I would point out that more and more Americans will be ensnared in the death tax because it is not indexed, like the AMT. And I would point out, we would not be here today if President Clinton had not vetoed the death tax repeal in 1999.

I yield myself an additional 15 seconds.

And I would further point out that polls consistently show 70 percent of Americans support the complete and full repeal of the death tax because it is un-American for this country to swoop in and take up nearly half of what you have spent a lifetime building up and wanting to hand down to your children and grandchildren.

With that, I yield 3 minutes to the distinguished gentleman from California (Mr. Herger) who has worked on the death tax issue as a senior member of the Ways and Means Committee.

Mr. Speaker, I yield 2 minutes to the lead Republican on the Small Business Committee, the gentleman from Missouri (Mr. Graves).

I yield myself, Mr. Speaker, as much time as I may consume.

I know Washington takes great delight in reading from comments from the very wealthy who, by the way, usually find loopholes by accountants and have whole planning teams to make sure they don't pay these taxes. But I like to listen to those who are actually struggling with these death taxes, our small businesses, our family farms and our local manufacturers who have got a lot of challenges.

I have a letter from the National Federation of Independent Business which has weighed in on almost every key issue dealing with the impact on small businesses and independent businesses. Like me, they do appreciate the work that Mr. Pomeroy has done on this issue. But just quoting from their letter: ``While well intentioned, H.R. 4154 is an incomplete solution. A $3.5 million exemption per person and a 45 percent rate do not provide adequate protection for many small businesses. In addition, the $3.5 million exemption is not indexed for inflation, meaning that protection from the estate tax will erode each year.''

Our manufacturing groups, for example, National Association of Manufacturers, in a letter they wrote, again, yesterday, say: ``The NAM, the National Association of Manufacturers, the Nation's largest industrial trade association representing small and large manufacturers in every industrial sector and in all 50 States, urges you to oppose H.R. 4154,'' the bill we have before us today.

``While NAM appreciates efforts to provide certainty by making estate tax rates permanent, we do not view a 45 percent rate or an exemption that is not indexed to inflation as efforts that will achieve significant reform.''

And finally, the American Farm Bureau Federation, again, family farmers all throughout this country are involved, again, in trying to help them keep those family farms, pass them down to the next generation, say that the current estate tax exemption is $3.5 million per person and the top tax rate is 45 percent under this bill. This exemption level is inadequate to protect our Nation's farms and ranches from estate taxes and causes financial burden of complicated and expensive estate tax planning.

It is clear while we may claim on this floor that this is a bill great for family farms and great for small businesses, and only taxing the wealthy, our family farms, our small businesses, our local manufacturing companies say it does not.

National Federation of

Independent Business,

Washington, DC, December 2, 2009.

Dear Representative: On behalf of the National Federation

of Independent Business (NFIB), the nation's leading small

business advocacy organization, I am writing to share our

views about H.R. 4154, the Permanent Estate Tax Relief for

Families, Farmers, and Small Businesses Act of 2009.

With the current estate tax law expiring after 2010, H.R.

4154 provides certainty to help small business owners plan

for the tax and maintains stepped-up basis. While well-

intentioned, H.R. 4154 is an incomplete solution. A $3.5

million exemption per person and a 45 percent rate do not

provide adequate protection for many small businesses. In

addition, the $3.5 million exemption is not indexed for

inflation, meaning that protection from the estate tax will

erode each year.

NFIB has always supported full repeal of the estate tax as

the one solution that will protect all small businesses from

this tax. Short of that, NFIB has supported H.R. 3905, a

bipartisan compromise bill which provides an exemption level

of $5 million per person and a rate of 35 percent. Much of

the cost of the estate tax occurs before the tax is levied

because the threat of the tax forces families to pay for

expensive estate planning to ensure their business stays with

the family. Such costs are a drain on the finances of many

already struggling small businesses, and relief along the

lines of H.R. 3905 would provide additional protection for

many small businesses.

NFIB is encouraged that the House of Representatives is

acting on this important small business issue by providing

long-term estate planning certainty. We look forward to

working with Congress to improve the legislation so that it

meets the needs of America's small businesses.

Sincerely,

Susan Eckerly,

Senior Vice President, Public Policy.

Yielding myself 15 seconds, I would like to submit for the Record a list of 49 organizations from family farmers to small businesses to local funeral parlors in support of Congresswoman Berkley's bill and amendment.

Family Business Estate Tax Coalition

American Farm Bureau Federation; American Foundry Society;

American Hotel & Lodging Association; American International

Automobile Dealers Association; American Rental Association;

American Wholesale Marketers Association; Associated Builders

and Contractors; AMT--Association for Manufacturing

Technology; Association of Equipment Manufacturers; Comporium

Group/Rock Hill Telephone Company; Financial Executive

International's Committee on Private Company Policy.

Food Marketing Institute; Heating, Airconditioning &

Refrigeration Distributors International; Independent

Community Bankers of America; Independent Insurance Agents &

Brokers of America; International Franchise Association;

Marine Retailers Association of America; Mason Contractors

Association of America; Mortgage Bankers Association;

National Association of Convenience Stores; National

Association of Manufacturers; National Association of

Wholesaler-Distributors.

National Automobile Dealers Association; National Beer

Wholesalers Association; National Cattlemen's Beef

Association; National Electrical Contractors Association;

National Federation of Independent Business; National Funeral

Directors Association; National Grocers Association; National

Lumber and Building Material Dealers Association; National

Newspaper Association; National Restaurant Association;

National Roofing Contractors Association.

National Small Business Association; National

Telecommunications Cooperative Association; National Utility

Contractors Association; Newspaper Association of America;

North American Die Casting Association; Plumbing-Heating-

Cooling Contractors--National Association; Policy and

Taxation Group; Printing Industries of America; S Corporation

Association; Society of American Florists; The Associated

General Contractors of America; The Bowling Proprietors'

Association of America.

At this time, I would like to yield 2 minutes to one of the outstanding members of the Ways and Means Committee, the gentleman from Illinois (Mr. Roskam).

The two questions we ought to ask ourselves when we consider this bill, besides the principle underneath it, which is should family farms and small businesses work their whole life, build up a nest egg and have Uncle Sam swoop in when they die and take up nearly half of it themselves, is this supported by the people whom you say it will help, and will this bill or can this bill become law?

As to the first case, it is not supported by the organizations that have worked the longest and the hardest on the death tax. And we have, again, 49 organizations who support a bipartisan compromise who unfortunately cannot support this bill, small businesses, family farms, local newspapers, local marketing groups, equipment manufacturers, local builders and auto dealers. We have local convenience stores and beer wholesalers, our cattlemen, just the people who make up the fabric of our local economies believe this bill will not help them and will not help them enough.

But the other thought is, will this bill become law? And the answer, unfortunately, is no. H.R. 4154 is dead on arrival in the Senate. Even if it squeaks through the House with whatever arm twisting must be done, it will be dead on arrival in the Senate. Earlier this year the Senate voted on a bipartisan basis for a far more generous estate tax relief package. The Lincoln-Kyl amendment to the Senate's budget resolution, which mirrors the Berkley-Brady amendment that was not allowed to be offered today, provides a considerably higher exemption and a more reasonable 35 percent rate.

It's very unlikely that the Senate is going to take a break from health care and other issues to pass a bill that they have serious concerns about, and especially because they have serious concerns as well about this PAYGO sham language that is attached. Also, recent press reports make clear that key Senators, even Democratic Senators, believe that this bill, H.R. 4154, is insufficient.

According to a December 22 article in the BNA, it's quoted that the House plan to make permanent the 2009 estate tax rate exemption levels falls far short of what is needed in the long run and quotes key Senators in that Chamber. So, I think our goal ought to be helping the people we say we're trying to help: family farmers and small businesses. And we ought to be pushing a bill forward that can be accepted by the Senate, make it to the President's desk, and provide that certainty that helps these people.

I reserve the balance of my time.

I yield myself as much time as I may consume.

We have short memories around here. While I know it's sort of popular to blame President Bush for everything from acid reflux to Tiger Woods' car accident, the truth of the matter is we wouldn't be here today if President Clinton had not vetoed the full permanent repeal of the death tax once and for all for America. A Republican Congress sent him that bill saying the only peace of mind we can give to family farmers and small businesses is to put this death tax to death. But because of his actions and irresponsible veto, today we see a high tax rate and low exemptions and real damage upon America's family farms and small businesses.

We talk about fiscal responsibility. I just heard some more rhetoric about that. Now, let me point out that while Republicans, unfortunately, in responding to the terrorist attacks of 9/11 and creating a Homeland Security Department, I believe, while well- intentioned in defense of this country, also spent too much money. And you can tell from these red bars how once that mistake was made, the deficit, year after year, went down. In the first year Democrats had control of Congress the deficit went from 162 to 459. It tripled in 1 year that House and Senate, they tripled the deficit. This year it is

almost nine times higher than when Republicans left

Congress.

So, when I hear a lecture on fiscal responsibility, after a $1.4 trillion deficit, a quarter of a trillion dollar unpaid bill 2 weeks ago for the doctor fix, an unprecedented spending spree, bailouts, and PAYGO rules that have less credibility than all the fake stimulus jobs we hear about, please, no lectures. And when you talk about statutory PAYGO, I'll remind Members how many violations of PAYGO have occurred. Two dozen of them in the last couple of years by this Congress, supposedly fiscally responsible.

And you know the way they got around it? In some cases they used the same PAYGO 25 different times. That's like mortgaging your house 25 times to

the bank as collateral. They used some PAYGO 10 different times. In fact, one time, to try to look like they balanced the bill, this Congress, on this floor, with this leadership, decreed that there will be no terrorist attacks for the next 5 years so that this bill can look like it was paid for.

So, please, no lectures on fiscal responsibility from a Congress and a White House that is ruining this country, driving us so deep into debt I don't know how our grandchildren will ever get out of it.

I think the main point today that I will refute as well is that this is the only option. The truth of the matter is that there is a bipartisan bill that has support of some 39 or so Members of this House, supported by so many of the groups, family farms, small businesses, local nurseries, home builders, and retail shops, that does have support in the House and in the Senate. That's the compromise that should be on the floor today. That's the way we make sure we help our family small businesses.

And let me tell you, too, whenever Washington says we're only going after a few of the wealthy, grab your pocketbooks because we've seen this run before. And the alternative minimum tax was supposed to tax 100 or so of the wealthiest Americans, as we just heard. Today that tax can grab almost 24 million Americans. We're going to see every year more and more family farms, more and more small businesses trapped, damaged, destroyed by this death tax unless this bill is voted down. And we have other options that really can help.

I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

I would say while I disagree strongly with some of those assertions, I do very much appreciate the work that Mr. Pomeroy has done on this bill. It is an issue that concerns so many of us. I am hopeful we can still come together on a bipartisan compromise that can pass this House, and for many of us who have as our goal full and permanent repeal of the death tax, I hope someday to work with him on that as well.

I yield back the remainder of my time.

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.

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. 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).

I yield the gentleman an additional 30 seconds.

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.

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. 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.

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.)

I yield the gentleman 30 additional seconds.

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

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.

I yield back the balance of my time.

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

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

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.

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).

I thank my friend, Mr. Pomeroy, the representative of the Ways and Means Committee, for yielding, and I want to thank him for his efforts in pursuing this bill and introducing this bill and effecting the policy that currently exists in this country of a generous but fair provision for exemptions on estates. That exemption, as has been, I'm sure, debated today,

provides for $3.5 million for each spouse, or $7 million a family, for an exemption under the estate tax. However, what the Republican policy did was create a situation where there is no certainty, no ability to plan, and no confidence of what the tax policy will be in the coming years.

I, therefore, rise to support this bill which permanently extends estate tax relief to American families and which strikes a fair balance between what we owe to families, farmers, and small businesses, and what we owe to our country's fiscal future. This bill simply continues present law at current rates and exemptions. But it does not abolish the estate tax altogether, which I think would be a mistake. In fact, Teddy Roosevelt thought it would be a mistake. Teddy Roosevelt thought it would be a mistake because he did not want to see the constant accretion in just a few very wealthy people in America of the wealth of this country.

Abolishing the estate tax would add billions and billions to our deficit, as will happen next year if we do not pass this bill. And while a small number of wealthy families would benefit, the growth of our economy as a whole would suffer. So would vital programs on which millions of Americans rely. The estate tax also sets a limit on the concentration of inherited wealth from generation to generation. That's what Teddy Roosevelt, Republican President the early part of last century, thought was appropriate in American policy, which, at a time when this country's middle class is truly struggling, would make inequality even starker and more damaging to our country's social fabric.

That is why advocates of a dynamic economy have supported an estate tax for generations. When first proposing an estate tax, Theodore Roosevelt said, ``The man of great wealth owes a particular obligation to the state because he derives special advantages from the mere existence of government.''

And Bill Gates, along with Warren Buffett, one of the two wealthiest people in America, recently argued that the estate tax, ``puts a brake on the concentration of wealth and power, generates substantial revenue from those most able to pay, and encourages billions of dollars in charitable giving each year. The estate tax is not only fair,'' Bill Gates said, ``but an essential component of our Nation's economic dynamism.'' That's Bill Gates, who will, I think, be perceived by the American public as having probably the possibility of one of the largest estates.

Finally, it's important that this bill is permanent, and not a temporary fix. That guarantees families, farmers, and small businesses the certainty they need to plan ahead rationally. President Bush's estate tax policy, by contrast, gave the country anything but certainty. It phased out the estate tax, repealed it entirely for 2010, and then brought it back, at 2001 levels, for 2011. In other words, 3.5 today, zero tomorrow, and 1 in 2011. No accountant or estate planner is going to look you in the eye and say, Well, based upon that policy, I can give you some rational advice.

That was truly an irresponsible tax and fiscal policy brought to us, very frankly, by the minority party when it was in power. It made it impossible for families to plan with confidence for the future. It also hid the policy's true cost to our national budget. This bill can change that. It is in keeping with President Obama's pledge of a new honesty in budgeting.

I also want to point out that passing this bill is also an important step toward fiscal responsibility because attached to it is the House's support for statutory PAYGO, as it's affectionately referred to by some, me included. Now, let me say something about statutory PAYGO. My friends on the Republican side of the aisle are not for it. They're not for it because they wanted to make deep revenue cuts and didn't want to pay for them. They wanted my children to pay for them and my grandchildren to pay for them. And very frankly, that's who's going to pay for them. Those of us of my age are not going to pay for them because we incurred real debt by not paying for what we buy, and created extraordinary deficits over the last 8 years of the Bush administration.

As we know, the principle of paying for what we buy was central to turning record deficits of 1993, of 1992, of 1991, of 1990, and all of the years of the 1980s, turning record deficits into record surpluses. It was statutory PAYGO that allowed us to do that, along, obviously, with the extraordinary growth in the economy that occurred under an economic program put in place in 1993, for which none of my colleagues on the Republican side of the aisle voted. It can be an important step in our return to fiscal health today.

By passing this bill, we can also strengthen our commitment to pay for all new policies that reduce revenues or expand entitlements. In fact, I wish that this extension of estate tax relief were also paid for. It is not, of course. Why is it not paid for? Because we can't pay for it at a time when we are at great economic risk. We can't depress the economy. We need to stimulate our economy. But if we put in place PAYGO, we will give additional confidence to those who are prepared to invest their capital that we will continue to have sound fiscal policies.

It's unlikely that we will have the votes to pay for this extension of policies with bipartisan support. I choose to support the strongest version of PAYGO possible. That is the PAYGO provision in this bill. So, on the one hand, we bring in this bill estate planning rationality, substance, and confidence. And on the other hand, we adopt once again in this House the premise of statutory PAYGO, which got us to 4 years of surplus during the Clinton administration, the only 4 years of surplus in the lifetime of anybody in this Chamber.

I hope that the Senate will join the House in taking this essential first step out of America's deep fiscal hole. My friend, Mr. Brady, thinks that they will not. Perhaps he is correct. If he is correct, it will be unfortunate. My friend, I know, has been a proponent for the years he's been here, and some others have been, of going to zero, no estate tax. Very frankly, because of that position, we have not been able to reach compromise and, therefore, we find ourselves in this untenable position.

I urge all of my colleagues to support this bill, which makes a fair estate tax permanent, makes estate planning more reliable, and makes our commitment to fiscal discipline clear and unequivocal.

Mr. Speaker, I have a motion to recommit at the desk.

Yes, in its current form.

Mr. Speaker, this point of order shows the blatant inconsistencies the majority has set up with its own rules. On one hand, clause 10 of rule XXI--known as the PAYGO rule--requires amendments, including those contained in motions to recommit like this one, to be budget neutral. On the other hand, clause 7 of rule XVI-- known as the germaneness rule--constrains our ability to offer pay-fors by requiring that they be related to the underlying bill.

These two rules are problematic in today's case because H.R. 4154 is drafted so narrowly that it is impossible to identify germane offsets. Thus, not surprisingly, the majority has stacked the rules of the House to try to make it impossible for the minority to offer its preferred approach. We saw that 2 weeks ago on the SGR fix and are witnessing it again today as the rules are being used to keep us from offering a full and permanent repeal of the death tax.

Ironically, the bill before us today, H.R. 4154, doesn't even meet the House's own PAYGO rules. That's right. That is because the budget resolution allows the chairman of the Budget Committee to simply reset the baseline to accommodate a certain amount of death tax relief.

Mr. Speaker, you are being asked to rule on whether this motion to recommit complies with PAYGO, but the base bill itself is not PAYGO compliant. It would increase the deficit by more than $230 billion. This begs the question, if it's appropriate for the majority to consider estate tax relief under H.R. 4154 without offsets, in violation of the spirit of PAYGO, then why is it now inappropriate, or out of order, for the minority to provide even more tax relief under their amendment?

I request that you overrule the point of order and allow the House to debate our alternative, which is complete repeal of the death tax.

Thank you, Mr. Speaker, for the opportunity be heard on the point of order.

Mr. Speaker, I appeal the ruling of the Chair.

Mr. Speaker, on that I demand the yeas and nays.

I am, in its current form.

H.R. 4154 would be better called the Permanent Estate Tax Increase for Families, Farmers, and Small Businesses Act. My second motion to recommit still addresses elimination of the death tax. As the Chair has just ruled, the sensible alternative, full permanent repeal of the death tax, is not allowable under the House majority's rules. Therefore, this second motion to recommit is drafted to meet the arcane, pro-tax increase PAYGO rules.

This motion continues the full elimination of the death tax for 2010, as currently scheduled and promised to the American people, and then extends that full elimination 1 additional year to 2011. Business or farm income was taxed when it was created, saved, invested, and spent. These assets were taxed annually with property taxes. They don't need to be taxed yet again upon death. While 2 years is shorter than many of us in the House would prefer, it's the only alternative left.

Colleagues, the flaws with H.R. 4154 are numerous, but in defense of their misguided bill the majority cries that certainty trumps the punitive 45 percent rate. But the Federal Government shouldn't be entitled to half or even one-third of your assets when you die. Make no mistake: the purpose of the inheritance tax is to erase all of an individual's net worth within three generations. Let me repeat that: the purpose of the inheritance tax is to erase all of an individual's net worth within three generations.

Enshrining a 45 percent punitive tax rate is bad policy, and the only thing worse than bad policy is permanent bad policy. I am sure the American people will be upset with the certainty of zero. Today the majority is working hard to bring new vigor to the old adage ``The only things in life that are certain are death and taxes.''

Let's remember that the unemployment rate is still high: 10 percent nationwide and more than 13 percent in my home State of Nevada. Recent estimates show that the full repeal of the tax would create 1.5 million jobs. Again, that's jobs created. Who knows how many jobs will be saved by eliminating the death tax.

Eliminating the death tax will also have several other positive effects on the economy. One recent study showed that eliminating the death tax will increase small business capital by over $1.6 trillion; eliminating the death tax will increase the probability of hiring by 8.6 percent; eliminating the death tax will increase payrolls by 2.6 percent; eliminating the death tax will expand investment by 3 percent; eliminating the death tax will create 1.5 million additional small business jobs; and eliminating the death tax will reduce the current jobless rate by almost 1 percent.

The American people know that the death tax punishes hard work by discouraging savings and investing, undermines job creation, and frankly contradicts the central promise of American life. They know the death tax is a jobs destroyer.

Colleagues, our Founding Fathers worked to ensure the rights of life, liberty and the pursuit of happiness. In addition, they fought, spurred largely by unfair taxation, to secure their rights to private property and the efforts of their work. They wanted a nation where one could work, think, produce, create, invent and prosper. This made our Nation different than all others at the time which created the tremendous engine of the American economy. What would they say about a government confiscating 45 percent of property earned over a lifetime?

Of the 56 signers of the Declaration of Independence, 18 were merchants or businessmen and 14 were farmers. Many lost their lives or family members, and at least 11 signers had their homes and property destroyed. In committing their ``lives, fortunes, and sacred honor'' as the Declaration of Independence reads, they sacrificed to ensure their heirs could keep what they earned. What would those who sacrificed so much say about a permanent 45 percent rate?

Congress made a promise to fully eliminate the death tax. The American people are sick and tired of broken promises from their government. Congress should keep this promise to the American people and do what it committed to do 8 years ago: allow the estate tax to expire in 2010 and extend that expiration to 2011.

Death should not be a taxable event. Support this motion and keep the death tax buried.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I would be happy to respond. If the gentleman is asking to refer this piece of legislation back to Ways and Means and the Budget Committee, I would be happy to do so so that we can discuss those issues.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, nearly all American families do not qualify for the Federal estate tax. In fact, under the law as currently written in 2009, 99.75 percent of estates are exempt.

The Federal estate tax has been amended many times through the years--most recently in 2001 as part of the Republicans' omnibus tax cut legislation. That measure gradually increased estate tax exemptions and lowered estate tax rates between 2001 and 2009.

In 2002, people with estates valued less than $1 million ($2 million for joint filers) after deductions for expenses, debts, and bequests to a surviving spouse or charity were exempt from paying the Federal estate tax. Those with estates above that value were taxed at a rate of 55 percent.

In 2009, people with estates valued less than $3.5 million ($7 million for joint filers) after deductions for expenses, debts, and bequests to a surviving spouse or charity are exempt from paying the Federal estate tax. Those with estates above that value are taxed at a rate of 45 percent.

The 2001 tax law phases out the federal estate tax in 2010 but then reinstates the tax in 2011 at the level it was in 2002--$1 million for single filers and $2 million for those filing a joint return. This fluctuation in estate tax rates has caused a great deal of confusion for business owners and farmers who are participating in estate planning. In order to provide more certainty to those individuals, the Congress has been working to set a permanent estate tax rate that would exempt nearly all but the very wealthiest Americans.

Through the years, I have voted to eliminate the estate tax or to maintain suitably high exemptions to better shield farmers and small business owners from the burdens of the tax. This year, I cosponsored H.R. 3905, bipartisan legislation written by Congresswoman Shelley Berkley (D-NV) that would permanently exempt estates valued at less than $5 million for single filers and $10 million for joint filers and set the tax rate on estates valued above that amount at 45 percent on a decreasing scale to 35 percent over the next ten years.

I have also cosponsored H.R. 3524, the Family Farm Preservation and Conservation Estate Tax Act, which was introduced by Congressman Mike Thompson. This legislation would add a provision to the federal tax code allowing farmers and ranchers to defer payment of the Federal estate tax as long as the land is owned within the family and remains in agricultural production. H.R. 3524 would also defer the tax for land placed into a conservation easement. The measure would represent a win for farmers, for conservation and hunters, and for all of rural America. That is why it is supported by groups like the National Cattlemen's Beef Association, the National Corn Growers Association, the National Council of Farmer Cooperatives, the National Milk Producers Federation, the National Pork Producers Council, the Dairy Farmers of America, and the Agricultural Retailers Association.

While I would have preferred the House of Representatives to consider one of these well-written bills, the House of Representatives has considered a different measure, H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, which would permanently extend the estate tax levels at the current, 2009 rates.

It is very important for families, farmers, and businesses to have greater certainty with respect to estate planning. Groups representing a good number of Missourians expressed to me their views on this issue. The Dairy Farmers of America, which represents nearly 18,000 dairy producers in America, urged Congress to ``take action now on this important measure'' and to ``support H.R. 4154.'' The American Farm Bureau Federation, while neutral on the bill, indicated the ``need for certainty in estate tax law and the importance of maintaining the stepped-up basis.'' And, the U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations, wrote that Congress should ``expeditiously approve a permanent estate tax solution to provide certainty for family-owned businesses and farms.'' The Chamber further indicated that ``H.R. 4154, the `Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009,' is a step towards this goal.''

As a rural Missouri Congressman, I understand that farms and small businesses are disproportionately impacted by the Federal estate tax. That is why I supported H.R. 4154. Under the 2009 estate tax guidelines, nearly all small businesses and farms are exempt from paying the tax. Only a small fraction of all estates in America-- 9,600--are expected to owe Federal estate taxes in 2009. For farmers, USDA data indicate that, after deductions, approximately 554 farm estates throughout our Nation would be considered taxable.

We should strive to reduce the number of farms and small businesses that are subject to the Federal estate tax. As I have mentioned, I have cosponsored legislation to do just that. And, to make clear my view that we should strive for higher tax exemptions, I was one of only 21 Democrats to vote with Republicans against the Rule to consider H.R. 4154 in the House of Representatives and was one of only 18 Democrats to vote with Republicans to send H.R. 4154 back to the Ways and Means Committee so that it could be improved.

At the end of the day, though, both of those procedural votes failed and we were left with two choices--either pass a bill to give farmers and small business owners more certainty or sit back and do nothing, which would allow the rates to become more painful to farmers and small business owners over the next 2 years. To me, that choice was easy. H.R. 4154 is a step in the right direction and I look forward to working with the Senate on this important legislation.