Providing for consideration of the bill (H.R. 4154) to amend the Internal Revenue Code of 1986 to repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, and for other purposes.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 941 and ask for its immediate consideration.

Mr. Speaker, for the purposes of debate only, I yield the customary 30 minutes to the gentleman from Florida (Mr. Lincoln Diaz- Balart). All time yielded during consideration of the rule is for debate only.

General Leave

I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and to insert extraneous materials into the Record.

I yield myself such time as I may consume.

Mr. Speaker, this rule provides for consideration of H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009. The rule waives all points of order against consideration of the bill except those arising under clause 9 or 10 of rule XXI and against the bill itself. The rule provides that the previous question shall be considered as ordered without intervening motions except 1 hour of debate and one motion to recommit with or without instructions.

In the engrossment of H.R. 4154, the Clerk is directed to add at the end the text of H.R. 2920, the Statutory Pay-As-You-Go-Act of 2009, as passed by the House.

Mr. Speaker, this past weekend in honor of the Thanksgiving holidays, NBC's ``Meet the Press'' hosted the Reverend Rick Warren in a discussion on giving and civic duty. During the dialogue, Rev. Warren stated his belief that it isn't a sin to be rich, but it is a sin to die rich. While I don't agree with Rev. Warren on many issues, I ask my colleagues to now reflect on the meaning of those words. The Reverend was speaking, of course, of the importance of charity and our moral obligation to improve the condition of our fellow man whenever and wherever we can.

Today I speak to you with the same sense of duty--duty to our country that has allowed me personally to achieve personal wealth, and in turn, to help others.

Mr. Speaker, the bill before us under this rule is a significant tax cut. Without this bill, the estate tax will return in the year 2011 at a much lower exemption amount, an exemption of $1 million instead of an exemption at a rate of $3.5 million and at a much higher tax rate, a tax rate of 55 percent rather than a tax rate of 45 percent, which we have under this bill.

We all know that the occasion of the death of a loved one is a very difficult time for family and friends. The price of love is unfortunately loss, and that's a price that we all must pay at some point in our lives. While no act of government can ease this emotional pain, today we have the opportunity to at least give families who have achieved great success some surety in their ability to ensure that the next generation will receive the benefit of their works.

An estate tax distorts a free market less than an income tax. Instead of taxing productive capital, it takes taxes from a random heir. On a revenue-neutral basis, I for one would much rather pay taxes after dying than before dying. And however much an income tax may distort the market, an estate tax distorts it less on a revenue-neutral basis.

Mr. Speaker, allow me to be clear. Individuals like myself, who through hard work have been able to start businesses, create jobs, and, as a result, have been rewarded with the financial resources to provide a high standard of living for our families, have a duty to our fellow Americans to pay our fair share. And an estate tax, the existence of an estate tax, is critical to prevent a permanent aristocracy from arising in this country.

When I think of the everyday tax burden for my constituents or, for that matter, for my staff and associates as a proportion of their income as a result of sales taxes, property taxes, let alone income taxes, I can think of no credible argument for suggesting that an estate tax is unreasonable. I also take comfort in knowing that, with the passage of this bill, we are locking in that 99 percent of my constituents will never pay the estate tax. According to The Urban- Brookings Tax Policy Center, under this proposal only .25 percent, that's \1/4\ of 1 percent, of debts would be subject to an estate tax.

We ask those who labor to build the roads to also shoulder the cost. We ask those who educate our Nation's children to also help pay for the schools. Shouldn't we ask those who die with wealth to help give back a little to those around them? I say to my colleagues this is fair, this is right.

When factoring the full costs of being a member of a society, it's very clear that all too often we ask the most of those who have the least. For our country to continue to prosper, we can't just rely on the middle class to support our Nation's public safety and welfare and to cushion the success of families who are successful in this country. I can personally tell you, as one of those Americans that's in the .25 percent, I would gladly pay an estate tax to give back to the 99.75 percent of families who do the heavy lifting in this country every day and ensure that they never have to pay this tax and that family farms can be passed down to the next generation and small operating family businesses will be subject to no estate tax.

Yes, Mr. Speaker, I agree with Rev. Warren that it's no sin to be rich, but I disagree that it is a sin to die rich. A life's work should rightly be a benefit to one's heirs and one's causes. My belief that a family farm, a family business, or simply accumulated wealth should be passed from one generation to the next is consistent with the fact that those who benefited the most from the freedom and security that this country offers should pay their fair share for the benefits and the landscape that allowed them to reach the level of success that they did.

What all Americans deserve, rich or poor, is the knowledge that at a time of great personal pain for families, the stress will not be exacerbated by a complex or uncertain tax policy. That's one of the many reasons I ask my colleagues to join me in supporting this rule and the underlying bill.

Throughout our history, transfer taxes have been used to fund critical operations of the Federal Government. The modern estate tax was established by the Revenue Act of 1916 to offset declining import tariff revenues as a result of and to finance the United States' participation in World War I. Since World War I, the estate tax has continued to provide Federal revenues that have financed World War II and the New Deal, and have helped end the Great Depression. The estate tax includes, importantly, an unlimited deduction for charitable giving. In 2006 nearly two-thirds of charitable requests came from estates valued over $10 million.

What a way for Americans to leave a legacy for the next generation. Universities, hospitals, and arts organizations have come to rely on these contributions from our Nation's most wealthy. One need only tour a college campus to see the direct impact of the philanthropy on our students and its effect on our future displayed prominently on plaques outside many campus buildings like those at the University of Colorado in Boulder, which I represent.

H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act, does exactly what it says. The bill will make permanent the lowest estate tax rate our Nation has seen in a decade, making the current rate permanent and giving families the ability to plan ahead for an orderly transfer of assets. Business owners will be able to plan ahead to ensure that their employees will still have a job and their company will be able to continue to provide for their families after they're gone. Farmers will be able to keep their land in their family.

I remind my colleagues that the $3.5 million exemption means that no family will pay any estate tax unless the estate is valued at at least $3.5 million. It is substantially higher than it has been in this decade, and without our action today, we put families in a situation of unnecessary financial uncertainty at a time when their head and their hearts can least afford it. Without this bill the estate tax will return in the year 2011 at a much lower exemption amount of $1 million and a much higher tax rate of 55 percent.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, let me be clear with what happens if the House does not pass this bill: The estate tax would go away for 1 year in the year 2010, and then it would return at 55 percent and a deduction of only $1 million, so every estate above $1 million would be taxed at a rate of 55 percent. Many families would lose their family businesses, their family farms, if we fail to act and pass this bill to preserve the ability of Americans to pass along their assets to the next generation.

It would also create a very bizarre circumstance in the year 2010 where there would be an incentive to die. I had a friend with a good sense of humor who stated that his wealthy family, his father, had joked with him that he planned not to stand near the top of a staircase in the year 2010 if that was the case.

Mr. Speaker, the estate tax is paid by very few Americans. Historically, fewer than 2 percent of Americans have paid the estate tax, and under this bill it will be even less. And only 3.5 percent of those who pay the estate tax pay it on small business assets, and only 5 percent on farms. When looking at specifically family-owned businesses, the number goes down to one-half of 1 percent.

Mr. Speaker, let us talk about the options for wealthy families. The estate tax does two important things. First, it provides revenue to government to provide services in the context in which wealth can grow, provides the landscaping in our country that allows entrepreneurs and businesses to succeed. Programs paid for from this revenue fund our social safety net, our legal structure, our public safety programs, and our regulatory framework that allows businesses to prosper. It is the protection of the law that allows those who have gained wealth to be able to keep it and transfer it to the next generation.

The second and, arguably, also more important function of the estate tax is to provide an incentive for charitable giving. By supporting charities and nonprofit organizations of their choice, the wealthy can simultaneously give back to the community directly and protect the assets that they leave to their heirs.

The estate tax is an important incentive to leverage the work of government with the efforts of nonprofits to create broad opportunities and assistance throughout society. By making the rules of the estate tax stable and permanent, we give families the ability to plan for their future as well as invest in the future of their communities.

We know that planned giving is an important part of the fundraising strategy for the nonprofits that do the good work that government and industry cannot, and there is no denying the link between the estate tax rate and the amount of planned giving. A 2004 Congressional Budget Office analysis of charitable giving in the year 2000 indicated that estate tax not only provided an incentive for charitable giving at death, but also played a role in philanthropic decisions made during people's lives. The same report estimated that the repeal of the estate tax would result in a decrease in bequests of anywhere from 16 to 28 percent or $13 billion to $25 billion, more than total corporate donations in a year.

I ask my colleagues, which universities do you know could take a 16 to 28 percent hit to their endowment, coupled with the decreases in the market of the last year, and yet continue to prepare our students to be competitive in the global marketplace? This is the real-world impact of what would actually occur were the estate tax to be abolished in the year 2010, not to mention what would happen when it came back at 55 percent and only a $1 million deduction the following year.

Now imagine in the worst case scenario devised by opponents of the estate tax. Imagine that came true for a family, that in order to pay the tax, the heirs had to liquidate the assets of a business that had been in the family for some time. Do opponents of this bill truly believe that somehow making the family pay capital gains tax on these assets if they had purchased them in 1959 would be better? I know in my district, due to the growth and economic success Colorado has enjoyed, taxation on real estate assets, as an example, from a 1959 basis would be devastating. It would capture a much larger portion of middle class families. Many middle class families and, indeed, wealthy families worth $1 million, $2 million, $3 million would be stuck with large tax bills forcing liquidation if they were forced to pay capital gains tax on a 1950 basis or a 1959 basis.

I can't tell my constituents that I am against a permanent reduction in the estate tax and yet support a dramatic increase in capital gains taxation for them, which would bring the estate tax to upper middle class families. I hope the majority of my colleagues agree and will support the rule and the underlying bill.

I would like to thank Chairman Rangel, the members of the Ways and Means Committee and their staffs for their efforts in bringing this bill, and the gentleman from North Dakota (Mr. Pomeroy) for introducing this bill.

I urge my colleagues to consider that 99.75 percent of Americans will never pay this tax; and those who do should be thankful that they have had the opportunity to succeed in this great country and the privilege, the honor of being in a position where they are subject to this tax because their estates are worth more than $3.5 million.

I would like to remind my colleagues who stand by the old adage ``you can't take it with you,'' and I ask my friends and colleagues to consider the far-reaching benefits of charity and a sense of duty to country, and I ask for the passage of this rule and the underlying legislation.

I reserve the balance of my time.

I am our final speaker, so I reserve the balance of my time to close.

Mr. Speaker, I want to begin by addressing some of the misconceptions and inaccuracies in the arguments that have been made on the other side of the aisle.

First, I'd like to address some made by the gentleman from Texas that this is a tax on those who have paid the highest tax rates throughout their lives. I'd like to dispute this notion. Many of the people who have accumulated great wealth in this country have, throughout their lives, paid the capital gains tax rather than the income tax rate. I, for one, and I'm, I think, the fourth- or fifth-wealthiest Member of this body--I've accumulated some degree of wealth with my success in the Internet sector, starting companies, selling them. I've paid the capital gains tax. That is a 15 percent tax, not a 39.6 or a 35 percent tax.

In a moment we will hear some quotes from Mr. Buffett, Mr. Gates and Mr. Soros, three wealthy Americans, all supporters of the estate tax. They have also accumulated their wealth and have paid the capital gains rate. In the case of, for instance, Bill Gates, the wealthiest American, he has paid a rate substantially below 15 percent, due to his charitable contributions. The rate that Mr. Gates has paid is probably somewhere in the 10-12 percent tax range.

So again, I have paid less percentage tax than members of my staff here in Congress that earn $50,000, $60,000 a year. They pay a higher tax rate. So it's inaccurate to say that those who are hit with the estate tax have paid the highest tax rate throughout their lives. There might be some movie stars, sports stars, high-wage earners that have been paying the high-income margins, highest marginal income tax rate throughout their lives. But the majority of wealth is accumulated on the capital side and has been subject to the capital gains rate, which had been 20 percent, more recently, 15 percent, and scheduled to return to 20 percent; regardless, well below the highest marginal rate.

I'd also like to address a remark made by my colleague from North Carolina, Dr. Foxx. She called this the biggest increase ever in the inheritance tax rate. Again, this is a decrease, a decrease in the inheritance tax. Yes, there is a 1-year effect. For the year 2010 alone, it's an increase. For every other year it's a decrease. Instead of 55 percent and $1 million, every dollar above $1 million would be taxed at 55 percent if we don't pass this in the year 2011 and beyond. We are reducing that.

This is a substantial decrease one of the largest decreases in the inheritance tax rate, to 45 percent from 55 percent in 2011 and beyond. And we're increasing the deduction. We're starting that at a $3.5 million estate--that's a $7 million estate for a couple that passes away, instead of a $1 million deduction, to be clear. I'd further like to make it clear that repealing the estate tax and replacing it with a capital gains tax on the increase in basis would be a tax increase, as proposed by my colleagues on the other side of the aisle. This would be a tax increase for upper middle class families and would actually result in many families losing their family businesses.

If you have a $3 million family business, family farm, under the Democratic proposal they pay zero tax. Under the Republican proposal, a $3 million family estate or farm with a very low basis, they started it maybe with $100,000 in the 1950s, so that's a $3 million gain, that would be subject to $450,000 capital gains tax. At 20 percent it would be over $600,000 in taxes. That could result in the family losing the farm or losing the small business. Under the Democratic proposal we allow families to keep family farms and small businesses in the family.

Mr. Speaker, this bill is one of many steps that Congress must take towards an equitable Tax Code. The bill highlights Democratic commitments to fairness by making permanent the current estate tax exemption of $3.5 million, $7 million total, at a maximum tax rate of 45 percent. Opponents of this bill may say the estate tax should be repealed. Well, that's supporting a debt finance tax cut of $1.3 trillion.

Yes, repealing the estate tax in its entirety would result in an increase in the deficit of $1.3 trillion. That's $1 trillion in lost revenue and $277 billion in increased interest payments on our growing national debt. Does that sound like fiscal responsibility? The only result of repealing the estate tax would be that the .25 percent, quarter of 1 percent, of the wealthiest American families will pay a small estate tax, while other Americans won't have to suffer from increased debt.

Mr. Speaker, let's be honest with the American people. The estates of those 99.75 percent of Americans will continue to be tax free. As for those .25 percent that are subject to the tax, such as Bill Gates' estate, such as my own, we understand that ``the government that protects our business activities, the traditions that enable us to rely on certain things happening, that's what creates capital and enables net worth to increase.''

Those are Bill Gates' words, not mine. But I strongly agree. In Warren Buffett's opposition to the repeal of the estate tax, he said that the repeal of the estate tax would be akin to ``choosing the 2020 Olympic team by picking the eldest sons of the gold medal winners in the 2000 Olympics'' because ``without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit.''

America is, and should be, a meritocracy. Estate tax helps prevent a permanent aristocracy of the wealthy from arising in this country. Some opponents of the estate tax claim that it forces families to hand over half of their wealth to the government. But the facts simply don't support this claim. The truth is that few estates pay any estate tax whatsoever, and those that do, pay less than 20 percent of the value of their estate. We also know that the claims of rampant liquidation of farms is completely untrue. In fact, the American Farm Bureau Federation acknowledged to The New York Times that it couldn't find a single example of a farm to substantiate the claim, even when the estate tax was higher, 55 percent rather than the 45 percent it is today.

I'd like to give a quote from the president of the National Farmers Union, who says, ``Family farmers and ranchers are insulted by those who use farmers as the reason for eliminating estate taxes.'' I'd also like to give a quote from George Soros. George Soros said, ``The estate tax is the least damaging of all our taxation because it does not interfere with wealth creation. It increases social equality. It is so obvious estate taxation is a valuable taxation, and we should keep it.''

Again, on a revenue neutral basis, I would much rather pay $1,000 in tax after I die than before, when I'm using that capital to create value and jobs, or at least I was before I got to Congress.

Mr. Speaker, our choice here is clear. We can pass this bill which will remove the impact of the estate tax from 99.75 percent of Americans and give those who will pay this tax a substantially larger deductible. We can make sure that family businesses and family farms won't be subject to onerous taxation. Or we can increase the deficit by over $1 trillion and increase taxes for estates of $2 million, $3 million, $4 million with sizable capital gains within those estates.

Once again, I thank Chairman Rangel, the members of the Committee on Ways and Means and their staffs, as well as Representative Pomeroy, for bringing this important legislation to the floor. In America, it's not a sin to be rich, nor is it a crime to die rich. This bill gives our Nation's wealthiest families the ability to know exactly what their obligation to the Nation that fostered their wealth will be. And it is fair, and it is just.

Mr. Speaker, I'd ask my colleagues to join me on the side of facts, equity, and the 99 percent of Americans who will never pay this tax and who wish that

they were lucky enough to be successful enough to pay this tax, and remind them that a ``no'' vote is a vote against these principles.

I ask my colleagues to vote ``yes'' on the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009. I urge a ``yes'' vote on the previous question, and I urge a ``yes'' vote on the rule.

The material previously referred to by Mr. Lincoln Diaz-Balart of Florida is as follows:

Amendment to H. Res. 941 Offered by Mr. Lincoln Diaz-Balart of Florida

At the end of the resolution, insert the following new

section:

Sec. 3. On the third legislative day after the adoption of

this resolution, immediately after the third daily order of

business under clause 1 of rule XIV and without intervention

of any point of order, the House shall proceed to the

consideration of the resolution (H. Res. 554) amending the

Rules of the House of Representatives to require that

legislation and conference reports be available on the

Internet for 72 hours before consideration by the House, and

for other purposes. The resolution shall be considered as

read. The previous question shall be considered as ordered on

the resolution and any amendment thereto to final adoption

without intervening motion or demand for division of the

question except: (1) one hour of debate equally divided and

controlled by the chair and ranking minority member of the

Committee on Rules; (2) an amendment, if offered by the

Minority Leader or his designee and if printed in that

portion of the Congressional Record designated for that

purpose in clause 8 of rule XVIII at least one legislative

day prior to its consideration, which shall be in order

without intervention of any point of order or demand for

division of the question, shall be considered as read and

shall be separately debatable for twenty minutes equally

divided and controlled by the proponent and an opponent; and

(3) one motion to recommit which shall not contain

instructions. Clause 1(c) of rule XIX shall not apply to the

consideration of House Resolution 554.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

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 would like to thank my friend the gentleman from Colorado (Mr. Polis) for the time.

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

Eight years ago, Mr. Speaker, the Republican-led Congress passed legislation that provided over $1.3 trillion in tax relief by, among others, gradually increasing the exemption for the estate tax while decreasing the tax rate itself. As part of that legislation, the estate tax, also known as the death tax, is set to disappear next year. The underlying bill would undo the repeal of the death tax and instead bring back the tax, extend the estate tax rate of 45 percent, and include an unindexed exemption.

I believe these are excessively high rates of taxation, especially when we realize that the tax is imposed at the end of a lifetime of work on which taxes were paid throughout the stages in which income was made. It is wrong, I believe, to tax individuals who have spent their entire lives working to provide their families with some financial security, and so that's why I oppose the underlying legislation.

This double taxation, which is really what we're talking about today, I believe is destructive to family-owned businesses and farms, which are often torn apart or need to be liquidated entirely just to pay those burdensome taxes at the time of death. Americans who work hard and pay taxes all of their lives I don't think should be punished for responsibly saving with yet another tax when they pass away.

When the country has double-digit unemployment, the current majority in Congress is threatening small businesses, the engines of economic growth and job creation in the Nation, with even higher tax burdens. Small businesses are often struggling to survive, to meet payroll and avoid layoffs, and yet this is another example, Mr. Speaker, of the fact that the majority time and time again is proposing legislation that hampers the ability of small businesses to thrive and to hire new workers.

It's unfortunate that the majority feels that they can continuously impact, hit small businesses with tax after tax and expect them to survive

and thrive and retain their workers. That's not the way the economy works.

Even if small business owners do not receive an estate tax bill, they still spend resources on estate tax compliance. According to a recent survey of small and medium-sized manufacturers, those small businesses spend an average of $94,000 on fees and estate planning costs in preparation for an estate tax bill. Imagine what a small business, Mr. Speaker, could do with that money. They could invest it in their company to grow their business. They could add more workers. Instead, the majority prefers placing more and more burdens. And this is but one example, the legislation being brought forth to the floor today, of the majority's incessant endeavor to place more and more burdens on the engines of our economic growth.

Small businesses are responsible for 60 to 80 percent of all new net jobs that were created in the last decade. If the majority continues with their current policies, if they continue on this track of placing more and more burdens on small business, the unemployment rate is going to continue to rise.

I think what we should be doing is everything possible to lower unemployment, to spur investment and job growth. That's where we should be heading.

So I believe what we should be doing is extending the repeal of the death tax. And many of us in this Congress, especially on this side of the aisle, we feel very strongly on this issue. Short of passing the permanent repeal, which I support, at the very least I think we should enact legislation that sets a reasonable rate, provides an appropriate exemption amount, and indexes that amount for inflation. We already saw with the alternative minimum tax what not indexing is capable of doing when Congress acts in that manner. So, unfortunately, the bill does nothing of what I just said, a reasonable rate and indexing an exemption amount.

Yet we on our side of the aisle will not be able to have a debate on legislation, on a proposal to do just that, to index an exemption amount and set a reasonable rate indefinitely into the future. We won't be able to do that because the majority again is closing down the process, shutting down debate. They promised to do quite the opposite, as you know, Mr. Speaker.

So let's contrast what the current majority is doing today with the estate tax rule that we passed when we were in the majority. That rule allowed our distinguished colleague Mr. Pomeroy to offer his substitute amendment. Today we in the minority will be treated much differently.

We will not be given the opportunity that we gave the current majority and Mr. Pomeroy. We will not be allowed to debate our substitute proposal. We will not be afforded a vote on our alternative legislation.

The difference in treatment is not an isolated incident but the standard operating procedure for this majority. They continuously close down the process. They shut out Members from both sides of the aisle from being able to introduce and have debated their amendments, and I think it is unfortunate.

I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Georgia (Mr. Gingrey).

Mr. Speaker, I yield 3 minutes to the gentlewoman from North Carolina (Ms. Foxx), my distinguished friend and colleague from the Rules Committee.

I yield 30 more seconds.

Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Gohmert).

Mr. Speaker, I yield 2 minutes to my distinguished friend from Texas (Mr. Culberson).

Mr. Speaker, it's my pleasure to yield 2 minutes to my distinguished friend from Louisiana (Mr. Scalise).

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from California (Mr. Campbell).

Mr. Speaker, I yield 4 minutes to my distinguished friend from Texas, the Ways and Means Subcommittee on Trade ranking member, Mr. Brady.

Mr. Speaker, I yield 1\1/2\ minutes to my dear friend from Texas (Mr. Hensarling).

I thank you, Mr. Speaker, for the courtesy, and my friend, Mr. Polis, for his courtesy and all those who have participated in this debate. And I think the essence of the contrast of ideas that has been shown today is that we on this side of the aisle believe that we should be focused like a laser on job creation. I think Mr. Hensarling said it very well, Will this legislation create jobs?

We don't think so. As a matter of fact, we are convinced that it will continue to take the country in the wrong direction with regard to employment. Unemployment continues to rise, and the majority brings more regulation, more taxes, and further stifles small business at a time when we should be encouraging jobs.

Mr. Speaker, we believe, as the overwhelming majority of the American people do, that Members should have the ability to read bills before they vote on them. It really shouldn't be an issue because that was promised by the distinguished Speaker during the campaign when the majority was campaigning to take the majority. And even on her Web site, you'll read Members should have at least 24 hours to examine bills before floor consideration.

But that hasn't been the case. I remember when the Rules Committee-- at 3 in the morning we were handed a 900-page amendment to the so- called cap-and-trade energy legislation that we had to vote on simply hours afterward. And the American people were rightfully outraged about examples such as that. That's why there's legislation that's been filed by a bipartisan group that has 182 Members that have signed, right up there, right in front of you, Mr. Speaker, a discharge petition to have legislation brought to the floor requiring at least 72 hours before the legislation has to be voted on by this House.

So that's why today I'm asking for a ``no'' vote on the previous question so that we can consider that legislation, bipartisan legislation by Congressmen Baird and Culberson. It's not going to interrupt the death tax debate, the estate tax bill, because if the motion passes, the motion I'm making provides for separate consideration of the

Baird-Culberson bill within 3 days. So we can vote on the estate tax bill and then, once we're done, consider that legislation requiring the 72 hours.

I ask unanimous consent to insert the text of the amendment and extraneous materials immediately prior to the vote on the previous question.

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

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

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.