ESTATE TAX AND EXTENSION OF TAX RELIEF ACT OF 2006--MOTION TO PROCEED -- (Senate - August 03, 2006)
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Mr. KERRY. Mr. President, a lot has changed in the last 10 years. Gasoline prices have risen, up 70 percent since President Bush took office in 2001. Child care costs have risen and now a typical family can expect to pay almost $10,000 per year for one child, which is more than the cost of public college tuition. Health care costs are soaring, and health insurance premiums are skyrocketing. In short, the cost of everyday life has greatly increased. We in Congress have certainly taken notice: we have given ourselves a pay raise eight times since 1997, totaling $30,000, and we've given the President pay raises totaling $200,000. Yet in that time we have failed to give working Americans a raise by increasing the minimum wage.
Now, facing tough reelection races and a disillusioned public, my Republican colleagues are finally willing to do something about it, but only on their terms. Despite the fact that the rich are getting richer and the poor are getting poorer, my colleagues' ``solution'' to help American families is to attach the long-overdue minimum wage increase to an otherwise un-passable estate tax reform bill that will benefit just a few wealthy families. This is nothing more than political blackmail. If Congress were genuine about its care for the lives of hard-working Americans--if we truly believed that any honest American working a full time job should not have to live in poverty--we would never condition a minimum raise increase on a windfall for the wealthy.
Since President Bush took office, the number of Americans living in poverty has increased by 5.4 million, bringing the total to 37 million Americans who live in poverty today, 13 million of whom are children. What's even more disturbing is that over 70 percent of children in poverty live in a home where at least one parent works. So today in America we have a situation in which millions of children are living in poverty despite the fact that they live in homes with a working adult. Among full-time, year-round workers, poverty has increased by 50 percent since the late 1970s.
This may be surprising, but if you take a minute to understand the situation the picture becomes clear. Consider a single mother of two working a minimum wage job 40 hours a week for 52 weeks a year. Without taking any time off for illness or vacation, she earns just $10,700 a year, nearly $6,000 below the Federal poverty line for a family of three. The current minimum wage equals only 31 percent of the average wage for the private sector, nonsupervisory workers, the lowest percentage on record since World War II. In the past 9 years, the purchasing power of the minimum wage has deteriorated by 20 percent, and today the value of the minimum wage is as its lowest level since 1955.
What these figures make absolutely clear is that it's long past time to raise the minimum wage. Just 5 weeks ago, the Senate failed to give relief to hard-working Americans by increasing the minimum wage. What has changed? As far as I can tell, two things have changed. First, Republicans in tight races realized their failure to address the needs of working Americans would hurt their chances for reelection. Second, those in favor of repealing the estate tax realized that the likelihood of doing so was slim to none. So they agreed to increase the minimum wage to $7.25 over a 3-year period that will benefit millions of working families, but they would only do so at a cost of $268 billion in estate tax relief for a few wealthy families.
I think we can all agree that the estate tax law needs to be revisited. The current policy does not make sense, but neither does relief that benefits a few. The estate tax relief before us has a long-term negative impact on our deficit. The 10-year costs from 2012-2021 are $753 billion when interest is included. That is $753 billion that will be added to the deficit or result in vital programs having their funding slashed. And there is no discussion now about how to pay for this bill.
An increase in the minimum wage should not be saddled with an unrelated, unnecessary, and unfair tax provision. We should pass a clean minimum wage bill and then work on a bipartisan estate tax bill that is fiscally responsible and protects most small businesses from the estate tax.
The legislation before us provides an average tax cut of $1.4 million to 8,200 estates. A minimum wage increase would provide an average benefit of $1,200 to 6.6 million hard-working Americans. The package before us clearly reflects misguided priorities. I cannot think of one reason why minimum wage legislation should include estate tax relief.
When President Theodore Roosevelt advocated an estate tax nearly a century ago, he argued that, the ``man of great wealth owes a peculiar obligation to the state, because he derives special advantage from the mere existence of government.'' He further advocated that ``[w]e are bound in honor to refuse to listen to those men who make us desist from the effort to do away with the inequality, which means injustice; the inequality of right, opportunity, of privilege. We are bound in honor to strive to bring ever nearer the day when, as far as is humanly possible, we shall be able to realize the ideal that each man shall have an equal opportunity to show the stuff that is in him by the way in which he renders service.''
We need to return to a society that values hard work. We cannot let ourselves become a society divided by income inequity. Defeating this bill is a step in the right direction toward fairness and the restoration of sane, responsible fiscal policy.
In addition to the minimum wage, the bill before us includes so-called expiring tax provisions that Congress should pass. There is no reason we cannot work together to extend expiring provisions such as the research and development credit and a tax deduction for the cost of a college education, which expired at the end of 2005. It is embarrassing that the Senate is leaving for our August recess without extending these provisions, especially since the capital gains and dividends rates that did not expire until 2008 have been extended to 2010. The extension of these provisions should not be threatened. The price of helping families with college education should not be estate tax relief for the wealthiest estates.
Mr. President, I support raising the minimum wage. I support tax credits for research development and college education. But I cannot support them when they are tied to fiscally irresponsible so-called reforms. I cannot support a bill that continues to put the interests of the wealthy above the interests of hard-working Americans. If my colleagues are serious about increasing the minimum wage, I challenge them to do so in a clean bill. I challenge them to put the best interests of working Americans front and center. I challenge them to stand up to this political blackmail and oppose the Estate Tax and Extension of Tax Relief Act. The American people deserve better than this.
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