Providing for Consideration of H.R. 5638, Permanent Estate Tax Relief Act of 2006

PROVIDING FOR CONSIDERATION OF H.R. 5638, PERMANENT ESTATE TAX RELIEF ACT OF 2006

Mr. ETHERIDGE. Mr. Speaker, I rise in opposition to H.R. 5638, the Permanent Estate Tax Relief Act of 2006, and I urge my colleagues to join me in voting against it.

As a part-time farmer myself, I support tax relief that helps our farms and small businesses grow. I have supported raising the estate tax exemption level several times in previous years. However, this must be done in a responsible manner that does not dishonor our values, shortchange our essential services, or heap more debt on our children and grandchildren. Unfortunately, H.R. 5638 fails this basic test. H.R. 5638, the Permanent Estate Tax Relief Act of 2006 is far from the ``compromise'' that its authors claim. This bill would result in almost 80 percent as much lost revenue as a full repeal of the estate tax. H.R. 5638 would cost the American people $762 billion in the first 10 years of its enactment.

The Permanent Estate Tax Relief Act of 2006 is the latest example of this Congressional Majority's misplaced priorities. Less than 1 percent of estates will pay the estate tax this year under the exemption in current law and only 7,500 estates nationwide would be taxable under the $3.5 million exemption that would take effect in 2009. Under current law, 997 of every 1,000 estates would not pay any part of Federal estate taxes. Given current circumstances, the timing could not be worse for giving tax breaks that only apply to multi-millionaires' estates.

I am very proud that during my first term in the U.S. House, Congress and the President balanced the Federal budget for the first time in a generation. Until just a few years ago, the budget remained balanced and the surpluses we produced were being used to pay down the national debt and strengthen Social Security. The current Republican regime in the White House and Congress has reversed that progress and the Nation is much worse off because of their policies. Today the national debt stands at $8.4 trillion. We face the danger of being forced to borrow more money from countries like China to pay our national debt and putting ourselves at the mercy of their rising interest rates. A nation at war cannot justify adding almost $800 billion to this staggering debt. We cannot continue to pile on debt that our future generations will be forced to pay.

Increasing this budget shortfall only makes it more difficult to invest in our true priorities. We are still a nation at war and some of our soldiers lack the best armor. We are facing another hurricane season while continuing to rebuild the Gulf Coast following Hurricane Katrina. Already the Republican budget resolution cuts funds for homeland security, including port security by $6.1 billion over 5 years, cuts essential services for working families by $9.4 billion, and slashes funding for health by $18.1 billion below current services. As the former Superintendent of North Carolina's public schools, I find the budget cuts for education especially disappointing. Instead of investing in our future Congressional Republicans are eliminating 42 Federal education initiatives. The budget also eliminates vocational education ($1.3 billion); Perkins Loans ($730 million); Safe and Drug-Free Schools State grants ($347 million); and Even Start family literacy services ($99 million). The Republican budget cuts $15 billion from the amount authorized for the No Child Left Behind education reform effort and reduces the 17.7 percent Federal contribution to Individuals with Disabilities Education Act (IDEA) to 17.0 percent. The loss of revenue from H.R. 5638 leaves a huge budget hole that will have to be filled by the States and the burden will be placed on middle class and low income families.

In contrast, the Pomeroy Substitute is an alternative that offers a simpler solution without the damaging economic effects of H.R. 5638. Unlike the Republican bill, the Pomeroy Substitute would offer immediate tax relief by raising the estate tax exemption level to $6 million per couple and growing to $7 million per couple in 2009. This would exempt 99.7 percent of all estates in the nation while costing only 60 percent of H.R. 5638. While there is no plan to make up for the huge losses in revenue resulting from H.R. 5638, the Pomeroy Substitute would be payed for by closing the gap in unpaid taxes. Additionally, the estate tax revenue collected under the Pomeroy Substitute would be transferred as receipts used specifically to shore up the Social Security trust fund. According to the Social Security Actuary, this would eliminate one quarter of the trust fund's shortfall.

The Pomeroy Substitute offers immediate tax relief without adding to the crippling debt now facing future generations. This is the type of sound tax and budget policy Congress should pass. We owe the American people nothing less.

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