Family Prosperity Act

By:  James DeMint
Date: Sept. 26, 2006
Location: Washington, DC

FAMILY PROSPERITY ACT -- (Senate - September 26, 2006)

Mr. DeMINT. Mr. President, earlier this year Republicans put together one of the most important bills we have considered, and Republicans asked for a vote on that important bill we call the Family Prosperity Act. Indeed, it does deal with the prosperity, the economic well-being, the cost of living for every American family. It contains three very important measures and all enjoy majority support in the Senate. One was permanent death tax relief, another was the extension of very important expiring tax provisions, and a minimum wage increase of more than 40 percent.

The bill represents a true bipartisan compromise. Yet it met unified Democratic obstruction that prevented it from receiving an up-or-down vote. I do not think I have ever seen a vote that has so clearly demonstrated Democrats' willingness to turn their backs on American families in order to score political points. I believe Americans understand that Republicans worked hard to reach a true compromise that would raise the standard of living for all American families. I think they will remember that after years of rhetoric, Democrats proved they were all talk and no action.

For years Republicans, along with many Democrats, have worked for permanent death tax relief because it is an immoral double-tax that punishes death and savings. As the Senator from New York, Mrs. Clinton, said when she was running for office in the year 2000:

[Y]ou ought to be able to leave your land and the bulk of your fortunes to your children and not the government.

Other Democrats have supported death tax relief in the past, including Senators Wyden, Bayh, Pryor, Landrieu, and Cantwell. Even the minority leader, Senator Reid, has said he is for ``fixing the estate tax.'' Yet when it came time to vote, they joined their fellow Democrats to block death tax relief.

The Family Prosperity Act also extends several important tax relief provisions that are set to expire in October to extend several critical relief measures, including State and local sales tax deductions, research and development tax credits, college tuition deductions, work opportunity tax credits, welfare-to-work tax credit, depreciation for restaurants, timber capital gains, teacher classroom expense deductions.

These tax relief provisions enjoyed broad bipartisan support and need to be renewed to keep our economy growing. Instead, in August, Democrats obstructed these items and essentially voted to raise the cost of living for American families.

Additionally, the Family Prosperity Act contained a longtime priority for Senate Democrats, a 40-percent increase in the minimum wage.

I must make it clear that I personally oppose a minimum wage increase, as do many of my Republican colleagues. Economists agree that raising the minimum wage prices people with low skills out of the job market and keeps them from getting a job that ultimately pays higher wages. Yet Republicans such as myself are willing to vote for this true compromise bill. Unfortunately, Democrats chose election-year partisan obstruction instead of lowering the cost of living for American families.

However, today we can change this. We are nearing the end of the 109th Congress, and we have debated these issues over and over. We now have one final opportunity to get this right and pass this bill to secure America's prosperity. In fact, I understand that some Democrats just gave a press conference earlier today urging the passage of the tax relief extensions in this Family Prosperity Act. Well, they are about to have their chance. The Democrats now have one final opportunity to either do what is right for American families and lower the cost of living or they can choose to continue their partisan political games of blocking American priorities so they can try to blame Republicans as a do-nothing Congress.

Mr. CORNYN. Will the Senator yield for a question?

Mr. DeMINT. Yes.

Mr. CORNYN. Mr. President, I would inquire of the distinguished Senator from South Carolina--he has just described the blocking of the Family Prosperity Act, which, as I recall, combines the death tax, an increase in the minimum wage, and so-called extension of the tax relief, including the teacher classroom deduction, the State and local tax deduction, and the R&D--research and development--tax credit. But I believe he also referenced a press conference that was held at 10 o'clock this morning here at the Capitol where Republicans were charged with raising taxes against the middle class for failing to extend the very tax extenders that they blocked just in August.

Is that the Senator's understanding?

Mr. DeMINT. The Senator from Texas knows as well as I do that this has become the pattern of our Democratic colleagues: to purposely block important legislation and then attempt to come down and blame Republicans or blame the President when it doesn't actually get done.

I am excited, as the election nears, that the American people are much smarter than that. They are going to clearly see through those attempts. These important things which need to be done, many of which we have been able to accomplish despite Democratic obstruction, are still being blocked by our Democratic colleagues.

Mr. CORNYN. Mr. President, will the Senator yield for an additional question?

Mr. DeMINT. Yes.

Mr. CORNYN. Is the Senator aware that in addition to blocking the Family Prosperity Act, which would have achieved the No. 1 item on the Democratic agenda, which is raising the minimum wage, in addition to reducing the death tax and providing additional tax relief, which we discussed, that there have been other efforts to block and then blame Republicans for being a do-nothing Congress?

I would just like to read a short list--I know the Senator has some other prepared remarks he is going to focus on--just to cover sort of a survey of the field, of areas which our friends on the other side of the aisle have sought to block and blame the majority while, at the same time, being the ones responsible for blocking important legislation.

For example, is the Senator aware that there is now an attempt on the Democratic side to block the Child Custody Protection Act--and we mentioned the estate tax and Extension of Tax Relief Act, the Gulf of Mexico Energy Security Act, which would help us become less dependent on imported energy and oil, the Arctic Coastal Plain Domestic Energy Security Act, the Health Insurance Marketplace Modernization and Affordability Act, the Legislative Line Item Veto Act, the Federal Election Integrity Act, and the Social Security Guarantee Act? Is the Senator aware that in each of those instances, but for blocking by our friends on the other side of the aisle, we would actually be able to make bipartisan reforms and actually advance the agenda of the American people in very positive and constructive ways?

Mr. DeMINT. Yes, I am aware. And I am aware that all of the bills and legislation that my colleague mentioned have majority support in the Senate. But by using procedural blocking techniques, the Democrats have kept these from coming to a vote, or even debated in some cases. But, again, I am confident the American people, as they focus on what we have been doing--and I realize our Democratic colleagues produced their commercials to call us a do-nothing Congress several months ago, so it has become very important for them in the last days of this Congress to block everything that they can. But we have several important pieces of legislation this week related to the security of this country that we need to pass, and we are going to have the opportunity in a few minutes to hopefully get unanimous consent to pass the Family Prosperity Act, to give people a raise in the minimum wage, to pass these tax extenders, and to create a compromise on this death tax, which is so immoral and hurts so many families.

Mr. CORNYN. Mr. President, if the Senator would yield for one last question.

Mr. DeMINT. Yes.

Mr. CORNYN. Mr. President, I know the Senator's focus is on the Family Prosperity Act. But one of the bills that I mentioned, just as a final example of this tactic of blocking and then blaming the majority for being a do-nothing Congress, is the Health Insurance Marketplace Modernization and Affordability Act. As I recall, this is sometimes called the small business health insurance bill, which would be designed to allow small businesses and other associations to pool together to buy health insurance for their employees at about 12 percent lower rates than are otherwise available.

Is the Senator aware that while we attempted to close off debate, 55 Senators voted to be able to close off debate and go to that important small business health reform legislation, and 43 Senators voted against closing off debate, thus preventing us--again, blocking us--from passing this important health care legislation which appears to otherwise have broad bipartisan support?

Mr. DeMINT. I am glad the Senator from Texas brought that up because this morning our distinguished colleague from New Mexico was talking about how Republicans have done nothing significant to lower health insurance costs when, in fact, the small business health plan would have done just that. I was a small businessman for many years. Health care is one of the highest expenses we had. The chance to pool together with small businesses all over the country to buy insurance, just like large companies can do, is a commonsense measure that should have been passed in the Senate, yet was blocked by our colleagues.

Mr. CORNYN. I thank the Senator.


Mr. DeMINT. Mr. President, we have the opportunity to correct a wrong. An important bill was blocked. I would like, as we consider this Family Prosperity Act this morning, to ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 562, H.R. 5970, which is the Death Tax Repeal Act, which we call the Family Prosperity Act. I ask unanimous consent that the bill be read the third time and passed, and a motion to reconsider be laid on the table.

The PRESIDING OFFICER. Is there objection?

Mr. BINGAMAN. Mr. President, I object.

The PRESIDING OFFICER. Objection is heard.

Mr. DeMINT. Mr. President, we see again a bill that has been debated and considered for many months, a bill on which a press conference was held this very day saying we need to pass a major portion of it. Yet at every turn there is blocking.

I would like to take a few minutes--and if the Presiding Officer would let me know when I have 5 minutes left--to talk about one of the provisions of the Family Prosperity Act. My friends on the other side of the aisle are holding up legislation that would prevent an enormous increase in the death tax on everyday Americans. I will talk more about this chart, but Democrats widely claim that the death tax impacts only a few of the wealthiest Americans. The truth is, the only reason the death tax doesn't affect more hard-working Americans today is that it currently--the Republicans have passed temporary legislation that is phasing out the death tax, as we can see on this chart through 2010. And we have done this despite Democratic obstruction. But as you can see from this chart, if the Democrats have their way, a huge number of American families will be in the death tax death grip in 2011.

Minority Whip Durbin, my colleague from Illinois, said this about the death tax:

How many families will benefit if the estate tax is repealed? Each year in America, a Nation of 300 million: only 8,200 families. You have to search long and hard to find them. These families are so well off, who have done so well in this great Nation, who have benefited from this democracy and the blessings of liberty, who have enjoyed a comfortable life because of their prosperity, who now have taken millions of dollars to hire the most effective lobbyists in Washington, DC to push this outrageous special interest legislation, the fattest of cats in America will get a great bowl of tax cuts, tax cuts on the estate tax.

Senator Durbin argues against full repeal of the death tax, but we are not arguing for full repeal of the death tax. Our legislation would simply prevent an enormous increase in the death tax, while Senator Durbin is arguing that we should let the death tax increase in 2011 to a top rate of 60 percent. That is not taxing, it is taking. No, in fact, it is stealing.

Senator Durbin also argues that the death tax only affects 8,200 families. The truth is, the death tax doesn't affect 8,200 family members who may die; it affects millions of family members still living who are left to deal with Uncle Sam's sticky fingers.

Let's take a look for a minute at homes in Senator Durbin's State. Keep in mind, in 2011, if Senator Durbin has his way, all estates of $1 million or more will be taxed at a very high rate.

He says: You will have to search long and hard for these families.

But look at these homes in Chicago that he says are owned by the fattest cats. These are very modest and some would consider lower scale homes, all valued at over $1 million today. Are these the wealthiest Americans? If you look at Chicago, right now over 36,000 homes in urban areas would be affected by the 2011 death tax. But if you move ahead to 2011 and look at the number of homes in the Chicago area that will be affected by the death tax, the Democratic death tax increase, you are looking at more than 143,000 homes. You don't have to look long and hard to find that many houses.

What about other cities? By 2011, when the death tax is raised to the Democrats' level that they want, if you look around the country, over 500,000 in New York City, over 200,000 in Boston, over 250,000 in Newark. If you go to Atlanta, 26,000; Chicago, as I said, 143,000; San Francisco, over a quarter of a million; Los Angeles, 812,000. You don't have to look long and hard to find these homes.

The Census reports that just over 1 million homes in 2004 were subject to the death tax at the Democrats' level of 2011. In 2005, that number reached 1.4 million, over a 40-percent increase. As properties continue to appreciate, that number will continue to increase year after year, subjecting more and more Americans to the Democratic death tax. If you look at 2005, under the levels that will happen in 2011, there has been a 143-percent increase in the number of homes that will be affected, just in 2 years, based on the Democratic death tax.

Let's talk about some farms. Let's look at who these families are who Senator Durbin claims have enjoyed a comfortable life--the ``fat cats'' as he calls them. There are nearly 30,000 farms in Illinois alone, many of them owned by families whose comfortable life has made them a target of Senator Durbin's death tax should we not vote to block the impending tax increase. Based on 2002 Illinois Farm Bureau figures, over one-fourth--26.7 percent--of all Illinois farms would currently be subject to the death tax at Senator Durbin's rate of taxes in 2011. In 2011, you will have about 30,000 Illinois farms, or over 40 percent of all farms will likely be subject to the death tax. When we fail to prevent the 2011 Durbin death tax increase, it will not be hard to find almost one-half of Illinois' farms. If you take the USDA figures, the Department of Agriculture, they say that over half of the farms in Illinois will be subject to the death tax in 2011 if Senator Durbin gets his way.

How many farms will be eligible if hit by the Democratic death tax increase in 2011? Well, again, the fat cats we are talking about, if you look at Arkansas, you have nearly 5,000; Missouri, 9,200; Iowa, nearly 20,000 farms; South Dakota, 5,500; in California, 20,000. Lots of family farms are going to be affected by the Democratic tax increase.

Let's talk about small businesses, really the backbone of the American economy. Who are these--to quote Senator Durbin--``the fattest of cats who have taken millions of dollars to hire the most effective lobbyists in Washington, DC to push this''--as he calls it--``outrageous special interest legislation.''

Again, his numbers are somewhat questionable. The National Federation of Independent Business reports that 1.4 million small businesses would currently be subject to Durbin's tax increase in 2011 if the Democrats get their way. And by 2011, an additional 1.2 million will be eligible for the tax. A vote against the Republican legislation to reform the death tax is a vote to increase the death tax on 2.6 million small businesses.

Are these 2.6 million hard-working small business owners and employers the fattest of cats?

Small businesses that we all use every day will be affected.

Let's take a closer look at some of the specific examples of these family farms, family homes, and family-owned businesses if the death tax is implemented the way the Democrats want. I will use one. The Greens, the Green family--Greens Printers. For 97 years, Janet Green and her family have owned and operated Greens Printers, Inc., in Long Beach, CA. Her company operates a sheet-fed, four-color printing plant with full bindery and electronic capabilities. The family wants to remain in business for many years to come. The fact that they have to pay a ridiculous insurance premium for the sole purpose of paying a tax when they die is not only absurd, it is antibusiness. However, the future of Greens Printers is being threatened by the death tax. Janet's company cannot afford to pay an enormous life insurance cost that would help pay for the death tax when
her parents need to pass on the business.

Janet says:

Because we are a third generation printing facility, we have already paid the estate tax in the early 1970's. Both of my parents are well into their seventies and not insurable because of ill health and the astronomical cost associated to do so. At roughly $100,000 a year [for this insurance policy], we cannot afford it.

She says:

Let my employees keep their jobs and let us maintain the risk of owning the business to keep them employed.

She is reminding us it is not just the family that is affected, but it is everyone who works for these businesses who are ruined by this death tax.

Over the years, Green has tried not only to be successful in generating profits, but also successful at being a good neighbor. She does this by supplying 20 people in the community with good jobs and benefits, and by building lasting relationships with employees that allow the company to plan for future growth and the workers to enjoy a stable income and fulfilling livelihood.

Her family wants to keep Greens Printers even after she is gone.

We have 16 grandchildren who would love to take over the company and see it grow someday.

She asked us in Congress:

Does Congress really think that we small, family-owned businesses out here have hundreds of thousands of dollars tucked away for estate taxes? Any money we make we put right back into the business by purchasing new equipment and hiring more employees.

Let's look at another business, the Barthle Brothers Ranch, in Florida. These are some more fat cats, as Senator Durbin would call them. Larry, Mark, and Randy Barthle are brothers who share a similar story with many ranchers around the country. They are trying to maintain the family ranch their father built in the early 1930s so they can pass it on to future generations.

The ranch has received national recognition for its environmental stewardship practices that protect and promote the environment and wildlife. The family is dedicated to youth development to encourage future generations of ranchers to care for resources responsibly.

Larry Barthle says:

Our family was first struck by the Death Tax in the early 1970s when both my grandfather and uncle passed away within a short period of each other. We had to sell 1,200 acres of the ranch. Every penny went to pay taxes assessed to us and we still had to take out a loan for the balance. Not one cent was used for anything except taxes. After such a devastating blow, it was my father's lifelong goal to be able to pass along the ranch to his kids without being hit by the Death Tax. He was successful at the time of his death because he was able to make the transfers to my mother. We currently have our ranch set up [in all kinds of legal frameworks in order to try to get it through the death of another owner.]

This is not fair to American families and businesses.

Just one more quick example here, Mt. Pulaski Products. Scott and Kathryn Steinfort operate the family-owned Mt. Pulaski Products, Inc., in a small town in Illinois that bears the company name. It has been in business since 1951. They sell products that are absorbents and abrasives. For decades, the family has worked to build a successful business, which employs over 44 citizens there in Mt. Pulaski.

The Steinforts also are known for their community service, dedicated to serving the community. They have two sons. Both are serving in Iraq, both with engineering degrees. While many other engineering graduates are making big salaries, they serve our country. Someday they would like to join the company business, but the death tax looms over the family business. Without wealth, the Steinforts may be forced to sell the business to pay for the death tax, not only taking from future generations but possibly putting 40 families out of work. The say:

My wife and I have life insurance to cover these taxes, but as we age our premiums are marching steadily higher. Combined with not knowing how much we need to plan for in taxes and fees, the potential costs ultimately point to only one path: sale or liquidation of our plants to pay our tax burdens.

I have a lot more here that we could talk about, but I will put up one more chart. The Senator from Illinois, Senator Durbin, has told the American people that only 8,200 American families are affected by the death tax. The only reason that is today is because the Republicans have overcome Democratic obstruction and at least temporarily reduced the death tax. If the Democrats get their way, the tax on the American family will reach over 3.3 million children and grandchildren of those who die in the 10 years after 2011. Over the next generation, millions of children and grandchildren and workers in small businesses and farms will be affected.

I ask all my colleagues, what is the difference between these numbers? The difference is the truth. We have been misled, that this tax is about the wealthiest of Americans. Whereas, as we have seen today, in the homes and the farms, the small businesses, this tax is immoral. It steals from the American people, the hard-working families who put together some savings to pass along to the next generation. It is not to the fat cats and their lobbyists. It is to the average Americans, who are doing what we expect them to do, and that is to work and to save and to build a better future.

Today we have seen again that the opportunity to compromise and at least reduce these taxes was blocked again by our Democratic colleagues. Yet they come to this floor every day and ask why we are not doing something for the cost of living of the American people, to help improve their future. I think the reason for this is obvious. Senator Cornyn brought it up a minute ago. The Democratic strategy is to block what needs to be done and then try to blame someone else when it does not get done. The American people are smarter than that and they will see the difference.

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