A telling sequence of events is occurring in the House
of Representatives that speaks volumes about competing priorities and
fiscal responsibility. To pay for an estate tax repeal that will
be a windfall for the heirs of Bill Gates, Steve Forbes and other
super-wealthy families, and do nothing for more than 98 percent of
Americans, lawmakers are cutting or short-changing programs for
children, workers, the elderly, and the sick. Additional domestic
and international programs also will be on the chopping block soon to
pay for other indiscriminate tax cuts.
This choice isn't necessary. We can afford the programs
our future depends upon, as well as targeted tax cuts for those who need
it.
The appropriations bill for the Departments of Labor, Health
and Human Services, and Education was the most recent victim of the
House leadership's misguided strategy. The measure, which narrowly
passed in a largely partisan vote, cut $9 billion from the President's
request. Lost are funds that would allow 53,000 children to
participate in Head Start, assistance for 438,000 dislocated and
unemployed workers, $125 million for health coverage for uninsured
workers, and family caregiver and nursing home support for about 2
million elderly or disabled Americans. Many other education,
employment and health services would be cut back or frozen at inadequate
funding levels.
Unless funds are restored before the bill is enacted, Maine
would lose access to $12.8 million in federal education funds. We
would not get $8.1 million to reduce class size by hiring more teachers,
nor $3.4 million to improve teacher quality and recruitment in high
poverty school districts. Maine also would receive no new help in
repairing dilapidated schools, since the bill denied the President's
entire $1.3 billion school construction initiative. Federal
support under the Individuals with Disabilities Education Act would
increase, helping Maine school districts pay the extra costs of
educating children with special needs, but under the current bill the
funding continues to fall far short of the 40 percent Congress pledged
years ago.
These cuts are designed to compensate
for the blanket repeal (rather than targeted reform) of the estate tax
adopted by the House earlier this month. That tax now brings in
$28 billion a year. The repeal (which is phased-in) would cost
about $625 to $675 billion over the next two decades. That is a
lot of money, and if we are to keep the budget balanced, this lost
revenue would require further spending cuts.
Few American families now pay federal estate taxes–less than 2
percent of estates. But when an estate exceeds the law's $675,000
exemption, the amount due Uncle Sam can go as high as 55 percent.
I believe valuable but cash-poor family-owned businesses and farms
deserve relief. We should encourage family businesses and farms to
keep going, for this encourages community responsibility and
discourages suburban sprawl.
I favor a targeted tax cut. The Family-Owned Business
Survival Act (H.R. 1278), which I cosponsor, would eliminate the federal
estate tax for these assets. I also voted for an alternative that
would provide a 20 percent across-the- board reduction in estate tax
rates, raise the personal exemption to $1.1 million, and create a $4
million exclusion for family farms and closely held businesses.
There was a bipartisan consensus that family-owned businesses
and farms need protection. Yet, in the quest to reward big donors
and other wealthy interests, sensible reform was stifled. Instead
of fixing the problem, the majority pushed through a fiscally
irresponsible total repeal that will be costly for all, and beneficial
to only a few.
Budgets and tax cuts are all about choices, which is no less
true in these times of budget surpluses. Indeed, the choices we
make at this juncture are likely to determine whether our prosperity
continues. Whether taken in many small doses or one large one (as
was attempted last year, when Congress adopted–and the President
vetoed–a massive, $792 billion tax cut package), the consequences will
be the same: fiscal irresponsibility that will haunt this nation well
into the new century.
The surplus should be directed to improve education and health
care, pay down the national debt, protect the solvency of Social
Security and Medicare when the baby boomer generation retires, and pay
for targeted tax cuts. It should not be used to reward only the
wealthiest.