CONGRESSMAN TOM ALLEN 
June 17, 2000 
 
"A Poor Choice: Robbing the Future to Reward the Few" 
(Message to Maine weekly column for June 17, 2000)
by U.S. Representative Tom Allen
 
 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.
 
 


 
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