September 8, 2000

Washington, D.C.– Following the vote of the U.S. House of Representatives to sustain the President’s veto of estate tax repeal legislation, Congressman Charlie Stenholm today called on the leadership of Congress to work with the President to provide meaningful estate tax relief to middle class families, family farmers and small businesses owners without jeopardizing Social Security and Medicare.

“There is agreement from both Democrats and Republicans that we need to provide estate tax relief for small businesses and family farmers and ranchers.  I still have hope that Congress will be able to come to agreement with the White House on a bill to provide immediate estate tax relief that can be signed into law.” Stenholm said.

The estate tax relief plan Stenholm proposed would immediately repeal the estate tax for all family owned small businesses, farms and ranches under $4 million, and reduced rates on all other estates, effective January 1, 2001.   This approach would immediately exempt 99 percent of family farms from estate taxes, and reduce the number of estates subject to the estate tax by 50 percent.

In contrast, the bill vetoed by the President would have gone well beyond providing relief for small businesses owners and family farms, resulting in much greater costs.  The bill’s costs would explode to more than $50 billion per year at exactly the time when Social Security and Medicare will begin to face financial challenges of retiring Baby Boomers.  The House of Representatives failed to muster the two thirds vote necessary to override the President’s veto on Thursday.

“The expense of this bill brings into serious question both debt reduction and other budget priorities.  With this sort of hole blown in the federal budget, everything from paying down the debt to protecting Social Security and Medicare to restoring payments to rural hospitals becomes doubtful, if not impossible,” Stenholm noted.  “That is why I encouraged the President to veto this fiscally irresponsible legislation.”

“I want folks who have a farm or ranch or who have built up a small business to be able to leave the fruits of their labor to their children, but I don’t want to leave future generations with a massive national debt and trillions of dollars in unfunded liabilities in Social Security and Medicare.”

“Despite this vote which was more about making a political statement than changing policy, I have hopes that we will be able to continue working on this issue and bring immediate estate tax relief to small businesses and family farmers before the year is over,” Stenholm concluded.