JIM LEHRER: And, speaking of certainty, President Obama did score a victory today when his deal on the Bush era tax cuts cleared the United States Senate.
NewsHour congressional correspondent Kwame Holman reports.
WOMAN: Mr. McConnell. Mr. Menendez
KWAME HOLMAN: The overwhelming majority on the Senate floor were in support when the final vote came.
WOMAN: The yeas are 81. The nays are 19. The motion is agreed to.
KWAME HOLMAN: In the end, most Democrats swallowed doubts about extending Bush era tax cuts even for the wealthy.
Florida’s Bill Nelson said the choice was clear.
SEN. BILL NELSON (D-Fla.): So, without action, on January the 1st, those fortunate enough to have a job would see a significant drop in their paycheck, as the middle-class tax cuts enacted 10 years ago also expire, with the effect that the taxes would be going up all across the income spectrum.
KWAME HOLMAN: Republicans negotiated the deal with President Obama, but some, such as Tom Coburn of Oklahoma, said no because the $858 billion cost is not offset by cuts elsewhere.
SEN. TOM COBURN (R-Okla.): Well, we’re going to run trillion-dollar deficits as far as the eye can see right now, with no grownups in the room saying, it’s time to quit doing that.
KWAME HOLMAN: Still, party leaders touted the tax cuts and the extension of jobless benefits through 2011.
The spirit of cooperation in the Senate didn’t extend to a mammoth bill funding the government for the rest of the fiscal year. Democrats and a handful of Republicans want to wrap $1.2 trillion worth of spending measures into a single appropriations bill. But the Republican leadership objected to that approach,
Among them, John Thune of South Dakota.
SEN. JOHN THUNE (R-S.D.): I mean, it’s inexcusable to think that we have to pass a $1.2 trillion bill, 2,000 pages, which we just got less than 24 hours ago, and that’s the way that you’re going to fund the government. And you’re going to load it up with all of this special interest stuff, to boot.
KWAME HOLMAN: The House already passed a bill to fund the government through next September that freezes current spending levels. Lawmakers there readied today to take up the tax cut measure.
The hangup in the House was an estate tax provision that sets a top rate of 35 percent on values above $10 million. Many Democrats instead want a top tax rate of 45 percent on estates of more than $7 million.
Republicans warned any move to change the tax cut deal now might jeopardize the entire package. But, in The Washington Post today, Maryland Democrat Chris Van Hollen vowed to try nonetheless.
He wrote, “We don’t think it’s fiscally responsible or fair to provide a tax cut bonanza to super-rich estates.”
For his part, President Obama again urged lawmakers to come together and finish the job.
U.S. PRESIDENT BARACK OBAMA: I know there are different aspects of this plan to which members of Congress, on both sides of the aisle, object. That’s the nature of compromise.
But we worked hard to negotiate an agreement that’s a win for middle-class families and a win for our economy. And we can’t afford to let it fall victim to either delay or defeat.
So I urge members of Congress to pass these tax cuts as swiftly as possible.
KWAME HOLMAN: The House could vote on the tax cut package tomorrow.
JIM LEHRER: It is on the estate tax provision where Judy Woodruff picks up the story now.
JUDY WOODRUFF: And we get two opposing viewpoints on the estate tax that has been a key sticking point for many House Democrats.
Republican Representative Kevin Brady of Texas and Democratic Representative Earl Pomeroy of North Dakota both join us from Capitol Hill. They both serve on the House Ways and Means Committee.
Gentlemen, thank you for being with us.
REP. EARL POMEROY (D-N.D.), North Dakota: Hi, Judy.
REP. KEVIN BRADY (R-TX): Thank you, Judy.
JUDY WOODRUFF: Now, Representative Pomeroy, it’s our understanding that this compromise would mean a tax only on a very small, relatively small, 3,500 estates in the entire country. Why do you think it’s unfair?
REP. EARL POMEROY: Well, we think the agreement reached on the Senate side simply went too far in terms of basically taking out estate tax as a revenue item for this country.
We prefer an approach taken in 2009. And that’s what an amendment that will be considered on the floor would substitute in place of the Senate deal. In 2009, we had the smallest level of taxation on estates in 80 years — 99.8 percent of the estates in this country had no tax at all.
And we believe that that’s an appropriate way to resolve this thing. The Senate deal gives away over two years an additional $23 billion, just as you mentioned, to the wealthiest few families. At a time we’re dealing with record debts and deficits and tremendous spending cuts ahead, why would we want to devote $23 billion to the wealthiest few families in this country?
JUDY WOODRUFF: Congressman Brady, given that, why do you think it should become law?
REP. KEVIN BRADY: Well, I think the death tax is wrong, and as close to a moral — immoral a tax as we have.
There’s something wrong about family farmers, family-owned businesses working their whole life to build up a nest egg, some of them working generations to do that, and then when they die have the government swoop in and take as much as half of everything that they have earned.
I think the death tax needs to go away permanently. Short of that, I think the common ground that was reached that exempts a lot of our family farms and family-owned businesses and taxes others at a 35 percent rate, that wasn’t created, that number didn’t come up from Washington.
That came from our local farmers, our local small business people, our local newspapers and grocery store owners, who said, if you can’t eliminate it completely, this will allow many of us to survive.
So I think that common ground is what we ought to stick with. And I don’t think 45 percent — I don’t think the government deserves half of what our hardworking Americans spent their life to build up.
REP. EARL POMEROY: Judy, let me straighten a couple of facts out there. The — of course, the 45 percent is on the amount over $7 million for a couple. So, there’s zero on the first $7 million and then 45 percent over that.
An average taxable estate — and there are very, very few of them — would be about 18 percent, almost the rate of the capital gains tax. Again, across the country, you’re not having family farms and small businesses lost due to the estate tax. At the ’09 levels, they would have to have amounts net over $7 million. This thing makes it go away for 99.8 percent of the families in this country, and that’s a level we ought to have.
JUDY WOODRUFF: Yes, let’s stick, though, to what is in this proposal.
And, Representative Brady, just to be clear, you’re arguing that this is still onerous, even though, as we understand it, it would only affect something like 100 businesses across the country.
REP. KEVIN BRADY: No, that’s not true.
There’s at least 40,000 — 44,000 that will be affected by the estate, the death tax if the law is allowed to continue through and starting on January 1, where it goes — comes back fully to life. A number of them are protected by the common ground, the compromise that was reached in this bill.
But I will tell you we’re sitting here saying it’s no big deal, won’t affect that many. I was just given a letter from a fifth-generation Texas rancher, small businessperson. They’re paying — they had to go to the bank twice to pay the death tax on the grandfather’s ranch and now on their father’s ranch. They’re struggling to make ends meet. Five generations, they have worked that soil, and now government wants, again, more of what they have earned.
And so I don’t care whether it affects one or 6,000 or 44,000. That tax is wrong. It needs to go away.
JUDY WOODRUFF: Well, Representative Pomeroy, we know there are a number of farms in your state of North Dakota. Why don’t you — why aren’t you sharing this concern about the effect this could have on slowing down the economy?
REP. EARL POMEROY: Those are the same talking points they were using when the estate tax was at much lower levels.
Nationally, there are very — there were fewer than 100 farms at the ’09 levels. Fewer than 10 had to liquidate any assets, 10 in the entire country, and these are the wealthiest few. Now, at a time when we are going to make deep and painful cuts in order to deal with these deficits, why would we want to take $23 billion and basically give an enormous additional tax break to the wealthiest few families of this country? It just doesn’t make sense.
REP. KEVIN BRADY: Judy, if I may, Mr. Leverett (ph) of Texas, who wrote me that letter, doesn’t think he’s a talking point. He’s just a family that has struggled to make ends meet and doesn’t think it’s fair.
I also point out that we would have, under Mr. Pomeroy’s rate, the second highest death tax among the globe, at least among our competitors in the world. And, finally, this — the Democrats have raised taxes by more than $600 billion this session alone. Not one dime went to reduce the deficit. In fact, all of it went to double the spending.
So the truth is, I think government needs to start sacrificing by tightening its belt, balancing its budget, getting back and living within its means. Let’s not burden all of — this poor spending decision in Washington, why take it out on the backs of family-owned businesses and family farms?
REP. EARL POMEROY: Here’s what Kevin is saying. We need to tighten our belt, we need to cut wasteful spending, and we need to give a great big tax cut to the wealthiest few families in this country. It just doesn’t make sense.
REP. KEVIN BRADY: Earl, we have ran this play before.
JUDY WOODRUFF: I do want to ask Representative Pomeroy to pick up on that point you just made, though, that, essentially, you are saying that even the wealthiest shouldn’t be asked to pay an extra amount. So…
REP. EARL POMEROY: So, my own view is, you look at the ’09 levels, that was a level of tax on estates lower than when Ronald Reagan was president, lower when President Bush I was the president, lower than President George W. Bush was the president.
It was the lowest level we had had in nearly — in 80 years. And this year, of course, it went away altogether. But everyone seems to recognize that zero estate tax…isn’t going to happen.
JUDY WOODRUFF: And, Representative Brady, it sounds like you’re saying the standards have changed here.
REP. KEVIN BRADY: I will tell you what I think, is that you can’t tax your way back to a balanced budget. The government, we’re going to have to cut real spending.
And, by the way, that death tax, the proceeds of those families who have created businesses out of the garage, run up their credit cards, working evenings, years and years, to make ends meet, that’s not the government money.
JUDY WOODRUFF: Right.
REP. KEVIN BRADY: That’s not the government’s money. And we shouldn’t burden them with it.
And, by the way, we have run this play before. The alternative minimum tax was put in place to cover only 200 millionaires. Today, it would reach 25 million Americans, middle-class Americans. I don’t trust this government in the way they do business.
JUDY WOODRUFF: Representative Pomeroy, what has your leadership in the House, the Democratic leadership right now in the House, told you in terms of how much of a change they want you to make?
We have heard the president say to the House, essentially, don’t make a change. The Senate Republicans have said, if the House changes this in any way, they’re going to reject it.
REP. EARL POMEROY: Well, a year ago, the House voted to establish the estate tax permanently at those ’09 levels, passed it almost a year ago today. And we want to have an amendment vote on basically the same proposition. So, we would substitute the $10 million exclusion for joint estates…
JUDY WOODRUFF: Even if that means scuttling the whole thing…
REP. EARL POMEROY: Well, at that point, we send it back to the Senate, and they have a decision to make. The Senate has a decision to make. Would they have taxes go up on everyone just because they want to take care of that wealthy, that little estate tax exclusion exposure for the wealthiest 6,600 families in this country?
We think that we improve the package by making the amendment in order and approved.
JUDY WOODRUFF: A short final comment from Mr. Brady.
REP. KEVIN BRADY: You made the point for me, Judy. This is a stalking horse for those who want to kill this bill, allow taxes to go up on January 1, damage our economy, damage our families, damage our small businesses.
JUDY WOODRUFF: Gentlemen…
REP. KEVIN BRADY: We’re going to fight hard against it.
JUDY WOODRUFF: Gentlemen, we hear you. And we will leave it there for now.
Thank you very much, Representative Brady, Representative Pomeroy.
REP. KEVIN BRADY: Thank you.
REP. EARL POMEROY: Thanks.