Cloture Motion

Floor Speech

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Mr. HOEVEN. Mr. President, I rise today to join my good friend from Arkansas, John Boozman, who is the ranking member on our Ag Committee. He has organized this colloquy that we have to talk about how important it is that we support our farmers and ranchers. I mean, in my home State of North Dakota right now, we have terrible drought, and our farmers and ranchers are up against it. I think the Presiding Officer-- I think in your State, you are having real drought as well.

So it is a tough time for our farmers and ranchers, and we need to be out there doing everything we can to help them and support them, but instead, the Biden administration is looking at tax increases. That is going to be a big, big problem for them. So we are here today to talk about that.

Our farmers and ranchers produce the highest quality, lowest cost food supply in the world, and they continue to navigate bottomed-out commodity prices, complex global trade uncertainties, unpredictable weather, as I said, including drought this year in North Dakota and across much of the West, and also the COVID pandemic. So they have been dealing with all of these things.

Throughout these numerous challenges, our producers have continued to put food on the shelves at supermarkets and on the tables of families around the world, not just in this country but around the world. In this country, every single American benefits every single day from what our farmers and ranchers do, and that is, produce the highest quality, lowest cost food supply in the world.

Yet, rather than help improve the economic outlook for our producers and strengthen our ag supply chain, the Biden administration has put forth tax-and-spend policy proposals that would further increase the cost of food production, harm family farmers and ranchers, and reduce our economic growth, all as we are working to recover from the COVID-19 pandemic.

The trillions that Democrats in Congress have already spent this year have led to a $2.2 trillion deficit through the first 9 months of the fiscal year, and we are on track to end the year with a deficit of more than $3 trillion, the second largest deficit since World War II. With our national debt already at $28 trillion, we simply cannot afford to spend more.

The American people are beginning to feel the impact of those spending policies. The prices of consumer goods are increasing at the fastest rate since 2008. Just last week, the Department of Labor released data showing that inflation has increased to 5.4 percent, the largest year-over-year gain since 2008. This includes farm country, where producers are facing increased costs for everything from fertilizer to fencing supplies, to combines and tractors.

As we watch inflation grow faster than American workers' paychecks, wiping out wage gains and leaving American families behind, the Biden administration is planning an even larger, $3.5 trillion tax-and-spend package that will bring economic harm to American workers, small businesses, and farmers and ranchers.

For example, the Biden administration and Democrats in Congress have proposed to eliminate stepped-up basis, a tax provision that prevents family-owned farms and ranches from being hit with a crippling tax bill when a family member passes away.

Under current law, when passing down a family farm or ranch to the next generation, the tax basis is stepped up to fair market value, preventing a large tax bill on the next generation of farmers.

In addition to increasing the tax bill on multigeneration farmers and ranchers, repealing stepped-up basis would add significant complexity to farmers' and ranchers' tax-filing process. In fact, when a Democratic Congress previously tried to repeal stepped-up basis in the 1976 Tax Reform Act, it was labeled by the New York Times as ``impossibly unworkable.'' Congress at the time must have agreed because the provision was never implemented and was ultimately repealed 4 years later in 1980.

The impacts of a repeal of stepped-up basis would not only be felt by our farmers and ranchers, but it would also impact small businesses and their employees and supplementary services.

A recent report from Ernst & Young estimates the repeal of stepped-up basis would result in the loss of 80,000 jobs in each of the first 10 years after the repeal and the loss of 100,000 jobs in each subsequent year--80,000 jobs to 100,000 jobs.

Similarly, a study by the Texas A&M Agricultural and Food Policy Center determined that more than 97 percent of the representative farms in its 30-State database, including North Dakota, would be impacted by a proposal to eliminate stepped-up basis, with an average additional tax liability totaling nearly $725,000 per farm.

While the administration claims these changes would impact only 2 percent of farms, they have provided no explanation or data to support those assertions.

With the average age of farmers in our country now nearing 60 years old, now is not the time to burden the next generation of young farmers and ranchers with massive, complex tax bills.

In addition, the Biden administration has proposed to eliminate the use of 1031 like-kind exchanges, a provision that has been in the Tax Code since 1921, which allows farmers and ranchers to defer taxes on land transfers when they continue their investment in similar land assets.

Farmers and ranchers use the 1031 like-kind exchanges for many reasons. This includes consolidating land parcels to reduce time and money they spend moving equipment, supplies, and commodities from one place to another. Producers also consolidate cropland closer to their livestock barns, crop storage facilities, or even as part of the estate planning process to help young or beginning farmers join their business.

In short, in the middle of the recovery from a global pandemic, President Biden is proposing a massive tax-and-spend bill that will harm our economic recovery, increase the cost of consumer goods, reduce American competitiveness globally, and disproportionately hurt our small businesses, our farmers, and our ranchers.

Instead, we need to get our debt and deficit under control and ensure U.S. competitiveness in the global marketplace, while positioning our farmers, ranchers, and ag supply chain to continue to produce the highest quality, lowest cost food supply in the world.

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