TRAIL Act

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I call up amendment 68.

Mr. President, the most disturbing thing about this supposed bankruptcy reform is the utter lack of fairness and balance in the legislation. It gets tough on working families facing financial hardship due to a health crisis, job loss caused by a plant closing or offshoring of a job, or a military callup to active duty. The laws of bankruptcy are being changed to wrest every last dollar out of these unfortunate families in order to further enrich the credit card companies.

However, the authors of this legislation look the other way when it comes to closing millionaires' loopholes and ending corporate abuse. The legislation fails to address the real crisis in corporate bankruptcy where reorganization plans often benefit the very insiders whose greed and mismanagement brought down the company at the expense of the workers, the retirees, and the creditors, and it fails to address the shocking abuse of millionaires hiding their assets in so- called asset protection trusts, placing them completely beyond the reach of creditors.

This bill also fails to deal effectively with the unlimited homestead exemptions in a few States which allow the rich to hold on to their multimillion-dollar mansions while middle-class families in other States lose their modest homes. We truly cannot allow this bill to pass without closing the millionaires' homestead loophole once and for all. It has become a national embarrassment. Millionaire deadbeats buy a huge mansion in Florida and Texas to shield their wealth from creditors. The harsh rules of bankruptcy being established by this bill will trap hard-working middle-class families, but the unlimited homestead exemption will allow rich debtors to escape.

Existing bankruptcy laws allow those in bankruptcy to protect from their creditors certain assets, the nature of which is largely determined by State law. Most States make some allowance for homes or homesteads people live in, but the allowance is a modest one, too modest, in many States, for elderly people with large equity in the homes they have lived in for most of their lives.

However, five States--the most notorious of which are Texas and Florida--have unlimited homestead exemptions. This means debtors in those States can stash away millions, even tens of millions of dollars in the States and leave their creditors with nothing.

S. 256 leaves this gaping loophole wide open. It will allow the real abusers of the bankruptcy system to file for bankruptcy and to still keep their fortunes and properties intact while leaving their creditors with nothing. S. 256 has created some minor exceptions to the homestead exemption, none of which would be applicable in many of the most egregious cases. The bill fails to deal with the problem head on of multimillionaires who abuse bankruptcy by stashing away wealth while they declare bankruptcy.

My amendment caps the amount allowed for the homestead exemption at $300,000. This is an adequate allowance for most people. The average home in the United States is $240,000, a great deal higher in many of the regions of the country and lower in some parts of the country. This $300,000 is an adequate allowance for most people and would end the exploitation of the homestead exemption to hide assets from creditors. It would add some measure of fairness and balance to a bill that sorely needs some fairness and balance.

Some of the most egregious abuses we have currently and that this legislation fails to deal with are the kinds of abuses that we have in the case of Ken Lay, the former chairman of Enron, who owns a $7 million penthouse condominium. Mr. Lay made over $200 million from Enron stock and $19 million in bonuses. Other executives received bonuses as high as $5 million. Over 5,000 employees lost their jobs, and 20,000 lost an estimated $1 billion in retirement savings. Now, Ken Lay has been able to put some $7 million in a penthouse condominium in Houston's exclusive River Oaks neighborhood with 12 rooms covering 12,800 square feet.

We are going to find there have been hard-working men and women who have had health insurance--half of all of the bankruptcies are the result of dramatic health bills. Seventy-five percent of those individuals had health insurance. And, as we have pointed out during the course of this debate, if your family is touched by cancer, you, by definition, are going to have $35,000 to $40,000, at a minimum, out-of- pocket expenses. And that, in many situations, is enough to drive a family into bankruptcy.

If you have another serious health need, it will do the same. If you have important needs for children, such as spina bifida, autism, or other kinds of significant and important children's diseases, it will run into tens of thousands of dollars.

What we have seen in our study of these bankruptcies is half of the bankruptcies are caused by these medical disasters. Yet, we are unprepared to give any kind of consideration to these hard-working people who have taken out health insurance to try to provide for their families and, through no fault of their own, have been caught up in these dramatic health care bills. They are struggling and try to avoid bankruptcy and meet their responsibilities. But once they get caught in this net that is included in the bill, they will be punished--and I say ``punished''--by the provisions in this bill which are unduly harsh and I believe unduly unfair.

But not Ken Lay. Not Ken Lay. Here it is: He will be out there in his $7 million penthouse condominium in Houston's River Oaks neighborhood, with 12 rooms and covering 12,800 square feet.

Or Andrew Fastow, the former chief financial officer of Enron, who recently built a large house in River Oaks valued in the millions, his home will not be taken. He will be able to go home every night to that home and be able to live there while we are seeing the homes taken from working families whose only problem was that their family was hit by cancer or another serious illness. We are seeing their homes taken, when we see individuals who have basically violated the trust of their company and of the workers get a free ride in the form of millions of dollars.

You call that fair? You call that fair? All this amendment says is, we will have a uniform standard. We have a uniform standard in this amendment. We are going to have a uniform standard with regard to the equity in the house. We are not going to let these individuals go off and be able to shield all of their income.

We find Jeffrey Skilling, Enron's former president and chief executive officer, lives in a 15-room house in River Oaks valued at over $4 million.

WorldCom's chief financial officer, Scott Sullivan, who was charged with falsifying the books by more than $3.8 billion, recently built a 4-acre, $15 million estate in Boca Raton, FL, with an 18-seat movie theater, art gallery, and lagoon.

You are telling me we are going to protect those individuals in their homes when we have single mothers who cannot get the child support or alimony, through no fault of their own, and they are thrown into bankruptcy and in danger of losing their homes? And the cruelty is the innocent individual, more often the wife, who is not getting the alimony or child support, has a very good chance of losing her home-- but not these individuals, not Dennis Kozlowski, the former CEO of Tyco International, who is said to have used $19 million from a no-interest loan from his company to pay part of the cost of a $30 million compound in Boca Raton, FL, called, ironically, Sanctuary. So $30 million he has been able to put away there.

There are hundreds of thousands of workers who have lost their jobs, lost their savings, lost their health care, lost their pensions--but he is going to be protected by this legislation. Where is the fairness in this legislation when it comes to this issue in terms of homes?

We have a law firm in hock for $100 million. Former Baseball Commissioner Bowie Kuhn moved to a mansion in Ponte Vedra Beach, FL, and immediately sought protection from the creditors. And the list goes on and on and on.

What is the current situation with regard to the homes and homesteads? Well, if you get caught up with a claim against you, and you live in any of these States--in New Jersey, in Pennsylvania, or Maryland--there is no homestead exemption. Your home, if you have the blessings to have a home, is thrown right in there, sold right off, put right on the market, and out you go.

In the State of Michigan, it is $3,500 in value. In Kentucky, it is $5,000 of value; Georgia, $5,000; South Carolina, $5,000; Ohio, $5,000; Alabama, $5,000; Virginia, $5,000, plus $500 per dependent; Tennessee, $5,000 in value, and $7,500 with your home if you are a married couple; Indiana, $7,500; Illinois, $7,500; Missouri, $8,000.

But there is no limitation for the Ken Lays, the Jeffrey Skillings, the Dennis Kozlowskis putting aside tens of millions of dollars that is going to be protected.

These families will have that amount of equity that will be protected. You can go into some other States: New York, $10,000; North Carolina, $10,000; and Wyoming, $10,000. And some States go on up to $75,000--Connecticut. In Montana it is $100,000. In my State of Massachusetts, it is $300,000. But there is no limit at all, no dollar limit--some acreage amount--in Texas. In Texas, it is 10 acres in an urban area. It can be in downtown Dallas or downtown Houston. Or it can be 200 acres in a rural area. You are protected. If you have a home on 10 acres, wherever it is in an urban area--or 200 acres in a rural area--you are not touched by this legislation. And that is true in varying degrees for the six States.

So we have to ask ourselves, why treat these six States separately and differently from all of the other States, and particularly where, in the other States, when people fall into bankruptcy, one of the first assets they are going to lose is their home.

So at the appropriate time we will have an opportunity to vote on my amendment. As I say, this amendment closes that homestead loophole but permits, notwithstanding any other provision, the maximum amount of homestead exemption that may be provided under State law shall be $300,000.

If you get a judgment against you for $400,000, they sell your home, but at least that $300,000 is enough that you may be able to get something, particularly if you are an elderly person living on an income of $1,200 or $1,500 a month, you might be able to survive.

But the idea outside of that is that you are effectively taking away the homes and putting them at risk for 44 States and permitting 6 States to effectively circumvent this legislation in a very important way. It is wrong. I hope our colleagues and friends can support our measure.

Amendment No. 70

Mr. President, I would ask that amendment be temporarily set aside, and I call up amendment No. 70.

I thank the Chair.

Mr. President, this amendment is designed to protect single mothers and their children, who are forced into bankruptcy because they did not receive the child and spousal support they were entitled to, from the harsh provisions of this bankruptcy bill. Single mothers are 50 percent more likely than married people to go bankrupt and three times more likely than childless people to go bankrupt. That statistic tells a great deal about the reality of why people are in bankruptcy.

The proponents of this bill argue that people file for bankruptcy because they are spendthrifts looking to escape their financial obligations. But this stereotype is terribly wrong. The bankruptcy courts are filled with the cases of hard-working people who were pushed over the financial brink because of a family health crisis, a lost job, or a failure to receive child support. These are the people this bill would turn the screws on, looking to squeeze out a few more dollars for the credit card companies.

The amendment focuses on this last group, on single parents trying to raise their children without the financial support they were supposed to receive from the absent parent. It would exempt from the onerous means test a single parent who failed to receive child support or spousal support that she was entitled to receive pursuant to a valid court order totaling more than 35 percent of her household income within a 12-month period. No wonder such a person ended up in bankruptcy. She was never paid more than a third of the income she expected over an entire year to help raise her children, to provide for their basic needs and well-being. Under those circumstances, she had no choice but to fall back on borrowing to support her family. She was not irresponsible. What she did was unavoidable.

Few people realize the magnitude of this problem. In 2004, $95 billion in child support--$95 billion--was uncollected. Failure to receive that child

support put millions of single-parent families in a deep financial hole through no fault of their own, and it is the children who suffer the most in these situations. Why on earth would we want to make things even more difficult for these families? Most single moms have to struggle to make ends meet. They are working in low-wage jobs without good benefits. Over three quarters, 78 percent, of them are concentrated in four typically low-wage occupational categories. When the economy is tough, they are often the first ones let go.

The poverty rate for single moms is nearly 40 percent as compared to 19 percent for single fathers. It is no wonder that single mothers are now more likely to go bankrupt than any other demographic group--more than the elderly, more than divorced men or married couples, more than minorities or people living in poor neighborhoods. Yet this legislation would deny traditional bankruptcy relief to many single-parent families who never received the child support they were owed. Instead, they would have to keep paying those credit card bills for another 5 years. Is that fair? I can't believe that a majority of my Senate colleagues think it is.

I am asking them to extend a little compassion to these single mothers struggling to raise their children.

The following women's and children's organizations continue to oppose this bill: The National Women's Law Center, the National Partnership for Women and Families, National Organization for Women, Parents for Children, YWCA, Business and Professional Women, the Children's Defense Fund, Voices for America's Children. They do so because of the particularly harsh provisions of this bankruptcy bill and the heavy weight it puts upon women generally and most particularly on innocent women who are being denied child support and alimony and because they, through no fault of their own, run into this kind of a financial crisis. This legislation will impose harsh provisions upon them, and they will be treated not just in bankruptcy but they will be treated with the harsh provisions that will effectively put them in indentured servitude for the next 5 years.

The National Women's Law Center, in writing to urge opposition to S. 256, says it is harsh on economically vulnerable women and their families. They point out that the bill would inflict additional hardship on over 1 million economically vulnerable women and families who are affected by the bankruptcy system each year--1 million women, the majority of whose only problem is that their husbands have failed to provide alimony and child support. And we are going to wrap them in with the spendthrifts who run amok with their credit. These are innocent individuals. We are saying that the harsher provisions of this bankruptcy law--that is going to indenture these women for 5 years; they can get judgments against them for 5 years--will exist for these families, women forced into bankruptcy because of family breakups, factors which account for 9 out of the 10 filings of women who are owed child and spousal support by men who file for bankruptcy.

It is going to be more difficult for the women to even get the alimony from their husbands who may be in bankruptcy but needing to owe alimony to their wives, because the husbands are going to be subjected to the provisions in this legislation and that is going to make the wife compete with the credit card companies. So that is going to be another burden which these individuals are going to have to face.

I hope we can find some support for this amendment because we are talking about perhaps among the most innocent group of people who will be caught in this. We have talked about single moms. We have talked about the National Guard and Reserve. We have talked about those who have been hit by the medical bankruptcy. All, through really no fault of their own or very little fault of their own, are going to be facing a very harsh future.

I suggest the absence of a quorum.

Mr. President, next I will address amendment No. 69, which I believe is pending.

Mr. President, one of the extraordinary phenomenons we are facing at this time is the outsourcing of American jobs, the movement of American manufacturing jobs out of this country--by and large to the Far East but to other countries--and the growth of what we call ``temps''--companies that provide temporary workers. Those temporary workers have few, if any, benefits. So, obviously, when they run into challenging health crises and more limited incomes, they are facing the dangers of bankruptcy.

That is why I am offering this amendment--to ensure that workers who have lost their jobs or who have an illness or injury that prevents them from working are not unfairly thrown into the harsh means test created by this bill. This means test puts additional burdens on the debtors already trying to get their lives and finances back together after a difficult period.

The means test applies to those debtors whose average income for the 6-month period prior to filing bankruptcy is above the median income. Some debtors forced to file for bankruptcy because they lost their jobs are already exempt because they had no income in the last 6 months, but those who lose their jobs within 6 months before the filing for bankruptcy can be fairly included in the means test based on income they are no longer earning. My amendment would correct this problem. It provides that income from any job in which the debtor is no longer employed and income from any activity in which he can no longer engage due to a medical disability will be excluded from this calculation.

Mr. President, if we look at what has been happening in the economy, particularly to those individuals who are unemployed, many of them have been looking for employment for some period of time. If we look at the numbers of unemployed workers in January 2001, it was 6 million. In February 2005, it is 8 million. We are in a period where those who are unemployed are unemployed for a longer period than at any time in recent history.

This chart shows what happens in recoveries. The recoveries before 1991--the increase in terms of the employment and recoveries beginning in 1991 are here, and our current recovery shows that it is very light in terms of the total number of jobs that are created.

This is one of the important charts, Mr. President. This has 8 million Americans competing for 3.4 million jobs. That is the economic condition for workers in this country: 8 million people are looking for 3.4 million jobs. Obviously, there are going to be many millions of Americans who are not going to be able to get those jobs. When they can't get the jobs, they don't have the unemployment compensation, and they are unable to provide for their families, what happens? They end up in bankruptcy.

We are trying to say that for those individuals--by and large individuals who have lost their jobs because of outsourcing--the best projection is that we are going to lose 3.4 million jobs; 3.4 million jobs are at risk of being shipped overseas. 540,000 jobs in 2004; 830,000 in 2005; 1.7 million in 2010; and 3.4 million in 2015. Basically, when the manufacturing jobs go overseas, individuals lose their income, or if they are able to get some income, it is as a part- time worker with no health coverage. Their income goes down dramatically. What happens to those individuals? They end up in bankruptcy through no fault of their own. These are Americans who want to work.

From 2001, we have seen 2.8 million manufacturing jobs lost; 2.8 million jobs were lost. These are the jobs with good benefits, good wages, the jobs that are the backbone of America. When you take 2.8 million of these jobs out of the market and you have 8 million people chasing 3.4 million jobs, we know there are going to be millions of American workers who are going to find increasing pressure in providing for their families. That is what is happening today.

What we are saying is, if these workers are going to be forced into bankruptcy because they have lost their jobs, they are not going to have to fall into the cruelest part of the bankruptcy. That is all we are saying. We have done this. I have been here when we had our trade adjustment assistance. We said some industries were adversely affected because of imports. We provided some consideration for those workers. We are finding out now that we are losing hundreds of thousands and millions of jobs that are being moved overseas. The result is that many of these individuals are unable to have the kind of income they need, and they are forced into bankruptcy. When they are forced into bankruptcy, we are saying that they don't go into chapter 13; they go in and meet their responsibilities and get a fresh start. They don't go into a chapter 13, which will force them to continue to pay for 5 years.

If you look at this chart, you will see that 49 of the 50 States have lost manufacturing jobs. So this reaches the whole dimension of this legislation because this legislation is national. This particular challenge is national. There is obviously a great deal more focus on this in the industrial heartland, in New York, Pennsylvania, Ohio, Indiana, Illinois, Michigan, Wisconsin, and many of those States, and even in Massachusetts we have lost 83,000 manufacturing jobs. There are plenty of other jobs, such as in North Carolina where they lost 163,000 jobs.

So we have to ask ourselves, what happens to these individuals? We know what happens to them. We know that if they can get a job, they are going to be paid a good deal less. If they cannot, they will run out of unemployment compensation. We are not providing extended unemployment compensation, and we know that the final catch is that in this economy, the health insurance is up, college tuition is up, housing is up, and gas is up. It is forcing these individuals into bankruptcy.

All we are saying for those individuals who have lost their jobs-- jobs that have gone overseas, lost manufacturing jobs--and are unable to get those jobs and are forced into bankruptcy, that they will not have the harshest provisions of bankruptcy directed upon them. We ought to show some consideration to them. These are not spendthrifts, Mr. President. These are hard-working Americans who, 5 years ago, would not be facing this particular challenge, and now they are. We ought to at least give them some consideration.

Mr. President, I think I have until 2:45.

Mr. President, we in the Senate were elected to serve the people. It is our solemn duty to fight for the American people every single day, for the values they share and the priorities they care about most. Above all else, the American people expect us to stand for fairness, freedom, and opportunity. Those values are the cornerstone of the American dream. We believe that if you live right and work hard, you should be able to care for your family. You should be able to afford a comfortable home in a safe neighborhood. You should be able to put your children through school and in college. You should have time to spend with your family, practice your faith, and contribute to your community.

We also believe that when life throws you an unexpected setback, you can count on your neighbors to pitch in. If you lose your job or you fall seriously ill, we all want to help out. You should be given a second chance to pick yourself up, dust yourself off, work hard, and reclaim the American dream for you and your family. That is the American way. That is the American spirit. That is what our bankruptcy courts should be about: giving average Americans who have lived responsibly a second chance.

This bill before us turns the American dream into the American nightmare. This bankruptcy bill turns its back on our most basic values as Americans. It is not a bill of the people, by the people, or for the people. It is a bill of the credit card companies, written by the credit card companies, and for the credit card companies, and it has no place in America.

This bill is about greed. It is about the most profitable corporations in America--the credit card companies--using the Senate to enhance their profits, even more by shaking down hard-pressed Americans in bankruptcy court. It stacks the deck in favor of the credit card companies and against American families who do everything right but find themselves in bankruptcy because they lose a job, fall ill with cancer, or get divorced.

I am reminded of the words of Leviticus in the 25th chapter. It reads:

If one of your brethren becomes poor, and falls into

poverty among you, then you shall help him, like a stranger

or sojourner, that he may live with you. Take no usury or

interest from him; but fear your God, that your brother may

live with you.

You shall not lend him your money for usury, nor lend him

your food at a profit.

But this bill ignores those words. It allows the credit card companies that charge outrageous interest rates, exorbitant fees, and force you into bankruptcy to still win back almost every dime in bankruptcy court against Americans who have fallen on hard times. This pillaging of the middle class must come to an end.

Today we will pass a bankruptcy bill that rewards the credit card companies at the expense of average Americans. Last month, we passed a class action bill that makes it harder for average Americans to hold big corporations accountable, and we have a President who wants to give your Social Security away to Wall Street.

Credit card companies, big corporations, Wall Street--when is this President and this Republican Congress finally going to give the American people just 1 minute to debate their issues? When are we going to make their health care more affordable so they do not have to worry every night if one of their children gets sick? When are we going to make college more affordable so parents can proudly send their children to college to build their own futures? When are we going to fight for clean water and clean air so we can raise our families in health? When are we going to compete for good jobs, not by lowering the pay but by raising our skills in the global economy? When are we going to fight for a secure retirement for Americans who have lived responsibly and worked hard all of their lives? When is the Senate finally going to stand up and fight for the American people?

Mr. President, I suggest the absence of a quorum.

Mr. President, do we have an minute on each side?

I ask unanimous consent for a minute on each side.

First of all, I want to pay tribute to my friend and colleague, Senator Kohl, who has worked on this issue for many, many years. This amendment closes one of the gaping loopholes in this bill, but it is a loophole millions of dollars wide and millions of dollars deep.

Right now, because a few States have no limit on homestead, the Ken Lays, the Jeff Schillings, and the Dennis Kozlowskis in this world can hide millions of dollars or tens of millions of dollars of their assets from their creditors even after they go into bankruptcy. There isn't much fairness or balance in the bill so far, but this amendment will put a very small measure of balance in the bill by limiting the homestead exemption nationwide to $300,000.

I ask my colleagues to vote for balance and fairness, and agree to this amendment.

Mr. President, those Americans who have been watching this debate on bankruptcy reform for the last 8 days must wonder what in the world is happening in the Senate this evening where we have had these prolonged quorum calls. We have had a series of votes over the course of the day. We had tentatively planned to have another series of votes on amendments at 5 o'clock this evening.

But then because of the concern of our Republican colleagues on one particular amendment, an amendment that would have addressed the provisions in the underlying legislation that repeals the conflict-of- interest provision for major banks, suddenly the quorum call goes in and there is no further action on the issue of bankruptcy.

This is absolutely amazing. Many of us have pointed out how this is special interest legislation. It was written by the credit card companies for the credit card companies. They are the principal beneficiary.

The argument for this legislation, according to the proponents, was: Look, we have a number of spendthrifts in the United States. People ought to act responsibly. This legislation will deal with it.

That was their argument. And that is an argument that those of us who have differed with this legislation would gladly accept. The percentage of spendthrifts, so to speak, is anywhere from 5 to 7 percent of the total number of people who go into bankruptcy. Those of us who have been battling this legislation for the past several days all agree, we would join up with our colleagues in a bipartisan way to address that issue. But that isn't what this bill is about.

This bill is about encumbering working families, primarily, who fall on difficult times, as we have pointed out during the debate. We have offered a series of amendments. A number of my colleagues have offered amendments. Every one of them has been defeated by our Republican colleagues.

Now in the final hours of consideration of this legislation, because one particular amendment is going to touch the banking industry and they are unsure of the votes, they effectively call off all the votes for this evening. That is what is going on here in the Senate.

If you want to put your finger on special interests, look what is happening in the Senate at this moment. We have the Sarbanes-Leahy- Warner amendment, the authors of which were prepared to vote on. But no, the Republicans say, no, we are not going to let the Senate vote on that, because they are not sure of the votes.

They are not sure of the votes. They are not sure that they have the votes to defeat that particular provision that would override a provision that is in the banking bill that repeals some conflict of interest for banking interests. Isn't that something? Doesn't that really show what this legislation is all about? Sure it does.

Why not call the roll? Why not call the roll? We have been listening about let's move the banking legislation along; let's move it along. Why do you have to take time when you are talking about what the impact of this legislation is going to be on the members of the National Guard and Reserves, who go overseas--the 20,000 that would be bankrupt this year and subject to the harsh provisions of this legislation.

And then we had a phony amendment that was accepted here that will do virtually nothing to protect them. What about the homestead exemption, which says that those who exist in five States are going to be able to squirrel tens of millions of dollars away so that if they go into bankruptcy they would be able to protect their million dollar homes? Why not have fairness across the country? Oh, no, we cannot do that because we have a delicate compromise. What is that delicate compromise they are talking about? I thought this legislation was going after spendthrifts. We agree to go after them, but when we know half of the people going into bankruptcy are going there because of health care bills that are run up, with 75 percent of those individuals covered with health insurance, but because they have a heart attack in their family or because they have a stroke in their family, or because they have a child who has spina bifida in their family, they are subject to the harsh provisions of this legislation that will virtually make them an indentured servant of the credit card companies for the next 5 years. That is what is in this bill. We have pointed that out. No, we will vote that down. We will vote down any consideration for the National Guard and any consideration for the Reserve if they happen to be individuals who may be running a family business, one or two working in a particular employment or a mom-and-pop store, and they go overseas and they are going to serve for many months, and the store bellies up, then they are subject to the harsh provisions of this. No, we are not going to give consideration to those veterans. What about those individuals? It could happen to any family--except Members of the Senate, who have very good health care. It would not happen to us. But we cannot get health care for the rest of

Americans. No, that is just too bad, that they have a heart attack in their family, or a stroke, or that they have a sick child, they are going into bankruptcy, and they are going through the harsh provisions of bankruptcy that are going to make them pay for the next 5 years to 10 years $15 or $20 a week, and continue to bleed them. That is what is in this bill.

The American people are beginning to understand it. We talked about all the single women who go into bankruptcy because their ex-husbands do not pay them money for child support. Do you think we could have some understanding or some sensitivity to their particular problem? Absolutely not. No way. Let's take those spendthrifts and put it right to them. That is what this bill does. No, we cannot deal with that. What's your next amendment? Let's go on, it is getting late. Let's have time. Time, they say. What has happened here for the last 3 hours? The clock has run and they cannot figure out whether they have the votes to protect the banking industry. That is what is going on. The Republicans are trying to find out whether they have the votes to protect the banking industry, and they get all worked up when we call this special interest legislation. You have not seen special interest legislation until you see this bill.

We used to, around here, look at a piece of legislation and say, who benefits and who suffers with this? Well, it is very easy to find out here who benefits. It is the credit card companies. They are the ones who are going to be put in the catbird's seat. Their estimate in the passing of this bill--listen to me--this legislation makes the bankruptcy courts of the United States the collection agencies for the credit card industry of America. Who do you think pays for the bankruptcy courts? You do, Mr. America. Ordinary Americans pay for those bankruptcy judges and the bankruptcy courts, and they are going to be out there as a collecting agency for the credit card companies. That is what this is about.

It has been difficult to get anyone on the Republican side to understand that. Well, we voted on this some years ago. We have a changed condition from some years ago. Sure, we have the problems of bankruptcy. What about Enron and WorldCom? What about Polaroid in my own State? When they went belly up, the people not only lost their health insurance and pensions, they also lost their investments in what was called an ESOP--their requirement to invest in the companies. They all lost out on it. We are sure of one thing: Ken Lay and all of the people at Enron have big houses all sheltered away in places like River Oaks in Houston, TX. They have all those protected, tens of millions of dollars. What happened to the other people?

So we do have a problem, but this bill doesn't address it. It does nothing about WorldCom or Enron or about Polaroid and what happened to those workers. Zero. Zip. Nothing. And then, when we found out that there is another loophole where, when wealthier people know they are going into bankruptcy, they can get a clever lawyer and put their money in trust and be free from the reaches of the bankruptcy court, that was addressed. No, we are not going to change this legislation. We are concerned about these spendthrifts--whoever they are. I have been on the floor for most of the time in this debate, and I still have not heard who they are. All I heard is that we passed this several years ago, and we have to pass it again.

Well, there have been many changes since the last time we addressed this bankruptcy bill, and the major companies and corporations have basically done in the workers with their pensions, with their health insurance, with their life insurance; they have done them in, but this bill doesn't do anything about that. And then we have the issue of the use of these trusts to protect the assets of these wealthy debtors who are going into bankruptcy. But this bill doesn't do anything about that. We have the inequities where people in at least 20 or 25 States across the country, their investment in their homes will be protected up to $5,000 or $7,000, but not in Texas or Florida, where you can have tens of millions. Fair? Equitable? No, we are not going to do anything about that. No, we have not done anything about any of these issues.

What we are basically saying is that those people who have worked hard, have health insurance, and had a serious health challenge or need in their family--just enough to tip them over--is that we are not going to show them any mercy. Absolutely, no, put the wood to them. Veterans, put the wood to them. Single moms who are not getting their payments of child support and alimony, put the wood to them.

If you happen to fall below the median line, so you are outside--you would think that if you could show that your total certified income was below the median income of your State, you are supposed to be free from repaying. That is what you heard on the floor of the Senate. Yet when amendments are offered to make sure that all the other punitive provisions that are added to that--you have to go out there and enlist in some course on credit. Find a course on credit counseling. These are people who average $12,000 to $15,000 a year in terms of income--you are going to require them to take a credit course? They have to demonstrate that they graduate from that course; otherwise they will be subject to the $5 or $10 a week in terms of payment.

This bill is all about $5 billion dollars in additional profits to the credit card companies. That is what this bill is all about. Where do you think it comes from? People who have gone into bankruptcy. Who are those people? They are the people that have the heart attacks. They are the men and women whose jobs have been outsourced.

They are the mothers, single moms who are not getting paid alimony and child support. Those are the people who are being hurt, and those are the people who are hard-working Americans and who are going to have their final drops of blood drawn out of them with payments. That is this bill.

We have been saying this is a special interest bill; tonight reaffirms it. The Republicans will not vote to restore a provision in this bill that was existing law that dealt with conflicts of interest for banks. They do not want to risk a vote in the Senate tonight. Why don't they explain it? Where is their shame? Why don't they explain it to the American people? Where are they? Where are all these proponents of this wonderful bill to explain why it is so difficult for them to decide tonight? This is just seamy, just a terrible way to legislate.

We have seen these votes, as I mentioned, over time. We have seen who the vulnerable people are. We have seen who the beneficiaries are. We have pointed out what has been happening in America, across the landscape, over the last 4 or 5 years with the loss of jobs, the loss of extending unemployment compensation to people who paid into the unemployment compensation fund for a long time. The jobs are not out there. We have 8 million people who are unemployed, and there are 3.4 million jobs out there. There are going to be people who cannot work, cannot find work.

Yes.

I thank the Senator very much. I appreciate it.

Mr. President, I thank the Senator.

What has happened out there? We have seen the economic challenge for workers as a result of outsourcing, the mergers that have taken place, a number of them in my own State that are having a direct impact.

There are two important industries that are the fastest growing industries in America. One is the collection industry. That is right, the collection industry, the people who spend their time dialing people who owe money on credit cards. They keep dialing--talk to the principal, talk to their children, talk to them at 3 o'clock in the afternoon when the children come back from school. That industry is growing.

The second industry is part-time workers. That is what is happening. We find with part-time workers that they do not have coverage. People are ready to work. They want to work. They want these benefits. They have fought for these benefits over their lifetimes, the primary benefit being health insurance.

We find out that what has happened in the United States today is the collapse of the pension system. What we are finding today is the lowest rate of savings in 40 years. And what does this administration want to do? They want to give Social Security to Wall Street. They want to give Wall Street Social Security and privatization. They took care of the major companies with the class action bill just a week ago, and now they are ready to take care of the credit card companies. But they cannot quite make up their mind whether the vote in the Senate that would restore existing conflict-of-interest provisions, which are existing law and which, I might point out, the Securities and Exchange Commission supports--not what is in this bill, but the amendment of Senators Sarbanes, Leahy, and Warner. They support that position. The SEC supports it because of conflict of interest. But not our Republican friends. No, they cannot make up their mind. If they add that to it, the power of the banking industry would be so strong over in the House of Representatives, they will have a stalemate, and then they will not get their goodies. They will not get their goodies. This is what has been happening.

Look at the profits of the industry that is going to benefit, the credit card industry. In 1990, 6.4; 1995, 12.9, 2000, 20; 2004, look at this, $30 billion, between 2000 and 2004. Find an industry like that in America, except maybe the Guaranteed Student Loan Program, where we have a loan guaranteed by the Federal Government and lenders make 9% on some student loans. Parents wonder why the cost of going to school at the universities are so high, because the government is padding the pockets of student loan providers with tax payer dollars. These are the profits.

Who are the people affected, as I mentioned before, during the course of this debate? We have 1.5 million bankruptcies annually and half of them are as a result of illness. Nonmedical causes, 54 percent; medical causes, 46 percent. But we are not going to show those. This bill was supposed to go after the spendthrifts. We can get the spendthrifts. We do not have to put these people through the mill. That is what this is really about.

We are here this evening waiting until the clock moves down. We are at our offices constantly wondering when we are going to start the votes. Two votes were supposed to be at 5 o'clock--one to deal with single women who are in bankruptcy because they are not being paid their alimony and child support. That was dismissed out of hand; you will have to take that to a vote. We are prepared to take it to a vote, and we will certainly continue to take it to a vote. If we are not successful on this, anyone who thinks we are going to let these issues go away just does not understand those of us who are opposed to this particular program.

We are also going to have an opportunity to vote on what has happened to so many of our American families as a result of outsourcing and how they have faced the economic challenges over recent weeks and months. More than 450,000 jobs have been outsourced. Over the next 10 years, we are expecting close to 3.4 million jobs to be outsourced, going outside the country.

We have seen what is happening in manufacturing all across this country. We all know that manufacturing jobs are the ones that have the higher pay. That has been part of the phenomenon. Do you think that concept is of any importance to the proponents of this legislation? Absolutely not. No way.

Health care prices have gone through the roof by 59 percent and the cost of prescription drugs 65 percent, and the fact we are an aging population with our parents, children, almost a third disabled who need those prescription drugs, and the prices are going up through the roof--are we giving them any consideration? Absolutely not. We do not care about the workers who have gotten shortchanged. We do not care about those who have needed prescription drugs and have been bankrupted in paying the prices.

This is the same Republican Senate that would not permit the Secretary of HHS to negotiate prices downward--do you hear me--like we do in the Veterans Administration. Here we have hundreds of thousands of people who are going bankrupt because of increases in the cost of health care and prescription drugs, and we--most of us on this side-- who are opposed to these harsh provisions tried to make some difference several months ago to permit the Secretary of HHS to negotiate prices downward, as they do in the Veterans Administration. But, no, we are not going to let you do that. So that was defeated. You cannot import cheaper drugs from outside the country. You cannot get cheaper prices here. And what happens? You end up going into bankruptcy and end up with the harsh provisions of this legislation.

This legislation is not fair, it is not just, and tonight we have seen what this is all about.

The bankruptcy bill as written contains a provision, section 414, which would repeal the provision in current law on investment banks which underwrote a security of the company in bankruptcy from now serving as adviser to the bankruptcy. This is a basic conflict-of- interest prevention in current law, which this bill would repeal. It is one of the many shameful special interest provisions in this bill.

To their credit, Senators Leahy and Sarbanes offered an amendment to remove this provision and maintain the current law against conflicts of interest by the investment banks. It appears that it may have the votes to pass, so to protect the investment banks the Republicans have effectively shut down the process. There should be no doubt, when people finally vote tomorrow, what this bill is all about, who it was for. When it is a fight for the real people, then we hear from the other side saying, no, no. But when it is their friends in the banks who are threatened, it shuts down debate in the Senate.

Clearly, there is no room in the Republican agenda for the real needs of the real people, the veterans, the workers, the mothers, the children, and the widows.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I would like to have the attention of the Senate to discuss my remaining amendments to the bankruptcy bill. I think my colleagues are aware that I strongly oppose this bill and that I am

very disappointed in the process that has brought us to this point. I do not believe the sponsors of this bill and its supporters in the other body have dealt fairly with the proposed amendments.

I understand the Senator from Utah came to the floor earlier in the day and was complaining that I had a number of amendments and that I did not intend to vote for the bill.

I have been a legislator for 22 years. This is not an auction. Even if you are going to vote against a bill, if you have an amendment you believe will make it a better bill, it is still a worthy consideration. I was told in the committee, where I wanted to offer many of these amendments, that I should not offer them, that I should wait until the bill came to the floor to offer the amendments. So in most cases that is exactly what I did, being assured there would be a good faith response and consideration of the amendments. Well, of course, that is not what has happened to date. And I categorically reject the idea that simply because you do not think a bill is good, you do not have a proper role on the floor of the Senate in trying to improve it.

This has not been a legislative process worthy of the Senate. Members of the Judiciary Committee, as I just said, were implored to save their amendments for the floor. Then, when we got here, we were told no amendments could be accepted. It was a classic bait and switch. Negotiations have been minimal and pro forma. Extremely reasonable amendments were rejected supposedly because they were not drafted correctly, according to the sponsors, but there was no willingness to work on the language of the amendments so they could become acceptable.

One of the most disheartening examples of this way of dealing with good faith amendments was the treatment of the amendment offered by the Senator from Florida concerning identity theft. Senator Nelson simply wanted to give some special consideration to people who are forced into bankruptcy because other people--criminals, in fact--ran up debts in their names. It is awfully hard to argue with a straight face and pretty hard to claim that victims of identity theft should have to pay at least some of their debts if they have a higher than median income. The debts are not even theirs. Believe it or not, this bill might actually force someone to file for chapter 13 and make payments on debts for 5 years that were not even run up by the person filing for bankruptcy. I find this to be incredible. Unfortunately, the response from one of the bill's cosponsors was: ``well, you have a good point here, but your amendment is just too broad.''

In the Senate I have come to love in my 12 years here, the Senate I served in just a few years ago when we last considered the bankruptcy bill, Senators and their staffs would have sat down and they would have worked out language that was not too broad. There would have been some negotiation. In many cases an agreement would be reached. But in this debate that kind of legislating is apparently forbidden.

What is most disheartening is that so many Senators sent here to represent their constituents, to exercise their independent judgment for the good of their States and the country, have been willing to blindly follow instructions from the shadowy coalition of groups that are behind this bill--mainly the credit card industry--and vote down even the most reasonable of amendments. It is just sad when there is no debate on amendments, no discussion, no negotiation, just an edict from outside of the Senate, and the ``no'' votes follow every time.

Last night I offered a very important amendment concerning small businesses. I spoke for 10 or 15 minutes about the amendment and explained some new data on small business bankruptcies that I think shows these provisions are actually very wrongheaded. After what has gone on here, I, of course, didn't expect to win the amendment, but I did think we might have a debate of sorts. The sponsors of the bill didn't even bother to come down and debate. Not one Senator made a single response to my arguments. They sent an emissary to deliver the message right before the vote that the sponsors expected a ``no'' vote. Nonetheless, I have not given up hope that some real legislating can still take place in the waning moments of our consideration of this bill.

I have a number of amendments, 14 to be exact, pending before this body. They are entitled to receive votes before we vote on final passage. They are reasonable and modest amendments. They are not so- called message amendments. They are not intended to be poison pills or bring down the bill by causing a huge disagreement with the House. They are intended to improve the bill because this bill is now not an academic exercise, as we know. It is going to become law. It is going to be the first bankruptcy reform of any great substance since 1978. It is going to become law, probably in a matter of weeks, and it will have a real impact on real people all over this country.

Last night my staff was able to have some discussions about these amendments with staff for the sponsors. I am hopeful that some of these amendments can be accepted or negotiated. I am prepared to entertain any reasonable offer. If I feel the sponsors have made a legitimate effort to look closely at my amendments and consider them with an open mind, and if some number of those amendments are accepted, I will not seek votes on all the amendments. No one likes a vote-arama, as it has come to be known, when we vote on a bunch of amendments in a row and often people don't know what they are voting on. But we will have one if the attitude that has been on display for the last week and a half continues.

I know my bargaining position is not strong. But I hope my colleagues will look at these amendments and realize that they are modest and might actually improve the bill in a way that wouldn't offend anyone in this entire body from the point of view of their philosophy about what bankruptcy law should be. Writing laws that work is what the Senate is supposed to do. Here is an opportunity to do that.

Let me talk briefly about each of these amendments because I do not intend to call each one up individually for debate. Some of them are very simple. Let me reiterate that I am open to discussion on any of these amendments. If there is something about the drafting that could be improved, I urge the sponsors to work with me and help me perfect the amendments so they can become part of the bill in a managers' package or perhaps even by unanimous consent.

The first amendment I will discuss is amendment No. 92 which has to do with section 106 of the bill on credit counseling and education. The bill requires credit counseling and credit education for people who file for bankruptcy. Section 106 of the bill requires debtors to obtain a credit counseling briefing before filing a bankruptcy case and to take a credit education course as a condition of receiving a discharge. However, the provisions provide no recourse for debtors who have exigent circumstances that would make it actually impossible for them to take a credit education course after filing or to get credit counseling, even during the 30-day grace period the bill now allows.

Let me give a few examples. I know these cases may be rare, but they are real. There are people in this country who are homebound and do not have a telephone or Internet access. I wish there weren't, but there are. Are we going to decide in the Senate that these unfortunate citizens can never file for bankruptcy because they are in that situation? How about people who suffer from dementia caused by Alzheimer's or some other disease? They sometimes have to file for bankruptcy because of massive medical bills, and they can do so through someone who has power of attorney. Do we think anything is to be gained by requiring a debtor who is ill with a terrible, incurable disease, not even competent to sign legal papers anymore, to take a credit education course?

How about U.S. soldiers fighting in Iraq or Afghanistan or serving anywhere overseas? It is a tragedy that some of our young men and women serving their country have to file for bankruptcy, but that is actually happening right now every day. Yes, there is Internet access in Iraq, but do we want to require a soldier to sit down at a computer to take a credit counseling or credit education course while they are in Iraq in order to protect his or her family back home from financial ruin?

By the way, the Servicemembers Civil Relief Act does not address this problem. Nothing in that statute would excuse members of the military, even those on active duty serving overseas, from the credit counseling and education requirements. Our fighting men and women are already having to file for bankruptcy despite the protections of that law. My amendment creates simply a safety valve to address this problem by giving courts discretion--it just gives them discretion--to waive the credit counseling and education requirements based on a sworn statement filed by the debtor with the court.

The bill also fails to address the potentially prohibitive cost of credit education to some debtors. In contrast, section 111, which addresses credit counseling services, requires credit counseling organizations to provide counseling without regard to ability to pay the fee for such a service. My amendment borrows the same language, requiring credit education to be offered for a reasonable fee and offered to all persons without regard to ability to pay the fee.

These changes are essential to ensuring that the bankruptcy system is still an option available for those who truly need it. Let's not make these counseling and education requirements, which I think have a great deal of merit, into some kind of a trap for some unusually situated but still good-faith debtors whom the bankruptcy decision is actually designed to help. I know this issue is particularly important to Senator Sessions. I hope to be able to work with him to reach agreement. He and I have worked together well on this and a number of other issues in the past with the regard to the bankruptcy bill. I hope he will follow suit on this as well.

The amendment I have just discussed deals with the impact of this bill on a very few, unusual, and very hard-luck debtors. The same is true of the next amendment I want to discuss concerning current monthly income. There are actually two amendments I have filed on this topic, amendment No. 96 and amendment No. 97. I am suggesting two alternative approaches to deal with the same problem.

Section 318 requires debtors in chapter 13 whose current monthly income is over the median to file a 5-year plan rather than a 3-year plan. Requiring debtors to file a 5-year plan means it will take them longer to get back on their feet and they will end up paying more money to emerge from bankruptcy. Only those with a higher income should be subjected to this longer plan. But because of the way the income threshold is calculated in the bill, there is a great possibility of arbitrary and unfair results.

Whether this requirement applies depends on the income that debtors earn in the 6 months before bankruptcy rather than their actual income at the time of filing. In other words, the median income test is based on what you used to make, not what you make at the time of bankruptcy. To understand this problem, imagine person A has an income of $60,000 and that the State's median income is $45,000. A month before bankruptcy, she loses her job and is forced to take a job that pays only $30,000. Under the bill, her current monthly income works out to $5,000, even though she only makes $30,000 at the time of the bankruptcy and even if she never finds a higher paying job. So she would be forced into a 5-year plan, even though her real income is well below the threshold the bill's drafters apparently had in mind.

Imagine person B has an income of $40,000 before and after filing for bankruptcy. Because person B's income is below the median, she will be allowed to enter a 3-year plan even though she actually makes more than person A. So the definition of current monthly income as the average of the prior 6 months' income may not make sense in some cases.

My amendments provide two alternative ways to allow for a different and more accurate monthly income to be calculated. In addition, under my amendment, if a debtor's income decreases during the bankruptcy case to less than the median income, then a debtor who is at that time on a 5-year plan can seek to have the plan reduced to a 3-year plan.

Incidentally, the bill already provides a safety valve for calculating current monthly income in chapter 7. The court can reduce the income used for the means test if special circumstances are present. Special circumstances such as job loss or a sharp reduction in income from a home business would certainly qualify. I think it is an oversight that this was not done for chapter 13. So I hope the sponsors will simply fix this problem.

This change also needs to be made in another section of the bill where current monthly income plays a significant role; that is, in determining whether a debtor will have to use the restrictive IRS standards under the means test to figure out what living expenses will be permitted.

Again, it is unfair to someone filing in chapter 13 to make that determination based on past income rather than what the person actually makes.

This is a commonsense fix. We shouldn't import the means test to chapter 13 without allowing for special circumstances adjustments to income. Either of my amendments would bring chapter 13 in line with chapter 7 on this score.

The next amendment I want to discuss also has to do with chapter 13. There is a peculiar problem in this bill. I have often called it a bill that is at war with itself. What I mean by that is that the bill's overriding purpose--the argument that we have heard over and over on the floor in the past week 26 and a half--is to get more people to file for bankruptcy under chapter 13, which will require them to pay some of their debts over a 3- or 5-year period before getting a discharge of their remaining debts. This is what the means test is all about-- getting debtors to pay some of their debts if they are able. That is chapter 13. You would think, then, that the bill's sponsors and supporters would want to make sure that chapter 13 remains a viable option for those debtors. But the bill also includes a number of provisions that make it less advantageous to file in chapter 13 and harder to complete repayment plans. That is a bill at war with itself, and I predict this bill will have very bad consequences if it is adopted as it stands. The chapter 13 bankruptcy trustees and judges have certainly told us that over and over again for the past 8 years. Apparently, no one wants to listen.

One amendment I have offered to try to undo one of the problems this bill creates for chapter 13 amendment No. 95, having to do with discharge of back taxes. Current bankruptcy law allows debtors who complete chapter 13 payment plans to discharge all taxes that were owed more than 3 years before the time of the petition. This allows debtors to look forward to someday improving their financial situation without facing a lifetime of debt repayment for old taxes. But the bill makes it less advantageous to file for bankruptcy under chapter 13 by disallowing the discharge of many of these older taxes.

Under section 707 of the bill, a standard now applicable only to chapter 7 would be applied to chapter 13. In chapter 7 cases, debtors may only discharge old taxes if they filed a tax return for those taxes at least 2 years before filing for bankruptcy. That limitation does not currently apply to chapter 13 cases. By the way, under chapter 13 today, as in chapter 7, taxes owed for the last 3 years must still be paid in full as priority debts, which enables the IRS to collect what is available from the debtor's disposable income with very low collection costs, and older taxes are paid pro rata with other creditors for duration of the plan. Society benefits at the completion of a debtor's chapter 13 payment plan when the debtor is able to rejoin the economic system as a tax-paying wage earner.

This is an important protection. Typical older tax cases involve debtors who have recently gotten back on their feet and found a job after years of economic or family displacement. The displacement is often the result of serious health or substance abuse problems, unstable employment or a marital collapse. These debtors may have drifted through many jobs over several years without keeping the W-2 or 1099 forms needed to file tax returns. Having finally found steady employment, debtors are often faced with a wage garnishment for these old taxes just at the time they are attempting to get back on level financial ground. The debtors may need to file for bankruptcy to stop the garnishment so that they will have

enough money left from take-home pay to pay rent, child support, or other financial necessities.

But if old taxes cannot be discharged through a chapter 13 plan, as proposed in this bill, debtors will have no reason to try to pay what they can afford to pay through a chapter 13 plan, because they will know that at the end of the 3- to 5-year payment plan, they likely will again face an IRS garnishment for the older taxes.

My amendment addresses this problem. I should also point out that the amendment retains the bill's prohibition on the discharge of taxes for which a fraudulent return was filed. So we are talking about discharging of back taxes that are not the result of fraud, just the result of nonpayment.

The next amendment also deals with chapter 13. It is amendment No. 94, and would correct a serious drafting error in section 102(h) of the bill that threatens to unintentionally eviscerate chapter 13. Refusing to remedy this error would be disastrous for the very chapter of the code that the sponsors of this bill want to encourage people to use.

In chapter 13 cases, debtors must devote all they can afford--that is, their disposable income after living expenses--to payments under their plan. These payments go to administrative expenses, secured creditors and unsecured creditors. In fact, most chapter 13 cases filed under current law are filed in order to deal with secured debts, to prevent foreclosure on a home or repossession of a car.

As written, section 102(h) of this bill would instead require that for debtors who are below median income, all disposable income must go to unsecured creditors, and none could be used for secured debts or administrative expenses. This is an obvious drafting error, since the purpose of section 102(h), as I understand it, was simply to require debtors with income over the median income to use the IRS standards contained in the means test to determine their allowable living expenses but to leave the law unchanged for debtors below median income.

If this error is not corrected, the bill will make it impossible for debtors below median income to use chapter 13. Now some in this body may be under the mistaken impression that people who file for chapter 13 bankruptcy are well off and they will only choose that chapter if they are forced to by this bill. That is obviously not true since chapter 13 exists now and millions of people use it voluntarily. The large majority of chapter 13 filers are actually below median income. In fact, in the 1980s, one study found that about 15 percent of chapter 13 filers were actually below the poverty line. Very few people file in chapter 13 because they have large amounts they can afford to pay to unsecured creditors. They do it to protect their homes from foreclosure or their cars from repossession. While there certainly are exceptions, people who file for bankruptcy are generally poor, whether they choose chapter 7 or chapter 13.

Currently, with no means test in place, about 30 percent of bankruptcy debtors voluntarily file under chapter 13. Even the sponsors of this bill claim that only another 8-10 percent of those who now file under chapter 7 would be switched to chapter 13 if the means test were implemented. So even with the means test, the majority of chapter 13 debtors will almost certainly be below median income. That means the drafting error I have discussed is a big deal. We have to fix this problem before it becomes law.

A second problem created by this error has to do with administrative expenses in chapter 13 cases. Administrative expenses in bankruptcy include the fees of lawyers and trustees who are paid to process the case.

Section 102(h) of the bill would effectively impose a 10 percent cap on chapter 13 administrative expenses for debtors with income over the median. And it would prohibit any payments at all for administrative expenses for debtors below the median. What that means is that there will be no lawyers to handle chapter 13 cases at all. Chapter 13 will become a nullity.

This bill has contained a number of antilawyer provisions over the years, but I cannot imagine that the drafters of this bill intended to effectively prohibit attorney participation on behalf of debtors in chapter 13 cases.

My amendment will correct these drafting problems. It makes clear that the means test expense standards will be used for chapter 13 cases filed by debtors who make more than the median income. It makes sure that below median income debtors can pay their secured creditors. And it will allow administrative expenses, including attorneys' fees, to be included in the plan payments. I urge my colleagues to support this amendment if you don't want this bill to write chapter 13 out of existence.

Another of my amendments deals with a provision that bankruptcy lawyers are very concerned about. This is amendment No. 93 on debt relief agencies. The amendment is strongly supported by the American Bar Association. This amendment would exclude lawyers from the provisions dealing with ``debt relief agencies'' in sections 226 to 228 of the bill. As currently written, the bill would impose a number of unnecessary burdens on the attorney/client relationship in bankruptcy proceedings. Subjecting attorneys to the ``debt relief agency'' provisions will add little substantive protection for consumers, but require substantial amounts of extra paperwork and cost.

Requiring lawyers to call themselves ``debt relief agencies'' will do more to confuse the public than to protect it. I think members of the public generally understand what the word ``lawyer'' means, but the phrase ``debt relief agency'' is vague and unhelpful. It is also misleading, because there are significant differences between lawyers and nonlawyers, but both would be identifying themselves as debt relief agencies under this bill.

Only lawyers are permitted to give legal advice, to file pleadings, or to represent debtors in bankruptcy hearings. Perhaps most importantly, only lawyers are bound to confidentiality by the attorney- client privilege. These distinctions are important to consumers, but they would be obscured by the bill as written.

Furthermore, these provisions would apparently apply to any law firm that provides bankruptcy services, even if that law firm were primarily providing landlord-tenant advice--even to landlords--criminal defense services, or other unrelated services. Large firms with only one bankruptcy practitioner may be required to advertise themselves as ``debt relief agencies.''

I think this will be immensely confusing to consumers without any apparent benefit.

The substantive provisions on ``debt relief agencies'' would add little to the already existing laws and regulations governing attorney conduct. Attorneys currently have extensive duties relating to disclosures, fees, and ethical obligations. These provisions would micromanage that relationship without adding any meaningful substantive protection.

I think the intention of the bill's drafters was to prevent attorneys from tricking consumers into bankruptcy by not telling consumers from the beginning that they work on bankruptcy issues, and then sort of springing the idea of bankruptcy on the consumer. But rather than simply prohibiting this sort of unethical behavior, the bill tries to micromanage the attorney-client relationship by requiring large amounts of additional paperwork and disclosure. Extra paperwork substantially burdens the consumer and adds to the cost of bankruptcy. Given that attorney conduct is already regulated, I believe these provisions are unnecessary as applied to attorneys and provide no clear benefit.

As I mentioned, the American Bar Association strongly supports this amendment. The Federal Bar Association is also strongly in favor of it.

Mr. President, I ask unanimous consent that a letter from the Federal Bar Association be printed in the Record.

Mr. President, another amendment I have pending is really concerned with making the bankruptcy system work better for both creditors and debtors. It is amendment No. 90, dealing with notice.

The bill contains three separate notice requirements which seem to create significantly differing procedures for notice.

The first provision requires debtors to send notice to the creditor at whatever preferred address the creditor has specified in correspondence with the debtor shortly before bankruptcy.

The second provision says that debtors and the court must send notice to the creditor at an address the creditor files in each individual case.

And the third provision says the court must send notice to an address the creditor files for all cases, with an exception if a different address is filed for an individual case.

The first requirement, that debtors send notice that bankruptcy has been filed to creditors at the creditors' preferred address, is actually unworkable and unfair and serves no apparent purpose. Debtors often do not receive correspondence within the last 90 days prior to filing for bankruptcy, and even when they do, they may not know that the correspondence is significant. Essentially, debtors might end up having their cars repossessed despite the fact that they filed for bankruptcy and repossession should be prevented by the automatic stay because they threw away what appeared to be junk mail from the creditor. And bankruptcy lawyers are forced to search through their clients' correspondence for an address or a change of address.

I think we can come up with a much more streamlined notice provision that will satisfy the interests of both creditors and debtors.

My amendment will eliminate the first notice provision of the bill and instead establish a central national registry for creditors' correspondence addresses. The registry would be available to debtor's counsel and the court on the Internet, as is already done for government creditors under the Federal Rules of Bankruptcy Procedure. The same address could be used for all notices, except when a creditor files and serves a different address for an individual case.

The bill generally provides for such a registry, and the courts are moving in that direction anyway, but the bill has two significant flaws. First, the bill is vague about whether a registry is to be maintained by each court or in a central national database, and it does not provide that the registry will be made available to the public.

Second, the bill's current language is unworkable because counsel will have to constantly check court records in every case to see if a new address was filed with the court. My amendment requires parties to use any address that has been filed more than 120 days previously with the registry. Within that 4-month period, the addresses should be updated in various software programs that bankruptcy attorneys use to find addresses, or they can recheck the registry to find if addresses have changed.

The exception to sanctions for a violation of an automatic-stay violation must also be amended so it does not include creditors who have clear actual notice of a stay. As it stands now, the bill creates a loophole that will encourage rampant abuse. For example, a debtor who filed for bankruptcy the previous week might return home from work to find her car being repossessed. The creditor might claim the debtor did not provide proper notice of the bankruptcy because notice was not sent to the correct address and therefore the creditor can proceed with the repossession, even if the debtor has her time-stamped bankruptcy petition in her hand and shows it to the repo man. It would not even work in that circumstance, which is an absurd result.

Finally, the language of the bill should be clarified so that actual notice reasonably calculated to come to the attention of a creditor or its agent is sufficient to allow sanctions for violation of the stay.

Correcting the notice provisions will protect the interest of debtors and creditors. Do we really want to leave in place a provision that is so obviously contradictory and unworkable and that could lead to a result as unjust as the example I just described? I hope not.

I also believe that creditor as well as debtor attorneys will appreciate the streamlined notice provision in my amendment and the establishment of a national registry available on the Internet.

It is my understanding the Administrative Office of the Courts does not favor the current language of the bill because it has essentially been overtaken by events. The courts are moving to electronic filing and notice registries. Keep in mind, this bill started about 8 years ago. An awful lot has happened in that time to make this much more feasible and, frankly, much more helpful to whoever is working on this, whether it be creditor representatives or debtor representatives.

My amendment is consistent with that movement. The bill is not.

One of my amendments is just a clarification of the effect of my bill and should not be controversial at all. It is amendment No. 100 on reaffirmation.

Section 524(1) allows creditors to accept payments made ``before and after filing'' of a reaffirmation agreement with the court. It also provides that a creditor may accept payments from a debtor under an agreement that the creditor believes in good faith to be effective.

I am concerned that these provisions could allow creditors to accept and retain payments where the reaffirmation agreement is ultimately held to be invalid.

In the late 1990s, in a celebrated case, the retailer Sears was required to disgorge literally hundreds of millions of dollars in payments made by debtors

pursuant to reaffirmation agreements that were invalid because they were never filed with the court. This bill would permit acceptance of payments before a reaffirmation agreement is filed. This will leave an ambiguity that would potentially require courts to allow a creditor such as Sears to retain all those payments.

The current language in section 203 of the bill suggests that if Sears in good faith believes those invalid agreements to be legitimate, it could have retained the payments. This would undermine the integrity of the bankruptcy system, and I can see no policy justification at all for allowing creditors to retain payments made pursuant to invalid reaffirmation agreements.

This amendment would clarify that courts have the option to order the disgorgement of payments made pursuant to invalid reaffirmation agreements or to order other appropriate remedies. Again, it is simply a logical correction to an ambiguity in the bill. If it is not necessary, I would appreciate the sponsors saying so on the record so that the legislative history on this point is clear.

Finally, I hope the sponsors will consider agreeing to amendment No. 87 on inflation adjustments. As a result of the efforts of Senator Grassley and my efforts, one of the provisions in this bill is a long overdue inflation adjustment to the dollar amounts in chapter 12, the chapter covering farm bankruptcies. Those dollar amounts were originally set in 1986. We increase the farm bankruptcy amounts to account for inflation since 1986 and then index them for future inflation.

Inflation has severely limited the usefulness of chapter 12 to family farmers, and I am pleased that this bill addresses that problem as well as others with chapter 12.

Virtually all the dollar amounts in the Bankruptcy Code are now subject to section 104, which provides for their adjustment every 3 years in accordance with the cost of living. But not all of them are. The reason that the family farm amounts needed to be increased so much in this bill is because they were not previously adjustable under section 104.

This bill adds a number of new sections or subsections with dollar amounts that are not indexed, including the family fisherman provision, household goods, educational savings limits, certain venue thresholds, and the applicability in chapter 13 of the additional monthly allowance for individuals over a family of four.

Again, this is just a commonsense technical issue. Almost all of the dollar values in the current bill should be added to section 104 and adjusted for inflation, just as the family farm values are, and the homestead exemption, and many others. I implore my colleagues: Do not make the same mistake that was made with respect to family farms back in the mid-1980s.

Do not set up a situation where 10 or 20 years from now some provision is clearly too low, but it cannot be fixed for 7 years while Congress works on another big revision to the Code.

I do hope the sponsors can accept this amendment. If there is an amount they have a real argument about that should not be indexed, I am willing to consider that. I removed one provision in this amendment having to do with the definition of financial participant when I heard from the Bond Market Association that that one should not be indexed. So I am willing to be reasonable, and I hope my colleagues who have worked so hard and long on this bill over the past 8 years will be reasonable as well, as this moves to final passage.

I have taken some time in going through these amendments, and perhaps people watching would say: Why is this Senator waiting until the last minute to raise these issues?

Of course, that is not the case at all. I waited patiently in the Judiciary Committee, provided these amendments well in advance in almost every case for everybody to review. I started to offer the amendments in committee and make my arguments. We received no substantive response at all in the committee on almost every amendment.

When one Senator actually could not take it anymore on the other side and offered a substantive response to my amendment, he said, I apologize to the chairman for making an argument, basically because apparently they had been instructed not to talk about these amendments.

He asked: Senator, why are you doing this? We need to get this out of committee. Why do you not wait until the floor to offer these commonsense amendments, and then we in good faith will work together to try to solve these problems?

Well, that is not what is happening. This is just a slam dunk. There is no danger anymore about considering these amendments. They got cloture. There are plenty of votes. What is the harm of fixing the bill? What is the harm of doing the right thing? What is the harm of doing our job as legislators and making sure we do not stick the entire bankruptcy community with these provisions that do not make any sense? Come on, we can do this now. It is safe to go back in the water. This is going to become law, and not a single one of my provisions will do any damage whatsoever to the fundamental intent or goals of this bill.

I do thank my colleagues for their attention in this presentation. These are highly technical issues. Some may seem minor, and some may actually be minor. I do not want to take the Senate's time on these amendments, which is why I attempted to get them considered in committee and have tried to make myself available at every instance to discuss them over the past week and a half.

I look forward to discussions over the next few hours with the managers of the bill. Perhaps we can still reach agreement that will make some of these votes unnecessary.

I yield the floor, and I suggest the absence of a quorum.

Mr. President, how much time remains?

Mr. President, let me talk about the Boxer amendment for a minute or two. The purpose of this amendment is to restrict credit availability for young adults.

Others believe that using credit cards to build a history is a laudable objective for young adults. This amendment does not distinguish between legitimate uses by young adults from other uses. It applies to any person under 21, regardless of his or her financial independence or employment situation.

Also, note that 18-year-olds can serve in the military, get married, vote, and in most States serve on juries, all without a cosigner.

This bill does address the issue of credit card debt and younger adults. Title XII of the bill provides for a study regarding the impact of the extension of credit to individuals who are claimed as dependents for Federal income tax purposes and are in college.

The same section provides other relevant credit card-related reforms that are the result of careful negotiation. These include several amendments to

the Truth in Lending Act which includes creating increased disclosure requirements for credit card statements and mandating the credit card companies assist borrowers in determining how long it will take to pay off their credit card balances; requiring certain additional disclosures to borrowers buying and refinancing their homes; require additional disclosures regarding credit card so-called introductory rates; extending Truth in Lending requirements to Internet-based credit card solicitations; adding new disclosures related to the credit card late fees; and prohibiting cancellation of credit cards solely due to borrowers' failure to incur finance charges.

These are good changes, in my view, and the view of the majority of the Senate. They were all carefully negotiated over the last 8 years. We do not need to come in now and make further revision to delicate compromises such as this. I urge my colleagues to vote against the Boxer amendment. It would do more harm than any good.

Amendment No. 67

I wish to speak against Senator Dodd's amendment 67. This is an omnibus amendment. There is nothing else to call it. This late in the game, a successful amendment usually targets specific provisions in the bill for improvement. And getting agreement on one of these rifleshot amendments can be like herding cats.

Quite frankly, this is a message statement. It asks us to protect families. This is a noble goal, but it is not one served by this amendment. This amendment alters the carefully negotiated means test to permit nearly all filers to avoid a presumption of abuse. In some respects, it is redundant.

For example, it lists as expenses many things that are already covered in the IRS standards used in the bill to determine appropriate expenses. In other areas, it is excessive. For example, it increases the allowable expenditures for private school education from $1,500 to $5,000.

The worst part of this is it created a category of miscellaneous expenses. This is not just a loophole. My gosh, you could drive a truck through the opening for abuse this amendment puts through the middle of the means test, a test that has the purpose of a reduction in abusive bankruptcy filings.

I said it once, and I say it again. This means test is the heart of this bill. The means test is fair. The means test has been carefully negotiated between Democrats and Republicans over 8 years of time. I have to oppose any effort to revise the means test at this late day. I urge my colleagues to vote against this amendment.

Amendment No. 110

I rise in opposition also to the Durbin amendment. It takes a broad swipe at the means test again. First, the very purpose of the means test is to treat genuinely impoverished filers fairly. If you are below the State median income, you are not subject to the means test. It is as simple as that. This amendment undermines the ability of a court to verify a person's income when he or she is filing for bankruptcy.

This amendment would remove the basic requirement that debtors fill out certain forms to verify their income. You have to fill out forms to get a driver's license, to get a job, to apply for a retirement plan. For example, when an individual applies for food stamps, there is a complete application process to verify income and assets before this benefit is approved. Is it too much to ask that if the Government is going to allow you to liquidate all of your debts, you at least show the court definitive proof of your income?

Instead, this amendment allows a person simply to declare that his income is below the State median income. All he has to show are ``calculations or other information.'' In other words, take their word for it. That seems to open the door to the fraud this bill is designed to prevent.

I believe most people are honest, but inevitably there are some applicants who will take advantage of the looser requirement. As Ronald Reagan said in a different context: Trust but verify.

I urge my colleagues to vote against the Durbin amendment, as well.

Amendment No. 66

I oppose the Harkin amendment. This was part of a problematic Rockefeller amendment we have already voted down. I respect my colleagues' dedication to the issue, but I must urge my colleagues to vote no.

I am pleased we invoked cloture yesterday by a vote of 69-31. If that is not bipartisan, I do not know what is. This bill has been in the works for 8 years now, and I hope we can soon pass it for the fifth and final time. My colleague from Wisconsin has 14 amendments pending. I also understand there are roughly another six or so Kennedy amendments and two Durbin amendments. That is 22 amendments between these Senators.

I wonder if my colleagues know how many other amendments are pending. The answer is three: one from the ranking member of the Judiciary Committee, one from Senator Akaka, and one from Senator Talent. What does this tell you?

I respect my colleagues from Wisconsin, Massachusetts, and Illinois, but why are they dragging out this process? Their amendments constitute roughly 88 percent of the remaining omnibus bill. I suspect that even if we accepted every one of the amendments, all three would not vote for this legislation. So this is important. I respect the right of Senators to bring up their germane amendments in postcloture situations. If they want to do it that way, they certainly can.

I oppose every one of those amendments. I think a majority of the Senators should oppose those, as well. We need to get this bill done. We know we have to keep it intact in order to get the House to take it and get it signed by the President. It is time to bring this to an end. We have been at it for 8 years and we have worked to accommodate everyone we possibly could. It has been a bipartisan vote every time, overwhelming bipartisan vote every time. By gosh, it is time to vote on this bill.

How much time remains?

Is that my time? I am prepared to yield back the remainder of my time and proceed to a vote.

Do we have the yeas and nays on all four amendments?

I ask for the yeas and nays on all four amendments.

I ask unanimous consent that after the first 15-minute rollcall vote the remaining three votes be 10 minutes each.

Mr. President, I will have a little bit to say about what the distinguished Senator from Massachusetts has been talking about, but I rise in opposition to the Kennedy amendment to S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Now, it is important that colleagues on both sides of the aisle fully understand what this amendment does to our bankruptcy laws and what it does to the prospects for reform. Before I start, I will take a few minutes to remind everyone what this bill is all about. The short answer is fairness. Those who can pay their bills should pay their bills. That is the American way.

All law-abiding, bill-paying consumers pay when some do not repay their obligations. You and I and every citizen of this country is going to pay if we allow people who can pay to escape their obligations, and this bill stops the gaming.

This is not too revolutionary an idea, but to listen to some of the opponents of this legislation on the floor these last few days, one would think we are trying to square a circle.

I have been down on this floor quite a bit over the last few days and I have heard many of the arguments from the few Senators against this bill, and I emphasize the ``few Senators against this bill.'' It sounds pretty familiar. I have been around this place for a long time and I only know one thing for sure. At the end of the day, some on the losing side will think that the underlying bill is without any merits at all and that their concerns have not been treated with the seriousness they feel they deserve.

The principal substantive argument we have heard is that this bill goes too far and too fast; we have to take it slow; we have to rethink this; this bill is too extreme, they say. For some of my colleagues across the aisle, this is the same old song we have heard now for 8 solid years that we have tried to put this bill together and it has always had huge bipartisan support. That is bipartisan support, Democrat and Republican support.

I am a bit confused by some of the arguments that have been used on some of the same old amendments and against the bill itself. Sure, there are places we could have done better in this bill, as in every other legislation. There are always things we could do better. But the votes we have gotten on this bill, on its amendments in committee, and in previous Congresses are

as good an indication as we can ever have of the underlying reasonableness of these proposals.

As a long-time supporter of the bankruptcy bill, I was extremely pleased by the strong bipartisan vote we had on cloture yesterday, 69 to 31. That is not just Republicans; there are a lot of Democrats who know this bill is the answer to a lot of the problems we have in bankruptcy in our society, and who have been working with us for 8 solid years in a bipartisan fashion. But to hear some of our critics, one would think that everybody concerned, all 69 of us, are nutcakes who do not know what is going on in our society or do not care for the poor, or for the weak, or for the worker, or for the union man. Give me a break.

I am one of the few people in this body who ever held a union card. I worked for 10 years in the building construction trade unions, earned my journeyman's card as a wood, wire, and metal lather, now a carpenter today, and I am darned proud of that. I think a lot about people who are not as fortunate as we are in the Senate.

As a long-time supporter of the bankruptcy bill, I was extremely pleased by the strong bipartisan vote, 69 to 31, on cloture. That was a big bipartisan vote by any measure. This vote is in keeping with the long record of bipartisan support for this bill over the life of the legislation.

I will briefly review this history: We held our first meeting on this in a Judiciary subcommittee in 1998. I want to make sure everyone heard that right: 1998. Early on, the good-faith compromises began. To give everybody an idea, these are some of the amendments we accepted in committee over the last 7 years. We modified the homestead exemption. We modified the means test. We allowed for sanctioning of attorneys who file abusive claims. We made privacy concessions for filers. We prevented creditors from demanding repayment for debts incurred through predatory lending practices, something that has long been overdue for the poor, the weak, and the unfortunate. All of these were amendments from my Democratic colleagues. I could go through dozens of others.

Two weeks ago, the Judiciary Committee held another markup on the bankruptcy legislation. We adopted five more amendments proposed by our Democratic colleagues. If some of the amendments that have been proposed on the floor sound similar to the matters I listed, that is because they are. Taken in a vacuum, as it might sound to anyone who randomly tunes in on C-SPAN, these amendments might sound reasonable. Yet in proper context of past history and compromises, many of these amendments should be understood for what they are: more of the same.

Many of the amendments address issues we have already negotiated previously. Frequently, these amendments make this a better bill. But now after so many years of hearing the same complaints, even after we attempted to address concerns by accepting or modifying amendments, including, I repeat, five in their latest and hopefully last markup of bankruptcy reform in the Judiciary Committee, it is less than clear that some of these remaining amendments will improve this already fully vetted bill.

The five amendments adopted in the markup ran the gamut. One was a technical fix that created a more restrictive inflation adjustment plan. We decided to prevent corporate executives--that is corporate executives, by the way--from declaring bankruptcy to avoid paying fines for securities fraud. That does not sound like something that hurts the little guy. We are trying to stop this type of fraud.

We accepted three amendments from the senior Senator from Massachusetts, Mr. Kennedy. We clarified the means test, even in an instance where we sincerely believed that the means test was already more than clear, to explain that without any debt, health and disability expenses will not be included against a filing for bankruptcy. We allowed for a trustee in cases of fraud involving persons representing the debtor. In an amendment that many think we went too far on, we even accepted a compromise version of an amendment that restricted payments to executives and businesses going through a bankruptcy. Unfortunately, this amendment may discourage senior officials from taking on the task of seeing a company through a difficult financial reorganization. The unintended consequences of this might be to further limit the ability of damaged companies to emerge from bankruptcy and to keep thousands of employees on the job. They may lose those employees. Those employees may lose their jobs if we cannot keep good, competent executives there. I think this issue deserves more attention. But we agreed to it.

I am hopeful. I have been chatting with my good friend from Massachusetts and he has indicated he thinks we might be able to resolve that problem so people will not lose their jobs. But it depends upon what he thinks, not on what I think, because I accepted the amendment in committee, as the person who was in charge of the committee at that time.

Fairness demands that we work with our colleagues in the minority but this is a two-way street. Fairness also demands that large bipartisan majorities, after they have done all they can to reach agreements with the other side, be allowed to move on. That is why we invoked cloture, so we can move on.

This bill is a case study in such accommodation. I could go through dozens and dozens more accommodations we made to the other side, and to people on this side as well. This bill first passed all the way back in the 105th Congress. Let me refer to this chart. In the 105th Congress we passed this bill 97 to 1. I don't think everybody who voted for this was an idiot, who did not care for the poor and the weak and the infirm and the downtrodden. No. We are trying to solve some of their problems. This bill passed the Senate by a 97 to 1 vote. You cannot get much more support than that. There is no denying the bipartisanship of that vote.

When we came back to the issue in the 106th Congress, we again had massive bipartisan support for this bill. The Senate passed H.R. 833 on February 2, 2000, 83 to 14. I think that was a pretty good bipartisan vote. It is virtually the same bill. Then the conference report came back and on December 7, same year, 2000, we passed this same bill 70 to 28. That was a big bipartisan vote--which was right. That bipartisan conference report was supported by Democrats and Republicans. That was vetoed with a pocket veto by President Clinton. He had a right to do that, but he pocket-vetoed it because it didn't have an abortion amendment on it.

What about the 107th Congress? Did we give up hope? I can tell you that I did not. I just could not believe, I still cannot believe that a bill with such wide support could repeatedly fail to become law. So what did we do in the 107th Congress? Let me refer to this chart. In the 107th Congress, on March 15, 2001, this bill passed again, 83 to 15, and then passed again, 82 to 16. Those are bipartisan votes. I don't think the Democrats who voted with us are idiots or did not care for the poor. I don't think they failed to acknowledge that we have to take care of those who are unfortunate in our society. They did acknowledge that it cost every family in America $400 extra because of what is going on in this system.

All in all, the full Senate has voted favorably on bankruptcy reform legislation five times. Five times, all sweeping bipartisan votes, and the bill is not yet signed into law.

If we adopt any of these amendments from people who will never vote for this bill no matter what we do--they would rather criticize it than vote for it. I can criticize aspects of this bill myself, I believe. But it is a classic working together in the best methodology that we have, to bring everybody together and get legislation done that will do a lot of good. It will cause people, who can afford to, to pay their bills, or at least pay some of their bills.

It seems to me that is the American way. We want to teach our children, our young people, that it is important to pay your bills. It is important to live up to your responsibilities.

We do a lot to make sure corporate America lives up to their responsibilities in this bill as well. The bill is not signed into law yet, but we hope we can get it through--apparently not tonight, but by tomorrow. If not tomorrow, then Friday. If not Friday, Saturday. As far as I am concerned, whatever it takes to get it done.

These reform-minded votes are not just coming from the Senate. Here is

how the House voted over the years, just so everybody knows. There are 535 Members of the House. Here is how they voted: 300 to 125; 313 to 108; 306 to 108. Overwhelming bipartisan votes, because this bill is the best we can do. It will do a lot of good, to make things right in our society. With all due respect, these are not even close calls. They are consistent, bipartisan blow-outs. But, to listen to the opposition, you would think this legislation is supported by only a small minority of Representatives in the House of Representatives or in the Senate. Nothing could be further from the truth.

I really do not know what else we can do. We have compromised when it was reasonable to do so. As a matter of fact, in our very first subcommittee debate on this issue we accepted an amendment from my distinguished colleague, the Senator from Illinois, that adjusted the requirements for being subject to the means test. That amendment created a safety valve for those who fall below the national median income.

This was an important amendment. This bill does not track it exactly, but our exclusion of those who fall below the State median income takes this original amendment as a guide. It materially limited the reach of the means test. It allowed a fresh start to those poor people who are drowning in a sea of debt with no way to pay it back.

I said many times during this debate and I will say it again: 80 percent of bankruptcy filers will be excluded from the means test--80 percent. They will be permitted to file chapter 11, which will completely wipe out their debts. The supposed draconian means test has results in only one half of the mere 20 percent that it even applies to. It allows those with incomes that remain above the State median income, after numerous health and education and other exceptions, to pay back some of their debt over the course of 3 or 5 years. It gives them even a break there.

When all is said and done, the means test in this bill will only result in about 1 in 10 individuals who file bankruptcy from ever having to pay some of their past debts with future earnings. So 10 percent of 100 percent will have to do some payback because they can afford to do it. It is only right. They should not saddle all America with their debts when they can afford to pay them back. But in the first markup, the man who is now the minority whip, my friend from Illinois, proposed the amendment that remains at the heart of the means test in this bill, and we accepted it.

What is amazing to me is that when my colleagues want to raise taxes they are always talking about how great the means test is. But when we want to make sure that people who can pay can pay, suddenly the means test is not a good test. You can't have it both ways. It is amazing to me. It is almost hypocrisy.

I am pleased that cloture has been invoked, giving us the opportunity to once again pass this bill. It is getting to the point where some might even forget why we initiated this legislation. We have been at it for 8 years now. Some of those who oppose the bill and are offering final postcloture amendments are flying in the face of years and years of hard work and bipartisan compromise. By the way, the ones who bring up the amendments will never vote for this bill no matter what you do, unless it is a complete cave-in, so we cannot solve the problems that are eating our country alive in bankruptcy. And they do it under the guise that they are trying to protect the weak and the infirm and those who really cannot help themselves.

Give me a break. We over here get so tired of those populist arguments. We hear them over and over and sometimes I think they think the more they yell and scream the more people must think their arguments are serious. I hope people are listening because, my gosh, after 8 years of compromising and working and bringing people together and listening to both sides and doing everything we can to accommodate, why do we have to go through all the same amendments over and over again; they have been defeated time and time again because they deserve being defeated. Yet it happens every time--they get up and act like the world is coming to an end because their populist rhetoric is not being listened to. Unfortunately, there are people out there who really believe this stuff when somebody starts yelling, screaming, and shouting on the Senate floor.

The fact is that many of these final amendments being proposed during this debate are just further adjustments of adjustments to adjustments that were already made during this process. We have made further adjustments and refinements when we found broad consensus. These amendments have been brought up postcloture.

You would think there would be a time when you admit that you have had your shot, you have had 8 years of your shot; you have had amendment after amendment, the same thing over and over again, and the amendments have been defeated. You would think sooner or later they would come to the conclusion to stop holding up the Senate and the people's business and let this bill go; we lost this bill even though we as liberals don't like it. But there are liberals who do like it because they know it is right. They know what we are trying to do here will work to the betterment of the bankruptcy laws of the country.

I would like to add that during the course of the floor debate over the last week and a half we accepted more amendments that will improve this bill.

The Senate agreed to the Sessions amendment that makes clear that bankruptcy judges must consider military and veteran status and health care costs when determining whether a portion of future income must be used to pay past debt.

The Sessions amendment addressed many of the issues presented by Senator Durbin with respect to military personnel and veterans, and Senator Kennedy with respect to health care costs.

We accepted the Specter amendment that made clear how bankruptcy judges will be paid through increased filing fees. This important amendment stands for responsible government and eliminates any objection to the legislation based on a budget point of order.

In addition, we adopted an important amendment by Senator Leahy that corrects some potential problems that relate to privacy of certain personal information, including Social Security numbers.

In short, we have improved this bill on the floor in a number of important aspects. We have been open to our colleagues. We have tried to accommodate them where we can. But there are areas where we can't and have this bill became law.

I think that the cloture vote we just took is evidence of those changes to this already moderate legislation. I understand some Senators do not think they have had an adequate hearing. At the beginning of this process, I gave them my word to at least consider amendments from all sides, and I believe we have done so. This institution is rather unwieldy, though. I think anybody who watches it or thinks about it has to admit that. That is probably putting it mildly. Unfortunately, even decent arguments, if they come at the wrong time, are going to have an uphill climb.

As I said earlier, since I was first elected I have tried my best to reach out to the other side as a good-faith actor. That is no less true with this bankruptcy bill. I have listened to more proposals and voted on more amendments that I can recall, and so has Senator Grassley and Senator Sessions and others who have worked so hard on this issue. My hope is that as we move forward the opposition remembers the bigger picture. Even those few Senators who will not vote for final passage know that this bill was made better because we have accepted their amendments over the years.

At this late date, though, it is difficult to accept many more for procedural reasons. I oppose the amendment offered by the distinguished Senator from Massachusetts for all of these substantive reasons.

Let me give a couple more substantive reasons. I accept Senator Kennedy's argument that health care costs are the key factor in bankruptcy. I have heard that for days around here; that most people go into bankruptcy because of health care costs. Much of his argument stems from the so-called Warren study. Let me talk about the Warren study cited by Senator Kennedy and give a response to it by the

Department of Justice. Here is what the Department of Justice said. I would suggest that the Warren study has been greatly overplayed here on the floor.

They said:

Professor Warren, a long-time opponent of bankruptcy

reform, and her so-called ``studies,'' should be approached

with skepticism.

Though Ms. Warren's study claims that more than half of

consumer bankruptcies are medically related, the DOJ has told

us that only ``the conclusion that almost 50 percent of

consumer bankruptcies are `medical related' requires a broad

definition and is generally not substantiated by the official

documents filed by debtors.''

In other words, this claim that 50 percent of the bankruptcies are caused by medical expenses is pure bull.

The means test doesn't apply to the poor or anyone without the ability to re-pay.

Anyone under the median income for their State is automatically exempt from the means test.

They can go right into chapter 7 and have every one of their debts removed; that is, the poor.

To the extent that ``above median'' families have ongoing medical expenses, they are permitted to use those expenses as a reason to not pay their debts. These are people above the median income level.

GAO's 1999 analysis of the expenses allowed under the means test clearly shows that the means test permits all debtors to account for health care expenses.

For people with repayment capacity and financial resources, the bankruptcy legislation prevents abuse by requiring some of their bills to repaid in exchange for not having to pay the full amount.

This is fair. If they can pay some, they ought to pay some. We shouldn't just stick the hospitals and the doctors and everybody in medical care with these unpaid debts.

I was talking to one of the large hospital chains the other day. I asked them how much uncompensated debt they had every year; in other words, medical care that you have given that you receive no compensation for. It was almost $1 billion a year that they have given in free medical care for the poor and for some who game the system. Guess who pays for that. You and I, and everybody else in the final analysis because it is going to have to come back in most cases to Medicaid and Medicare. These are Federal programs that wind up with those debts. By the way, we pay for them for a variety of reasons. We don't pay almost $1 billion to those hospitals. They don't get anything in most cases. That uncompensated debt means they are not getting paid. They are giving emergency care. That is why some hospitals are now doing away with emergency care facilities, because they can't keep doing it. People who do not pay their bills raise the cost of everything for all of us. That is OK when they can't pay their bills when they are poor. But when they can, and when they think they can just escape them by going into bankruptcy and they are capable of paying some or all of their bills, they ought to help to do it.

For people with repayment capacity and financial resources, the legislation prevents abuse by requiring some of the bills to be repaid in exchange for not having to pay the full amount.

If someone can't pay health care debts, the bill does not force them to. This bill will not force them to. If they can pay health care debts, they should repay those debts and those bills just like everybody else has.

The Sessions amendment we adopted last week addresses this problem. It simply addresses the problem.

Let me close by addressing the investment banker provision my colleague from Massachusetts has strenuously commented upon. I am not sure if strenuous is quite the word, but I will use that word here tonight. It seemed to me a little more than strenuous.

Companies in financial distress need the ability to retain good help. They need to be able to keep people on who know the company best and who will enable that company to emerge from reorganization a more healthy outfit that can continue providing for its employees and contribute to the economy.

Under current law, investment bankers alone among professionals in the business world were deemed, per se, interested persons who could not work for a company after filing for bankruptcy if they had served as banker for any outstanding security of the corporation. This bill simply extends the test, one of the materially adverse interests that applies to lawyers, accountants, and other professionals to investment bankers.

This amendment makes sense. It continues to provide the courts with discretion to exclude bankers from participation in a reorganization while giving companies more flexibility as they attempt to reorganize and save themselves.

The amendment under consideration would undo this flexibility by imposing a strict 5-year exclusion on participation by investment bankers. This makes little sense. I will be voting against the amendment. I urge my colleagues to do the same. I especially make the case that this is not special interest legislation, as my colleague says it is. This is a classic message amendment. The message we should send tomorrow is to vote ``no'' on this amendment. When we talk about message amendments, these are amendments that our colleagues know we cannot take for very good reasons, but they are trying to score political points with the Nation. Anyone who looks at these matters carefully and understands the law would say, let's not let these message amendments take over a good bill that can do so much good for our society. We then should vote ``yes'' on final passage because this is a good, balanced, bipartisan, bicameral bill.

What gets me down is I have heard these arguments for 8 solid years. Most of them do not make sense. Most of them are message arguments for political reasons by people who will never vote for this bill, basically have not helped bring this bill about, who have not cooperated in trying to bring both Houses together, who are not part of the huge bipartisan consensus on this bill, and who are trying to score political points, hoping we will never come on the floor and refute them.

I could not sit back and not come to the Senate tonight because we have to quit making political points. We ought to pass this bill so we can help this country and its people go forward in ways it should.

People who can pay their debts ought to. Companies that are doing wrong ought to pay for that. Where there is fraud, this bill will attack it.

We can go through so many good aspects of this bill. Could it be better? I have never seen a bill pass here of any magnitude that could not be improved. But we have had 8 years of improvements and this is the bill that will pass if we do not amend it. We should pass it. We should move forward from here.

Having said that, that does not mean we should not immediately start work on the next bankruptcy bill to see if there are ways we can improve even this. As this bill becomes law, we will find ways that it may not work as well as we contemplated and we ought to continually oversee this and make sure this bill works in the best interests of all Americans, that it works in the best interests of the poor, and the working people, our union men and women, people who have to make a living all over this country, and for investors and everybody else in our society. We ought to make sure we do the best we can. I assure you we will continue to try and work to continue to improve our laws in this country. That is what this body is all about.

I will briefly mention an important issue that arose from the amendment at the markup. This amendment offered by my friend from Massachusetts, Senator Kennedy, seeks to prevent unfair and unnecessary retention bonuses to insiders in chapter 11 companies. The goal here is certainly laudable and I agree with the desire to try to do that, but it has come to light since our markup that this amendment may act to effectively prohibit responsible companies undergoing reorganization-- in other words, trying to save themselves--from keeping key employees who may best be able to steer the company back into solvency.

I have a letter from the Association of Insolvency and Restructuring Advisors enumerating these concerns in further detail and I ask unanimous consent it be printed in the Record.

We have language in this issue which would mitigate what I believe are unintended effects of this amendment. Under this modified language, all payments where ``misconduct, fraud, or mismanagement'' is present are prohibited. This language also keeps the burden on chapter 11 companies to prove that retention bonuses are ``necessary, fair and reasonable,'' and ``likely to enhance a successful reorganization.''

This seems like a reasonable fix to me and I hope we include this language in the bill. I appreciate any help my friend from Massachusetts would give on that particular issue because if we are interested in doing what is right, this will do what is right.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 211 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Florida (Mr. Hastings), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

Mr. Speaker, this is a closed rule providing for consideration of S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

The rule provides for 1 hour debate in the House, equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary. It waives all points of order against the bill and its consideration, and it provides for one motion to recommit with or without instructions.

General Leave

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H. Res. 211.

Mr. Speaker, bankruptcy reform is overdue for passage. Despite its critics, S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, does not exclude anyone from filing for bankruptcy. Instead, it implements a simple means test to shield debtors who make below their State's median income and to determine if a higher income debtor has the ability to partially pay back his or her creditors.

To phrase it simply, bankruptcy reform is financial accountability. It protects our system against fraud and abuse. And it asks those who have the means to repay as much of their debts as they can.

For at least four previous Congresses, members have been trying to reform our ``when in doubt, bail out society'' in favor of personal responsibility. Bankruptcy should not be a financial planning tool, and it should be available for legitimate emergency situations only. Our bankruptcy system should fit the needs of the individual, no more, no less. With this rule, and

passage of the underlying legislation, S. 256 we will finally see some movement in the right direction.

Bankruptcy reform is important to help speed up court hearings, because it only takes a few fraudulent or misdirected cases to stall a court for hundreds of other legitimate bankruptcy filings. Federal bankruptcy filings per judgeship have increased by 71 percent from 2,998 in 1992 to 5,130 in 2003; and it represents the largest case load in our Federal court system. This creates a backlog that slows down the process for those really in need of bankruptcy protection.

Bankruptcy reform provisions found in S. 256 include, but are not limited to: abuse prevention so debtors who have committed crimes of violence or engaged in drug trafficking are no longer able to use bankruptcy to hide their finances;

Needs-based credentials, where if a debtor has the ability to partially repay debts, he or she must either be channeled into a form of bankruptcy relief that requires repayment or risk having the bankruptcy case dismissed as an abusive filing;

Spousal and child support protections to help single parents and their children by closing a loophole used by some spouses currently avoiding their child support responsibilities. This would put child support and alimony payments as a first priority, ahead of credit card debt and attorney's fees. Child support and alimony payments are currently seventh in the priority list of payments;

Closing the mansion loophole require a debtor to live in a State for at least 2 years before he or she can claim that State's homestead exemption. The current requirement is 91 days, allowing some debtors to shield themselves from creditors by putting all of their equity into their homes;

Debtor protections requiring potential debtors to receive credit counseling before they can be eligible for bankruptcy relief, allowing them to make an informed choice about bankruptcy considering all alternatives and consequences;

Further, small business protections to defend against needless bankruptcy lawsuits. Under current law, a business can be sued by a bankruptcy trustee and forced to pay back monies previously paid by a firm that later files for bankruptcy protection;

Additionally, family farm relief by doubling debt eligibility for chapter 12 filing, allowing periodic inflation adjustment of this debt, and lowering the required percentage of a farmer's income that must be derived from farming operations.

There are business privacy protections to prohibit the disclosure of names of a debtor's minor children with privileged information kept in a nonpublic record. Current law allows nearly every item of information supplied by a debtor in connection with his or her bankruptcy case to be made available to the public.

S. 256 passed the Senate with a clear 74 to 25 majority. The House judiciary markup on March 16 included rollcall votes on 11 amendments. The reforms included in this legislation will be very beneficial to our society without ignoring the need of those suffering financial uncertainty. This legislation deserves a clean up-or-down vote. Mr. Speaker, I ask my colleagues to support this rule and pass S. 256 bankruptcy reform.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I want to point out, Mr. Speaker, to the gentleman from Florida that medical expenses are specifically covered in the bill, and all other extenuating circumstances are covered in section 102 of the bill allowing judicial latitude.

At this point, I would like to yield 4 minutes to the gentleman from Wisconsin (Mr. Sensenbrenner), the distinguished chairman of the Judiciary Committee.

Mr. Speaker, I yield to myself such time as I may consume.

I want to thank the gentleman from Wisconsin, distinguished chairman of the Committee on the Judiciary, for bringing forth those statistics and that stack of documents that he just went over; and I want to add one more statistic to that, and this is that since the 105th Congress, the House and the Senate have passed bankruptcy reform legislation a dozen times, with a vote tally of 2,455 for and 871 against.

To my distinguished colleague from Florida, in regard to the amendment process in the Committee on Rules, my colleague knows that the other side was offered an amendment in the nature of a substitute. That substitute amendment could have included all 35 Democrats, who my colleagues allege were shut out. Every one of those 35 amendments could have been included in an amendment in the nature of a substitute; but apparently they just could not get their act together, did not have an amendment and passed on that opportunity.

In regard to the gentlewoman from California and the concerns about identity theft, opponents of the means test of the bankruptcy legislation have attempted to claim that a debtor should be except from the means test if the debt is related to identity theft. This is a red herring, Mr. Speaker, because consumers who are victims of identity theft do not owe the debts that result from identity theft; and, therefore, it is not an issue addressed by the bankruptcy court.

We all understand the sentiment of trying to help identity theft victims. Amendments related to identity theft, though, are not necessary. They would inadvertently do serious harm to consumers and create a significant potential for fraud and abuse. A consumer who is victimized when an identity thief establishes credit in the consumer's name is not liable for any of the debts incurred by the identity thief. The maximum amount I think is $50, and that is even waived by the credit card companies if it is proved to be fraudulent. Bankruptcy relief is, therefore, not necessary in regard to identity theft.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from Wisconsin (Mr. Sensenbrenner).

Mr. Speaker, I yield myself such time as I may consume.

In the 105th Congress, H.R. 3150, bankruptcy reform, passed 306-118.

In the 106th Congress, H.R. 8333 passed the House, 313-108.

In the 107th Congress, H.R. 333 passed the House 306-108.

In the 108th Congress, H.R. 975 passed the House 315-113.

The gentleman from Virginia (Mr. Scott) was not one of those voting in the affirmative on any of those occasions, but I want to point out to the gentleman in regard to his concern over medical and health- related expenses for a debtor, spouse, and dependents, on line 23, page 8, continuing through line 10 page 9, this covers the treatment of medical expenses for the debtor, spouse of the debtor, and dependents of the debtor. It expressly includes not just actual medical expenses but expenses for health insurances, disability insurance, and health savings accounts.

Mr. Speaker, put another way, contrary to misrepresentations by opponents, the needs-based test not only takes into account the full range of medical expenses by the debtors, but it also covers the spouse and dependents. This is just one of three provisions for a member of the household or immediate family. The provision includes for the monthly expense of the debtor, expenses incurred for the care and support of an elderly, chronically ill or disabled member of the debtor's immediate family. This includes parents, grandparents, siblings, children and grandchildren of the debtor, among others.

So medical in any situation, Mr. Speaker, medical or otherwise, no debtor is denied access to bankruptcy relief. All S. 256 says is that, in a limited range of cases, a debtor with meaningful capacity to repay may have to file in chapter 13 as opposed to chapter 7. In no case is a debtor denied access to the bankruptcy system.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from California (Mr. Dreier).

(Mr. DREIER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself such time as I may consume.

In response to the gentlewoman from Texas, Mr. Speaker, a substitute amendment was offered in every other Congress that bankruptcy reform was considered. Every other Congress in which bankruptcy reform was considered, the minority submitted a substitute amendment. Why not now? I have asked that question several times, and I still have no answer.

In regard to health care expenses, and I am reading from a March 29, 2005, CRS report for Congress titled ``Treatment of Health Care Expenses under the Bankruptcy Abuse Prevention and Consumer Protection Act'':

``Conclusion. Health care expenses will generally be considered in one of two contexts in a bankruptcy filing. Significant expenses incurred prior to the bankruptcy filing may be calculated as unsecured claims; if the debtor cannot afford to pay 25 percent of unsecured claims or $100 a month, the debtor may be eligible to file under chapter 7.

``Ongoing health care expenses and health insurance premiums may be deducted from the debtor's monthly income. Factoring in these expenses may also reduce the debtor's disposable income under the means test.''

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself 1 minute.

The gentlewoman from California brought up the issue about bankruptcy reform harming veterans. In speaking to that, Senate 256 needs-based test includes several safeguards and exceptions for special circumstances, including those of veterans: a specific reference to a debtor who is subject to a call or ordered to active duty in the Armed Forces to the extent that such occurrences substantiate special circumstances.

S. 256 means test has a special exception just for debtors who are disabled veterans if the indebtedness occurred primarily during a period when the debtor was on active duty or performing a homeland security activity. The bill excuses a debtor if he or she is on active military duty in a military combat zone from the mandatory credit counseling and financial management training requirements.

I could go on and on, Mr. Speaker; but we are addressing, as we always have on this side of the aisle, the special needs of our great veterans of this country.

Mr. Speaker, I yield myself 1 minute.

In response to the gentlewoman, I have got a letter from the National Child Support Enforcement Association, February 8, 2005, that I will insert for printing in the Record.

Let me just read one paragraph, the first and most important:

``The National Child Support Enforcement Association is a membership organization representing the child support community--a workforce of over 63,000 child support professionals. For the past 5 years, it has strongly supported the enactment of bankruptcy reform because the treatment of child support and alimony under present bankruptcy law so desperately needs reform. We applaud your continuing efforts since the mid-1990s to reform the bankruptcy system and welcome your introduction of S. 256. The bankruptcy bill, S. 256, like the reform bills of the last three Congresses and the signed conference report of 2002, includes provisions crucial to the collection of child support during bankruptcy.''

National Child Support

Enforcement Association,

Washington, DC, Feb. 8, 2005.

Re: Child Support Provisions in S. 256

Hon. Chuck Grassley,

Hart Senate Office Building,

Washington, DC.

Dear Senator Grassley: The National Child Support

Enforcement Association is the membership organization

representing the child support community--a workforce of over

63,000 child support professionals. For the past 5 years it

has strongly supported the enactment of bankruptcy reform

because the treatment of child support and alimony under

present bankruptcy law so desperately needs reform. We

applaud your continuing efforts since the mid 1990s to reform

the bankruptcy system and welcome your introduction of S.

256. The Bankruptcy Bill, S. 256, like the reform bills of

the last three Congresses and the signed conference report of

2002, includes provisions crucial to the collection of child

support during bankruptcy.

With each day that passes under current law, countless

numbers of children of bankruptcy debtors are subject to

immediate interruption of their on-going support payments. In

addition, during the lengthy 3 to 5 years duration of

consumer bankruptcies as they happen every day under present

law, debtors often succeed in significantly delaying or even

avoiding repayment of child support and alimony arrearages

altogether. Hardest hit by these effects of current

bankruptcy law are former recipients of welfare who are owed

support arrears but are stuck waiting until the bankruptcy is

completed before such debts can be collected. Families who

are dependent on obtaining their share of marital property

for survival may now find under present bankruptcy law that

such debts are discharged. And, worst of all, under present

law significant collection tools used to require the payment

of current child support needed by the custodial parent to

feed and clothe children may be rendered ineffective after a

bankruptcy petition is filed. Today, a bankruptcy filing may

delay or halt the collection of support debts through the

federally mandated earnings withholding and tax refund

intercept programs, the license and passport revocation

procedures, and the credit reporting mandates.

S. 256 would provide these children with first priority in

the collection of support debts, allow the enforcement of

medical support obligations, prevent any interruption in the

otherwise efficient process of withholding earnings for

payment of child support, and insure that during the course

of a consumer bankruptcy all support owed to the family would

be paid, and paid timely. It will allow state court actions

involving custody and visitation, dissolution of marriage,

and domestic violence to proceed without interference from

bankruptcy court litigation.

We, therefore, urge the members of the Conference Committee

and the leadership of Congress to enact this important piece

of legislation with its long overdue bankruptcy reforms.

Sincerely,

Margot Bean,

President. National Child Support Enforcement Association

Mr. Speaker, I reserve the balance of my time.

Parliamentary Inquiries

Mr. Speaker, I yield myself 1 minute.

In response to the gentleman from Illinois, the reform bill significantly limits two practices that some wealthy filers use to hide assets from bankrupt creditors. Under the current system, in States with unlimited homestead exemptions, debtors can shield the full value of their residencies from creditors. To discourage debtors from relocating to the State to hide assets prior to a bankruptcy filing, the legislation requires a 3-year residency before a debtor can take advantage of the State's full homestead exemption. Currently, that is 91 days.

In addition, the bill adds a specific provision that prevents filers from shielding funds in an asset protection trust when fraud is involved. In fact, these practices will continue unabated unless this legislation is passed.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I thank the gentleman from Georgia (Mr. Gingrey) for yielding me the time.

Before yielding myself such time as I may consume, I yield to the distinguished gentleman from California (Mr. Stark) for a unanimous consent request.

(Mr. STARK asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today to oppose this closed rule and S. 256. Once again, the majority has squelched debate on a controversial piece of legislation for no legitimate reason.

More than 35 Democratic amendments were offered in the Rules Committee yesterday. Yet none have been made in order. Why? There is no reason for limiting the debate in this manner.

The House came into session on Tuesday and Members will leave town later this afternoon after just 2 days of work. Even more, there was only one other bill of substance before the House this week. The time to debate this bill and its offered amendments is available. The willingness to conduct meaningful business, however, is the missing ingredient. A 1-hour debate on legislation containing such sweeping reforms is not the way to conduct the people's business.

The argument will be made that this has been 9 years in the making. But a lot of this measure has been overcome by time, and that will be discussed by others later.

I am particularly disappointed that an amendment I offered is not being allowed to come before this body for consideration. My amendment seeks to prevent the very bankruptcies that are

causing this Congress so much consternation and is germane to the discussion. It requires credit card companies to preserve a customer's interest rate prior to incurring medical expenses if the customer is unable to pay off the full medical expenses on time. It also prohibits hospitals from reporting delinquent patients for 5 years, provided that the patient is paying 20 percent of his or her monthly mandated medical expenses.

All the information we have available suggests that medical bills are the second leading cause of personal bankruptcy in the United States. It is, in my opinion, hypocritical to prevent debate on an amendment that could ameliorate some of the issues facing this bankruptcy reform legislation. Is not the whole point of this bill to make bankruptcy less frequent? If Members of Congress have ideas about how to accomplish that, should they not be heard?

Many other Members sought to introduce amendments, but have also been denied their opportunity to be heard. These amendments could have improved this legislation.

For example, the gentleman from Virginia (Mr. Scott) offered an amendment to exempt from the means test provision of debtors who have business losses incurred by a spouse who has died or deserted the debtor.

The gentleman from California (Mr. Filner) offered an amendment that would exempt victims of identity theft. And the ranking member of the Rules Committee, the gentlewoman from New York (Ms. Slaughter), offered an amendment that imposes restrictions on issuing credit cards to college students. But none of those amendments, or the 31 others, will be debated today because the rule on this bill is closed.

At this point, Mr. Speaker, I will insert a list of all 35 amendments which the Republican majority has blocked from being considered in the Congressional Record.

Amendments Submitted to the Rules Committee for S. 256 and Denied

Consideration by the Rule (H. Res. 211)

1) Emanuel/Delahunt/Dingell--prevents debtors from

shielding their funds from bankruptcy liquidation through so-

called ``asset protection trusts;''

2) Filner--exempts disabled veterans from the bill's means

test;

3) Filner--exempts from the bill's means test consumers who

are victimized by identity theft;

4) Inslee--exempts from the bill's means test consumers

whose debts are the result of serious medical problems;

5) Delahunt--requires debtor corporations to file for

bankruptcy where their principal place of business is

located;

6) Sanders--establishes a ``usury rate'' for credit card

companies, above which credit card companies cannot charge

consumers;

7) Sanders--caps fees credit card companies can impose on

consumers at $15;

8) Sanders--prohibits credit card companies from changing

interest rates based on changes in consumers' credit

information;

9) Sanders--prohibits credit card companies from raising

interest rates based on consumer credit reports;

10) Ruppersberger--requires credit card solicitations to be

accompanied by a brochure explaining the consequences of the

irresponsible use of credit;

11) Schiff--exempts from the bill's means test consumers

who are victimized by identity theft, if at least 51% of the

creditor claims against them are due to identity theft;

12) Lofgren--exempts from the bill's means test 1) families

facing bankruptcy due to a serious medical hardship that

drains at least 50% of their yearly income, and 2) families

who lose at least one month of needed pay or alimony due to

illness;

13) Lofgren--exempt from the bill's means test a single

parent who failed to receive child or spousal support

totaling more than 50% of her or his household income;

14) Scott (VA)--exempts from the bill's means test

provisions: 1) debtors who have business losses incurred by a

spouse who has died or deserted the debtor 2) debtors who

have had serious illness in their family and 3) debtors who

have been laid off;

15) Scott (VA)--exempts from the bill's means test

provisions debtors who have business losses incurred by a

spouse who has died or deserted the debtor;

16) Scott (VA)--exempts from the bill's means test

provisions debtors who have had serious illness in their

family;

17) Scott (VA)--exempts from the bill's means test

provisions debtors who have been laid off from their jobs

through no fault of their own;

18) Nadler--sunsets the bill after 2 years;

19) Watt--prohibits annual credit card rates higher than

75%;

20) Watt--includes the costs of college in the calculation

of debtor's monthly expense;

21) Ruppersberger--exempts from the bill's means test

debtors who have declared bankruptcy due to high medical

expenses;

22) Hastings (FL)--prevents credit card companies from

increasing rates on consumers who use their credit cards to

pay for extraordinary medical expenses; also prevents

hospitals from generating negative credit information on

consumers who are paying their bills in good faith;

23) Meehan--Exempts from the means test disabled veterans

whose indebtedness occurred primarily as a result of an

injury or disability resulting from active duty or homeland

defense activities; closes a loophole in S. 256, which

exempts only disabled veterans whose indebtedness occurs

primarily while on active duty while failing to exempt

disabled veterans whose indebtedness occurs after they have

left active duty;

24) Jackson Lee--makes debts arising out of state sex

offenses non-dischargeable in bankruptcy proceedings;

25) Jackson Lee--clarifies Congress' intent that nuclear

liabilities be covered by the Price-Anderson Act, and not by

bankruptcy laws;

26) Jackson Lee--makes debts arising out of penalties

imposed on businesses for false tobacco claims non-

dischargeable;

27) Jackson Lee--strikes the bill's means test provision;

28) Woolsey--requires credit counseling agencies to provide

free services to recent veterans of the military who served

in combat zones;

29) Slaughter--requires credit card companies to determine,

before they approve a credit card, whether a student

applicant has the financial means to pay off a credit card

balance; it restricts the credit limit to minimum balances if

the student has no independent income; and it requires

parental approval for credit limit increases in the event

that a parent cosigns the account;

30) Slaughter--applies the highest median income of any

county or Metropolitan Statistical Area in the state to all

residents of the state petitioning for bankruptcy protection;

31) Millender-McDonald--provides the bankruptcy courts a

higher percentage of the fees collected when a debtor files

for bankruptcy;

32) Maloney--ensures that debtors emerging from bankruptcy

make child credit payments first, before payments on credit

card debt. The current version of the bill does not ensure

that child support payments will have priority over the other

types of unsecured debts, such as credit card debt;

33) Meehan and Berman--provides a modest homestead

exemption for people who have suffered a major illness or

injury;

34) Jackson Lee--provides additional protections to debtors

who are the victims of identity theft;

35) Jackson Lee--increases the means test limit on

parochial school tuition expenses from $1,500 to $3,000, so

that families Chapter 13 bankruptcy can keep their children

in schools that conform to their deeply held religious

beliefs.

Mr. Speaker, the House has adopted a new modus operandi. We saw it earlier this year with the class action bill, and we are seeing it again today.

It seems that if the Republican leadership deems legislation important, and that is their prerogative, it is willing to push through the other body's version without the opportunity for debate here in the people's House on any amendments. This new method does a great disservice to the people of this Nation. Even more, it stops Members, Democrats and Republican, from serving as thoughtful, effective legislators.

The House of Representatives is the people's House. The Founding Fathers envisioned a forum for lively debate on the issues of the day, not the controlled steering of selected legislation with no opportunity for meaningful change.

What also concerns me is the unworkable means test contained in this legislation. I am greatly disturbed, as I know all the residents of south Florida will be, that this means test includes disaster assistance as a source of revenue.

People forced into dire financial circumstances through natural disasters should find bankruptcy a source of relief. Considering disaster assistance as a source of revenue adds insult to injury and contradicts the government's efforts to help people get back on their feet.

This legislation, masquerading as protection against bankruptcy abuse, is really a protection for credit card companies and their predatory lending practices. This legislation does not protect the American people. This legislation protects the credit industry at the expense of the American people.

Increasingly, credit card companies market their product to riskier consumers, and now they want the Congress to protect them from the losses that are the foreseeable result of this ill-sighted business strategy. Why are we not debating legislation that would address those practices, instead of eviscerating a crucial safety net that Americans rely on when all else fails?

Mr. Speaker, should it pass, this bill will severely curtail the ability of Americans to obtain relief from bankruptcy without solving any of its underlying causes. Medical bills, unemployment, and predatory lending practices are at the root of this problem. In the long run, the net effect of this legislation will drive more Americans deeper into financial crisis and weaken our social structure and the Nation's economy.

I will not, and cannot, support such an attack on American consumers. I urge my colleagues to vote ``no'' on this closed rule and ``no'' on

Mr. Speaker, I yield myself such time as I may consume.

My respect for the chairman of the Committee on the Judiciary is immense, and he has thrust all of these hearings and all that were in committee where 40 Members of the Committee on the Judiciary had an opportunity to participate.

What we are talking about is today, 35 Members of the House of Representatives, 35 amendments are not being permitted today. So I guess the 40-plus people are the ones who are representing the near 395, 40-plus none for the American people. That would be what I would put on the table from the minority side.

Mr. Speaker, I am delighted to yield 3 minutes to the gentlewoman from California (Ms. Matsui), our newcomer, who is making her first statement as a Committee on Rules member.

(Ms. MATSUI asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield myself such time as I may consume before yielding to the distinguished ranking member to respond to my colleague from Georgia by indicating, the last time I looked at the rules, it allowed that individual Members have a right to make amendments, and we are not required to offer a substitute.

Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Ms. Slaughter), my good friend.

(Ms. SLAUGHTER asked and was given permission to revise and extend her remarks, and include extraneous material.)

Mr. Speaker, I yield 2 minutes to the gentleman from Virginia (Mr. Scott).

Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Delahunt).

Mr. Speaker, I am pleased to yield 2 minutes to my good friend, the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Speaker, I yield 2 minutes to my good friend, the gentlewoman from California (Ms. Waters).

Mr. Speaker, I am pleased to yield 1 minute to my friend, the gentlewoman from California (Ms. Lee).

Mr. Speaker, I am pleased to yield 2 minutes to my good friend, the gentlewoman from New York (Mrs. Maloney).

(Mrs. MALONEY asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 5 seconds to the gentlewoman from New York (Mrs. Maloney) for the purpose of making a unanimous consent request.

Parliamentary inquiry, Mr. Speaker. What was the objection about?

Mr. Speaker, further parliamentary inquiry, what is the ruling of the Chair?

Further parliamentary inquiry, so the gentlewoman from New York's request to put in the Record the material?

Mr. Speaker, there is objection to a Member's placing in the Record, a Member who had made a statement supporting the things that she asked to be submitted, that is being denied?

Mr. Speaker, with the Speaker's permission, I ask unanimous consent that the extraneous material offered by the gentlewoman from New York (Mrs. Maloney) be made a part of the Record following her remarks.

Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Emanuel).

Mr. Speaker, I yield for the purposes of making a privileged motion to the gentlewoman from California (Ms. Woolsey).