Floor Statements

Mr. Speaker, I thank the gentlewoman for yielding. I want to congratulate her for presenting to the American people the truth.

I was so impressed as I heard my colleagues come to the floor and describe the realities of what is occurring. The gentleman from Texas just alluded to the chairman of the Committee on Veterans Affairs and praised him for his efforts. It is fascinating to read in today's Roll Call that he was castigated and admonished by the House Republican leadership for his efforts in this regard. That, I suggest, says something loud and clear to the American people.

We know what is happening. The veterans know what is happening. But it is time for the American people to be informed, and I congratulate the gentlewoman for her efforts.

What I find particularly fascinating is sometime supposedly next week we will be considering a supplemental budget in the amount of $75 billion, some $63 billion of which I think we all support. It is for our troops and for the men and women that find themselves in harm's way. The rest of the money, much of it, is allocated to other nations: $1 billion for Turkey, monies for Egypt, for Jordan. And for what reason I cannot understand. But if we can afford to take care of the rest of the world, we should be able to take care of the men and women that served us, not just in this war, not just in the Vietnam conflict, not just in Korea and World War II, but all of our veterans.

It is absolutely unconscionable. It is un-American. Those men and women that will be coming home from the Middle East and leave the military, many of them will assume the title ``veteran.'' While we honor them while they are there, we are disrespectful to them when they come home, and that has to stop.

We, and I know the gentlewoman has been a leader in this regard, have to design a strategy when it comes to that supplemental budget to take care of those men and women and not to continue the disrespect that has been shown to them.

Mr. Speaker, I thank my dear friend for yielding. I thank the gentleman for his spirit of collegiality.

Mr. Speaker, what I wanted to conclude with was this observation, and I direct it to my colleagues on both sides of the aisle: if we are unable to work out in the course of our consideration of the supplemental budget full funding for all veterans services, then it is time for the veterans in this country to take action. Many of us have read in our history books that there was a march on Washington in the early 1930s. It is time for the veterans organizations and for the American people to march again.

Mr. Speaker, tonight the invasion of Iraq has begun. Overwhelmingly, it is the men and women of the American military who are carrying out this operation. That's why, although nobody can predict the twists and turns this war will take, I have no doubt that our troops will ultimately prevail. They are the best trained, equipped, and motivated soldiers the world has ever seen. They make us proud even in peacetime. And they will do so again in this conflict.

So it is right that the U.S. Congress should come together to express the Nation's respect and gratitude. And this resolution is a good first step. But it is only a beginning. We must follow up these flattering words with concrete measures of support for our troops, and for those veterans who served before them.

Let me be clear: I oppose this war. I voted against the Congressional authorization to use military force. I would prefer that our fellow citizens in the military were not risking their lives in this invasion tonight. But now that it is underway, there should be no doubt in anyone's mind that the U.S. armed forces have our full and sustained support.

Within the Congress and across our Nation, we still have profound disagreements over the rationale for this pre-emptive strike. For my part, as a member of the International Relations Committee, I have been thoroughly dismayed at the handling of the buildup to this war. I believe it is particularly misleading to argue that this assault is part of the fully justified and necessary response to the savagery of al Qaeda. I strongly object to language in this resolution that does exactly that.

This is not to say that I oppose liberating the Iraqi people or ending the brutality of the Iraqi regime. Saddam Hussein is a ruthless dictator who has visited unspeakable horror on Iraqis and their neighbors. And I find myself concurring with those in the Administration who believe that this could be exactly the kind of radical strategy that could shock the Middle East into real change. But the way that the Administration so thoroughly assaulted the structures of world order in its rush to war could make our coming victory in Iraq a Pyrrhic one.

The White House attitude has isolated our nation from the rest of the world more thoroughly than at any time in recent history. It has alienated some of our closest allies, seriously damaged the United Nations and the North Atlantic Treaty Organization, and potentially undermined the international order that the United States worked so hard to establish after World War II.

Either the Administration does not realize, or else it refuses to accept, that we need that international order. It is precisely because of this global cooperation that we have been so successful in the war against al Qaeda. Since for the most part, that is not a war in the traditional sense. It is one waged in the shadows, through intelligence agencies, special forces operations, and old-fashioned police work. Due to the sheer obscenity of the September 11 attacks, and the threat to the international order that this organization represents, most of the world welcomed the chance to assist us in fighting al Qaeda. And the help of many nations--yes, even that of France--has made a great contribution to our efforts against the terrorists.

But the Administration's belligerent swagger into war with Iraq has squandered that goodwill. Its ever-changing rationales for this action--particularly its assertion of direct links between Saddam and al Qaeda, which our own CIA refuses to corroborate--have undermined our credibility. Its refusal to estimate the cost of the invasion and subsequent occupation has stripped the budget resolution the House considered tonight of any connection to reality. Its abandonment of our veterans calls into question our long-term commitment to our serving military. Its penchant for secrecy and intolerance for dissent feeds conspiracy theories about our true intentions. And its assumption that might makes right sends a terrifying signal to a world that only recently had begun to embrace the traditional American view that legitimacy is derived from democracy and the rule of law. Although I am certain that our military will win the war in Iraq, I am greatly concerned that the Administration will lose the peace.

Time will only tell who is right. Many in this chamber will continue to have great differences with the Administration on this policy. But there is one thing on which I agree wholeheartedly with the President: our men and women in uniform deserve our deepest respect and appreciation. These American citizens are willing to die so that we may live; to risk life and limb for the sake of our national security. And they will do their job effectively, honorably, and without unnecessary partisan rancor. I call on my colleagues, and all Americans, to acknowledge their sacrifices by living up to the ideals for which they are fighting.

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

Mr. Speaker, judges certainly should not be immune from criticism. I mean, healthy debate on the merits of judicial decisions is an important feature of our democracy. But there is a difference between legitimate criticism and overt pressure that threatens judicial independence.

Like all Americans, Members of Congress are free to criticize judicial decisions with which we disagree. Our collective voice should be heard on matters of profound constitutional significance as we, too, are guardians of the Constitution. In fact, I joined most of my colleagues in voting for a resolution during the last Congress that was referenced by the chairman that expressed disapproval of this very decision on the Pledge of Allegiance and urged that it be overturned.

However, I intend to vote present on this current resolution because it does not stop at expressing disapproval; it goes further, in a way that I believe would set an unwise and dangerous precedent.

It is one thing to urge the judicial branch to use the normal process of appellate review to correct an erroneous decision. It is quite another to imply that judges who issue unpopular decisions in particular cases are unfit for office.

Unfortunately, that is what H.R. 132 does. It not only expresses disapproval of the court's reasoning in the Newdow case, but it states that the President should nominate and the Senate should confirm Federal circuit court judges who interpret the Constitution consistent with the Constitution's text.

By linking future nominations to a particular ruling with which the proponents disagree, the resolution sends a not-so-subtle message to sitting judges, and in particular to potential nominees, that they had better tailor their constitutional views to those of the congressional majority if they wish to be confirmed. That, I submit, goes far beyond our appropriate constitutional role.

The Framers of the Constitution recognized that an independent judicial branch is an essential guarantor of liberty in any democracy. To understand this, one need only observe those nations with a weak judiciary that is subservient to the political branches. Invariably such nations are democracies in name only. Those who profess fidelity to the Constitution must take

great care not to chip away at the independence of the judiciary on which our liberty depends. For that reason, this resolution ought to be rejected.

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

Mr. Speaker, I yield such time as he may consume to the gentleman from New York (Mr. Nadler).

Mr. Speaker, I yield 5 minutes to the gentleman from Virginia (Mr. Scott), a member of the Committee.

Mr. Speaker, I yield 5 minutes to the gentlewoman from Texas (Ms. Jackson-Lee), a member of the Committee on the Judiciary.

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I have no additional speakers, and I reserve the balance of my time.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank the gentlewoman for yielding me this time.

Mr. Speaker, two amendments rejected by the Committee on Rules which I had hoped to offer illustrate the double standards represented by this bill because wealthy debtors with their lawyers and financial advisors can continue to game the system, and corporate insiders who have managed healthy businesses into bankruptcy can still be awarded with golden parachutes. Meanwhile, people of modest means will be denied a genuine fresh start, and retirees whose pensions and life savings have been wiped out by corporate bankruptcies will get little relief.

My first amendment would have placed reasonable limits on exorbitant retention bonuses, obscene severance

packages, and other outlandish payments to corporate insiders whose companies are bankrupt or insolvent; and the amendment would have reserved those assets for the benefit of employees, retirees, and other creditors.

In the State of Massachusetts, Polaroid executives canceled their retirees' health coverage days before filing for bankruptcy and then terminated workers on long-term disability when the company reorganized. At the same time they awarded themselves more than $5 million in various bonuses and incentive payments shortly before filing for bankruptcy and then another $6 million in so-called retention bonuses afterwards.

Of course, this pales in comparison to Enron, where their CEO, Kenneth Lay, received gross profits of $247 million, or Global Crossing where Gary Winnick, their CEO, grossed $512 million, all the while eliminating thousands of jobs and driving their companies into bankruptcy.

My second amendment would have helped eliminate the most notorious abuse of all, the financial planning strategy whereby debtors purchase expensive homes in States with unlimited homestead exemptions, declare bankruptcy, and continue to enjoy a life of luxury while their creditors get little or nothing, like the convicted Wall Street investment banker who filed bankruptcy while owing some $15 million in debt and fines, but still kept his $5 million mansion complete with 11 bedrooms and 21 bathrooms. Yet while the so-called bankruptcy abuse prevention bill obsesses about whether small debtors can manage to pay $100 a month in Chapter 13, it continues to tolerate this outrageous abuse.

Mr. Speaker, this is not the only exemption that allows the wealthy to shelter their assets. In addition to the million dollar mansion, they can receive a substantial pension, have an IRA up to a million dollars, and own annuities worth additional millions and not worry about it because depending on where they live, these assets are exempt and creditors cannot touch them. This bill does nothing about that.

What message does it send when Congress subjects middle-class debtors to a means test while permitting the wealthy to continue to place their millions out of reach of their creditors? We are creating different classes of debtors, and every fair-minded person should find this unconscionable. This rule should have provided an opportunity to deal with these issues, and I urge my colleagues to oppose the rule and vote down this unfair and one-sided bill.

Mr. Speaker, I rise in opposition to the rule.

The rule fails to allow the House to consider two amendments I had intended to offer to illustrate the double standard represented by this bill: A bill that denies a fresh start to people of modest means while allowing wealthy debtors and corporate insiders to continue to abuse the bankruptcy system.

It was one thing to consider this kind of legislation when our nation was enjoying the prosperity of the 1990s. But this debate takes on a certain surreal quality when we consider the depths of the economic difficulties our country is facing at the moment. With unemployment rising. Growing numbers of working Americans who can't buy health insurance at reasonable rates. Retirees whose pensions and life savings have been wiped out by corporate bankruptcies.

And what are we doing about it? We're helping the credit card companies squeeze a few more pennies out of these same working families. And we're ignoring the massive abuses that have turned the Bankruptcy Code into a bonanza for a handful of unscrupulous executives.

Some months ago, the Financial Times published an analysis of the profits amassed by top officers and directors of the 25 largest companies to declare bankruptcy during the previous 18 months. According to the report, ``in just three years, they grossed about $3.3 billion before their companies went bust, having wiped out hundreds of billions of dollars of shareholder value and nearly 100,000 jobs.''

And so, as Global Crossing was losing $9.2 billion and eliminating over 5,000 jobs, its chairman, Gary Winnick, grossed $512 million. While Enron lost $18.8 billion and eliminated 5,500 jobs, its CEO, Kenneth Lay, and the chairman of its energy services subsidiary, Lou Pai, made gross profits of $247 million and $270 million, respectively.

The sources of these windfalls included such now-familiar devices as retention bonuses. Severance payments. Forgiven loans. And dividends on holdings of company stock.

In my corner of the world, Polaroid executives cancelled their retirees' health and life insurance coverage and terminated workers on long-term disability--all while awarding themselves more than $5 million in various bonuses and ``incentive'' payments before filing for bankruptcy and another $6 million in retention bonuses afterwards. Officers and directors received severance packages while employee severance was terminated. Officers and directors were able to redeem their company stock while employees, forced to put 8 percent of their salaries into the stock option plan, were prohibited from withdrawing the funds and watched their holdings evaporate. No sooner was the sale of the company completed than the new CEO terminated the retiree pension plan.

What happens to people who lose their livelihood, their savings, and their health coverage? Lots of them wind up unable to pay their debts and forced into bankruptcy. So in fact, we have corporate bankruptcies causing personal bankruptcies. And the only response from Congress has been to push an industry-sponsored bill that would make it harder for these people to get a fresh start. A bill that penalizes the very working families that have been victimized by corporate misconduct, while preserving the loopholes and exemptions that allow corporate insiders to shelter their ill-gotten gains when they declare bankruptcy.

I had sought to offer an amendment that would begin to redress the balance. It would have placed reasonable limits on exorbitant ``retention bonuses,'' severance packages, and other payments to corporate insiders of companies that are bankrupt or insolvent. The amendment would not have prohibited such payments to the extent that they are truly necessary to keep key employees in place. But it would have permitted them only when the court finds that, first, the employee has a bona fide job offer from another business at the same or greater rate of compensation; second, the services provided by the person are essential to the survival of the business; and third, the amount of the payment is not excessive when measured against the amounts paid to nonmanagement employees in the ordinary course of business.

The amendment would have empowered the court to return excessive payments to the bankrupt company, so that these funds can be available to help the company reorganize, or, in the alternative, can be distributed to employees, retirees, and other creditors. It would have restored some semblance of fairness to this unbalanced bill.

The second amendment I had hoped to offer would have helped eliminate the biggest loophole in the Bankruptcy Code, by placing a meaningful national cap on the homestead exemption.

I say ``meaningful,'' Mr. Speaker, because the $125,000 cap that is currently in the bill is qualified by a series of exemptions that assure that those who engage in flagrant abuse of the bankruptcy system by sheltering homestead assets can continue to do so.

My amendment would have left the cap at $125,000 while eliminating the exemptions for transactions conducted more than 1,215 days preceding the bankruptcy filing and for interests transferred from a debtor's previous principal residence acquired within the same state prior to that time.

The rationale we have been given for the so-called ``needs-based'' reforms proposed in H.R. 975 is to eliminate abuses of the bankruptcy laws--abuses which proponents of the legislation have characterized as the use of the Bankruptcy Code as a ``financial planning tool.''

Yet while the bill obsesses about whether small debtors can manage to pay $100 a month in chapter 13, it continues to permit--indeed, it endorses--the most notorious abuse of the consumer bankruptcy system of all: The ``financial planning'' strategy whereby debtors purchase expensive homes in states with unlimited homestead exemptions, declare bankruptcy, and continue to enjoy a life of luxury while their creditors get little or nothing.

If we are truly serious about curtailing abuses, it seems to me that this is the place to start. With the owner of the failed Ohio S&L who paid off only a fraction of $300 million in bankruptcy claims while keeping his multi-million-dollar horse ranch in Florida.

Or the convicted Wall Street financier who filed bankruptcy while owing some $50 million in debts and fines, but still kept his $5 million Florida mansion--complete with 11 bedrooms and 21 baths.

Or the Miami physician with no malpractice insurance, who was named in four separate malpractice actions, filed for bankruptcy protection, and kept a $500,000 home--complete with a 100-foot swimming pool.

Or the movie actor, Burt Reynolds, who declared bankruptcy in 1996, claiming more than $10 million in debt. Reynolds kept a $2.5 million home--appropriately named ``Valhalla''--while his creditors received 20 cents on the dollar.

The situation in Florida has become so notorious that one Miami bankruptcy judge told the New York Times, ``You could shelter the Taj Mahal in this state and no one could do anything about it.''

The sponsors of the bill will claim that they have closed the loophole by putting a cap on the exemption. But the provision is riddled with loopholes that ensure that wealthy debtors who are sophisticated enough to plan ahead will still be able to shelter their assets without ever being subject to the cap. Under the bill, they can purchase a homestead to shelter their non-exempt assets and simply wait the 1,215 days before filing their petition. And the bill expressly permits them to transfer their assets from a previous principal residence into a new one at any time prior to their bankruptcy filing without being subject to the cap, provided that the former residence is located in the same state.

What message does it send, Mr. Speaker, when Congress subjects middle-class debtors to a means test while permitting the wealthy to continue to place their millions out of reach of their creditors? What message does it send when we impose tough repayment plans on working families that are barely making ends meet, while allowing corporate insiders to drive their companies into bankruptcy and pocket millions of dollars in bonuses, severance packages, and other ill-gotten gains?

I urge my colleagues to oppose the rule and vote down this bill.

Mr. Speaker, I thank the gentlewoman for yielding me this time.

In response to my colleague and dear friend from Texas, it is not the cap. It is not the cap that disturbs us. The question is, is it a genuine cap, or is it a sham? I suggest that this cap is a sham. There are more loopholes in this particular provision than one can even comprehend. This is not about the individual, the average, middle-class American who earns 25-, 30- or $35,000, but it is about the sophisticated investor, it is about the sophisticated individual who has access to the very best in terms of legal talent and financial advice, who knows how to game the system. We are talking about not $125,000, but about the millions, the millions, that are being prevented from going to legitimate creditors because of this particular exception.

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

Mr. Chairman, the American people should not be deceived as to who really benefits from this so-called reform because it is not the American consumer. It is not the American taxpayer or the worker who loses his job or someone facing catastrophic medical expenses or the small business entrepreneur who is also hurt by provisions in this bill. No, the big winner here is the credit card industry because passage is going to mean billions of dollars to their bottom line.

The American consumers should understand that the interest rate on their credit card will not decline because of this bill. Over a 12-year period when the Federal fund rate fell from 13.5 percent to 3.5 percent, a line of some 10 percentage points, the average credit card rate actually rose to nearly 18 percent. Furthermore, it is going to cost the American taxpayer $500 million over 5 years to transform the Federal bankruptcy system into a collection agency for the benefit of the credit card industry.

We are going to hear a lot and we have heard during the course of our hearings about personal responsibility. Well, no one disagrees with that particular principle, but it ought to be a two-way street. Whatever happened to creditor responsibility? The former Chair of the Committee on the Judiciary, Henry Hyde, identified some 75 creditor enhancements in this bill. Passage of this legislation will undoubtedly exacerbate the imbalance between creditor and debtor.

A respected consultant for the credit card industry stated that the principle

factor in increase in bankruptcies has been the dramatic lowering of loan standards, of underwriting. And every single time we attempted to introduce some reasonable measures to ensure appropriate lending practices, we were defeated by the credit card lobby. And meanwhile, they induced consumers to take on an ever-increasing amounts of debt by inundating the American people with some $5 billion of solicitations yearly. They have increased rates and fees on current accounts often with inadequate or misleading disclosure, and they engage in relentless marketing efforts that target children, the deceased, and in one particular case, even a dog.

Some of the major players such as Providian and MBNA have paid healthy penalties to settle claims regarding late fees and other practices. What has happened, Mr. Chairman, is that the credit card industry has created a culture of debt that is overwhelming millions of Americans, and that is particularly frightening in this extremely precarious economy. So let us be responsible and accountable. Let us defeat this bill because it is not bankruptcy reform. It is a bill that simply bankrupts.

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

Mr. Chairman, I yield 3 minutes to the gentlewoman from California (Ms. Lofgren), a member of the Committee on the Judiciary.

Mr. Chairman, I yield 5 minutes to the gentleman from New York (Mr. Nadler), a member of the committee, the former ranking member on the Subcommittee on Commercial and Administrative Law.

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

My friend, the gentleman from Ohio (Mr. Oxley), the chairman of the Committee on Financial Services, indicated that this was a bill that would benefit the consumer. I would point out to him that this particular proposal, as drafted, has the support of the American Bankers Association, the United States Chamber of Commerce and American Financial Services Association.

I would suggest they are not protecting the interests of the consumer. That is not their role. They have a responsibility to advocate for their memberships, and I would acknowledge that they have been extremely effective, but those that are opposed to this particular proposal do represent the American consumer. Let me just enumerate some of them: The Consumer Federation of America, the Consumers Union, Foundation for Taxpayer and Consumer Rights, the National Consumer Law Center.

Mr. Chairman, I yield 5 minutes to the gentleman from California (Mr. Sherman).

Mr. Chairman, I yield 4\1/2\ minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

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

I think it is important to point out that there was an American Bankruptcy Institute study that showed that while the credit industry estimates it may recover some $4 billion under the rigid standards of the means test, the study indicated that the creditors would only receive $450 million in actual collections. The Executive Office of the United States Trustee within the Justice Department conducted a similar study that reached similar results, estimating that the passage of the bill incorporated within the conference report last year, which is almost identical to the bill that is before us now, would have netted creditors no more than 3 percent of the $400 per household they claim to be losing.

Finally, Mr. Chairman, we have received no evidence, no empirical data whatsoever, that the credit card industry would likely pass on any of the potential savings, albeit minimal, from bankruptcy law changes to the consumer. It would go to the bottom line.

Mr. Chairman, I yield such time as he may consume to the gentleman from North Carolina (Mr. Watt), ranking member of the Subcommittee on Administrative Law.

Mr. Chairman, I appreciate the gentleman yielding me this time.

I want to commend him and congratulate him for his leadership on this issue. I believe this is a very sound amendment. It is a good initial step, and I would seek the time for the purpose of engaging in a colloquy with my friend, the gentleman from Utah.

Mr. Chairman, by increasing the monetary cap on wage and employee benefit claims and lengthening the reach-back period for wage claims, the amendment increases the likelihood that lower-wage workers would get back some of the money they are owed. That is an excellent start. But at some later point, I hope in time for the House-Senate conference on this bill, I would like us to focus on the treatment of severance payments under current bankruptcy law. Some Courts have held that these payments should be prorated over the entire course of the individual's employment. As a result, only the small fraction of the severance payment that is attributed to the reach-back period may be treated as a priority claim, which unfortunately means that the employees receive much less than the monetary cap. This is a concern I hope we can address.

Would the gentleman be prepared to continue to work together so that this problem might be addressed when the bill goes to conference?

I yield to the gentleman from Utah.

Mr. Chairman, as the gentleman knows, I authored legislation in the last Congress that would address in a more thorough and comprehensive way the effects of corporate bankruptcies on workers and retirees. At our markup on H.R. 975, the gentleman indicated a willingness to explore these questions, and I would ask the gentleman whether he would be willing to schedule hearings beginning in the spring in which we could begin to talk about this overall issue.

Mr. Chairman, again I thank the gentleman for his answers and for his genuine commitment to providing relief for workers and retirees, and possibly we could have a field hearing on this particular initiative on Cape Cod either in May or June sometime.

Mr. Chairman, I am pleased to join with the gentleman from Utah (Mr. Cannon) in offering this amendment. It would restore a modicum of balance to this unfair, unbalanced bill.

The sponsors of the bill say they advocate personal responsibility. Yet the bill does nothing to curb the corporate abuses that have turned the Bankruptcy Code into a bonanza for a handful of unscrupulous executives.

It does nothing to stop corporate insiders from stripping their companies of their assets,

paying themselves exorbitant salaries and bonuses and leaving little or nothing for their workers.

It does nothing to compensate workers whose jobs, pensions, health insurance and life savings have been wiped out by corporate bankruptcies.

The amendment represents a first, modest, effort to restore some balance. To recognize the obligations that an enterprise owes to the working people who have labored to build and sustain it.

The amendment will increase the chances that employees and retirees whose companies collapse into bankruptcy are able to retrieve some portion of what they are owed for back wages and benefits. And it will provide the courts with additional tools to recapture excessive compensation paid to corporate insiders. And I commend the gentleman from Utah for his willingness to offer it.

As the gentleman has explained, this amendment consists of three components. The first increases the monetary cap on wage and employee benefit claims entitled to priority under the Bankruptcy Code from $4,650 to $10,000, and lengthens the reachback period for wage claims from 90 to 180 days. This change increases the likelihood that workers--particularly those at the lower end of the wage scale--would actually see some of the money they are owed.

The second component lengthens the reachback period during which fraudulent transfers can be rescinded, from one year to two years, and provides that certain bonuses and other payments to corporate insiders can be rescinded during this period if they meet certain criteria. This provision gives the bankruptcy courts an additional tool for recapturing excessive compensation paid to officers and directors so that these can be available to help the company reorganize, or, in the alternative, can be distributed to employees, retirees, and other creditors.

The third component requires the court to reinstate retiree benefits--including health and pension plans--which the company modified within the 180-day period preceding the bankruptcy filing, unless the court finds that the balance of the equities justifies the modification. This provision prevents corporate debtors from evading the requirements of current law by terminating retiree benefit plans on the eve of bankruptcy.

These are good, sensible changes that will help people who lose their livelihood, their savings, and their health coverage. I sincerely appreciate the willingness of the gentleman from Utah to join in this effort. But as I'm sure he would agree, these changes are only a modest step--a baby step--and I hope we can continue to work together to address this issue in a more serious and comprehensive way.

Mr. Chairman, I thank the gentleman for yielding me this time.

Talking about the practical impact of the gentleman's amendment, it would end the practice of forum shopping; but even more meaningful, it would provide in very real terms an opportunity for small creditors, for retirees, for shareholders and others to participate in the process itself. Why should a court, with all due respect, in Delaware adjudicate a corporate bankruptcy that wipes out thousands of jobs in Ohio? Why should a judge in New York decide how to divide the spoils of an insolvent corporation in Massachusetts? The bankruptcy business, and it truly is a business, has been a windfall for certain jurisdictions; and they understandably resist any effort to reform the venue rules, but the rest of us ought to protect our constituents from this particular abuse, and I urge support for the amendment.

Mr. Speaker, I thank the gentleman from California (Mr. Lantos) for yielding me this time.

Mr. Speaker, a constituent once asked if minor pieces of legislation that we consider on the suspension calendar actually matter, particularly those that concern foreign nations. My response was that it is important to remember, especially in this era of the Internet and instant communication and CNN, that what might appear to be trivial to us is seen quite differently elsewhere and can have significant long- lasting effects. This bill, for example.

While to some it may seem to be an obscure piece of legislation dealing with a tiny, impoverished nation, one that is not on the Security Council, and given the challenges that we face with the war against terrorism and imminent invasion of Iraq, a distressed economy, a health care crisis, it might even seem to be an afterthought. But it is not an afterthought for the people of Nicaragua, and it should not be an afterthought for the United States. In fact, this bill has the potential to be critically important for Nicaragua's future, for Central America's future and, ultimately, for our own future.

As the gentleman from North Carolina (Mr. Ballenger) indicated, Nicaragua, after Haiti, is the second poorest nation in the hemisphere. It was battered by years of war. It is a place where the magnitude of corruption by the political leadership has been enormous, especially recent ones. Now Nicaragua finally has a president in Enrique Bolanos, an honest man who genuinely wants to make a difference. This bill can help him and that fragile democracy that he presides over.

As the gentleman from California (Mr. Lantos) and the gentleman from North Carolina (Mr. Ballenger) have indicated, current U.S. law prevents us from providing certain kinds of foreign aid to countries that have seized the property of American citizens. Never mind that these seizures occurred under previous governments. Never mind that some of these claimants were not U.S. citizens at the time of the seizures, which I believe violates international law; but that is a debate for another day. This legislation changes that.

As the chairman of the subcommittee indicated, after a certain period of time, new claims will no longer prevent Nicaragua from receiving U.S. aid and will not prevent the United States Government from assisting our fellow citizens who seek and deserve justice, and it will not end the Government of Nicaragua's responsibility to settle these claims. But this bill will do much to nurture Nicaragua's efforts to develop its democracy; and it will encourage a new spirit of respect and cooperation between that impoverished nation and the United States.

Mr. Speaker, I want to commend my friend, my colleague, my chairman, the gentleman from North Carolina (Mr. Ballenger), for introducing this bill. It is just more evidence of his attention to this hemisphere and his love for its people. He and I do not always agree on how to deal with all of our neighbors, but we do agree that they deserve far more of our attention, and our respect. So I am grateful to him for inviting me to cosponsor this important piece of legislation.

Mr. Speaker, it is my hope that the passage of this legislation is followed quickly by an increased program of U.S. assistance to Nicaragua, particularly to develop its judicial system and strengthen its legislative body. While I have full confidence in President Bolanos, it is the development of strong democratic institutions that will allow democracy to prosper and flourish in Nicaragua.

Reports speak of a reconstruction program for Iraq in excess of $100 billion. For far too long we have failed to adequately engage in our own neighborhood. We cannot continue to ignore our neighbors in Central America, the Caribbean, and South America. To do so, we do so at our own risk.

Once upon a time, Nicaragua was front and center in our policy debates. That war that many in this Chamber spent enormous time and effort on this floor debating and discussing has faded from our memories, and Nicaragua has receded from the spotlight. However, this modest bill, in a rather nuanced and subtle way, will help Nicaragua move closer to the democracy its people so justly deserve and desire. I urge my colleagues to support it.

Mr. Speaker, I thank the gentleman for yielding me time.

This is Linda McDougal, and like Nathaniel and many others she too would be a victim of the underlying bill H.R. 5. She received an unnecessary double mastectomy after doctors mixed up her results, her lab results, and erroneously told her she had breast cancer.

Under this bill her lifetime of pain and disfigurement would be worth $250,000 and not a penny more. I ask my friends, is that fair?

Well, if my friends have any doubts, I would suggest they ask their mother, their sister or their daughter.

Mr. Speaker, I thank the gentleman for yielding me time.

Mr. Speaker, next week we will be considering most likely on the floor of the House a bill dealing with bankruptcy. Today we are considering a bill that is bankrupt, because it is an act of special cruelty that is being perpetrated on the most vulnerable of victims of malpractice, stay-at-home mothers and children, children like Steven Olson, who was left blind and brain damaged after an HMO refused to give him a $800 CAT scan when he was 2 years old. He is going to need round-the-clock care for the rest of his life. A jury, a jury, awarded him more than $7 million for his pain and suffering. But California has a cap on noneconomic damages, so the judge was forced to reduce the award to $250,000. That is $12 a day for the rest of his normal life expectancy.

Is that all he is owed for the irreversible damage that was done to him? Is that fairness? Is that justice? I think we know the answer.

Mr. Speaker, the sponsors of this bill have assured the physicians of America that this bill will lower their insurance premiums. The doctors are being deceived, for it includes none of the provisions that would be necessary to bring about such a result.

The bill does nothing to reduce the staggering number of medical errors that kill so many thousands of Americans each year, according to some estimates, up to 98,000 deaths per year. That is a real crisis. It does nothing to weed out the 5 percent of the medical profession who are responsible for 54 percent of the medical claims. So what is going to happen is good doctors will continue to subsidize those that ought to be out of the profession.

It does nothing to regulate the rates that insurance companies charge their policyholders. That did prove effective in California when it was passed in 1988.

Instead of adopting any of these measures, the Republican majority has chosen to blame the victims, capping injury awards at artificially low levels that are insufficient to meet their needs and making it difficult for them

to even find a qualified attorney who is willing to take their case.

It is unconscionable, Mr. Speaker, for Congress to deprive these victims of the right to have a jury of their peers decide what their pain and suffering is worth. It is rather ironic that rather than regulating insurance rates, the apostles of the free markets opt to impose a system of wage and price controls. What irony.

Mr. Speaker, would the Chair indicate how much time is remaining?

Mr. Speaker, it pleases me to yield 1 minute to the gentleman from Ohio (Mr. Ryan), a new Member and someone we are particularly proud of.

Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Sandlin), the chief deputy whip of the Democratic Caucus.

Mr. Speaker, I yield 1 minute, the balance of my time, to the gentleman from New York (Mr. Nadler), who serves admirably on the Committee on the Judiciary.

Mr. Speaker, the sponsors of this bill have assured the physicians of America that the bill will lower their insurance premiums. Yet it includes none of the provisions that would be necessary to bring about such a result.

The bill does nothing to reduce the staggering number of medical errors that kill so many thousands of Americans each year.

It does nothing to weed out the five percent of the medical profession who are responsible for 54 percent of the claims.

It does nothing to regulate the rates that insurance companies charge for their policies.

Instead of adopting any of these measures, the Republican majority has chosen to blame the victims--capping jury awards at artificially low levels that are insufficient to meet their needs, and that makes it difficult for them to find a qualified attorney who is willing to take their case.

The cap on non-economic damages is cruelest to the most vulnerable: children and mothers who stay at home. They have no econimic damages. No loss of employment. No loss of past and future earnings. No loss of business opportunities. Apart from their medical bills, all of their losses are noneconomic--for pain and suffering. Physical impairment. Disfigurement.

It's unconscionable for Congress to deprive these victims of the right to have a jury decide what their pain and suffering is worth.

Stephen Olson was left blind and brain-damaged after an HMO refused to give him an $800 CAT scan when he was two years old. He'll need round-the-clock supervision for the rest of his life. The jury awarded him $7.1 million for his pain and suffering. But California has a cap of non-economic damages, so the judge was forced to reduce the award to $250,000. Is that really all he is owed for the irreversible damage that was done to him?

Linda McDougal receive an unnecessary double mastectomy after doctors mixed up her lab results and erroneously told her that she had breast cancer. Under this bill, would receive a maximum of $250,000 for her lifetime of pain and disfigurement. Is that really all she is owed? Is that really all the compensation we would wish for our own mothers, sisters, and wives?

The irony is that despite the claims of the bill's supporters, there is no reason to believe that the cap on non-economic damages will have a serious impact on insurance premiums. A report by the New Jersey Medical Society estimated that a state cap of $250,000 on non-economic damages might result in reductions of, at most, five-to-seven percent. Other studies suggest that insurance rates are affected less by the level of non-economic damages than by the amounts paid out for economic losses.

And in California, whose 1975 Medical Injury Compensation Reform Act, known as MICRA, was the model for many of the provisions of this bill, there is little persuasive evidence that the law has brought about any reduction in premiums. Indeed, a 1995 study concluded that premiums increased dramatically during the decade following enactment of MICRA, and only stabilized once the voters imposed rate regulation under a 1988 ballot measure known as Proposition 103.

The sponsors of the bill are unwilling to take that step. Far be it from them to impose regulation on the insurance industry! Yet when it comes to litigation, these apostles of free markets opt for wage and price controls. They are horrified at the though that Congress would cap the amount of assets that wealthy bankrupts can shelter from their creditors, but have no compunction about capping the amount that malpractice victims can recover from their injuries.

I suppose it's all a question of priorities. If medical care were really a priority for the majority, we'd be talking about increasing reimbursement rates. Improving the quality of medical training. Providing incentives for doctors to practice in underserved communities. Reducing the paperwork burden that drives dedicated physicians out of the profession. But we can't talk about any of these things. They cost money. And with new tax cuts promised and deficits mounting, investments in the health care system are simply not a priority.

That's why we're debating a bill like this one instead. A bill that does nothing to address the legitimate concerns of physicians, while inflicting further harm on patients who have suffered enough.

Mr. Speaker, I rise today on the floor of the U.S. House of Representatives to pay tribute to Phillip A. Rollins, who stepped down from office this year after serving for 32 years as a District Attorney in Massachusetts.

Since Phil is too modest to draw attention to his own accomplishments, I want to take this moment to share with you some highlights of his distinguished career in public service. Phil started in Cape Cod politics in the 1960s, serving in local government as a Selectman in the Town of Mashpee. He then ran and won a contested race against a longtime District Attorney, representing the Southern District of Massachusetts. From the start, Phil realized that the issues and problems facing the communities on Cape Cod and the Islands of Nantucket and Martha's Vineyard were so unique

as to require special focus. The solution was both innovative and practical. The Cape and Islands region needed its own District Attorney, and Phil Rollins had the skill to fulfill that vision.

Over the years that followed, Phil Rollins racked up some impressive professional accomplishments. He was among the first in the Commonwealth to hire female prosecutors, he created a regional crime hotline and developed regional crime prevention strategies, and earned an outstanding reputation for innovation in child abuse and domestic violence. Respected and admired by his colleagues, he was twice selected to be the President of the Massachusetts District Attorneys Association.

As he leaves office, he can look back with enormous pride on all that he has done to professionalize the work of prosecutors, and to improve the quality of life on Cape Cod and the Islands. Most of his crime initiatives are still in place, and he leaves a highly trained office with over 20 lawyers, and a budget of over $2.5 million. Those who have left his office are considered to be among the best and brightest lawyers in the state.

So, I rise today as a former District Attorney myself, and as the Congressman of a very grateful Cape and Islands constituency to join with my colleagues in the US House of Representatives to recognize the important work of a fine public servant and longtime and very dear friend. Thank you, Phil.