Floor Statements

Mr. President, this bill is all about fairness and balance. This bill, as I introduced it minus the

Schumer amendment, is exactly the bill that Democratic leaders of the Judiciary Committee signed off on in the summer of 2002 when they controlled the U.S. Senate. I don't know how much more compromise you can get than that. But this amendment would gut one of the major compromises of this legislation that has evolved over that period of time going back to August 2002.

The bill's homestead compromise that we have would create a Federal cap of $125,000 on the homestead exemption, but would allow those States with higher or unlimited exemptions to take advantage of them as long as they comply with the 2-year residency requirements and a 10- year fraud reachback provision.

The bill's compromise is a good one that all parties have signed off on. The Kennedy amendment would gut it.

I ask you to kill this amendment.

I ask for the yeas and nays.

Mr. President, I move to reconsider the vote and to lay that motion on the table.

The motion to lay on the table was agreed to.

I suggest the absence of a quorum.

Mr. President, this would be a good opportunity for us to consider the general environment and the reason for this legislation.

First of all, there has not been any major rewrite of the bankruptcy legislation for more than 25 years. During that period of time, there has been a dramatic change in the economy, particularly the globalization of the economy. It has brought about reasons for changing parts of the Bankruptcy Code.

We have gone from around 300,000 bankruptcies a year to a high of 1.6 million or 1.7 million bankruptcies a year. So there has been an explosion of bankruptcies. Even in the best of times there has been an explosion of bankruptcies. It has become an economic problem where the average person in America is paying an additional $550 for goods and services because somebody else did not pay their bills.

All of these things have brought about reasons for changing the Bankruptcy Code. This legislation that is 500 pages that has been referred to is not something that just has been dropped on the Congress of the United States.

First of all, at least 10 years ago, the Judiciary Committee set up a commission of experts in bankruptcy, not made up of Members of Congress, a commission of people from the private sector and from academia to study what needed to be done with the bankruptcy laws to bring them up to date with the global economy, to bring them up to date with the changes in our domestic economy, and to look at the problem of so many people filing for bankruptcy.

This commission worked several months--more than a year--to produce a product. That was the basis for the introduction of legislation in 1997. In that period of time, this bill has passed the Senate in several different Congresses and has passed the House in several different Congresses, has been worked out in conference, an agreement between the House and Senate in several different Congresses, one of those even reaching President Clinton for his signature. But it was the end of the year, and he pocket-vetoed it. We did not have a chance to reconsider that veto.

The legislation before us, as I have introduced it, and basically the legislation that is before the Senate is legislation that has been so compromised, except for the Schumer amendment--and I will not go into what the Schumer amendment is--but except for that amendment, the bill we introduced and maybe four or five technical changes that were accepted in the Judiciary Committee is the legislation that was signed off on by Democrats who had a majority in the conference committee in the year 2002 when the Democrats controlled the Senate.

Is that exactly the way that I would write this legislation? No, it is not. There are a lot of provisions in this bill I would like to be different. But in the Congress of the United States as a whole--and particularly in the Senate where there is no limit on debate, where filibusters are possible, where the minority has rights they should have, and the only place minority rights are protected--you have to reach compromises.

I know no better compromise that I could put before the Senate than the wording of a compromise that was worked out between a Republican House and a Democratic-controlled Senate in the year 2002. That is what we have before us.

There are probably a lot of people who do not want any bankruptcy reform, but they will probably end up voting for it because this bill in different Congresses has passed by a margin of 97 to 1 on one occasion. The last time it passed the Senate, I think the vote was 85 to 12.

I think all of this is evidence of a bipartisan agreement that the bankruptcy laws need to be reformed. I do not know what more evidence I can give the American people of the way our political system works, the way the Congress works, to arrive at compromise, than the compromise that I lay before the Senate.

We recently heard from my good friend, the Senator from Illinois, the Democratic whip, that there have been many opportunities to help this group of people or that group of people or another group of people. We refer to that sort of helping this group or that group or another group as a carve-out.

My colleagues have seen amendment after amendment that was introduced to do that. We defeated that, because there ought to be uniformity of application of law across the United States, not separating something special for this group or that group or another group when it comes to justice in the bankruptcy courts. And if we added all of that up, we might not have a lot of people left who are going to be affected by what a bankruptcy judge is supposed to decide, which is justice between creditors and debtors.

In this legislation, we preserve one of the main goals of bankruptcy for the last 100 or more years, and that is the principle of a fresh start, where somebody is going to bankruptcy because they have problems that they cannot deal with, financial problems, natural disaster, divorce, medical, whatever it takes to get into financial trouble, that might not be any fault of one's own.

To make it clear that we are not after people who do not have an opportunity--when people are below the median income of their State, they are practically guaranteed a fresh start under this legislation, and if people are above the median income for their State, there is a simple process called a means test, where one puts down all of their income and assets and what they owe and through that makes a determination of whether they have the ability to repay some of their debt.

My friend from Illinois mentioned the figure of $150 or $175 that maybe over the next 10 years one would have to pay. If people have the ability to repay some of their debt, should they not have to repay some of their debt? It seems to me to be fair to those people to whom they do pay their debt.

So we preserve the principle of a fresh start, but we also establish a principle that if one has the ability to repay some their debt, they are not going to get off scot-free.

It is just not those two principles that ought to be looked at to understand whether Congress might be doing the right thing. I am not saying just an overwhelming vote in support of legislation is the only way that one ought to judge whether that legislation is justified, but surely the extent to which things are more bipartisan in the way they are done in this body

ought to be some justification that certain tests of justice and fairness are being done or they would not get that kind of support, because I do not know a single Senator who for the most part is not concerned about doing right for the people of his State.

So that is the sort of consideration I hope the people of this country will give to this legislation, the need for it, the justification for it, the fairness of it, and most importantly those two principles of a fresh start for those who deserve it and the principle that if one has the ability to repay some of their debt that they are not going to get off scot-free.

Mr. President, reserving the right to object, and I will object, but I would like to take just 30 seconds to explain that there are problems with the Coal Act. They are within the jurisdiction of the Senate Finance Committee, and we ought to look at all these issues in the context of a comprehensive review and a comprehensive solution.

So I would see a piecemeal approach, as is being done now through the bankruptcy bill, as, first of all, intervening in the jurisdiction of the Finance Committee, which as chairman I should protect, and, secondly, making more difficult the comprehensive solutions that we ought to find. So I object.

I would like to speak for a short time.

Mr. President, under current law, investment banks are not allowed to compete on the same playing field as other professionals. Right now, investment banks are precluded per se, in many circumstances, from representing a debtor in a business bankruptcy if the investment bank acted as the investment banker for the company before it filed for court protection.

I think this is a draconian rule. The bill would give the bankruptcy judge the ability to determine whether an investment banker is disinterested, just as the judge determines whether other professionals are disinterested. The provision in the bill, it seems to me, is not only fair, but it will also safeguard the proceedings from any conflict of interest. Do we trust our Federal judges, or don't we, to make this determination? After all, the environment for this is in the judiciary--before judges. We happen to trust them for all other professionals involved in the bankruptcy proceedings, whether there is any conflict of interest for anyone involved. So then the question becomes, why should it be different for investment banks?

I think the provision in the bill is fine as it is. It is part of the compromise. We should allow a judge to make this determination and, thus, protect the integrity of the bankruptcy process. So I ask my colleagues to oppose this amendment.

I suggest the absence of a quorum.

Mr. President, I rise in strong opposition to the Schumer amendment which would make debts incurred in connection with violations of the Freedom of Access to Clinic Entrances Act nondischargeable in bankruptcy. This amendment has been a poison pill to enactment of the bankruptcy bill and must be defeated.

On two previous occasions, CRS performed research for us and told us that FACE debts had never been discharged in bankruptcy. Just recently, I asked CRS to perform an updated search on reported decisions considering the dischargeability of liability incurred in connection with violence at reproductive health clinics by abortion protesters. CRS confirmed that this amendment is not necessary. The CRS memo identified only one reported case, which found the debt to be nondischargeable under the bankruptcy law's discharge exception for willful and malicious injury. So this amendment is not necessary. Even Senator Schumer's own witness at the Senate Judiciary Committee hearing on the bankruptcy bill testified that in all the cases that she had litigated, the court had always found that the debts incurred under the FACE Act were nondischargeable in bankruptcy.

My colleagues make a big deal out of the fact that some of us on this side have supported amendments similar to this one before. The truth is, when the Schumer abortion amendment was offered in 1999 to the comprehensive bankruptcy bill, Vice President Gore was campaigning for the Democrat nomination. His opponent, Senator Bradley, was alleging that Vice President Gore was not sufficiently pro-choice. Vice President Gore's allies in the Senate were maneuvering to create a tie vote on the Schumer amendment so Gore could ``break the tie'' to improve his political standing.

To avoid this, most Republicans voted in favor for the Schumer amendment. Thus, that vote in the 106th Congress was not a vote on the merits of the Schumer amendment.

The Schumer amendment was included in the 107th Congress bankruptcy bill. But the fact is that in the 107th Congress, the Schumer amendment killed the bankruptcy conference report because the House would not take it. Thus, the Schumer amendment is a poison pill and must be defeated.

Let me reiterate that in two previous memos, CRS concluded that the Schumer amendment is unnecessary because abortion protester debts are already not dischargeable in bankruptcy. We have just updated this research and CRS has confirmed that FACE Act violations are not dischargeable in bankruptcy. The proponent's own witness testified before the Judiciary Committee that none of these debts have ever been discharged in bankruptcy. The reality is that the Schumer amendment is just a political ploy designed to generate opposition to the bankruptcy bill. The Schumer amendment is a poison pill which will kill the bankruptcy bill. This amendment must be defeated, and I urge my colleagues to oppose it.

Yes.

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

Mr. President, I ask unanimous consent that when the Senate resumes the bankruptcy bill tomorrow morning, the Senate begin 10 minutes of debate equally divided on each of the following amendments in the order mentioned below; provided further that following that debate the Senate begin a series of votes on or in relation to the amendments in that same order; provided that no amendment be in order to the amendments prior to the ordered votes. I further ask that there be 2 minutes equally divided for debate between the votes after the first vote and, lastly, that all votes in this sequence after the first vote be limited to 10 minutes in length.

The amendments are Durbin, No. 110; Harkin, No. 66; Boxer, No. 62; Dodd, No. 67.

I further ask unanimous consent that notwithstanding the adjournment of the Senate, all time overnight until the Senate resumes consideration of the bill be counted under the provisions of rule XXII.

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

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

Mr. President, I ask unanimous consent that there now be a period for the transaction of morning business, with Senators permitted to speak for up to 10 minutes each.

Mr. President, I understand there is a bill at the desk that is due for its second reading.

Mr. President, in order to place the bill on the calendar under the provisions of rule XIV, I object to further proceedings.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 74, submitted earlier today by Senators Biden, Clinton, Lugar, Kohl, and others.

Mr. President, I ask unanimous consent that the resolution and preamble be agreed to, en bloc, the motion to reconsider be laid upon the table, and that any statements relating to the resolution be printed in the Record, without intervening action or debate.

Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of S. Res. 75, which was submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table.

Mr. President, I ask unanimous consent that when the Senate completes its business today, the Senate adjourn until 9:30 a.m. on Wednesday, March 9. I further ask that following the prayer and the pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved and the Senate then begin a period of morning business for up to 60 minutes, with the first 30 minutes under the control of the majority leader or his designee and the second 30 minutes under the control of the Democratic leader or his designee; provided that following morning business the Senate resume consideration of S. 256, the Bankruptcy Reform Act, as provided under the previous order.

Tomorrow, following morning business, the Senate will continue its consideration of the bankruptcy bill. Under the agreement reached tonight, we will have up to 40 minutes of debate on a series of amendments, which will be followed by four stacked rollcall votes. That will be on these amendments. The first vote will be in relation to the Durbin paperwork amendment, and that vote will begin at approximately 11:30 tomorrow morning. For the remainder of the day, we will continue working through the amendments to the bankruptcy bill. There are a number of amendments pending, and it is my hope that most of them will not require rollcall votes.

Earlier today, cloture was invoked on the bill by an overwhelming margin. It is the leadership's intention to complete action on the bill during Wednesday's session.

If there is no further business to come before the Senate, I ask that the Senate stand in adjournment under the previous order.

Mr. President, I rise today in tribute to a noble Iowan who has given his life for his country. 2LT Richard ``Brian'' Gienau was killed on Sunday, February 27, in Ar Ramadi, Iraq, when his military vehicle was struck by an explosive device. He was 29 years old, a fellow alumnus of my alma mater, the University of Northern Iowa, and a member of A Company, 224th Engineer Battalion, Army National Guard, Burlington, IA.

Second Lieutenant Gienau is remembered as a hard-working family man with a history of military service. He joined the U.S. Navy in 1994 and enlisted in the Iowa Army National Guard in 1999. After graduating in 2003 from University of Northern Iowa, he was commissioned in the Reserve Officers' Training Corps as a second lieutenant. He was mobilized last October.

Second Lieutenant Gienau is survived by his mother, Debbee Way, of Dunkerton, IA, and his father, Richard Gienau, of Waterloo, IA. He also leaves behind a young son. My prayers go out today to his family and friends in their time of loss. Let us today remember

his life as we honor his sacrifice on behalf of all of us. We are forever in his debt.

Mr. President, I am taking this opportunity to talk about the mess we have in the Medicaid Program, a mess that does not properly account for billions of taxpayer dollars. First, allow me to remind everyone about a report released last summer by the Government Accountability Office, GAO. That report on Medicaid Program integrity found that Medicaid's size and diversity made it vulnerable to fraud, waste and abuse. Further, the GAO found that the Centers for Medicare & Medicaid Service, CMS, allocated only $26,000 and only eight employees to work on Medicaid program integrity.

As I said at the time, it does not make sense for CMS to invest so little in Federal oversight when so many Federal taxpayer dollars are at stake. If one considers that Medicaid has surpassed Medicare as the single largest Government health program in the United States, it makes no sense at all. The Congressional Budget Office projects the Federal share of total Medicaid payments for Fiscal Year 2005 at greater than $183 billion. Medicaid's vulnerability to fraud, waste and abuse have also ranked it on the GAO's list of high-risk programs for the past 2 years.

The Medicaid Program continues to pay too much for prescription drugs. CMS estimated that Medicaid expenditures for prescription drugs in Calendar Year 2003 totaled more than $31 billion, triple the $9.4 billion spent in 1994. Each year drug companies pay approximately $6 billion in rebates.

Today, the GAO released a damning report on Medicaid drug spending. Congress established the Medicaid drug rebate program in 1990 to help control spending on drugs. Note that the word choice and intent here was control, not out of control. It should come as no surprise that the GAO's report shows that the drug program has been and continues to be badly mismanaged.

The report--requested by Congressman Waxman and me--identified fundamental problems in the program. The mismanagement has been bipartisan and has spanned multiple administrations. According to the GAO, it is a program virtually without regulation. CMS has been sitting on draft regulations since 1995 a decade ago.

It is also a program virtually without oversight. The GAO found that the Office of Inspector General has issued only four audit reports on drug-company reported prices since the inception of the program. Of course, the OIG says in its defense that its efforts have been hampered by unclear CMS program guidance and a lack of documentation by drug companies.

According to the GAO, even when the OIG has managed to identify problems related to the drug companies' reported prices and methodologies for price reporting, CMS has not done much of anything to resolve them.

The drug rebate program is governed by a contractual agreement between the States and each drug company that wants to participate in Medicaid. One of the things that boggles the mind is that this contract allows drug companies to rely upon reasonable assumptions''

Each drug company may craft its own ``assumptions'' as long as they are consistent with the ``intent'' of the law. Consequently, because drug companies can pick their own methods, they in effect set their own prices and amount of rebates they pay.

According to the GAO, ``CMS does not generally review the methods and underlying assumptions that [drug companies] use to determine [the reported prices], even though these methods and assumptions can have a substantial effect on rebates.''

Furthermore, quoting the GAO again, ``CMS sometimes identifies price reporting errors . . . but does not follow up with [drug companies] to verify that errors have been corrected''.

In sum, the GAO report confirms that neither CMS nor the OIG know the extent to which Medicaid overpays for prescription drugs because the program lacks effective management and oversight. A worse state of affairs is not likely. Drug companies have been profiting for the past years on Medicaid drug pricing. We are dealing with a system that unnecessarily costs taxpayers untold hundreds of millions A not billions of dollars annually. The Medicaid drug rebate program is quite simply a mess--a Medicaid mess.

I urge my colleagues to consider this GAO report and its recommendations.

Five minutes on the beef resolution because I have to go to a committee meeting.

Mr. President, with the permission of the Senator from Georgia, I yield myself 5 minutes.

Mr. President, I rise to speak on the resolution that comes before us disapproving the actions of the Department of Agriculture on the importation of Canadian beef into the United States. But in doing so, I do not denigrate the efforts that are being made to have a debate on a legitimate public policy issue, but to put it in context.

First, from the standpoint of my chairmanship of the Senate Finance Committee with jurisdiction over international trade, I think this is something for which we have developed policies over the last couple decades, where we have worked very hard to see that several rights can be preserved.

One, probably basic to this debate, is obviously the sovereign right of any country to make sure that it does not in any way allow products into the country that would in any way hurt the health and safety of the consumers of that particular country. I think every trade agreement takes that into consideration.

Within the last 10 or 15 years, we have worked very hard and have included in our trade agreements rules concerning sanitary and phytosanitary measures. These rules require that science, as opposed to political science, be the basis upon which we base decisions as to whether a product is safe to enter the U.S. market.

So I hope during this debate that we keep in mind that we do have commitments to rely on science when making determinations as to whether products are safe. Hopefully, each country respects that. Particularly the United States, being a leader in the rule of law in international trade, ought to do that. But we expect every country that comes under the WTO to do exactly the same, and the same holds with other trade agreements. We also, of course, reserve the right to make sure our food is safe.

For the debate we are in now, I hope we remember that if it had not been for mad cow disease in Canada, there would never be any such discussion before the Senate because over a long period of time we had imports of beef from Canada, and we have been exporting our red meat and other food products to Canada. So if we had not had mad cow disease in Canada, then we would not be debating this issue.

So when it gets to the issue of whether mad cow disease is an issue with Canadian beef coming into the country, then let's remember that decision ought to be made strictly on the sound science of whether that meat is safe. If we are going to make a political decision in place of a scientific decision as to whether Canadian beef should come into the country, then, of course, our purity in international trade is going to be questioned by other countries.

The second point is that, during this very same period of time when we have been having this problem with Canada as to whether their meat is safe to come into the country, we have also been trying to negotiate with the Japanese because we had one mad cow case and the Japanese and other countries are not taking our beef. We have been working over the last several months to get Japan to take our beef based upon the principle that we are following the sanitary and phytosanitary rules, on a scientific basis, for making sure our meat is safe for the Japanese consumers. We do not want to get ourselves into a position where we are going to ignore the science of the safety of meat in Canada versus--

Madam President, I will finish one sentence, if I could.

We do not want to get ourselves in a position of having the Japanese say to us our meat is not safe even though it is shown to be safe based on sound science. Since we want our beef to go to Japan because it is safe, then, obviously, if meat is safe coming in from Canada, it has to be received as well.