S2462 CONGRESSIONAL RECORD — SENATE March 10, 2005 judge disregarded the use clause and al- from Chairman SENSENBRENNER right Feingold Lautenberg Rockefeller Feinstein Leahy Salazar lowed a lease sale to go through to a on through the whole Judiciary Com- Frist Levin Santorum non-conforming user. However, in In re mittee and, of course, the leadership Graham Lieberman Sarbanes Trak Auto Corp., 367 F.3d 237 (4th Cir. over in the House as well and others Grassley Lincoln Schumer 2004), an appellate court held that a use who are not on the Judiciary Com- Gregg Lott Sessions Hagel Lugar Shelby clause must be strictly enforced under mittee but are concerned about this Harkin Martinez Smith Section 365(b)(3) on sale of the lease, very important bill. They work closely Hatch McCain Snowe notwithstanding Section 365(f). This with us. It is difficult for them and it Hutchison McConnell Specter Inhofe Mikulski Stabenow legislation provides the necessary clar- is difficult for us, but that is the way Inouye Murkowski Stevens ity by amending Section 365(f)(1) to these two bodies ought to work to- Isakson Murray Sununu help make clear it operates subject to gether, and this bill is a perfect illus- Jeffords Nelson (FL) Talent all provisions of Section 365(b). tration of what can happen if good peo- Johnson Nelson (NE) Thomas Kennedy Obama Thune I note that Section 365(d)(4) of the ple can get together, compromise on Kerry Pryor Vitter Bankruptcy Code applies to cases some of these issues that can be com- Kohl Reed Voinovich under any chapter of Title 11. Lan- promised, and yet stand firmly so we Kyl Reid Warner guage to that effect in the current can pass legislation like this that will Landrieu Roberts Wyden Code’s Section 365(d)(4) is deleted be- benefit the whole country. NOT VOTING—1 cause it is repetitive of Sections 103(a) In my final remarks, let me recognize Clinton and 901 of the Code, which already the efforts of Ed Pagano and Bruce The bill (S. 250), as amended, was make clear that provisions like Sec- Cohen of Senator LEAHY’s office and passed. tion 365(d)(4) apply to all cases under Jim Flug and Jeff Teitz of Senator f Title 11. KENNEDY’s office for all the hard work This bill creates new legal protec- they have done over the years on this BANKRUPTCY ABUSE PREVENTION tions for a large class of retirement issue as well. It is a pleasure to work AND CONSUMER PROTECTION savings in bankruptcy. This measure with staff on the Judiciary Committee. ACT OF 2005—Continued has widespread support from a long list They are bright. They are articulate. AMENDMENT NO. 90 of groups, ranging from the American They are brilliant, as a matter of fact. The PRESIDING OFFICER. There Association of Retired Persons, to the That is what you want in Judiciary will now be 2 minutes of debate, equal- Small Business Council of America and Committee staffers. I wish those on the ly divided, on the Feingold amendment the National Council on Teacher Re- minority side would not be nearly as No. 90. tirement. tough as they are, but I respect them Mr. FRIST. Mr. President, for the in- Let me take this opportunity to for being that way. formation of my colleagues, in con- point out that the assets of some pen- With that, I suggest the absence of a sultation with the Democratic leader, sion plans already are protected from quorum. we would like to have all of the re- bankruptcy proceedings. The United The PRESIDING OFFICER. The maining votes be 10-minute votes. We States Supreme Court has ruled in Pat- clerk will call the roll. are going to be enforcing it strictly, so terson v. Shumate, reported at 504 U.S. The assistant legislative clerk pro- we have a reason to keep moving along. 753 (1992), that assets of pension plans ceeded to call the roll. We ask that everybody, once we start which have, and are required by law to Mr. HATCH. Mr. President, I ask voting shortly, stay in the Chamber have, anti-alienation provisions, are unanimous consent that the order for and continue to vote. We will have 10- excluded from bankruptcy estates. the quorum call be dispensed with. minute votes for the remainder of the Let me be absolutely clear that this The PRESIDING OFFICER. Without evening. provision is not intended in any way to objection, it is so ordered. The PRESIDING OFFICER. The Sen- diminish the protections offered under ator from Wisconsin is recognized. existing law and under the United f Mr. FEINGOLD. Mr. President, if we States Supreme Court’s decision in have a brief quorum call, I believe we Patterson v. Shumate, but rather, is CARL D. PERKINS CAREER AND may be able to eliminate the need for intended to provide protection to other TECHNICAL EDUCATION IM- some of the votes. retirement plans and accounts not cur- PROVEMENT ACT OF 2005—Contin- Mr. FRIST. Mr. President, I suggest rently protected. ued the absence of a quorum. Mr. President, this has been a battle, The PRESIDING OFFICER. Under The PRESIDING OFFICER. The there is no question about it, like all the previous order, the question is, clerk will call the roll. hotly contested issues are. But I think Shall the bill pass? The yeas and nays The legislative clerk proceeded to virtually everybody has contributed, have been ordered, and the clerk will call the roll. and we have had some tough times on call the roll. Mr. FEINGOLD. Mr. President, I ask the floor. We have had even some bad The assistant legislative clerk called unanimous consent the order for the feelings from time to time. But we the roll. quorum call be rescinded. have been at this for 8 solid, difficult Mr. DURBIN. I announce that the The PRESIDING OFFICER. Without years. It is unfortunate we could not Senator from New York (Mrs. CLINTON) objection, it is so ordered. work out more amendments, also, but is necessarily absent. The Senator is recognized. we couldn’t and still have this bill The PRESIDING OFFICER. (Mr. Mr. FEINGOLD. Mr. President, I ap- pass, hopefully for the last time. We VITTER). Are there any other Senators preciate the fact that we have had worked in good faith to try to do that. in the Chamber desiring to vote? some opportunity to make a few mod- For those who feel they have not The result was announced—yeas 99, est modifications at the end of this been treated as fairly as I would cer- nays 0, as follows: process. Obviously, I hoped for more, but I do thank the Senator from Utah, tainly have wanted to treat them or I [Rollcall Vote No. 43 Leg.] feel I have treated them and others as Mr. HATCH, the Senator from Alabama, YEAS—99 well have treated them, we feel bad Mr. SESSIONS, the Senator from Iowa, about that and hope they will forgive Akaka Burns Corzine Mr. GRASSLEY, and the Senator from Alexander Burr Craig us for not being able to make some of Allard Byrd Crapo Pennsylvania, Senator SPECTER, who the changes that perhaps we would Allen Cantwell Dayton are working on a number of changes have made had this been the first year Baucus Carper DeMint and accepting a couple of amendments Bayh Chafee DeWine of this bill and we didn’t have the dif- Bennett Chambliss Dodd so we can move this process through. ficulty of meeting the suggestions of Biden Coburn Dole The result will be that the next five our friends over in the other body. Bingaman Cochran Domenici votes on my amendments will not be We think they have done a terrific Bond Coleman Dorgan necessary, if this agreement is made. Boxer Collins Durbin job. The people in the House of Rep- Brownback Conrad Ensign So I hope that causes the unanimous resentatives are tremendous leaders, Bunning Cornyn Enzi consent agreement to go through.

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00058 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.084 S10PT1 March 10, 2005 CONGRESSIONAL RECORD — SENATE S2463 AMENDMENTS NOS. 90, 93, 95, AND 96 WITHDRAWN it is all right with the Republican lead- port of the National Child Support En- AMENDMENT NO. 92, AS MODIFIED er. I have no amendment relating to forcement Association, which rep- AMENDMENT NO. 87, AS MODIFIED the bill. I would like to proceed as if in resents over 60.000 child support profes- I ask unanimous consent that my morning business until anyone has an sionals. amendments No. 90, No. 93, No. 95, and opportunity to move on the bill, and I It has earned the support of the Na- No. 96 be withdrawn; that my amend- will cease and desist at that moment. tional Association of Attorneys Gen- ment No. 92, as modified and as at the The PRESIDING OFFICER. Is there eral, which has sent a letter of support desk, be adopted; and that a modifica- objection? Without objection, it is so personally signed by twenty-seven tion of my amendment No. 87 which ordered. State attorneys general. was agreed to last night be accepted as (The remarks of Mr. BIDEN are print- Over the years, the child support pro- well. ed in today’s RECORD under ‘‘Morning tections in this legislation were en- The PRESIDING OFFICER. Is there Business.’’) dorsed by the Attorney General of the objection? Without objection, it is so (The remarks of Mr. BIDEN pertaining State of Vermont. ordered. to the submission of S. Con. Res. 17 are The Attorney General of Minnesota The amendment (No. 92) as modified, located in today’s RECORD under ‘‘Sub- endorsed them, too, along with the At- was agreed to, as follows: mission of Concurrent and Senate Res- torneys General from Illinois, from Credit Counseling Amendment: olutions.’’) Massachusetts, and from California, (1) On page 34, after line 25, insert— The PRESIDING OFFICER (Mr. Montana, North Carolina, Michigan, ‘‘(4) The requirements of paragraph (1) THUNE). The Senator from Tennessee. Maryland, Iowa, Hawaii, and Wash- shall not apply with respect to a debtor Mr. FRIST. Mr. President, for the in- ington. whom the court determines, after notice and formation of our colleagues, we are The child support and alimony pro- hearing, is unable to complete those require- about to have the last vote of the tections in S. 256 are so far superior to ments because of incapacity, disability, or evening which is final passage of bank- current law that the National District active military duty in a military combat zone. For the purposes of this paragraph, in- ruptcy legislation. I thank all Members Attorneys Association, representing capacity means that the debtor is impaired for their hard work today in the Cham- more than 7,000 local prosecutors, have by reason of mental illness or mental defi- ber, as well as the Budget Committee endorsed them. ciency so that he is incapable of realizing and their efforts on the budget resolu- In addition to those national associa- and making rational decisions with respect tion. They made huge progress today. tions, those protections have earned to his financial responsibilities; and ‘‘dis- We will start on the budget Monday the support of: the California Family ability’’ means that the debtor is so phys- morning. We expect amendments dur- Support Council, whose 2,500 enforce- ically impaired as to be unable, after reason- ing Monday’s session. Therefore, we do ment professionals are responsible for able effort, to participate in an in person, telephone, or Internet briefing required expect the next vote to be Monday carrying out the Federal child support under paragraph (1)’’; evening at 5:30. program in California; (2) On page 42, line 15, strike ‘‘and’’; and Mr. BIDEN. Mr. President, several The Western Interstate Child Sup- (3) On page 43, between lines 3 and 4, insert years ago, when we were considering port Enforcement Council, composed of the following: this legislation, I spoke here on the child support professionals from the ‘‘(E) if a fee is charged for the instruc- Senate floor about some important private and public sectors west of the tional course, charge a reasonable fee, and provisions that I think have been over- Mississippi River; provide services without regard to ability to looked in our discussions. In my re- The California District Attorneys As- pay the fee.’’ (4) On page 35, line 12, insert ‘‘who is a per- marks today I will repeat what I said sociation, consisting of elected district son described in section 109(h)(4) or’’ after back then, in March of 2001. attorneys from each of every one of the word ‘‘debtor.’’ We have heard a lot in recent days California’s 58 counties and over 2,500 (5) On page 36, line 9, insert ‘‘who is a per- about how this bill lacks compassion— deputy district attorneys; and finally, son described in section 109(h)(4) or’’ after specifically, that it will hurt women The Corporation Counsel of the City the word ‘‘debtor.’’ and children who depend on alimony of New York. Yes, even New York City The amendment (No. 87) as modified, and child support. loves this bill. was agreed to, as follows: Critics claim that by making sure Why has this legislation earned such On page 445, strike lines 10 through 13, and that more money is paid back to other overwhelming support from the profes- insert the following: creditors, this bill will make it harder sionals out in the field and in the SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS. for women and children to get what is trenches who, ever single day, seek and Section 104(b) of title 11, United States coming to them. enforce child support orders? Code, as amended by this Act, is further I am particularly proud of my record One reason is the hard work of Phil- amended— of protecting women and children dur- lip Strauss, who, speaking for the Na- (1) by inserting ‘‘101(19A),’’ after ‘‘101(18),’’ each place it appears; ing my career in the Senate. That tional Child Support and Enforcement (2) by inserting ‘‘522(f)(3) and (f)(4),’’ after record includes the Violence Against Association, has represented the con- ‘‘522(d),’’ each place it appears; Women Act to protect women threat- cerns of child support professionals in (3) by inserting ‘‘541(b), 547(c)(9),’’ after ened by domestic violence. testimony before our committee over ‘‘523(a)(2)(C),’’ each place it appears; I am here again today to show that, the years we have debated bankruptcy (4) in pagagraph (1), by striking ‘‘and contrary to a lot of the rhetoric that reform. From his personal experience 1325(b)(3)’’ and inserting ‘‘1322(d), 1325(b), and has been tossed around, this bill actu- with the problems women and children 1326(b)(3) of this title and section 1409(b) of ally improves the situation of women face under current bankruptcy law, he title 28’’; and (5) in paragraph (2), by striking ‘‘and and children who depend on child sup- brought together his fellow enforce- 1325(b)(3) of this title’’ and inserting ‘‘1322(d), port. It specifically targets the prob- ment officials to draft the provisions I 1325(b), and 1326(b)(3) of this title and section lems they face under the current bank- am here to discuss. 1409(b) of title 28’’. ruptcy system into a virtual extension As Mr. Strauss and his colleagues Mr. FEINGOLD. Mr. President, I sug- of the current national family support have told us, right now the treatment gest the absence of a quorum. collection system. of child support and alimony in bank- The PRESIDING OFFICER. The There may be other aspects of this ruptcy is a mess, and this bill fixes it. clerk will call the roll. legislation that we can debate: the bal- When a deadbeat dad files for bank- The legislative clerk proceeded to ance between creditors and debtors, be- ruptcy under the current system, what call the roll. tween different kinds of creditors, or happens to mom and the kids? Mr. BIDEN. Mr. President, I ask between different kinds of debtors. But Well, if the dad is actually making unanimous consent that the order for on the question of child support and al- the payments, those payments stop. the quorum call be dispensed with. imony, there should be no dispute. That’s right, the payments stop cold. The PRESIDING OFFICER. Without Because this bill strengthens the col- Mom then has to find a lawyer or a objection, it is so ordered. lection of alimony. Period. government advocate, take time off of Mr. BIDEN. Mr. President, I checked Over the many years we have dis- work, and go to bankruptcy court to with the leader on our side, and I hope cussed this bill, it has earned the sup- try to get those payments started

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00059 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.087 S10PT1 S2464 CONGRESSIONAL RECORD — SENATE March 10, 2005 again. And when she goes to court, her That’s the beauty of this bill: It is family support officials use to go after claim may not be heard that day, so self-executing. The provisions to be deadbeat dads, who today can hide be- she’ll have to return again and again added to the Bankruptcy Code will hind the bankruptcy system. Unlike . . . or if she’s late, she’ll miss her day function automatically. This is vital. current law, this bill would permit re- in court. Unrepresented women will not be porting the deadbeat’s overdue support What else happens under current harmed by the process, as they are payments to a consumer reporting law? When dad’s bill collectors show up under the current Code. agency. Under current law, it would in bankruptcy court, mom has to fight Today, under current law, these permit restrictions on a deadbeat dad’s with them over dad’s assets. There’s a women have to get an attorney and go driving, professional, or recreational li- good chance that mom not only needs to court to assert their claims. censes. It would permit family support her payments started again, but she is In addition, under this bill, family collection officials to intercept his tax due past support—support payments support will never be dischargeable. It refunds. dad never made last month, last year. must be paid in full. All of it. The legislation also clarifies the defi- She needs him to pay her back for all This is important because, under the nition of support payments, ending the payments he failed to make. curren, domestic debts may not be paid conflicting bankruptcy decisions by And in asserting her claim, she is not in full or at all . . . believe it or not. different courts that today question the ‘‘Number 1’’ collector in line. Right now, a deadbeat father can file what support payments actually are. Under current law, she is Number 7. for bankruptcy and come out without Most significantly, though, this bill That’s right—Not So Lucky Number 7. paying one penny of support. While his prevents a father from completing The current Code permits other bill slate is wiped clean, a mother and her bankruptcy unless he has paid all his collectors to beat her in the race to get children go without. When this bill support obligations due after he filed at dad’s assets. The current law handi- passes and the President signs it, the for bankruptcy. caps her at the starting line. She is law will hold the deadbeat dad’s feet to Let’s think about this. Under current forced to wage a fight to make sure she the fire: he will pay, he will pay in full. law, a father filed for bankruptcy and and the kids receive their due. There are other important ways that can complete bankruptcy under a plan And what happens after she fights it this bill will remove real obstacles to that relieves him of his past-due do- out with the bill collectors? Well, justice that exist in current bank- mestic obligations. Under the bill, how- under the current system, she might be ruptcy law. ever, this scenario will become obso- lucky and get every dollar due. But, This bill not only lifts the stay on lete. A father will never complete she may only get a portion of what is support payments during bankruptcy, bankruptcy until he is paid up. He due or she may not get one red cent. but it adds that, when a wife-beater must pay. That’s not right. If a bankrupt house- files for bankruptcy, a domestic vio- Moreover, the bill protects mom dur- hold is a sinking ship, then women and lence restraining order against him ing a bankruptcy plan. Once a father is children should be protected first. This must remain in effect. It cannot be under a bankruptcy plan and he fails to is what the current law fails to do, but stayed. And the woman who needs a re- make his support payments, a mother it is what this bill does: it puts women straining order against him can still can march to the bankruptcy court and and children first. get one. ask the court to dismiss his plan. The S. 256 dictates that even if he files for I have here an order from a family court will call dad back in to explain bankruptcy, dad must continue making court in my home state of Delaware. A himself. He doesn’t want to make pay- those support payments that mom woman went to the court and requested ments during his bankruptcy plan? needs to feed and clothe her children. a restraining order against her abuser, Fine, he can be thrown out of bank- Under this bill, women and children who had already filed for bankruptcy. ruptcy, and find himself back at square will continue to receive their support Incredibly, the judge found, under the one. payments during bankruptcy, while ev- current Bankruptcy Code, that a pro- Some claim that this bill lacks com- erybody else, from the credit card bank ceeding for a domestic abuse restrain- passion. Well, right now, women who to the department store, waits for the ing order is automatically stayed ‘‘by want child support orders or who al- bankruptcy judge’s final order and operation of law.’’ ready have orders but fail to enforce plan. That’s right. We have judges out them slip through the cracks. If we That alone would be a major im- there right now who look at today’s pass this bill, the Bankruptcy Code will provement over current law. But that Bankruptcy Code, and they find that empower women with the information is just the beginning of the advances of filing for bankruptcy stops all pro- they need. this bill over current law. ceedings. They find that we have failed Section 219 of the bill requires the This bill makes mom ‘‘Number 1’’ to write an exception for proceedings U.S. Bankruptcy Trustee to notify a and places her ahead of all the bill col- like those for domestic violence. They woman of her rights to use the services lectors on her past-due claim. No other find their hands are tied. of her state child support enforcement bill collector—not the credit card com- Then they send a woman in fear for agency and gives her the agency’s ad- pany, not the car loan company, not her life off to a federal bankruptcy dress and phone number. Better yet, the student lenders—can jump ahead of court to lift the Code’s automatic stay the Trustee likewise notifies the agen- a mother and her children. Every other by filing a special motion. Unbeliev- cy independently of the woman’s claim. bill collector must stand in line behind able. This is striking. the family. If you think this is fair, if you prefer Women who need help will get the in- What is so great about the continu- this state of affairs, then I guess you formation they need, because the bank- ation of payments and making mom will vote against this bill. Personally, I ruptcy system is charged with reaching ‘‘Number 1’’? As a practical matter, she am proud of this bill, and I wish that out to family support professionals— doesn’t have to find room in her hectic those who are fabricating wild claims acting under federal family support schedule to make appearances in a fed- about it would stop. If they have their collection law—and putting them at eral bankruptcy court—an intimi- way, the women and children in this the service of the women and children dating place for most people. She can country who depend on alimony and who need them. go to work without interrupting her child support will be robbed of real pro- This last item needs stressing, Mr. day. She can complete her errands and tections. That would be a crime. President, because so much has been pick up her kids after school. Under Under current law, more than just made about what will happen after the bill, she will be automatically first child support and—alimony are stopped someone who owes family support pay- in line on her claims and she will con- in their tracks by the filing of bank- ments comes out of bankruptcy. The tinue to receive her payments during ruptcy. That automatic stay, as it is claim is that other ‘‘more powerful’’ bankruptcy. called, stops a lot of other proceedings creditors will push women and children When we pass this bill, she does not that could provide real help to women aside and strip the dad bare before he have to work her way through the and children. can make payments to his family. bankruptcy system. The system will This legislation changes that. It lifts That makes for a moving story, Mr. work for her, not against her. the stay on a number of methods that President, but it is fiction, not fact.

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00060 Fmt 0624 Sfmt 0634 E:\CR\FM\A10MR6.068 S10PT1 March 10, 2005 CONGRESSIONAL RECORD — SENATE S2465 This legislation requires the bank- for him to know her address. We have setts to Michigan. I want to save ruptcy Trustee to notify both the to leave that decision up to her, but women and children from having to woman and the family support collec- she will get all the help we can give to fight their way through a broken bank- tion professionals about the dad’s re- help her know her rights. ruptcy system. I want to make the sys- lease from bankruptcy, his last known As I said, I looked for ways to make tem work for them, not against them. address, the name and address of his this bill stronger in support of women A vote against this bill is a vote in employer, and a list naming all the bill and children who depend on support favor of the current broken system. A collectors who will still be collecting payments, and I simply couldn’t find vote for this bill is a vote to protect from dad. any. family support payments in bank- This section helps mothers both dur- Even if a father does not earn wages, ruptcy. ing and after bankruptcy. then support enforcement agencies That is why I support this bill. The new notification process will have many tools to use to ensure that Mr. DORGAN. Mr. President, I know help a mother and the support enforce- the mother and her children are paid. A that the Senate is about to pass a ment agencies keep track of a father, support enforcement agency can inter- bankruptcy reform bill, and that this where he is working, and what other cept taxes and unemployment benefits, bill will be signed into law. And it is bills he is required to pay. revoke driver’s, professional and rec- with some regret that I say that I will Because of this monitoring, which reational licenses (like those used for not vote for it. would be put in place by the bank- fishing, hunting, and boating), deny I do believe that there have been ruptcy system under this bill, mothers passports, and institute criminal and cases of abuse of our bankruptcy sys- and collection agencies can more easily contempt actions. tem, and that some reform is needed. go to court and get that portion of a fa- That is why, even compared to any Nobody likes to hear of wealthy people ther’s wages that now really belongs to imaginary ‘‘powerful creditor’’ you who walk away from their debts be- them. Dad may complete his bank- might be able to conjure up, mothers cause they can game the system. ruptcy plan, but his obligations do not and children have real, tangible protec- That’s not fair to financial institu- tions, and perhaps more importantly, stop. tions and resources at their disposal to These new protections guarantee bring a first priority claim against a it’s not fair to Americans who pay that family support claims of women father’s wages after bankruptcy. their debts in full. I voted for a bankruptcy reform bill and children,will always receive ‘‘Num- Finally, let me conclude where I twice in the past, most recently in 2001. ber 1’’ priority—during and after bank- began: with the enthusiasm for this That bill passed in the Senate with sig- ruptcy. The process for obtaining a legislation that we have heard from the nificant bipartisan consensus, and I folks in the trenches. portion of a father’s wages—through a had hoped that it would be signed into Here is what the National Associa- wage attachment—gives priority to do- law. But the House of Representatives tion of Attorneys General has asserted: mestic support orders over orders held refused to compromise with the Sen- the bill ‘‘improve[s] the treatment of by bill collectors, including credit card ate, and ultimately the bill failed. companies. domestic support obligations’’ and This time around, I would have liked That money is taken out of his pay- when the current Code’s ‘‘obstacles are to have reached another bipartisan check before he even sees it. He can’t removed, as this legislation seeks to consensus. However, the bipartisan be forced by ‘‘powerful creditors’’ to accomplish, we believe that our State spirit seems to have broken down. choose between them and his alimony and local support offices will continue My colleagues on the Democratic or child support. Those payments are to be able to collect these monies effec- side offered a number of amendments automatic. Again, the picture of greedy tively, regardless of whether other that were reasonable, common-sense bill collectors rushing to the front of lower-priority creditors remain.’’ tweaks to the bill, to reflect changes in the line makes for dramatic story- As I mentioned before, the Associa- our country since the last time the telling. But it is only that—story- tion’s letter was personally signed by bankruptcy bill was considered. telling. the State Attorneys General from There have been hundreds of thou- The legislation builds on the existing twenty-seven States, including the— sands of National Guard and reserve Federal Child Support Enforcement State Attorneys General from troops called up because of the con- Program, that exists to help women of Vermont, Minnesota, Illinois, Massa- flicts in Afghanistan and Iraq. They all walks of life receive their support chusetts, California, North Carolina, have left behind their jobs, their busi- payments. By tying Federal dollars to Michigan, Montana, Maryland, Iowa, nesses, and their families. When they federal standards, current law requires Hawaii, and Washington. find themselves in bankruptcy, why state and local support enforcement The National District Attorneys As- not allow them some consideration? agencies to enforce national standards. sociation, with more than 7,000 local My colleague from Illinois, Senator A couple of the requirements under prosecutors in their membership, does DURBIN, offered an amendment that Federal family support law are: first, ‘‘not believe that after bankruptcy it would have done precisely that, but it that immediate wage withholding would be more difficult to collect sup- was voted down on a largely partisan should be included in all child support port simply because credit card debts vote. orders; and second, that the with- are not discharged. To the contrary, Or how about victims of identity holding of child support obligations be support collectors have vastly more ef- theft? In the last few years, identity given top priority over every other fective, and meaningful, collection theft has become a plague on law-abid- legal process under State law against remedies before a bankruptcy case is ing citizens. My colleague from Flor- the same wages. filed, or after the case is completed, ida, Senator NELSON, offered a most Therefore, after bankruptcy, when a than any other financial institution reasonable amendment, which simply mother and the bill collectors walk . . . It is under the current law, during said that if someone is forced into into court to make claims against the bankruptcy, that support collectors bankruptcy because of identity theft, father’s wages, the mother is again have the greatest difficulty because he should receive some consideration. ‘‘Number 1’’ in priority and those bill they are in competition with all other That amendment was also voted down collectors fall in line behind her. creditors for bankruptcy estate assets along partisan lines. In response to some of my colleagues and because their most effective collec- Or how about Americans who suf- concerns—concerns that I would cer- tions remedies have been stayed . . . fered major medical problems and were tainly share if I listened to some of the This legislation provides a major im- driven into bankruptcy? A very recent claims out there—I looked for ways to provement to the problems facing child Harvard Medical School study found make the system even tighter. support creditors in bankruptcy pro- that about half of all people that have I found out that the only way to do ceedings.’’ been driven to bankruptcy have suf- that was to require a wage attachment, I support the reform that the en- fered a major medical problem. Many whether the woman wanted one or not. forcement professionals call for, from of these people have lost their homes. Maybe she wants nothing to do with an New York City to California, from Min- So Senator KENNEDY offered an amend- abusive husband. Maybe she is afraid nesota to Vermont, from Massachu- ment that would have allowed such

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00061 Fmt 0624 Sfmt 0634 E:\CR\FM\A10MR6.070 S10PT1 S2466 CONGRESSIONAL RECORD — SENATE March 10, 2005 Americans to keep their home—not a right thing. That’s not what we should ates needless and unfair hoops for these mansion, mind you, but a modest be doing in the United States Senate. individuals to jump through and the home, while they try to get back on Our job is to make sure we are pro- rigid means test puts those in real need their feet. But this amendment also tecting middle-class Americans and of relief at a disadvantage. It imposes was shot down. small businesses who are the lifeblood new burdens on families already over- We have not heard good arguments of our economy, not hurting them. burdened by the debt they must shoul- for why these amendments should have While some of the reforms of the bill der. Certainly we all agree that those failed. The majority party have really are good steps it goes too far to favor who can afford to should pay their only had one argument: that they want credit card companies and corporations creditors back—that they should be re- to avoid displeasing the House of Rep- over working families. sponsible for their debt. Those debtors resentatives, and don’t dare modify the This bill creates such strict stand- who charge thousands of dollars on lux- Senate bill even with modest, reason- ards that many of our nation’s most ury goods, new cars and the like, only able amendments. vulnerable families are treated un- to then declare bankruptcy, should be Well, I am just not going to support fairly when they are forced to file held accountable. Many of us can re- a bill that turns its back on service bankruptcy because of the loss of a job, member a mother or father who taught members and veterans, or on hard- the high cost of health care or a di- us about debt, taught us the dangers of working people that just happen to vorce. This bill does nothing to address getting into debt and to be responsible have had a medical crisis, and have the problems these individuals are hav- for paying all our debts back. But we been driven into bankruptcy not be- ing, the problems that have driven need to be fair in how we calculate who cause they are gaming the system, but them to bankruptcy and it provides can pay. And we need to make sure because of circumstances beyond their virtually no discretion for courts deal- that the provisions are not so rigid control. ing with these bankruptcy claims. that they allow courts no discretion to I have supported bankruptcy reform One other point. This bankruptcy bill take into account the circumstances legislation in the past—but it was not was supposed to be about preventing that lead to the bankruptcy. cheating in the bankruptcy system. this bill and it was not this process. The legislation that the Senate con- This bill was rushed through Com- Well, I offered an amendment, along siders today is different from past mittee with the promise that amend- with Senator DURBIN, that would have versions that I have supported. There ments would be considered on the floor, dealt with a different kind of cheating: is obviously the removal of the Schu- that there would be debate and an op- the fraud, waste, and abuse that has mer amendment which held those who portunity to improve the bill. Yet, been rampant in many of the recon- block access to abortion clinics ac- none of the amendments were truly struction contracts in Iraq. My amend- countable for the court judgments that considered, most were opposed by Re- ment said, let’s appoint a bipartisan they have incurred. But it also gives publicans marching in lock step to de- special committee of the Senate to in- women, single parents, families and feat every amendment to the existing those living in poverty less oppor- vestigate these abuses. But that bill. In short, there was no real oppor- amendment did not even get a vote. tunity to improve the bill. What came tunity to overcome their hardships and In 1941, a Senator from Missouri by to the floor leaves the floor virtually get a fresh start. This bill punishes the name of Harry S Truman heard al- unchanged and truly unfair to many of people, assumes that all those filing for legations of wasteful and fraudulent our citizens who are forced to file bankruptcy have purposefully created spending in the preparations for World bankruptcy because of unforeseen cir- their debt problems, imposes a strict War II. He thought this waste and cumstances like job loss, divorce or standard that does not take into ac- fraud could undermine the war effort, medical costs. count the circumstances surrounding so he drove around the country, vis- Half of all families filing for bank- the bankruptcy and the real means of iting military bases. And when he came ruptcy have faced illness or high med- individuals to pay their debt back. back, he called for the creation of a ical costs. Medical costs, especially for That’s not fair, it’s not right, and it special committee. That committee, seniors, are one of the fastest growing makes life tougher on working fami- which came to be known as the Tru- causes of bankruptcy. These are not lies. I urge my colleagues to join me in man Committee, saved the U.S. govern- folks who use their credit cards to buy standing up for women, children and ment an estimated $15 billion—and fancy suits, designer wares or other working families by opposing this bill. that’s in 1940s dollars. luxury goods. They are paying for the Mr. REED. Mr. President, today I That was a case of a Democrat call- basic necessities of their lives with share my concern over S. 256, the ing for investigations of contracts han- their credit cards. They are putting Bankruptcy Abuse Prevention and Con- dled by a Democratic Administration. their food, clothing and medical bills sumer Protection Act of 2005, and urge But for Harry Truman, this wasn’t on the credit cards. Nearly 9 out of 10 my colleagues to vote against this about politics—it was about looking people file bankruptcy because of flawed legislation. This legislation pro- out for the U.S. taxpayer, and not health care problems, job loss or di- vides a misguided and uneven approach squandering resources that were meant vorce. These individuals don’t want to to combating bankruptcy abuse, espe- for the war effort. file bankruptcy—in fact, they have cially because it leaves so many causes We need a Truman Committee again, tried to avoid bankruptcy. That’s why of bankruptcy unaddressed. because the majority party is not call- they pay those medical bills with cred- Most provisions in this bill were ing for oversight hearings on these con- it cards when they simply can’t afford written years ago and do not target tracting abuses in Iraq. My amendment any other way. Or they skip going to abuses which have recently gained pub- would have created a bipartisan special the doctor all together because they lic attention. When this bill was origi- committee to do just that. But it did know have no means to pay. And what nally drafted, corporate fraud at Enron not even get a vote, because the major- happens—they get sicker, incur greater and elsewhere had not yet come to ity party rested on a technicality in costs for catastrophic care and that light. The executives at these corpora- Senate rules to deny a vote. sends them spiraling further into debt tions had not yet been caught enjoying Under these circumstances, I am, re- and forcing many into bankruptcy. huge personal gains at the expense of gretfully, not going to vote for the We ought to be doing something to shareholders and employees only to bankruptcy bill. help those individuals—not creating a later file for bankruptcy. This bill does Ms. MIKULSKI. Mr. President, today law that will make matters worse. The not fully address these types of bank- I rise to oppose S. 256, the Bankruptcy Senate should be on the side of those ruptcy abuses, and unfortunately ef- Reform Bill. This bill is unfair to the Americans who are facing hard times forts to close these loopholes failed. little guy—to families who are strug- and hard decisions. We should be ad- At the time this bill was drafted, gling to overcome medical bills, unem- dressing the lack of health care and companies were less likely to file for ployment, or divorce and find them- working to ensure that we are creating bankruptcy to shed health care and selves forced to declare bankruptcy. good, high paying jobs. pension obligations to their retirees. In Under the guise of reform it makes it I am opposing this version of the fact, the number of senior citizens in tougher on families who have done the Bankruptcy Reform Bill because it cre- bankruptcy tripled from 1992 to 2001,

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00062 Fmt 0624 Sfmt 0634 E:\CR\FM\A10MR6.045 S10PT1 March 10, 2005 CONGRESSIONAL RECORD — SENATE S2467 representing the largest increase of eight years. This measure could have lies who are driven into bankruptcy by any group. Today, nearly a million meant the difference to countless a medical problem probably think it Americans have had their pension Americans between being able to pay can never happen to them because they plans taken over by the Pension Ben- their bills and having to file for bank- have health insurance. But it can hap- efit Guarantee Corporation and their ruptcy. pen to anyone, and it does. benefits reduced; this is a substantial Indeed, according to a new Harvard Three-fourths of the people who file increase from when the bill was draft- Law School study, illness or high med- for bankruptcy because of medical ed. I am disappointed that this body ical costs cause half of personal bank- debts have health insurance when the not only voted against the Feingold ruptcies. Certainly this is sure to affect medical problem begins. amendment that would have helped el- the 45 million uninsured Americans, up But eventually their insurance runs derly Americans protect their houses, from 30 million in 1978. It also has a out or certain treatments are not cov- but also against the Rockefeller traumatic effect on those who do have ered. And the next thing they know, amendment to improve employees’ health insurance, one-third of whom they are facing financial ruin. claim for owed wages and benefits. The lost it while they were sick. Yet again, Bankruptcy also hits families that Rockefeller amendment would have I believe it was a mistake for this body have been torn apart by divorce. On also required companies that dropped to have killed an amendment to offer Sunday, the Washington Post pub- retiree health benefits to reimburse protections to patients with high med- lished a front-page article about this each affected retiree for 18 months of ical bills. bill. COBRA coverage upon reemerging from We also continue to see some banks The article described how a woman bankruptcy. cross the line into predatory lending who was left alone by her husband to The bill adds a means test, which practices. We must continue to find a raise three children had fallen behind supporters of the bill say will signifi- balance between providing access to on her credit card payments. Even cantly reduce abuse. The nonpartisan credit and capital and protecting indi- though she worked a second job and American Bankruptcy Institute found viduals from predatory lending. Unfor- paid $2,000 a month to the credit card that over 96 percent of families seeking tunately, as many of my colleagues companies, her debt continued to pile to go into chapter 7 bankruptcy would have pointed out, members of our up because of exorbitant late fees and be judged as unable to pay under the Armed Forces have become a top tar- interest rates. This woman was almost new means test. However, the means get of these unsavory practices. Sen- an indentured servant to her credit test would likely deter qualifying fami- ator DURBIN’s G.I. protection amend- card companies, struggling to pay off a lies from filing for bankruptcy due to ment would have extended protections debt that could never be satisfied. the addition of regulatory require- to military members who have been This is not an isolated incident. The ments and legal costs. forced into bankruptcy because of in- trend in the credit card industry today I am not opposed to sensible bank- come loss connected to their service. It was described by one expert as a ‘‘fee ruptcy law reform, but this is a reverse would also have protected them from feeding frenzy.’’ Robin Hood—squeeze the down-on- predatory ‘‘pay day’’ loans. Unfortu- Credit card companies collected al- their-luck middle class and impover- nately, this amendment was voted most $15 billion in penalty fees last ished Americans and give the proceeds down. year—nearly 10 times the $1.7 billion to the financial services industry. Con- For all of these reasons, I intend to they collected in 1996. trary to the claims of creditors, many vote against this flawed legislation, Penalty fees have become so impor- of these families simply cannot pay. and I urge my colleagues to do the tant to the bottom line that some About half of families going into bank- same. banks refer to customers who pay their ruptcy have had their utilities or Mr. LAUTENBERG. Mr. President, bills on time as ‘‘deadbeats,’’ because phone shut off, and 60 percent went we are now into our second week of de- they cannot be hit with exorbitant pen- without medical care. One in five fami- bate on this bill, but in fact, we have alties. lies that are bankrupt because of med- been talking about it for 8 years, since It has become commonplace for cred- ical bills went without food. Surveys it was originally introduced. it card companies to jack up the inter- have shown that many of them want to During that time, personal bank- est rates of customers who are slightly repay their bills but are unable to, and ruptcies in our Nation have surged, late with their payments—in some they must ultimately file for bank- while the profits of credit card compa- cases, by no more than one day. ruptcy to stop the harassment of col- nies have soared. Credit companies already charge late lection agents. We had an opportunity to pass a good fees of up to $39 for every late pay- This bill does nothing to prevent bill that would have curbed real abuses ment. Piling a higher interest rate on bankruptcy by targeting its causes. We of bankruptcy, while protecting con- top of that late fee is like double jeop- should work to ensure adequate worker sumers who fall on hard times because ardy, and that is not fair to consumers. compensation, lower the high cost of of a medical catastrophe, divorce or There are many reasons why a con- health care, improve financial edu- the loss of a job. Instead, the majority sumer might be a day or two late in cation, and stem predatory lending. rejected dozens of amendments that making a credit card payment. Maybe Our middle class is increasingly would have protected the homes of sen- a child got sick and had to see a doc- squeezed. Median family income has ior citizens, and required credit card tor, and his mom was too busy taking been relatively stagnant, rising by only companies to level with consumers him to the hospital to worry about a 12 percent in constant dollars from 1978 about how much they would really pay credit card payment. Maybe a car to 2003. This increase has not kept up in interest and penalties. broke down, and it had to be fixed so a with families’ sharply increasing costs. Now we are left with a bill that pun- worker could get to their job. Maybe Health care costs have risen by 327 per- ishes consumers and lines the pockets the mail was a little slow that week. cent in constant dollars from 1988 to of the credit card companies, a bill Whatever the reason, a consumer 2004. The real cost of tuition at a four that protects the mansions of multi- should not be unfairly and harshly pun- year public university increased by 646 millionaires who file for bankruptcy ished for one late payment. percent from 1978 to 2003. Child care protection but makes it easier for land- At the very least, credit card compa- costs have risen by 35 percent more lords to evict tenants from their homes nies should give consumers fair warn- than inflation from 1986 to 2003. if they are forced into bankruptcy, and, ing before hiking their interest rates. With less disposable income, families a bill that makes no distinction be- If there is a problem, the consumer are less able to make it through dif- tween a family struck by catastrophic should have a chance to correct it be- ficult financial times and can be dev- illness, and a spendthrift who maxes fore their rate can be increased. astated by a single unexpected event. out his credit cards on a shopping But the credit card companies are It saddens me that many of my col- spree. not interested in fairness. In fact, they leagues in the majority voted against I mentioned catastrophic illness be- actually hope customers will be late Senator KENNEDY’s amendment to raise cause half of all bankruptcies today are with a payment so they can be hit with the minimum wage for the first time in the result of medical debts. Most fami- penalty fees.

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00063 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.093 S10PT1 S2468 CONGRESSIONAL RECORD — SENATE March 10, 2005 To that end, they engage in ‘‘bait and families and those who are struggling that turn the tide against average switch’’ tactics to lure consumers with under the weight of soaring medical Americans. Last month, Republicans low rates, then automatically jack bills. tipped the scales of justice against those rates up the first time a payment I have heard from residents across working families by limiting their abil- is a day late. Washington State that the cost of med- ity to seek compensation for a death or One example of this is the Capital ical care is forcing them into bank- injury caused by a company’s neg- One Platinum MasterCard. ruptcy. In fact, a report last summer ligence. On Monday, Republicans re- Customers going to the Capital One by the Working for Health Coalition jected a proposal to raise the minimum Web site to apply for a credit card will found that half of Washington State wage. Taken together, these actions find the following ad, which touts ‘‘a bankruptcies were due to rising health will make life harder for working fami- great low rate’’—an ‘‘8.9 percent fixed care costs. Most of these families are lies and represent a dangerous trend APR.’’ working and more than half have that threatens average Americans. This ad is pretty prominent. As you health insurance, but the growing cost In the past, I have voted for bank- can see, the type is large and easy to of health care is so overwhelming it ruptcy reform legislation, but today read, and there is a nice picture. pushes them into bankruptcy. A na- families find themselves in a much dif- On an entirely separate Web page, tional study last month found that 61 ferent place financially because of the buried in pages of fine print, Capital percent of bankruptcy filers did not costs of healthcare and military serv- One discloses that: seek the medical care they needed. ice. Congress should not punish them All your APRs may increase to a default These families deserve help, but in- for things beyond their control with rate of up to 25.9% ANNUAL PERCENTAGE stead this bill punishes them for cir- this unbalanced, unfair bill. American RATE if you default under this Card Agree- cumstances beyond their control. families deserve reform, not retribu- ment because you fail to make a payment to This bill also fails to adequately pro- tion. us when due, you exceed your credit line or tect our military families, particularly Mr. LEVIN. Mr. President, I cannot your payment is returned for any reason. De- our Guard and Reserve members. These vote for this legislation, although I fault APRs will be effective . . . imme- patriotic families have had to struggle support bankruptcy reform. It is clear diately. with half their normal income during that some people abuse the bankruptcy In other words, despite advertising a long—and often extended—deploy- system. However, this bill would make ‘‘fixed’’ rate of 8.9 percent, Capital One ments. Many have seen their busi- it more difficult for individuals and can almost triple a customer’s rate to nesses collapse at home while they families who have suffered genuine a whopping 25.9 percent—just for send- have served overseas. I have met with medical and financial misfortune to ing one payment one day late. Washington State Guard and Reserve get a fresh start. Nearly half of all of The cost of this rate hike to a cus- families and have seen how they are those studied in a recent research ef- tomer with a balance of $5,000 would be struggling to meet the financial bur- fort by Harvard Law School said that as much as $880 in interest payments dens of long deployments. They deserve illness or medical bills drove them to over the following year. That is simply a lifeline, not more paperwork, legal bankruptcy and nine out of ten have too harsh of a penalty for sending one fees, and threats from collection agen- faced health problems, job loss, divorce payment one day late. cies. The Senate had an opportunity to or separation. A letter to the Chairman This is the dire situation in which protect our soldiers through Senator and ranking member of the Judiciary many consumers find themselves. Even DURBIN’s amendment, but that was re- Committee, signed by nearly a hundred though they make payments every jected for a Republican amendment bipartisan bankruptcy law professors month, and don’t charge any new pur- that falls far short. Our military fami- from law schools across the country, chases to their credit card, they fall lies deserve better. said, ‘‘The bill is deeply flawed, and deeper and deeper into debt. Eventu- If Republicans had been willing to will harm small business, the elderly, ally, seeing no other way out, some of make the bill less punitive toward or- and families with children.’’ these people declare bankruptcy. dinary Americans, they would have I have in the past supported reason- Many States have passed laws to pro- adopted a number of reasonable amend- able bankruptcy legislation. The legis- tect consumers from unscrupulous pen- ments in committee and on the Senate lation which is before the Senate today alties and rate increases. Unfortu- floor, but they refused. For example, could have been greatly improved by a nately, these laws cannot be enforced, Republicans blocked an amendment number of reasonable Democratic as courts have ruled that the banks are that would have protected workers and amendments which have been offered bound by the laws of the States where retirees if their company files for over the last several days. However, they are located, not where their cus- bankruptcy. Republicans also voted the Republican majority has largely, tomers reside. down amendments to ensure the elder- on a party-line basis, rejected all As a result, credit card companies ly don’t lose their homes and to dis- amendments out of hand. have flocked to States with weak con- courage predatory lending. And they I am disappointed that we did not sumer protections, creating a ‘‘race to even failed to protect people who have add some reasonable flexibility meas- the bottom.’’ had their identities stolen by criminals ures to the ‘‘means test.’’ The purpose With this bill, we had an opportunity who then run up huge credit card bills. of the means test is to prevent con- to put a stop to that, and end the un- These are all examples of how Repub- sumers who can afford to repay some of scrupulous gouging of consumers. By licans are protecting corporate inter- their debts, from abusing the system giving consumers a chance to correct ests at the expense of vulnerable indi- by filing for chapter 7 bankruptcy. It problems before they were hit with viduals. makes sense to require those who are higher interest rates, we could have This bankruptcy bill also stacks the able to repay their debts to do so. How- prevented many bankruptcies. Unfortu- deck against women and children. For ever, there are some situations that nately, we have squandered that oppor- example, this bill will make it harder warrant an exception to the means tunity. for single mothers to collect the past- test. For example, the Senate defeated This bill does nothing to address the due child support they and their chil- an amendment that would have ex- roots of the bankruptcy problem in our dren are owed. empted members of the armed services, country today. And it does nothing to I am also disappointed that the Sen- veterans, and spouses of service mem- help consumers. For that reason, I ate rejected the Schumer amendment, bers who die while in military service must vote against S. 256. which would have assured that those from application of the ‘‘means test’’ Mrs. MURRAY. Mr. President, today who commit violent crimes at repro- provisions of the bill. This would have I voted against a bankruptcy bill that ductive-health facilities against helped them if their family or their puts credit card companies and politics women and doctors do not escape pay- business goes into bankruptcy. That ahead of ordinary Americans. Rather ing their debts and fines by declaring amendment was defeated. Further, an than providing balanced reform, this bankruptcy. amendment offered by Senator KEN- bill punishes those who have fallen on Looking at the big picture, this bill NEDY that would have exempted from hard times—particularly our military fits a pattern of Republican proposals the means test debtors whose severe

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00064 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.094 S10PT1 March 10, 2005 CONGRESSIONAL RECORD — SENATE S2469 medical expenses have caused the fi- the ability to repay their debts don’t low introductory rates. It requires nancial hardship was also defeated. do so, and the rest of us are left hold- credit card companies to provide key Senator CORZINE also offered an ing the bag. information about how much money amendment that would have exempted What we have tried to do with this people owe and how long it will take to economically distressed caregivers bill is inject some fairness into the sys- payoff their credit card debt by only from the means test, but that amend- tem, whereby people who have assets making a minimum payment. The bill ment was also defeated by a largely and the ability to repay back their requires lenders to prominently dis- party line vote. The Republican major- debts go into a chapter 13 repayment close when late fees will be imposed, ity even rejected Senator NELSON’s plan, and people who do not have any the date on which introductory or teas- common sense amendment that would means and no ability to repay go into er rates will expire, and what the per- have exempted victims of identity chapter 7. We’ve kept the safety net of manent rate will be after that time. theft from the means test. full chapter 7 bankruptcy discharge for The bill also prohibits lenders from Further, the Senate defeated amend- those who truly need it, and channeled canceling an account because the con- ments that would have protected the others that can pay their creditors into sumer pays the balance in full each homes of our elderly and people forced a repayment plan. month to avoid finance charges. into bankruptcy after a medical crisis. This is done through a means test, The bill also provides that consumers I am also disappointed that the Sen- which is fair and flexible enough to will be given a toll-free number to call ate defeated several amendments that take into account all the unique cir- where they can get information about would have closed loopholes used by cumstances a debtor and his family how long it will take to payoff their wealthy individuals seeking bank- face. The means test takes into ac- own credit card balances if they only ruptcy protection. count all reasonable and necessary ex- make minimum payments on their bal- The Senate had an opportunity to penses for a debtor and his family. We ance. This will educate consumers close an increasingly popular loophole provide for a court to consider ‘‘special about their financial situations. In ad- where the very wealthy shield millions circumstances’’, so that a debtor can dition, the bill allows for more judicial of dollars before declaring bankruptcy show that he doesn’t have the ability oversight of reaffirmation agreements, by setting up so-called asset protection to repay, and should stay in chapter 7. to protect consumers from being pres- trusts. Senator SCHUMER proposed an The bill excludes from the means test sured into onerous agreements. amendment to put an end to this abuse poor people, those individuals who are The bankruptcy bill also includes a of the tax system by limiting the use of below the median income. So if individ- debtor’s bill of rights to prevent bank- these trusts to shield assets only up to uals can pay and they really don’t have ruptcy mills from preying upon those $125,000. The amendment was defeated the ability to pay, they will continue who are uninformed of their rights. 39 to 56. to have their debts fully discharged in The bill provides for penalties on credi- The Republicans also rejected an chapter 7 bankruptcy, while those who tors who refuse to renegotiate reason- amendment offered by Senator DURBIN do have assets cannot hide them from able payment schedules outside of to curtail the abusive practices of ex- their creditors and escape repayment. bankruptcy. The bill provides for pen- ecutives at companies like Enron and Let me mention a couple of things alties on creditors who fail to properly WorldCom who received millions of this bill does not do. This bill doesn’t credit plan payments in bankruptcy. dollars in compensation shortly before put the credit card companies first or The bill strengthens enforcement and the companies filed for bankruptcy leaves hard working families out to penalties against abusive creditors for protection. The chamber also defeated dry, as some of the bill’s detractors predatory debt collection practices. Fi- an amendment proposed by Senator have claimed. In fact, the bill helps nally, the bill contains credit coun- AKAKA that would have provided credit women and children and improves their seling programs to help consumers card users with information to assist situation when someone files for bank- avoid the cycle of indebtedness. them in making more informed choices ruptcy because it provides new prior- So with the bankruptcy bill, we’ve about their credit card use and repay- ities and tools so that child support tried to close loopholes in the system ment. This amendment would have and alimony will be collected before and eliminate abuses. We’ve created helped consumers understand the con- other creditors. We move child support new consumer protections. We’ve made sequences of their financial decisions, up in priority, up to number one from chapter 12 permanent. We’ve made sure such as making only minimum pay- number seven in line, and that means that financial markets are not subject ments, so that they can avoid the kind that they will be paid before a lot of to risk. Although the bill doesn’t con- of financial pitfalls that lead to bank- other creditors, including the credit tain everything I would have liked to ruptcy. Sadly, this amendment was card companies. The bill makes stay- include, it is a good start to putting an also rejected. ing current on child support a condi- end to the abuses. The Schumer amendment, which in tion of discharge. We provide that debt It has been a long haul, but I think the past has been strongly supported discharge in bankruptcy is made condi- we are finally seeing this bill through on a bipartisan basis by the Senate, tional upon full payment of past due to the end. And there are many people was stripped from the bill this year. child support and alimony. that I’d like to thank because they’ve The amendment, which provides that Domestic support obligations are been instrumental in getting us to this debts arising from violence and threats automatically non-dischargeable, with- point. I’ve been quite busy lately as of violence could not be discharged in out the costs of litigation. The bill also chairman of the Finance Committee, bankruptcy proceedings, should have makes payment of child support ar- working on social security, medicare been adopted by the Senate. rears a condition of plan confirmation. and tax reform. I take that responsi- We do need bankruptcy reform, and I The bill provides better notice and bility very seriously. Because of Fi- wish that the Senate had taken this more information to facilitate child nance Committee markup and hearing opportunity to pass equitable reform. support collection, and tracking down conflicts, I have had to rely on my col- This bill does not achieve that goal and deadbeat parents. Further, the bill pro- leagues to manage this bill on the therefore I cannot support it. tects the name of a debtor’s minor chil- floor. But the job has been in very good Mr. GRASSLEY. Mr. President, I rise dren from public disclosure in a bank- hands. to urge my colleagues to vote for final ruptcy case. In’ particular, I appreciate Senator passage of the bankruptcy reform bill. This bill also doesn’t help credit card HATCH and the diligence that he has I have been working on this piece of companies and other lenders take ad- shown towards this bill. On more than legislation for a long time, and I am vantage of honest consumers, as some one occasion, he made sure that the pleased to see that we are nearing the have alleged. In fact, the bankruptcy bankruptcy bill made it through the end. This bipartisan bill has been ma- bill contains some new real and signifi- committee process so that we could ligned by many, and I want to set the cant consumer protections. The bill re- have it considered on the floor. He has record straight. What we are trying to quires credit card companies to make stepped up to the plate many a time to do is fix a bankruptcy system that has new disclosures that benefit customers manage the bill, work on compromises, gone awry, where individuals who have and prohibits deceptive advertising of and keep the engines running. Senator

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00065 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.095 S10PT1 S2470 CONGRESSIONAL RECORD — SENATE March 10, 2005 HATCH is a good friend and colleague, tection Act of 2005. This bill has been prise fees and unexpected rate fluctua- and I respect his perseverance as well under consideration in Congress since tion. It also contains a ‘debtor’s bill of as his legal expertise. I’m glad to see before I was elected to the Senate. rights’ requiring that bankruptcy at- that all his hard work during the years Since my arrival, I have been a pro- torneys and petition preparers disclose has finally come to fruition. Senator ponent of the goals it strives to attain their services and fees for those serv- HATCH has been a true stalwart to ensure that abuse of America’s ices to consumers. through the years, and I thank him for bankruptcy laws is curtailed and that It is important to note that no Amer- his dedication to bankruptcy reform. I Americans who find themselves in un- ican will be denied access to the bank- also want to thank his able staff, Perry anticipated financial duress and have ruptcy system under these reforms. Barber, Kevin O’Scanlin and Bruce legitimate reasons to seek bankruptcy However, those trying to shield their Artim for all their help on this bill. protections will have the opportunity assets while abandoning their financial I especially want to thank Senator to do so. responsibilities will find it much more SESSIONS for being a tireless champion The goal of the bill is to prevent cer- difficult to abuse the system and leave of bankruptcy reform here in the Sen- tain abuses of the bankruptcy system. their debts for other Americans to ate. I have relied on his intellect and It includes more than five hundred cover through higher interest rates and legal prowess for the last eight years pages of new and reformed law, but key fees. that we’ve been working on this bill. I provisions include the following. As I mentioned earlier, there were believe that Senator SESSIONS has First and foremost, the bill will curb many amendments to this bill offered brought a unique perspective to the abuse of the bankruptcy system by im- for consideration. As I considered each bankruptcy bill with his dedication to plementing a means test to ensure that of these amendments, I measured the eliminating abuses in the bankruptcy those who can afford to repay some intended impact of each amendment on process. He is a firm believer that if portion of their unsecured debts are re- the bill. In voting against many of the you borrow money, you have to pay it quired to do so. Bankruptcy petitioners amendments I did so knowing that the back. So I truly am thankful for all the with relatively high incomes could be groups of individuals singled out by the work that Senator SESSIONS has done, required to file under chapter 13 in- amendments, such as veterans, individ- especially in managing this bill on the stead of chapter 7, and repay some of uals with chronic health problems, or floor. He is one sharp lawyer, and I am their debt out of future income. The military personnel, were already ade- honored to have him as my friend. I means test takes into account the peti- quately protected in the underlying also want to thank his staff for their tioner’s income, debt burden, and al- bill. excellent work, in particular his tal- lowable living expenses, which can I carefully considered each amend- ented Chief Counsel William Smith, vary significantly according to the ment offered to the bill on a case by Cindy Hayden, Amy Blankenship and debtor’s place of residence and par- case basis to determine if the amend- Wendy Fleming. ticular circumstances. Filers who can- ment improved the bill. Because I be- I want to thank Chairman SPECTER not afford to repay at least $6,000 will lieve the bill already covered most of for placing this bill at the top of the be given unfettered access to chapter 7 the issues presented in the amend- agenda in the Judiciary Committee, liquidation proceedings. ments, it was my determination than and for moving it so quickly and ably The bill has a safeguard that will many of the amendments did not im- in this Congress. His staff, Harold Kim, allow judges to consider extenuating prove the bill and thus, I voted against Mike O’Neill, Ivy Johnson, Hannibal circumstances in each bankruptcy them. Kemmerer, Tim Strachan, Brendan case. After determining this means test Again, this bill includes a safeguard Dunn and Ryan Triplette have been ex- calculation, the judge can then take for judges to consider ‘‘special cir- tremely helpful in getting the job done. any ‘‘special circumstances’’ into con- cumstances’’ like medical bills, deploy- I want to thank Majority Leader FRIST sideration before making a decision to ment to war and other circumstances. and his staff, Allen Hicks, Eric Ueland, shift the debtor into chapter 13. This In addition to this safeguard, I sup- Sharon Soderstrom and Dave Schiappa, will allow judges to consider cases ported an amendment to the bill that as well as Senator MCCONNELL and his where catastrophic illnesses or other clarified the circumstances that might staff, John Abegg, Kyle Simmons, unexpected financial calamities that be considered by a judge. That lan- Malloy McDaniel and Brian Lewis. have impacted a family or individual guage provided specific examples a I would be remiss if I didn’t thank to the point where their debts are too judge might consider including ‘‘a seri- our friends on the House side, and in heavy a load to carry. This provision ous medical condition or a call to order particular Chairman SENSENBRENNER made many of the amendments consid- to active duty in the armed forces.’’ I and his staff, Phil Kiko, Susan Jensen ered on this bill redundant. voted for this amendment because it and Ray Smietanka. Chairman SENSEN- The bill implements an important provided an improvement, in the form BRENNER has really been a leader on safeguard for family farmers by mak- of clarity on special circumstances. bankruptcy reform, and a true driving ing permanent the extension of chapter It is important that creditors, retail- force behind this legislation. I look for- 12 bankruptcy rules. Chapter 12 has ex- ers, and small businesses who in good ward to additional collaborations with pired every year, necessitating the faith provide people with credit do not him. need for an extension. Last year, Sen- bare the brunt of the cost when debtors In addition, I want to thank Senator ator GRASSLEY and I worked in a bipar- find themselves unable to pay. It is CARPER, Senator NELSON, Senator tisan fashion to secure the chapter 12 also critical that we protect consumers BIDEN and Senator JOHNSON. This is extension. The bill also bumps the ex- who have found themselves in unantici- truly a bipartisan bill, and it couldn’t emption level for family farmers from pated situations where their inability have gotten done without their help. $1.5 million to nearly $3.24 million, to meet their debts is beyond their con- Finally, I thank my own staff, my Fi- which will be adjusted periodically for trol. And it is important to safeguard nance Committee Chief of Staff and inflation. consumers against predatory lending Legislative Director Kolan Davis and The bill includes an important provi- practices. my Judiciary Committee Chief Counsel sion to safeguard our children. It con- I worked hard to find the correct bal- Rita Lari Jochum, for their hard work tains provisions that strengthen the ance among these competing goals on on the bill. I also want to thank my ability of women and children to col- this bill and feel that the Senate did a former staffer John McMickle, for his lect child support and marital dissolu- good job in accomplishing that over- expertise and advice on this important tion obligations. This provision will en- riding principal. I am pleased to sup- piece of legislation. Good staff is hard able some families to continue to pro- port this bill because I believe it pro- to find, and I am proud to say that my vide for the needs of their children. vides needed improvements to our staff is probably the best in town. Consumers also benefit from protec- bankruptcy protection laws that will Mr. NELSON of Nebraska. Mr. Presi- tion measures in this bill. By requiring benefit every American. dent, today, I am pleased to see the new minimum payment and introduc- Mr. AKAKA. Mr. President, I am in passage of S. 256, the Bankruptcy tory rate disclosures for credit cards, opposition to the bankruptcy legisla- Abuse Prevention and Consumer Pro- consumers will be protected from sur- tion.

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00066 Fmt 0624 Sfmt 0634 E:\CR\FM\A10MR6.076 S10PT1 March 10, 2005 CONGRESSIONAL RECORD — SENATE S2471 The financial services industry has pay to eliminate their outstanding bal- sets are sold and the proceeds are di- become increasingly complex with new ance within 36 months. Finally, my vided among creditors, and chapter 13, technology, products, and services. amendment would have required that under which debtors who have a reg- However, this dated legislation has not creditors establish a toll-free number ular income develop a repayment plan had significant changes made to it so that consumers can access trust- for a portion of the debt. In many since the 107th Congress. worthy credit counselors. Unfortu- cases, debtors filing under chapter 13 Predatory lending has surged since nately, this amendment was defeated. repay a greater proportion of their debt the initial development of this bank- I appreciate the willingness of the than those filing under chapter 7. ruptcy legislation. In the early 1990s, Chairman of the Banking Committee, The Bankruptcy Reform bill creates there were fewer than 200 payday lend- Senator SHELBY, to continue to work a ‘‘means test’’ that will make it more ers nationwide. Now, there are more with me on this very important con- difficult for individuals earning above than 20,000. Payday lenders made 100 sumer awareness issue. the median income level to erase debts million loans in 2003. These loans rep- I also proposed an amendment that under chapter 7, forcing them to file resent more than $40 billion. Most would have required credit card compa- under chapter 13, which would require alarmingly, according to the Consumer nies to make concessions to individuals them to repay a greater portion of Federation of America, interest rates in debt management plans so that cred- their debt. I believe that those who can on these loans begin at 390 percent. it counseling could be a viable alter- afford to repay a greater portion of Yet, Congress has failed to act to pre- native to bankruptcy. Unfortunately, their debts during the bankruptcy vent the exploitation of working fami- that amendment was also defeated. process should be required to do so. lies that are short on cash due to unex- I fear that this bill will end up sig- A narrowly targeted reform bill de- pected medical expenses or other nificantly harming families that have signed to reduce abuse of the system needs. I am afraid that the passage of suffered financially due to illnesses, would provide bankruptcy judges with this legislation will further reduce the the loss of a job, or the death of a loved the discretion to dismiss or convert a risk for predatory lenders, and as a re- one. I supported other reasonable case to chapter 7, but would not man- sult, they will aggressively market amendments intended to protect low- date it. It would have provided credi- their products even more. We must act income families, the elderly, and other tors the opportunity to ask for a dis- to protect consumers from these un- vulnerable populations from this over- missal or conversion without putting scrupulous lenders. I remain com- ly restrictive legislation. However, the burden on every filer to prove that mitted to restricting all forms of pred- these amendments also failed. he or she deserves the protections of atory lending, including payday loans, Instead of making improvements to chapter 7. and to providing consumers with alter- the legislation, an old, outdated bill However, the ‘‘means test’’ included native affordable short-term loans. has been approved by the Senate. It is in the bill is inflexible, and it provides Access to credit has increased signifi- low-income working families that will no room for a bankruptcy judge to de- cantly and household debt has sky- be hardest hit by this anti-consumer termine whether the circumstances rocketed as a result. Revolving debt, legislation. After passage of this legis- that led to the debtor’s financial situa- mostly compromised of credit card lation, we will need to take additional tion warrant treatment under chapter 7. A parent with a sick child bank- debt, has risen from $54 billion in Janu- steps to prevent further exploitation of rupted by medical bills is treated the ary 1980 to more than $780 billion in consumers by unscrupulous lenders and same way as a reckless spender who November 2004. A U.S. Public Interest to improve relevant and useful infor- ran up debt on luxury items. That’s Research Group and Consumer Federa- mation about credit to consumers. I tion of America analysis of Federal Re- simply not right. will continue to fight to protect work- Again and again, Senators offered serve data indicates that the average ing families from predatory lenders amendments that sought to increase household with debt carries approxi- and overly aggressive creditors. the flexibility of the ‘‘means test’’ and mately $10,000 to $12,000 in total revolv- Mr. KERRY. Mr. President, I strong- offered other changes to improve many ing debt. This legislation tightens the ly believe that reform of our bank- aspects of this legislation. Unfortu- grip that creditors have on consumers, ruptcy laws is necessary. Too often, nately, in almost every case, these but it fails to restrict the aggressive bankruptcy is used as an economic tool amendments were defeated. marketing practices of credit card to avoid responsibility for unsound de- The Senate voted against giving any companies. cisions and reckless spending. relief to families forced into bank- In addition, this bankruptcy bill fails Last year Americans paid interest on ruptcy by devastating health care to provide adequate, timely, and mean- about $690 billion in revolving debt. costs. One million men and women ingful disclosures for consumers. As we Most of that debt is credit card debt. each year turn to bankruptcy protec- make it more difficult for consumers According to a Consumer Federation of tions in the aftermath of a serious to discharge their debts in bankruptcy, America study, the average household medical problem—and three-quarters we have a responsibility to provide ad- carries between $10,000 and $12,000 in of them have health insurance. Senator ditional information so that consumers credit card debt and has nine credit KENNEDY offered amendments to ex- can make better informed decisions. S. cards. Consumers pay an average inter- empt from the means test debtors who 256 includes a requirement that credit est rate of 12.4 percent or approxi- have incurred large medical expenses card issuers provide a generic warning mately $85 billion annually in credit and other reasonable considerations. about the consequences of only making card debt interest. Both his amendments were defeated. the minimum payment. This provision Let me point out that during both The Senate voted against relief for fails to provide the detailed informa- the 105th and 106th Congress, I sup- children caught up in their parents’ tion for consumers on their billing ported legislation to reform bank- bankruptcy. And it voted against relief statements that my amendment would ruptcy laws and end the abuse of the to help military families who are have provided. My amendment would system. struggling with the burdens in Iraq and have given consumers the detailed per- However, I am unable to support the around the world. sonalized information necessary for Bankruptcy Reform Act before us The Senate defeated critical con- them to make better informed choices today because I believe it is unfair and sumer protections that would simply about their credit card use and repay- unbalanced, does far too little to help give consumers more information and ment. It would have required compa- consumers and curb creditor abuses, might help end some of the abusive and nies to inform consumers of how many and includes an inflexible ‘‘means test’’ deceptive practices of some credit card years and months it would take to that will harm many debtors who are companies. The industry pushes out an repay their entire balance and the genuinely in need of the protections incredible 5 billion solicitations every total cost in interest and principal, if and the ‘‘fresh start’’ that bankruptcy year. Under current regulations compa- the consumer makes only the min- is intended to provide. nies can change interest rates at al- imum payment. The amendment would The Bankruptcy Code currently of- most any time. They market aggres- also have required consumers to be pro- fers two alternatives for individuals: sively and, I believe for some, decep- vided with the amount they need to chapter 7, under which a debtor’s as- tively. Only last year, the Office of the

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00067 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.074 S10PT1 S2472 CONGRESSIONAL RECORD — SENATE March 10, 2005 Comptroller of the Currency issued an make it easier for creditors to force As we approached this bill, our goal advisory letter warning national banks liquidations of small business during was not to punish those who legiti- that engaged in deceptive credit card the bankruptcy process. Unfortunately, mately need the fresh start that bank- marketing and account management that amendment was not adopted. ruptcy offers. However, our goal was to practices that they would face compli- I am pleased that an amendment disallow people from filing bankruptcy ance and reputation risks. sponsored by Senator COLLINS and my- simply for the sake of taking advan- Remarkably the bill does protect the self which will extend chapter 12 bank- tage of a financial opportunity pro- wealthiest Americans by allowing ruptcy protections to our family fisher- vided by the government. People who them to continue hiding their assets men, has been included in the bill. The can afford to pay all or a part of their from creditors during bankruptcy and small, family-owned fishing businesses debts over a limited period of time never making good on their debt. Sen- are in serious trouble. We are making should not get off Scot free. ator SCHUMER offered an amendment to progress in rebuilding stocks; however, Let me just for a moment, talk about eliminate and end this abuse, and it the cost of this progress has been car- the concept of bankruptcy. The term was defeated. And it does not stop cor- ried by fishermen working Georges derived from the medieval Italian porate executives from looting their Bank and the Gulf of Maine. The Col- phrase ‘‘broken bench.’’ Merchants companies and leaving workers, stock- lins-Kerry amendment will help ensure would sell their wares in the market- holders, and creditors holding the bag. that fishermen have the flexibility place from benches. If the merchant How can we target middle-class fami- under chapter 12 of the Bankruptcy ever reached a point where he could lies and ignore the wealthiest Ameri- Code to wait out the rebuilding of our not pay his debts, his creditors would cans as they hide their assets? commercial fish stocks without back seize all of his wares and divide it This bill is needlessly punitive to tracking on our conservation gains to among themselves. They did not stop families. It is as if we have gone out of date. It will help preserve the rich New with the seizing of wares, however. The our way to harm and not help them. England fishing heritage in Massachu- creditors would break the merchants’ For example, when a debtor receives a setts. bench, to bankrupt the merchant from bankruptcy discharge, the legislation Despite some provisions, which I do reopening. sets up new classes of nondischargeable believe improve the system, overall Our goal under this legislation was debt that will compete for payment this bill does not provide bankruptcy not and we did not ‘‘break the bench.’’ along with child and family support. reform. Inexcusably, this bill helps Instead of trying to prevent merchants Senator DODD offered an amendment to creditors without helping consumers. or individuals from having a second op- enable parents to better meet the needs It will let the very rich continue to portunity, we accomplished just the of their children during bankruptcy. hide money in homes and trusts. It opposite. People who need a fresh start Unfortunately, it was defeated. The gives no relief to families hit by med- under this bill will get one. The people credit card companies beat the kids on ical bills or other financial hardship. It who can pay some of their debts back that vote. even puts credit card companies ahead will have to do that. Let me just high- This bill is not only detrimental to of children when debt is allocated to light a few of the benefits in this bill. consumers, but it also hurts our small creditors. I will vote no. First, S. 256 requires that individuals businesses. This effort to reform our Mr. SESSIONS. Mr. President, today, receive credit counseling prior to filing bankruptcy laws will make it more dif- for me, marks the culmination of 8 for bankruptcy. This counseling will ficult for entrepreneurs to start a long years of hard work, and I am glad help an individual decide if bankruptcy small business and imposes additional we have finally reached this point, is the appropriate mechanism to re- regulations and reporting requirements where we will not only pass this bill, move debt and will help the individual on small businesses who file for bank- but the House will do so as well and the understand what filing bankruptcy ac- ruptcy. President will sign it into law. I believe tually means. In many instances, the I believe we must do everything pos- that we have eliminated some abuses deceptive and fraudulent advertising sible to ensure the viability of small with this bill. I wish we could have ac- practices of bankruptcy mills lure con- businesses and to assist in fostering en- complished more, but we could not let sumers into bankruptcy unnecessarily. trepreneurship in our economy. Regu- the perfect be the enemy of the good. Debtors should know that there are latory and procedural burdens should Let me say to my colleagues, that many ways to get back on their feet fi- be lowered for small business wherever there are some issues like homestead nancially—such as entering into vol- possible. However, the bill fails to meet and asset trusts that will come back, untary repayment arrangements. this challenge. Instead, this legislation and I look forward to working on To curb the practice of preying upon promotes additional red tape and a those, but make not mistake about it, debtors, S. 256 establishes the Debtor’s government bureaucracy. It imposes this is a good bill and I am excited to Bill of Rights. The Bill of Rights re- new technical and burdensome report- see it pass. quires that debt relief organizations ing requirements that are more strin- The policy questions we have been disclose the nature of the services they gent on small businesses that file for addressing are these: offer, explain the alternatives to filing bankruptcy than they are on big busi- (1) whether bankruptcy is a nec- bankruptcy, disclose the rights and ob- ness. Further, the bill will provide essary and permitted way to recover ligations of debtors who file for bank- creditors with greatly enhanced powers from overburdening debt; and ruptcy, and explain the consequences to force small businesses to liquidate (2) when is bankruptcy being abused of filing for bankruptcy. their assets. and used as an escape valve for individ- Second, S. 256 establishes a means Any big business would have dif- uals capable of repaying some, if not test to help determine whether people ficulty complying with these new bur- all, of their debt. are capable of paying back a meaning- densome reporting requirements. But The goal of this bill has never been to ful portion of their debts. This test think of the difficulties an entre- create additional burdens for those who might help the debtor avoid a Chapter preneur or a mom-and-pop grocery have over-extended themselves for one 7 filing, where creditors will liquidate store will have in complying with this reason or another, but to help them the individuals assets and where the dizzying array of new and complex re- achieve financial responsibility after debtor will have a very hard time get- quirements. These small businesses are bankruptcy, so that they can avoid ting creditors to extend credit to them the most likely to need, but least like- similar setbacks in the future. in the future. If a debtor files under ly to be able to afford, the assistance of It is clear to me that when you have Chapter 13 and learns how to manage a lawyer or an accountant to comply statements from debtors that they are money under a structured repayment with these new requirements. I cospon- using bankruptcy to ‘‘[take] advantage plan that requires some discipline, the sored an amendment offered by Sen- of one of the opportunities the Govern- debtor learns financial responsibility ator FEINGOLD to strike many of the ment offers,’’ that the responsibility and should be able to avoid future fi- small business provisions in the bill be- for slowing down the 1.6 millions con- nancial turmoil. Chapter 13 bank- cause they would increase reporting re- sumer bankruptcy filings per year lies ruptcies allow debtors to keep their as- quirements on small businesses and with Congress. sets and pay back a portion of their

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00068 Fmt 0624 Sfmt 0634 E:\CR\FM\G10MR6.076 S10PT1 March 10, 2005 CONGRESSIONAL RECORD — SENATE S2473 debts over a 5 year period. In exchange, Additionally, I appreciate the work hopeful that it will pass with a strong the remaining portions of their debt of Lloyd Peeples, a former counsel of bipartisan vote. are discharged and the debtor gets a mine who has clerked for a bankruptcy Bankruptcy reform has long been in fresh start. judge and now serves as an AUSA in the works. Similar bills have passed Third, S. 256 creates new protections the Northern District of Alabama. He the Senate in the 105th, the 106th, and for consumers, especially in the area of provided invaluable assistance on this 107th Congresses. Today, in the 109th credit cards. We require credit card bill. we will finally deliver a package that companies to disclose the dangers of Sean Costello, a former counsel of restores fairness and personal responsi- making only a minimum payment and mine who now works for the Office of bility to the bankruptcy system. we prohibit deceptive practices like ad- Justice Programs at the Department of The House has agreed to take up the vertising low introductory rates—rates Justice, provided outstanding work to legislation, pass it quickly, and send it used to bait and switch the credit card help make this bill a reality. to the President for his signature. holder. We also require that a toll-free Brad Harris, a former counsel of mine I thank my colleagues for their hard number be provided to consumers, who now works for the Burr and work and leadership. In particular, I where they can obtain information on Forman firm in Birmingham, never would like to thank: Senator MCCON- how long it will take to payoff their failed in working long hours and pro- NELL, a good friend and counselor, who credit card balances. viding key assistance in seeing this bill has made sure that we have the votes The consumer benefits of this bill are through. on every amendment and who has enormous. Instead of breaking the And finally, Brent Herrin, my former helped secure final passage; Senator bench, this bill promotes financial re- counsel who worked hard on cram GRASSLEY, the bill’s lead sponsor, who sponsibility. The bill vastly improves down and other issues, did outstanding has been a tireless advocate for bank- the current situation in bankruptcy for work. Brent practices tax law for the ruptcy reform for nearly a decade; certain categories of individuals. For Deloitte Touche firm in Atlanta. Chairman SPECTER, who skillfully led example, it provides special benefits to For eight years, these lawyers have the bill through Committee; Senator women and children, through child sup- all worked on this legislation. I know HATCH, who, as a floor manager, has led port and alimony, and provides parents they are happy to see it come to a con- on the substance of each and every the ability to deduct expenses such as clusion. I am too. amendment; and Senator SESSIONS, school tuition. Make no mistake about In the past I have thanked the former who has led debate on the floor again it, while the bill provides some in- staffers from other offices that have and again, and who lent his expertise creased protection for unsecured credi- worked on this bill, I will not name to explain the finer points of the law. Like class action, the bankruptcy re- tors, it provides more protection for them individually today, save John form bill is another example of bipar- consumers. Logically, there is abso- McMickle who served Senator GRASS- tisan cooperation. Nearly every vote on lutely no reason to oppose it. LEY and played a major role in helping every amendment has been bipartisan. Mr. President, over time, many peo- to craft this bill. John believes in the Our work has been a great example of ple have worked on this bill, and I underlying principles in this bill and I how thoughtful, bipartisan negotiation would just like to take a moment to appreciate his work. can deliver meaningful solutions for express my appreciation for their work. I also want to thank Rita Lari the American people. First, it has been an honor to work RASSLEY Jochum, Senator G ’s current America has always been a place for closely with Senators GRASSLEY and Chief Counsel. I have seen very few second chances. As Americans, we HATCH to make this legislation a re- staffers with her drive and dedication value innovation, reinvention and risk ality. I appreciate both of them so and she is to be commended for her ef- taking. It’s part of our national DNA, much and I believe they both have done forts on this bill. Her good demeanor part of why we are so spectacularly yeomen’s work on this bill. I thank has been a source of calm in the storm. successful. It’s also why America has Senator FRIST for making this bill one I appreciate the work Perry Barber, long supported generous bankruptcy of his top priorities and I appreciate Brendan Dunn, Kevin O’Scannlain, and law. We recognize that sometimes peo- the leadership of Senator MCCONNELL. Bruce Artim of Senator HATCH’s staff, ple get in over their head, or are hit I think it is appropriate that we take and the work of Harold Kim, Ivy John- with an unexpected set back, and they just a moment to express appreciation son, Tim Strachman, Mike O’Neill, need a fresh start, a second chance. to some people who gave extraordinary Hannibal Kemmerer and Ryan Congress has passed, and courts have effort to make this successful conclu- Triplette of Senator SPECTER’s staff. upheld, Federal bankruptcy laws for sion. I must also thank Dave Schiappa, over 100 years. The Constitution gives First, I note that in my office it has Allen Hicks, Eric Ueland, Sharon Congress the express power to ‘‘estab- taken three chief counsels to get Soderstrom, John Abegg, Kyle Sim- lish uniform laws on the subject of through this bill. I appreciate the hard mons, Malloy McDaniel and Brian bankruptcies throughout the United work of Kristi Lee, my first Chief Lewis from the Leadership staffs of States.’’ Counsel and currently a magistrate Senators FRIST and MCCONNELL, all As the Supreme Court has stated, judge in the Southern District of Ala- who have provided tremendous assist- ‘‘One of the primary purposes of the bama. She did an outstanding job on ance along the way in shaping this bill Bankruptcy Act is to give debtors a this bill during the first years that this into its final form. new opportunity in life and a clear legislation was in the Senate. I also ap- Mr. President, I also want to thank field for future effort, unhampered by preciate the work of my former Chief Chairman SENSENBRENNER and his staff the pressure and discouragement of Counsel Ed Haden, who is currently for their remarkable work in getting preexisting debt.’’ doing appellate litigation at one of this bill done. Phil Kilko and Susan Unfortunately, however, the system Alabama’s outstanding law firms, Jensen did outstanding work on this has veered away from its original posi- Balch and Bingham. While I also appre- bill. tive intent. In the past two decades, ciate the work of my current Chief I thank the senior Senator from Ala- bankruptcies have skyrocketed—actu- Counsel, William Smith, and legisla- bama, Senator SHELBY, for his work on ally accelerating during the economic tive counsels Amy Blankenship and this bill. He guarded his banking juris- boom years of the 80’s and 90’s. Wendy Fleming for their efforts in this diction like a roaring lion. Last year, we reached an historic endeavor, my Deputy Chief Counsel This is a great day, Mr. President. I high of over 1.6 million filings per year. Cindy Hayden has really given an ex- thank the Chair and yield the floor. The total number of bankruptcies more traordinary effort on this bill. Mr. FRIST. Mr. President, the Sen- than doubled during the 1980’s and then These fine staffers have worked night ate will soon vote on final passage of doubled again from 1990 to 2003. Per- and day for two weeks to guide this bill the bankruptcy reform bill. This bill sonal bankruptcies outnumber business to passage. William Smith has given constitutes the most sweeping over- bankruptcies by a multiple of more every ounce of his strength to success- haul of bankruptcy law in 25 years. than 45. ful passage. He deserves particular Like class action, bankruptcy reform We all pay the price for these bank- praise. curbs abuse of the legal system. I am ruptcy filings. Every bill you and I pay

VerDate Aug 04 2004 05:03 Mar 11, 2005 Jkt 039060 PO 00000 Frm 00069 Fmt 0624 Sfmt 0634 E:\CR\FM\A10MR6.080 S10PT1 S2474 CONGRESSIONAL RECORD — SENATE March 10, 2005 includes a hidden ‘‘bankruptcy tax’’ of Mr. CRAIG. Mr. President, I ask for The PRESIDING OFFICER. Without $400 per year per household. That tax is the yeas and nays. objection, it is so ordered. figured into in every phone bill, elec- The PRESIDING OFFICER. Is there a Mr. BIDEN. Mr. President, I rise for trical bill, mortgage payment, fur- sufficient second? two purposes. The first is to draw at- niture purchase, or car loan we pay. There appears to be a sufficient sec- tention to a recent program at the Su- For many people, bankruptcy has be- ond. preme Court on the work of Justice come a first step rather than a last re- The clerk will call the roll. Robert Jackson and Thomas Dodd, the sort. Opportunistic debtors who have The legislative clerk called the roll. father of Senator CHRISTOPHER J. the means to repay use the law to Mr. DURBIN. I announce that the DODD, dealing with the International evade personal responsibility. In some Senator from New York (Mrs. CLINTON) Military Tribunals at Nuremberg. I was cases, they even plan their bankruptcy, is necessarily absent. happy to read the remarks of my col- buying a mortgage and running up The PRESIDING OFFICER. Are there league, Senator DODD, at the event, credit cards and then declaring they’re any other Senators in the Chamber de- and I was interested to find that many broke. siring to vote? of the conclusions he draws from his fa- With this bill, we are putting an end The result was announced—yeas 74, ther’s experiences remain essential to to the abuse. Wealthy debtors who nays 25, as follows: our conduct of international justice have the means to pay some, or all, of [Rollcall Vote No. 44 Leg.] today—and, unfortunately, they are all their debt will be required to do so. too often forgotten. The bankruptcy bill establishes a YEAS—74 I would first echo the remarks made means test based on a simple, fair prin- Alexander DeMint McCain by Senator DODD and salute the ex- Allard DeWine ciple: those who have the means should McConnell traordinary work performed by Justice repay their debts. The legislation spe- Allen Dole Murkowski Baucus Domenici Nelson (FL) Robert Jackson and Thomas Dodd in cifically exempts from consideration Bayh Ensign Nelson (NE) their roles as the U.S. Chief Prosecutor anyone who earns less than the median Bennett Enzi Pryor and Deputy Prosecutor, respectively, income in their state. It allows every Biden Frist Reid Bingaman Graham Roberts at Nuremberg over 50 years ago. filer to show ‘‘special circumstances’’ Bond Grassley The Nuremberg Tribunal taught us if they cannot handle a repayment Salazar Brownback Gregg Santorum many lessons: that even in the depths Bunning Hagel plan. Sessions Burns Hatch of war, justice is not blind; that those And it makes clear that active duty Shelby Burr Hutchison who practice terror, oppression, hatred, military, low income Veterans, and Smith Byrd Inhofe and mass murder will be punished. Per- debtors with serious medical condi- Snowe Carper Inouye haps equally important, however, was tions are protected by these safe har- Chafee Isakson Specter Chambliss Jeffords Stabenow the notion that they should also be af- bor provisions. Stevens But for those individuals who are Coburn Johnson forded a trial. Indeed, the United Cochran Kohl Sununu States committed itself to overcoming abusing the system, they will no longer Coleman Kyl Talent be able to hide behind the law. Nor will Collins Landrieu Thomas the passions of the moment and re- they be able to duck their family re- Conrad Lincoln Thune affirming the rule of law. I believe this sponsibilities. These new reforms make Cornyn Lott Vitter action set an important precedent that Craig Lugar Voinovich is still applicable today. child support a high priority. Crapo Martinez Warner Most people who get into financial Critically, the Tribunal also helped trouble want to do the right thing. NAYS—25 record the horrific crimes of the Nazi They want to make good on their obli- Akaka Feinstein Murray regime so the whole world would see gations and pay what they owe. But Boxer Harkin Obama the brutality and understand the de- Cantwell Kennedy Reed pravity of those unimaginable acts. they are in over their head and need a Corzine Kerry Rockefeller fresh start. This legislation will not af- Dayton Lautenberg Sarbanes Unfortunately, crimes against hu- fect the vast majority of these filers. Dodd Leahy Schumer manity have occurred since the Nurem- Dorgan Levin Wyden berg Tribunals, and they continue to What it will do is close loopholes that Durbin Lieberman have let unscrupulous debtors slip Feingold Mikulski occur today in places such as Darfur in through. Sudan. I believe that it is again nec- Today’s impending vote is a victory NOT VOTING—1 essary to remind ourselves of the im- for fairness, compassion and common Clinton portant lessons learned over 50 years sense. It took eight years, but we are The bill (S. 256), as amended, was ago when Justice Robert Jackson and finally here. passed. then Thomas Dodd—soon to be Senator I applaud my colleagues for their (The bill will be printed in a future Thomas Dodd—brought before the leadership. Together with class action edition of the RECORD.) world the evidence of Nazi atrocities reform, we are returning fairness and Mr. HATCH. I move to reconsider the and said, ‘‘This cannot stand.’’ common sense to the legal system. vote, and I move to lay that motion on I ask unanimous consent that the re- When the legal system gets off track, the table. marks of Senator DODD at the Supreme it affects us all, consumers, creators, The motion to lay on the table was Court on February 15, 2005, entitled, and innovators alike. Jobs are lost. agreed to. ‘‘Justice Served, Lessons Learned: Rob- Prices go up. We pay in big and small Mr. HATCH. I suggest the absence of ert Jackson, Thomas Dodd and the ways. By reforming the system, we a quorum. Nuremberg Trials,’’ be printed in the strengthen our ability to grow. We The PRESIDING OFFICER. The RECORD following my comments here keep America moving forward. clerk will call the roll. today. I look forward to tackling other law- The legislative clerk proceeded to The PRESIDING OFFICER. Without suit abuse issues including gun manu- call the roll. objection, it is so ordered. facturer liability, medical liability, Mr. MCCONNELL. Mr. President, I (See exhibit 1.) and asbestos reform. I am hopeful that ask unanimous consent that the order Mr. BIDEN. Mr. President, I encour- we will continue to work together de- for the quorum call be rescinded. age my colleagues to take the time to livering meaningful solutions to the The PRESIDING OFFICER. Without read this speech and consider this im- American people. objection, it is so ordered. portant message and its application The PRESIDING OFFICER. The today. question is on the engrossment and f EXHIBIT 1 third reading of the bill. MORNING BUSINESS JUSTICE SERVED, LESSONS LEARNED: ROBERT The bill was ordered to be engrossed JACKSON, THOMAS DODD, AND THE NUREM- for a third reading and was read the Mr. MCCONNELL. Mr. President, I BERG TRIALS third time. ask unanimous consent that there now It’s a privilege to be with you in the Su- The PRESIDING OFFICER. The bill be a period for morning business with preme Court Chamber, where cases that have having been read the third time, the Senators permitted to speak for up to changed the course of our nation’s history question is, Shall it pass? 10 minutes each. have been argued and decided.

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