[Congressional Record Volume 144, Number 118 (Wednesday, September 9, 1998)]
[Senate]
[Pages S10090-S10093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         CONSUMER BANKRUPTCY PROTECTION ACT--MOTION TO PROCEED

  The PRESIDING OFFICER. Under the previous order, the hour of 4:30 
p.m. having arrived, the Senate will now begin 30 minutes of debate on 
the motion to proceed to S. 1301, which the clerk will report.
  Mr. BENNETT. Mr. President, I ask unanimous consent that I be allowed 
to finish my thought.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FEINGOLD. Mr. President, reserving the right to object, I ask 
that I be given the opportunity to respond briefly to the Senator's 
remarks.
  The PRESIDING OFFICER. Is there objection?
  Mr. BENNETT. I withdraw my request and suggest the absence of a 
quorum.
  Mr. FEINGOLD addressed the Chair.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  Mr. BENNETT. I object.
  The PRESIDING OFFICER. Objection is heard.
  The legislative clerk continued the call of the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       Motion to proceed to the consideration of Calendar No. 394, 
     S. 1301, a bill to amend title XI, United States Code, to 
     provide for consumer bankruptcy protection, and for other 
     purposes.

  The PRESIDING OFFICER. Time for debate between now and 5 p.m. will be 
equally divided between the Senator from Iowa and the Senator from 
Illinois, Mr. Durbin.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume from my portion.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. GRASSLEY. Mr. President, I want to say a few words today before 
we have our cloture vote on S. 1301, and that is the Consumer 
Bankruptcy Protection Act. That is going to occur, as stated by the 
Chair, at 5 o'clock. We are going to vote at that time on whether we 
can even consider this very important piece of legislation that is 
called the Consumer Bankruptcy Protection Act.
  As I said yesterday, I think the necessity of having a cloture vote 
and the objection to taking this bill up was a desperation tactic. If 
the opponents of reform want to fight reform, let's have a fight about 
the merits of bankruptcy reform. I would like to get to the bill. I 
would like to have everybody vote for cloture on the motion to proceed, 
and then we are there debating this legislation. When we get to the 
bill, I want to

[[Page S10091]]

assure everyone that I am going to work hard to further accommodate 
concerns expressed by members of the minority. I have proceeded in this 
fair way since we started to consider bankruptcy reform, and we have 
been at this at the subcommittee and committee level probably almost a 
year to this point.
  In subcommittee, when we marked up the bill, I personally saw to it 
that many of the changes which my distinguished ranking minority 
member, Senator Durbin, wanted were inserted into the bill, and at the 
full committee markup I worked with Senator Hatch to ensure that a 
number of Democratic amendments were offered. I did not accept these 
provisions because I supported them or thought these provisions were 
the best policy choice. I accepted these amendments out of a desire to 
accommodate the concerns of the Democratic Members. So there is no 
reason for them to filibuster this bill at all. If the Democratic 
Members want to be respected, then it seems to me that the members of 
that party also have to act responsibly when those of us in the 
majority go out of our way to accommodate the concerns of the minority. 
There is no need to clutter up the bill with amendments that are 
totally irrelevant or unrelated to the issue of bankruptcy.
  For instance, I have heard that the issue we just left, campaign 
finance reform, might be offered. I have heard that the minimum wage 
bill might be offered. I have heard that it is health care reform, that 
any or all of these could be added to this bill. That is why we have to 
vote for cloture now and, later on, on the bill. Otherwise, without 
imposing cloture, the bill becomes a vehicle for people who oppose 
reform to load this bill up with excess baggage.

  As I have said repeatedly here on this floor, the American public 
overwhelmingly favors bankruptcy reform: 68 percent of the people in a 
national poll; in my State of Iowa, 78 percent of the people. So let's 
stop playing games and get to the business of the country. The cloture 
vote is one of the key votes on bankruptcy reform. A vote against 
cloture is a vote against a piece of legislation that deals head on 
with an issue of extreme national importance. The Consumer Bankruptcy 
Reform Act that we have before us, or will have before us if we vote 
cloture, is fair and balanced. It passed out of the Judiciary Committee 
on a 16-to-2 vote. How could a bill that got out of committee 16 to 2 
be subject to a filibuster? So, let's get to the bill and, hopefully, 
pass it.
  The Consumer Bankruptcy Reform Act is a bipartisan effort. It is a 
bipartisan effort which keeps the best of old law while curbing abuses. 
S. 1301 continues to help those who need the protection of the 
bankruptcy laws but implements measures to screen out those who use the 
bankruptcy system to avoid paying debts that they can afford to repay.
  The fair nature of this bill is represented by the overwhelming 
bipartisan support that it received in committee. The near unanimous 
consensus of the committee action reflects a belief that something must 
be done to curb the skyrocketing rate of bankruptcies, which reached an 
all-time high last year, and that this bill is thus a necessary step in 
restoring common sense to our bankruptcy laws and the system of 
bankruptcy.
  As the prime sponsor of this bill and chairman of the subcommittee 
with jurisdiction over bankruptcy, I went out of my way to make sure 
the minority was treated fairly. At my hearing we invited every witness 
the minority requested. And every time my distinguished friend, Senator 
Durbin, sought to insert language into the bill, I personally saw to it 
that his desires were accommodated. The only time that I could not 
accommodate his desires was sometimes he asked for certain language to 
be deleted.
  American business lost around $40 billion last year as a result of 
bankruptcies. This translates into a hidden tax of $400 per family. We 
need to cut this hidden tax and put more money into the pockets of 
American families. We do this by reducing or eliminating the costs that 
we have of goods and services in America to every family of four by a 
figure of $400.
  Efforts to burden this bill with minimum wage and other completely 
unrelated amendments ought to be resisted. This bill is too important 
and time too short to allow political stunts and unrelated side issues 
to impede or delay its passage. As I said, 68 percent of the American 
people support bankruptcy reform. In its letter to the Judiciary 
Committee, the administration of President Clinton indicated its 
support for reform, and I thank the President and his people for 
helping this legislation along. I think there is a real consensus that 
now is the time to act. We have a fair, effective, bipartisan bill 
which deserves to be considered. As I said, we are willing to work with 
the minority to accommodate their concerns even further.
  It comes down to this. Do the Members of this body support bankruptcy 
reform? Will they vote for cloture today? And will they also follow on 
voting for cloture of the bill itself? I ask my colleagues to vote 
``yes'' at 5 o'clock.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, let me say at the outset, I am going to 
support this motion for cloture to proceed on the bill because I agree 
with my colleague and friend, the Senator from Iowa, that this is an 
important issue that should be addressed by this Congress. He has been 
eminently fair in all of his dealings with me on this legislation. 
Being a member of the abject minority, I appreciate that, and that sort 
of fairness I hope will be rewarded in the passage of a bankruptcy 
reform bill which both Senator Grassley and I will be proud of.
  I am hoping during the course of this debate we can point out those 
areas of the bill that need to be addressed and address them in a 
responsible way. I think this is, at its heart, a good bill. I think 
there are some elements of it which can be changed and improved to make 
it better.
  Let me address at the outset his frustration, and mine, too, over the 
fact that this bill may become a vehicle for other issues. First, why 
is this necessary? Why would any Senator want to come and put a measure 
such as an increase in the minimum wage on the bankruptcy bill? It does 
not seem to follow very closely. I guess there is some connection to 
it, but by and large you would think we could vote separately on the 
minimum wage bill. The honest answer is, we should. The honest answer 
is, we cannot. The Republican leadership refuses to afford an 
opportunity for many of the more serious measures that have been 
brought before this Congress to be considered. Some of my colleagues, 
in frustration, look for virtually any bill, any vehicle, to move 
important measures such as reform of HMOs, campaign finance reform, or 
an increase in the minimum wage. I hope, while Senator Grassley and I 
address the merits of this legislation, that the Republican and 
Democratic leadership in a bipartisan fashion can come to an agreement 
as to the proper time and place for us to consider important measures 
such as an increase in the minimum wage.

  Having said that, let me address the issue of bankruptcy reform. As I 
mentioned the other day, it is truly an area that deserves our 
attention. The dramatic increase in the filings in bankruptcy in 
America suggest that we should look at the bankruptcy system. We have 
tried to do that in the committee, both in the full committee and the 
subcommittee. We will address it again on the floor of the Senate. 
There are many people who have many explanations for the increase in 
the filings in bankruptcy. One of the most cogent explanations that I 
have found is demonstrated by this chart.
  Why do more people file for bankruptcy in a time when the American 
economy is expanding and more jobs have been created, people are 
building homes and starting businesses, and inflation is down? Why in 
the world would more people be filing for bankruptcy? I think this 
chart answers that question. Bankruptcy cases track consumer debt. As 
Americans become more deeply indebted, particularly unsecured debt--not 
their home or their car, but unsecured debt like credit card debt--they 
become more vulnerable. One bad occurrence in a person's life--the loss 
of a job, a divorce, a serious illness in the household --and they find 
themselves pushed over the edge. A lot of people find that as their 
debt increases they are more vulnerable to bankruptcy.

[[Page S10092]]

  Just look at this chart which tries to track the number of filings in 
bankruptcy per capita along with the debt-to-income ratio. It is no 
surprise to me that they are in lockstep. So the credit industry that 
comes to us and talks about bankruptcy reform must accept some share of 
responsibility for the increases in filing.
  Who are the people filing for bankruptcy? There are clearly 
exceptions to the rule, but if you look at the average person filing 
for bankruptcy, you will see that consistently the income of the person 
filing for bankruptcy has been descending, going down over the years; 
the average income in 1997, $17,652. These are people who are making 
less than $10 an hour who are filing for bankruptcy. So they are not 
the fat cats, the ones who are going to the canny attorneys who can 
find some way to bring them to bankruptcy court. These are genuinely 
low-income Americans. The average debt of the person filing for 
bankruptcy is about $28,000. That is the average.
  What this bill tries to address is not that average person but the 
person who is the exception filing for bankruptcy, the one who is, 
perhaps, trying to take advantage of the system.
  The reason this debate is important--and I hope my colleague, the 
Senator from Iowa, will note in the information that we have shared 
with him--is our belief that we should address not just the bill as it 
is written and some changes in it but some other aspects of this 
question. I do believe, as does Senator Sarbanes of Maryland and 
Senator Dodd of Connecticut, who are joining me in offering an 
amendment, that we should call on the credit card companies to accept 
more responsibility, too. If the people who are incurring debt are 
asked to be more responsible, so, too, should these companies.
  How many credit card solicitations have you received in the last 
month or two? You almost have to shovel them away from the mailbox. 
Whether you have asked for it or not, a lot of people want to offer you 
credit, perhaps more credit than you should have. Time and again, more 
people take these credit cards and get more deeply in debt and then 
struggle to find a way to pay for them.
  I also think we have to address the billing system, the minimum 
monthly payment on your credit card. I think the credit card companies 
should tell you how long it will take to pay off your balance and how 
much interest you will pay if you pay the minimum monthly amount. Is 
that unreasonable? I think it is only fair. It really gives a person at 
least some sobering message, perhaps, that they cannot continue to pay 
the minimum monthly balance and expect to ever come out of debt.
  Finally, you may not realize it but some of the credit cards that we 
own, when we go to charge on a purchase, establish a security interest. 
What does that mean? It means that if you find yourself in hard times, 
the credit card company can claim the item you purchased. You didn't 
know that? A lot of people do not. I don't think it is unreasonable 
that the credit card companies make that disclosure.

  We also want to make sure the credit card solicitations are done in 
an honest way. We find a lot of people, and some nonhumans, I might 
add, who are receiving credit card solicitations who should not--people 
who are mentally incompetent, people who are too young to own a credit 
card in any State. I think this needs to be cleaned up.
  We also need to protect retirement income in bankruptcy. If you file 
for bankruptcy, did you know your 401(k) plan is protected but your IRA 
is not? Why would that be? One of the amendments we are offering is to 
make sure that there is equal treatment of retirement income.
  We also want to change the area of farm bankruptcy. That has not been 
touched in 15 years, and it should be.
  In the area of reaffirmations, when it comes to the debts that the 
creditor should convince you that you shouldn't step away from, you 
should still accept responsibility for, let's make a level playing 
field. Let's make certain there is not too much pressure on the debtor.
  We also talk about tax returns with this bill. As it is written, if 
you walk into bankruptcy court and file a petition and do not produce 
within 65 days your income tax returns for the previous 3 years and 
your pay stubs for the previous 6 months, you are thrown out of court. 
I asked the Internal Revenue Service, if I asked for my income tax 
returns, how long would it take me to receive them? They said 60 days, 
if you are lucky. But you ask somebody who writes to the IRS, and they 
tell you it takes a lot longer. We ask that there be some provision in 
the bill that is sensitive to this.
  One of the other areas of the bill says you can't file for bankruptcy 
unless you have been to a consumer credit counselor. That sounds 
reasonable, but the consumer credit counseling industry came to us and 
said, ``We can't handle this. We can't handle over 1 million people 
coming through our doors each year. We can't be the threshold for 
bankruptcy court.'' That is what this bill does. I am afraid it goes 
too far.
  Another thing that concerns me is, in bankruptcy there are certain 
categories of debt that are protected. One of them is the area of child 
support. If we are going to have a mother with children, who was 
perhaps involved in a divorce and now relies on child support, receive 
enough money to raise her children, we can't send her into a bankruptcy 
court that diminishes her ability to recover those child support 
payments. Unfortunately, this bill does.
  I have just outlined a handful of the amendments that we think are 
important to make this a better bill. I believe that my colleague, the 
Senator from Iowa, is going to accept some of these or some form of 
these, as he has been very responsive and open in the past to talk 
about some changes, constructive changes in the bill.
  When it is all said and done, I believe we can pass a good Bankruptcy 
Reform Act, one that is a credit to both parties that have been 
involved in this debate, and particularly a credit to the chairman of 
the subcommittee who has worked so long and hard on this measure.
  Mr. President, I yield back the remainder of my time.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. Four minutes, 52 seconds.
  Mr. GRASSLEY. I probably will not use all that. I can yield back some 
time. I will comment briefly.
  First of all, in order to get to the point where Senator Durbin needs 
to be to get consideration of his amendments, we have to get through 
this cloture vote and a cloture vote on the bill so we can get down to 
talking about these very serious matters.
  Many of the things that Senator Durbin has stated that he is 
interested in changing I would not want to say right out that I agree 
with every one of those. Some of them, I think, maybe go a little bit 
too far, but I have not seen--maybe I shouldn't say I haven't seen any, 
but I have seen few issues that he brought up in the course of the last 
year as we constructed this bill, that it wasn't possible for us to 
work out a lot of differences, particularly for those things that are 
included in the bill.
  As I said in my opening remarks, some things that he wanted removed, 
we didn't remove. I look forward to that opportunity, if we get it by 
getting through two cloture votes, to sitting down with Senator Durbin 
and some of his colleagues on his side of the aisle who now have an 
interest in this legislation to see what we can work out and even 
minimize the number of votes or the length of debate we ought to have 
on this bill.
  I will make one comment about one of the things Senator Durbin made 
reference to about opposition from the National Foundation for Consumer 
Credit to some of the ideas of Senator Sessions. To Senator Sessions' 
credit, he did work out some compromises that needed to be done. We 
have a letter dated August 6 from the National Foundation for Consumer 
Credit that says that they support those provisions of the legislation 
as well, and there is a copy of that letter to Senator Durbin.
  I think we have a process here that has worked so well. If you would 
stop and think--and Senator Durbin has worked in this spirit--for the 
years I have been on this subcommittee, either as chairman or as 
ranking member--and I served 16 years with the predecessor of Senator 
Durbin, and that was

[[Page S10093]]

Senator Heflin from Alabama--there has not been a single piece of 
bankruptcy legislation to get through this body in that 16-year period 
of time that didn't have the cooperative effort of the Democrat 
chairman or ranking member and the Republican chairman or ranking 
member, depending on who was controlling the committee at that time in 
history. That reputation has been continued through Senator Durbin at 
this point.
  If we can just get everybody on Senator Durbin's side of the aisle to 
be in that same spirit that has promoted good bankruptcy legislation 
through this body for that period of time, we can be successful, not 
only with this piece of legislation, but also to emphasize that this is 
a needed piece of legislation. Even Senator Durbin, working with us, 
has helped us develop the first major change in legislation to be 
considered on the floor of this body since the passage of the 1978 
bankruptcy law.
  I hope that the spirit that former Senator Heflin of Alabama and I 
have worked in, and has been continued by Senator Durbin and me thus 
far, can be fully accepted by people from his side of the aisle. I know 
he has to satisfy a lot of interests. I even have, I say to Senator 
Durbin, some interests on my side that are not satisfied with the 
legislation we brought out of committee. So I have some problems with 
which I have to work.
  The point is, if, since 1981, this effort can be successful, it can 
be successful this time. I just plead with everybody who might want to 
filibuster this for some extraneous issues that probably can be brought 
up in some other way on other bills that would satisfy the Senate 
majority leader, we can get there.
  I urge, as Senator Durbin has, a very positive vote on this. I hope 
it will be followed, assuming we are successful this time, with a 
positive vote later this week on cloture on the entire bill.
  I yield the floor, and I yield back what few seconds I have 
remaining.


                             Cloture Motion

  The PRESIDING OFFICER. All time having been yielded back, the hour of 
5 p.m. having arrived, pursuant to rule XXII, the Chair lays before the 
Senate the pending cloture motion, which the clerk will report.
  The bill clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provision of Rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on the motion to 
     proceed to Calendar No. 394, S. 1301, the Consumer Bankruptcy 
     Protection Act.
         Trent Lott, Orrin G. Hatch, Charles Grassley, Arlen 
           Specter, Strom Thurmond, Connie Mack, Ben Nighthorse 
           Campbell, Thad Cochran, Tim Hutchinson, Wayne Allard, 
           Christopher Bond, Rod Grams, Rick Santorum, Chuck 
           Hagel, Larry E. Craig, and Jon Kyl.


                            Call of the Roll

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.


                                  Vote

  The PRESIDING OFFICER. The question is, Is it the sense of the Senate 
that debate on the motion to proceed to S. 1301, the bankruptcy bill, 
shall be brought to a close? The yeas and nays are required under the 
rule. The clerk will call the roll.
  The bill clerk called the roll.
  The PRESIDING OFFICER (Mr. Abraham). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 99, nays 1, as follows:

                      [Rollcall Vote No. 263 Leg.]

                                YEAS--99

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Cleland
     Coats
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Enzi
     Faircloth
     Feingold
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Warner
     Wellstone
     Wyden

                                NAYS--1

       
     Brownback
       
  The PRESIDING OFFICER. On this vote, the yeas are 99, the nays are 1. 
Three-fifths of the Senators duly chosen and sworn having voted in the 
affirmative, the motion is agreed to.
  Mr. KERRY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, what is the parliamentary situation?
  The PRESIDING OFFICER. The pending question is the motion to proceed 
to S. 1301, the bankruptcy reform bill.
  Mr. KERRY. Mr. President, I ask unanimous consent that I be permitted 
to speak as in morning business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________