[Congressional Record Volume 146, Number 7 (Wednesday, February 2, 2000)]
[Senate]
[Pages S225-S257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BANKRUPTCY REFORM ACT OF 1999
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of S. 625, which the clerk will report.
The senior assistant bill clerk read as follows:
A bill (S. 625) to amend title 11, United States Code, and
for other purposes.
Pending:
Schumer/Durbin amendment No. 2762, to modify the means test
relating to safe harbor provisions.
Schumer amendment No. 2763, to ensure that debts incurred
as a result of clinic violence are nondischargeable.
Feingold modified amendment No. 2748, to provide for an
exception to a limitation on an automatic stay under section
362(b) of title 11, United States Code, relating to evictions
and similar proceedings to provide for the payment of rent
that becomes due after the petition of a debtor is filed.
Levin amendment No. 2658, to provide for the
nondischargeability of debts arising from firearm-related
debts.
Mr. REID addressed the Chair.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. If I could say to the acting majority leader, we do hope to
finish the bankruptcy bill this morning. As I have indicated, we have
Senators Feingold and Levin coming over shortly after 11 o'clock. It
will take until 11 o'clock with what Senator Schumer has to work on.
I would also say that we want to make sure the record is clear; the
leader was wondering about the vote that was originally scheduled on
the nuclear waste motion to proceed, whether or not that needed to go
forward. I want the record to reflect that the Senators from Nevada
withdraw their objection and that the vote need not go forth.
Mr. GRASSLEY. I have been informed by staff that we will work on that
agreement, and it seems that can be accomplished.
The PRESIDING OFFICER. Under the previous order, the Senator from New
York, Mr. Schumer, is recognized to call up his amendments.
Mr. SCHUMER. I thank the Chair.
First, I ask that the amendment be considered as read. It is at the
desk.
The PRESIDING OFFICER. To which amendment is the Senator referring?
Mr. SCHUMER. Amendment No. 2763. On the other amendment, I just
inform my good friend from Iowa, we are trying to work out a compromise
and we may not have to debate it--the one on the safe harbor.
Mr. GRASSLEY. We think we can.
[[Page S226]]
Mr. SCHUMER. So we now call up amendment No. 2763, and if we cannot
work out a compromise on the other, then I would reserve the right to
bring it up.
Amendment No. 2763
(Purpose: To ensure that debts incurred as a result of clinic violence
are nondischargeable)
The PRESIDING OFFICER. Amendment No. 2763 is currently pending before
the Senate.
The clerk will report.
The bill clerk read as follows:
The Senator from New York [Mr. Schumer], for himself, Mrs.
Feinstein, Mr. Leahy, Mrs. Murray, Mr. Lautenberg, and Mr.
Durbin, proposes an amendment numbered 2763.
The amendment is as follows:
On page 124, between lines 14 and 15, insert the following:
SEC. 322. NONDISCHARGEABILITY OF DEBTS INCURRED THROUGH THE
COMMISSION OF VIOLENCE AT CLINICS.
Section 523(a) of title 11, United States Code, as amended
by section 224 of this Act, is amended--
(1) in paragraph (18), by striking ``or'' at the end;
(2) in paragraph (19)(B), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(20) that results from any judgment, order, consent
order, or decree entered in any Federal or State court, or
contained in any settlement agreement entered into by the
debtor, including any damages, fine, penalty, citation, or
attorney fee or cost owed by the debtor, arising from--
``(A) an actual or potential action under section 248 of
title 18;
``(B) an actual or potential action under any Federal,
State, or local law, the purpose of which is to protect--
``(i) access to a health care facility, including a
facility providing reproductive health services, as defined
in section 248(e) of title 18 (referred to in this paragraph
as a `health care facility'); or
``(ii) the provision of health services, including
reproductive health services (referred to in this paragraph
as `health services');
``(C) an actual or potential action alleging the violation
of any Federal, State, or local statutory or common law,
including chapter 96 of title 18 and the Federal civil rights
laws (including sections 1977 through 1980 of the Revised
Statutes) that results from the debtor's actual, attempted,
or alleged--
``(i) harassment of, intimidation of, interference with,
obstruction of, injury to, threat to, or violence against any
person--
``(I) because that person provides or has provided health
services;
``(II) because that person is or has been obtaining health
services; or
``(III) to deter that person, any other person, or a class
of persons from obtaining or providing health services; or
``(ii) damage or destruction of property of a health care
facility; or
``(D) an actual or alleged violation of a court order or
injunction that protects access to a health care facility or
the provision of health services.''.
Mr. SCHUMER. Mr. President, I ask unanimous consent that Senators
Snowe, Reid, Jeffords, and Kennedy be added as cosponsors.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I am offering this amendment along with
Senators Snowe and Reid, Jeffords, Feinstein, Leahy, Murray, Kennedy,
Lautenberg, and Durbin to ensure justice is served for those who
willfully and gleefully thumb their noses at clinic protection laws by
feigning bankruptcy. This amendment makes debts incurred as a result of
acts of clinic violence nondischargeable under the bankruptcy code, and
it does this clearly and unequivocally. In other words, this amendment
will hold the perpetrators of clinic violence responsible for the
damage they incur when they imperil, through either violence or
intimidation, a woman's legal right to choose.
The history of this amendment goes back several years. Before 1994, a
woman's right to choose, guarded carefully by the Supreme Court, was
imperiled. That is because a small and radical minority sought to
intimidate, to harass, and ultimately commit violence against clinics
that offered women their right, their constitutional right for an
abortion.
The chart tells the story. Acts of violence were way up, to 437. It
reached its peak in 1993. Acts of disruption went to 3,379 and
blockades, including arrests, went to 3,885. In many parts of this
country a constitutional right--whether one agrees with it or not--was
being prohibited by a very small minority who believed their view was
more important than our democratically chosen, American people chosen
view.
As a result, this body, in a fine moment, gathered together and said
the rule of law must prevail whatever our views, pro-choice or pro-
life. I was sponsor of the FACE Act in the House. Senator Kennedy was
the sponsor of the FACE Act in the Senate. Very simply, it said this
kind of violence and intimidation had to stop. The major tool it used
was to give these beleaguered clinics the right to sue those who
committed violence.
It was a proud moment on the floor of this body when, with strong
bipartisan support and strong support across pro-choice and pro-life
lines, this amendment was agreed to, 69-30, in 1994. It was a proud
moment for me in the House when I joined with my friend, Congressman
Henry Hyde--perhaps the leading voice of true conviction on the pro-
life side--to support this amendment. Congressman Hyde knew that
America depended on the rule of law.
The act had dramatic effects. If you look at the statistics, acts of
violence went down, from 437 in 1993 to 113 in 1998. Similarly, acts of
disruption went down, from 3,379 down to 2,600. The law was working.
But, unfortunately, that extreme few has found a new way to avoid the
law and threaten the kind of stasis, the kind of peace, the kind of
coming together we had found in this body. What they have done is, when
they get a judgment against the type of violence depicted here, they
declare bankruptcy and the law cannot be enforced against them.
Randal Terry has $1.6 million in judgments against him. So far not a
nickel has been collected. Flip Benham brags he will never pay a cent.
Perhaps the most extreme is the case of the Nuremberg Files, which
has, today, its 1-year anniversary of a jury verdict of $109 million
against those who put it together. The Nuremberg Files was a group of
extremists. They published the names of doctors and accused them of
murder. They published the addresses where their children went to
school. Their graphic on the computer had blood dripping from the
pictures of the doctors. They published the name of Dr. Slepian, who
was murdered, and after a doctor was injured they put the name in gray.
After a doctor was killed, as in Dr. Slepian's case, from my State of
New York, up in Buffalo, they put an X through the name.
Because of their activities, because of the ``wanted'' posters, where
three doctors were killed once they put out ``wanted'' posters, a
Federal court in Oregon urged the judgment against them. That judgment,
the jury verdict, was 1 year ago today.
What did the defendants in that case do? The judge knew they would
try to clean themselves of their assets and divest them. So the judge
ordered them not to divest themselves of their assets. In each case, 2
or 3 days before they were to come to the court for a disposition of
how they were going to pay their fine, they went back to their home
States and declared bankruptcy. This horrible, horrible situation was
compounded by the use of a bankruptcy law that no one in this body or
anywhere else intended to be for that purpose.
This is what the attorney for the defendants in the Nuremberg Files
case said:
The jury charge in this case created a negligence standard
for threats. The charge on punitive damages embraces reckless
or malicious conduct and my understanding is that reckless
conduct does not preclude a discharge in bankruptcy.
Anyone who says our present laws cover this horrible situation and
the many others like it ought to listen to the very lawyer in the
Nuremberg Files case.
So no money has been collected, not only from the Nuremberg Files
defendants but from all the others who are laughing at our law. They
have gone back to their States and now the whole issue will be
litigated again. Because we do not have a law, they will debate again
whether the conduct was reckless--which is what the lawyers claim the
jury verdict called for--or whether it was violent, in which case it
would be covered by present law.
So the reason we are here today, the reason this vote has been so
contested, is because a major tenet of our democracy is at stake--the
rule of law. We talked about the rule of law last year at this time in
this Chamber. If there was ever a case that cried out for
[[Page S227]]
Democrats and Republicans coming together, for pro-choice and pro-life
people coming together, it is this very case.
Let me answer a few questions that have been brought up about this
amendment. First, is this a move by the pro-choice movement to move the
goalposts? Absolutely not. My lead cosponsor on the Democratic side,
Senator Reid, is probably the foremost advocate on the pro-life side on
our side. I respect his view. Henry Hyde supported the FACE law. Others
who disagree with my view on choice have also come to support FACE and
the amendment. It is not pro-life or pro-choice, it is pro rule of law.
It is pro-American.
Second, some say it is already covered by the willful and malicious
exception in the bankruptcy law. It is true that if there is a willful,
intentional, malicious tort, it might be covered by the bankruptcy law.
But it would have to go to each bankruptcy court, as in the Nuremberg
Files case, after the judgment. Without our statute, it would have to
go back to each bankruptcy court in the State and be litigated. Then
there would be one determination or another.
But what about these types of cases? What about situations where
there is reckless conduct but not malicious conduct? The lawyer in the
Nuremberg Files matter--clearly conduct we wish to prohibit--said it
was reckless, not malicious, and would not be covered by the exception
in the bankruptcy law.
What about the case where there is no intent? Thousands come and
blockade a clinic but they say: My intent was not to create any
violence. Then you would have to prove, for each one of those
defendants, their own intent, a next to impossible job.
What about contempt orders? Everyone agrees that contempt orders are
not covered by the exception.
So for anyone to argue the present law covers this, I say two things
to you: No, it does not. And if you believe it does, there is no reason
not to make sure that it does by passing our amendment.
How about some from the other side who argue bankruptcy should not be
used to promote public policy? We are not promoting public policy. In
fact, it is those who have declared bankruptcy after committing
terrible acts who are seeking to use the bankruptcy code for public
policy goals. The bankruptcy code was never intended that way. What we
are doing by this amendment is protecting the bankruptcy code from
those who seek to twist it and turn it and use it for their goals in
public policy. In fact, we have done it before in this Chamber. We did
it, with almost unanimous support, for drunken drivers. There is an
exception in the code for that. It is a horrible thing--so is this.
I argue one more thing to my colleagues. This is the first time we
have had an organized movement in America that seeks to use the
bankruptcy code for these purposes. They tell people how to declare
bankruptcy. One of the major organizations says you have to be judgment
proof before you can join it. I have never seen that before in this
country--I don't think anyone has--where an organized group seeks to
subvert the law and then tells its members you can avoid its
consequences by declaring bankruptcy.
One final question. I do not know if my colleagues from the other
side will have an amendment similar to this. The Senator from Iowa is
shaking his head no. But we have not seen one so far, and the amendment
can only argue one of two things.
Mr. GRASSLEY. I just don't know.
Mr. SCHUMER. He doesn't know. I appreciate my friend's candor,
although we have been debating this. This amendment came up in the
Judiciary Committee in October or November and we do not know. But I
argue to my colleagues, whatever you think of the other amendment, if
it covers this it cannot hurt to have this one. If it does not cover
it, we need it.
I do not have any predisposition, having not seen the amendment,
whether you vote for or against an alternative. But voting for or
against that alternative will not solve the problem. Voting yes or no
on this amendment will.
In conclusion, this amendment and this debate--on its surface about
somewhat arcane provisions in the bankruptcy law--is what America is
all about. We have always had people with deeply felt views. The bishop
in my community every month says the Rosary in front of an abortion
clinic.
I disagree with his views. Bishop Daily is a fine man. I would defend
his right to do that. I would vote for legislation that would allow him
to do that.
We have always had people in America of strongly held views, but
every so often we have people whose views not only are strongly held
but who believe because they believe it, they should subvert the will
of the American people, they should take the law into their own hands.
This happened shortly after the founding of the Republic. It happened
throughout the 19th century. It happened throughout the 20th century.
Every time that has happened, the Members of this distinguished body
have risen and said we must defend the rule of law because nothing is
more sacred to America.
People have uttered courageous speeches on the floor of this Chamber
about that, even if they did not agree with the specific view. This is
one such moment.
The vote is close. It is neck and neck. The Vice President has
graciously agreed to interrupt his schedule to be here because the vote
is so close and because this bill and this amendment is so important.
I urge my colleagues to look into your hearts and souls. You walk
with America. We do it every day in this Chamber. Do not turn your back
on what you know is right. Do not turn your back on the rule of law. Do
not turn your back on what our Founding Fathers shed blood for, which
is the right of a democracy to make its own decisions and not have a
small band of people, for whatever reason, take decisions into their
own hands.
I urge my colleagues to support this amendment. I reserve the
remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. GRASSLEY. Mr. President, I yield myself such time as I might
consume. I hope my friend, Senator Hatch, will debate the fine points
of the law with the Senator from New York because I am not a lawyer. I
have strong feelings on the issue of abortion which do not have to be
expressed today. My friend, the Senator from New York, has opposite
views on that issue and he has not expressed them and does not have to
express them as far as this amendment is concerned. I oppose this
amendment simply because it is not needed.
First, I will comment on the possibility of the Vice President of the
United States having to vote today to break a tie. I predict that if
the Vice President is in town and this vote is that close, the Vice
President will be here and will have an opportunity to cast that vote.
If the Vice President is in town to break a tie, there is going to be
at least one person who supports that amendment who is going to vote
against it just so we can have a tie vote, just so the President can
cast his vote because the Vice President running for President of the
United States is not going to break into his schedule with the tight
vote he had in New Hampshire last night and avoid campaigning in the
other States and waste his time here if he does not actually have to
cast that vote.
We are in for not only political moments on this issue, but we are in
for some very constitutional moments on this issue as well.
I like the theater that is going on this morning. We have seen it at
least once before, and we may see it several times between now and
November. I do not blame the people on the other side for creating this
theater because I think the Vice President is going to need it between
now and the November election if he intends to be elected President of
the United States.
Mr. SCHUMER. Will the Senator from Iowa yield?
Mr. GRASSLEY. Of course, I will yield. I know what you are going to
say--that everything I have said is not true. I have seen it happen
before.
Mr. SCHUMER. Let me explain to the Senator from Iowa what happened,
and I realize he has not intended to cast stones.
I have been lobbying Members on this vote for the last several weeks.
As the Senator knows, this amendment held up the bankruptcy bill from
being voted on last year because many of us felt so strongly about it.
[[Page S228]]
As of yesterday, it looked as if the vote was dead even. That is the
count we have. Last night, I called the Vice President and said: It
looks dead even. You make a decision, but it is an important issue to
us. And he determined to come back. It has nothing to do with theater.
It has nothing to do with, frankly, the politics of this campaign. It
has to do with the fact that so many of us consider the FACE law--both
pro-life and pro-choice--so important that we could not bear to see it
undermined, particularly if it lost by a very narrow margin.
I do not know what the vote will be. I do not know what kind of arm
twisting will go on between now and then. I do know there has been
dramatic resistance to this amendment which held up a bill that large
numbers of people on both sides of the aisle wanted very much to have
come to the floor last year, and I think the remarks of the Senator
from Iowa do not fit the facts in this situation regarding the Vice
President.
I thank him for the graciousness of yielding.
Mr. GRASSLEY. Mr. President, before I proceed, I presume the Senator
from New York is willing to have the time for his remarks come out of
his time and not out of my time. I hope he will agree to that.
Mr. SCHUMER. I ask unanimous consent that each side be given an
additional 10 minutes because this is an important amendment. I ask
unanimous consent we each be given an additional 10 minutes.
The PRESIDING OFFICER. Is there objection to the request?
Mr. GRASSLEY. I still want the time to come out of his side.
Mr. SCHUMER. I will accept that.
The PRESIDING OFFICER. And it will be charged.
The Senator from Iowa.
Mr. GRASSLEY. I give the Senator from New York and all the other
people on the other side of the aisle the benefit of the doubt, but as
a matter of constitutional fact, there is always some theater when the
Vice President has to cast a tie-breaking vote. Also, there is some
justification for what I said, not based upon what I know is going to
happen this time but what I have seen happen in the past.
The other thing I want to tell the Senator from New York, regardless
of what I said about the theater, I want to base my remarks upon what I
think is unneeded legislation. This gets to some of the finer points of
law that I am not going to argue and debate with the Senator from New
York because he would say under certain circumstances, because of
intent or because of court orders, the necessity to go back to State
courts, his amendment will enhance the protection of people about whom
he is concerned. Those are not serious considerations. His amendment is
not needed.
First of all, it is very necessary to say, and I hope the Senator
from New York will not take offense with this, that we would not even
be debating this amendment or anything with bankruptcy if he had his
way because he was one of those who voted against the bankruptcy
legislation. I do not fault the Senator from New York for doing that.
That is, obviously, his right.
He can say he wants bankruptcy legislation and he voted against it
because this amendment was not included or maybe he is against
bankruptcy generally, but the fact is that he voted against the
bankruptcy reform bill we have before us.
People who generally do not want a bankruptcy reform bill have
proposed some pretty politically sensitive amendments--and this is one
of them--that are basically a distraction from the real issue of why we
need bankruptcy reform. I do not need to repeat what I said yesterday,
such as we have had a 100-percent increase in personal bankruptcies
over the last 7 or 8 years. From that standpoint, we have a very
serious social and economic problem with which we have to deal, and
particularly the way the present bankruptcy code is written, the
amendment is not needed. I want to state why it is not needed because
my colleagues are entitled to know.
I hope a lot of the people in this Chamber who want a bankruptcy
reform bill will view this amendment in its proper context of being
proposed as a distraction from the real issues of bankruptcy reform,
particularly since I am going to convince them that this amendment is
not needed based upon the way the present law is written.
But putting aside the obvious political nature of the amendment, this
amendment should fail on its merits. The amendment would make judgments
resulting from violent as well as nonviolent activities engaged in by
pro-life activists nondischargeable in chapter 7 bankruptcy.
The amendment does not provide for the same treatment for violent or
nonviolent activities engaged in by pro-choice activists. In other
words, this amendment does not even pretend to be fair and balanced. It
is an effort aimed only at one side of this very hot political debate
that is known as the abortion debate. I do not think the Senate should
change bankruptcy policy in such a one-sided way.
But the amendment does not even accomplish its one-sided goal. The
amendment only affects chapter 7 bankruptcy. So I want to give you a
second reason for being against it, based upon the fact that it fails
on its own merits. Since it only affects chapter 7 bankruptcy, there is
another way that people who are affected by this amendment, who want to
go into bankruptcy to protect themselves, can do it. They can do that
through chapter 13 because the amendment does not make any new debts
nondischargeable in chapter 13. So any of the people to whom the
Senator from New York refers to that his amendment is necessary for
could file under chapter 13, pay pennies on the dollar, and walk away
from debt.
As I said when I voted on this amendment in the Judiciary Committee,
the nonpartisan Congressional Research Service has concluded that court
judgments resulting from violations of the FACE Act are already
nondischargeable in chapter 7 under politically neutral provisions of
section 523 of the code. This amendment, the Congressional Research
Service says, isn't needed.
Finally, it is worth noting that some Senators on the Democratic side
have been very critical of making new categories of nondischargeable
debts. If you listen to the White House--and we have listened to the
White House quite a bit on this bill and have tried to satisfy people
by making changes in it that have not hurt our general approach--if you
listen to these same people, who have been listened to by me and other
people in this body who want bankruptcy reform, you hear that anytime
you create nondischargeable debts, the collection of child support
suffers. I will bet the Senator from New York has made this same point
on other nondischargeable debts concerning child support.
Some of those concerns have been very legitimate. We have responded
to them. I guess I would have to say, from where I started 2 years ago
on this legislation, I have been educated on some of the writing of our
original bill to make those changes so that we make child support No. 1
in our considerations in bankruptcy courts.
But the White House, regardless, is saying nondischargeable debts
make collection of child support much more difficult. But here we have
an amendment from the minority to create a nondischargeable debt. So
based on the arguments of the White House, this amendment should be
rejected because it hurts child support claimants.
This is a very serious inconsistency on the part of people,
particularly on the other side of the aisle, in proposing this
amendment. The fact is, bankruptcy reform is so popular with the
American people, so popular with Members of the Senate, that those who
oppose real bankruptcy reform look for distractions, distractions based
on the merits of their amendment, based on their opposition to the
legislation, but also a needless distraction.
If, in their good conscience, they believe their amendment is needed,
it in fact isn't needed because our bankruptcy code already deals, in a
nonpolitical way, with these political questions that people believe
can only be responded to by making one more thing nondischargeable.
This amendment is, on balance, a distraction and should fail for the
reason it was offered. But, most importantly, it should fail on its
merits. The merits just do not call for its adoption. I have expressed
my views on that.
[[Page S229]]
I yield the floor and ask our people to vote against it.
The PRESIDING OFFICER (Mr. Grams). The Senator from New York.
Mr. SCHUMER. I yield 4 minutes to the distinguished Senator from the
State of Washington, a cosponsor of this legislation.
The PRESIDING OFFICER. The Senator from Washington is recognized for
4 minutes.
Mrs. MURRAY. Mr. President, let me assure my colleagues, this issue
is not about theater. It is about the very real issue of violence
against women. I join with my colleague, the Senator from New York, and
thank him for his work on this amendment and urge my colleagues to
support it.
This amendment is not about abortion. This amendment is about
violence against women. We cannot allow violent extremists to use the
bankruptcy code to carry out their agenda of violence.
If anyone thinks this is simply another abortion or choice issue, let
me point out to all of you, there are groups and individuals who teach
violent protesters how to protect their financial assets in the event
of a civil or criminal penalty. There are classes one can take or
pamphlets one can read spelling out how violent protesters can get
around any punitive financial damage by simply running to bankruptcy
court.
It is simply beyond comprehension how we can allow those convicted of
violence and intimidation to be excused from punitive financial
penalties. If we are serious about reducing violence and sending the
right message to our children, we must support the Schumer amendment.
In 1998, there were two murders and one attempted murder of clinic
workers. Since 1990, abortion clinic arson and bombings have resulted
in over $8.5 million in damages. Two bombs were recently discovered at
clinics in Kentucky and Ohio. Every day, women are harassed and
intimidated as they seek proper health care services. This violence
must stop, and those responsible must be held accountable.
Passage of the Schumer amendment will send the message that violence
will not be tolerated. Peaceful protests will continue. Each individual
has a right to freely express their views and their opinions. But no
one has a right to carry out a campaign of fear and violence.
For too many women, these clinics are their only access to health
care, including cancer screening and prenatal care. Constant and
violent threats diminish access to health care for hundreds of women
and subject them to unreasonable abuse and intimidation. Do not reward
those who seek to deny women access to legal, affordable health care
services.
Mr. President, I urge my colleagues to do the right thing and support
the Schumer amendment.
I yield back my time to the Senator from New York.
The PRESIDING OFFICER. Who yields time?
Mr. HATCH. Mr. President, how much time remains on this side?
The PRESIDING OFFICER. The Senator has 17\1/2\ minutes remaining.
Mr. SCHUMER. Mr. President, how much on our side?
The PRESIDING OFFICER. The Senator from New York has 9 minutes
remaining.
Mr. SCHUMER. I thank the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, bankruptcy law already covers willful,
malicious, intentional conduct about which the distinguished Senator
from Washington has been talking.
I rise to speak in opposition to this amendment offered by the
Senator from New York. Nobody in this body condones violence of any
kind. There is no excuse for it; that is, whether it is committed at an
abortion clinic, whether it is committed by labor unions, or whether it
is committed against churches, or for any other reason. But this
amendment has nothing legitimate to do with bankruptcy reform. In my
view, we should focus on our task of providing real bankruptcy relief
for the American people.
This amendment is unnecessary. It provides that debts and liabilities
arising from abortion clinic violence would not be dischargeable in
bankruptcy. There simply is no need to place damages regarding access
to abortions in a special class with special protections above other
damages for other actions, including, for example, actions under civil
rights laws. Not only is it poor policy to segregate certain classes of
violence for special status in bankruptcy, but the bankruptcy code
already allows for the nondischargeability of debts for ``willful and
malicious injury by the debtor.'' This is already taken care of, if
that is what the Senator is really concerned about, willful and
malicious injury caused by the debtor. Indeed, I asked to include a
summary of a recent case in the Record.
In that case, the Behn case, it is said, in a newspaper report of
that case:
A veteran anti-abortion protester cannot use bankruptcy to
erase a debt of more than $50,000 in court-imposed fines,
legal fees and interest she owes a Buffalo clinic that
performs abortions, a federal judge has ruled.
``If anyone thought they might escape penalties for
violating a judge's order through bankruptcy,'' said Glenn E.
Murray, a lawyer who represented the clinic, ``they should
read this decision.''
Already the law takes care of what the distinguished Senator from New
York would like to have taken care of.
Notwithstanding that this amendment is entitled ``Nondischargeability
of Debts Incurred Through the Commission of Violence at Clinics,'' its
reach extends much more broadly. That is where the danger comes in.
For example, the amendment, by its own terms, is not limited to acts
of violence, as the title would lead us to believe, but covers acts of
``interference with'' a person seeking an abortion, whatever that
means. In addition, the amendment refers to ``an actual or potential
action under any Federal, State, or local law'' having to do with
providing abortions.
As I read this language, it goes far beyond the discrete issue of
violence at abortion clinics. In fact, if you read this language in the
actual amendment, it has some very strange language in it. It says, in
paragraph (3)(C):
an actual or potential action alleging the violation of any
Federal, State, or local statutory or common law, including
chapter 96 of title 18 and the Federal civil rights laws
(including sections 1977 through 1980 of the Revised
Statutes) that results from the debtor's actual, attempted,
or alleged--(i) harassment of, intimidation of, interference
with, obstruction of . . .
Then it gets into injury to, threat to, or violence against any
person. Look at that language: harassment, intimidation, interference.
My goodness.
I urge my colleagues to read the actual text of the amendment before
they vote. If they believe they are voting on an amendment that
strictly covers acts of violence at abortion clinics, they are
mistaken. Who knows how this amendment is going to be applied
otherwise. The bankruptcy law already takes care of violence, abortion
clinic violence, if you will. It does not discharge that in bankruptcy.
The cases so state. I do not think we should fail to recognize that the
bankruptcy code already provides or allows for the nondischargeability
of debts ``for willful and malicious injury by the debtor.''
This goes far beyond real injury. This actually could be used to
oppress people who legitimately feel otherwise than the abortion clinic
does. I urge my colleagues to reject this amendment. At the appropriate
time, I am sure the distinguished Senator from Iowa or myself will move
to table the amendment. I hope we can reject this amendment. I hope it
is not necessary for the Vice President to come and break a tie vote on
this matter. I think this would be catastrophic language in the
bankruptcy code, which already does take care of violence at abortion
clinics. Case law so states.
This is just another overreach by those who want to make a political
issue out of something that does not deserve to be in the bankruptcy
code, although I believe it is a sincere overreach that perhaps is not
considered such by my dear friend from New York, for whom I have a lot
of esteem in the law. I am concerned about this kind of language. It is
very broad, very undefined. No question that it goes far beyond actual
injury, far beyond malicious conduct, far beyond willful and malicious
injury that the bankruptcy code already covers. We have enough in the
code to take care of problems at abortion clinics without putting in
harassment, intimidation, interference, and obstruction into the
bankruptcy code.
[[Page S230]]
I reserve the remainder of our time.
Mr. SCHUMER. Mr. President, I yield 3 minutes to the distinguished
Senator from Nevada, cosponsor of this amendment and one of its
leaders.
The PRESIDING OFFICER. The Senator from Nevada is recognized for 3
minutes.
Mr. REID. Mr. President, I appreciate very much the statement of the
Senator from Iowa where he tried to indicate that the Vice President
was coming here because of some problem in the campaign. I direct the
attention of the Senator from Iowa to what really took place in New
Hampshire last night. As every political pundit in America has stated,
Democrat and Republican, those who are neutral, Bush was bushwhacked in
New Hampshire. That is the real problem. I appreciate the Senator's
attempt to divert attention from the fact that there really was a
problem in New Hampshire for Governor Bush.
In the year 1215, in a meadow in England, a group of barons were with
King John. King John couldn't sign his name, but he did affix his
cross, his X, to a document that we now call the Magna Carta. The
reason that was so important in our history is because it was the
beginning of common law. It was the beginning of the rule of law that
we adopted when we became a nation. We followed the English common law
which started with Runnymeade and the Magna Carta. It established the
rule of law, not a rule of kings, not a rule of demagogues, not a rule
of zealots but a rule where we follow the law.
That is what this debate is about today. There are a group of people
in America today who recognize there is a law, but they are above it.
They don't have to follow it. They can go and use butyric acid, fire,
bullets, guns, causing murder, disruption of businesses. They can, of
course, cause all these blockades, and people who disagree have said
what you are doing is wrong. You are avoiding the law, and we are going
to take you to court and have a court of law determine that you are
wrong, and you are going to have to respond in money damages for the
violence and the disruption in business and the damage that you have
caused. They have gone to court and they have won those lawsuits. They
have had money judgments rendered against them. These people who caused
this disruption of business, who threw this acid in people's faces in
clinics, who set fires, who murdered people, they say we are above the
law; we don't have to follow it because we disagree with the law.
We are a country that has a rule of law. These people should not be
able to discharge these debts in bankruptcy. That is what this
amendment is all about.
We recognize that violence and terror are worsening every day in this
world, and we have to stop it. This is one method of stopping it. One
of the reasons these people flout the law is they say don't have to
follow the law.
Mr. President, these people intimidate. They recognize that they do
not have to be held accountable. Today, what we are saying is we must
act to ensure that we live in a law-abiding society. This amendment
does that by saying that those who have a judgment rendered against
them in a court of law, where the court has determined that they
engaged in unlawful acts of intimidation and violence, can't escape
responsibility for their actions in bankruptcy court.
I believe in our system of justice, where courts and juries make
decisions that we as the American public must follow. Some people don't
believe in our system of justice; they don't believe in our system of
trial by jury and court determinations. They believe money damages
awarded against them mean nothing because they are going to discharge
them in bankruptcy. In effect, they believe the law is for everybody
else but them. We think that is wrong and that is why we should have an
overwhelming vote in the Senate. The Vice President, even though he is
going to be here, should not have to break a tie. People of good
conscience on both sides of the aisle should vote in favor of this
amendment. It is the right thing to do because it upholds the rule of
law.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. HATCH. Mr. President, look, let's not get this amendment mixed
up. The current law takes care of actual injury. It takes care of
malicious injury and willful injury by the debtor. That is not
discharged in bankruptcy. So it has nothing to do with violence. The
current law takes care of that.
None of us condone violence. That is not what this amendment is
about. Look at the doggone language of this amendment. It is
unbelievable. What it says here is, ``an actual or potential action
alleging the violation of any Federal, State, or local statutory or
common law'' and ``that results from the debtor's actual, attempted, or
alleged harassment. . .''
What does that mean? ``Intimidation of. . .'' What does that mean? If
somebody says ``boo,'' are they intimidating and they could not be
discharged in bankruptcy, in an unjust case in bankruptcy where they
haven't caused any harm or willful malicious injury? Interference with?
Obstruction of? This is an overreach if there ever was one, since we
already have bankruptcy law that provides nondischargeability of debts
of a debtor who has caused willful or malicious injury to another
person, or even to the clinic, I suppose. We should not get into a type
of social engineering in the bankruptcy code since we already take care
of willful and malicious activities. When you start talking about
harassment, intimidation, obstruction, interference--these are words
that can be used in a criminal code, but they should not be used in the
bankruptcy code which already provides for willful, malicious injury by
the debtor as nondischargeable in bankruptcy. I think when we get into
that stuff we are getting into areas that basically disrupt the code
and should not be part of the code.
None of us tolerate or approve of violence at the abortion clinics.
Some of these anti-abortion people who have committed violence should
be punished to the full extent of the law. They should not be allowed
to get away with it. Whichever side you are on in this issue ought to
be a side of debate and a side of honest debate, not a side of
violence. But we take care of willful and malicious injury, which may
not even be violence. It may be something that even involves
negligence, I suppose. We take care of it in the current code.
Why should we amend the code just because some would like to do so
with this strange and very undefined language. Plus, it is something
that everybody ought to think about--improper and illegal, or should I
say nonlegal, to argue that this amendment is all about violence. It is
not at all. It is about extending what is already covered to areas that
literally do not involve violence or malicious injury or willful and
violent and malicious conduct. That is not what the bankruptcy code
should be all about. I hope our colleagues will vote this amendment
down.
I reserve the remainder of our time.
The PRESIDING OFFICER. Who yields time?
Mr. SCHUMER. Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. The Senator from New York has 6 minutes.
Mr. SCHUMER. I yield myself 3 minutes.
Mr. President, I greatly respect my friend from Utah, who is a fine
legislator and a fine human being. He is just dead wrong on this. Let
me just answer this. He said we don't need this law, first, because the
present code covers it. CRS, which is hardly known as either a pro-life
or a pro-choice organization, is respected for their analysis and they
say in a memorandum of June 8:
We conclude, for the reasons discussed below, that the
Schumer proposal, which would add a new subsection 19 to
523(a), is far broader in scope and would encompass a far
wider range of potential debtor liability than is currently
covered by 523(a)(6).
Don't rely on Senator Hatch, don't rely on Senator Schumer, but on
523. One other point. The Senator from Utah says everything is covered.
Let's hear what the attorney said in that Nuremberg Files case, that
horrible and devastating case--so bad that a jury in Oregon awarded
$109 million in damages, realizing what has happened in America in
terms of the death of doctors. Here is what the lawyer said:
Your clients are nothing more than nonpriority, unsecured
judgment creditors, with other judgment creditors ahead of
them . . . even a car loan has priority over your judgment.
Let me repeat that so maybe my friend from Utah can hear me in the
[[Page S231]]
Cloakroom: ``. . . even a car loan has priority over your judgment.''
Is that what we wanted in the present law? No, absolutely not. The
record is clear. There are certain instances where the present law
would cover it--narrow instances, and even in those cases, you would
have to go all the way back to bankruptcy court and relitigate. But in
many of these cases, the law is not clear, and in every one of these
cases, you make them litigate two, three, four times. We know what the
policy of these violent extremists is. It is to delay and delay and
delay. They should not be allowed to use the bankruptcy code to do
that.
One other point. I think my good friend from Iowa said, well, it
doesn't stop violence. That might be done by pro-choice groups. Not so.
If a pro-choice group were to decide to blockade a clinic, or threaten
a doctor, or use violence because they did not like what that clinic
was doing, they would be equally subject to the law.
The reason that statement is so absurd is because we don't have a
grand movement on the pro-choice side seeking to use violence. Read the
works of Randal Terry and Flip Benham and everybody else. They believe
because they are morally superior to the rest of us that they have the
right to take the law into their own hands and use violence.
The PRESIDING OFFICER. The Senator's 3 minutes has expired.
Mr. SCHUMER. I thank the President.
The PRESIDING OFFICER. The Senator from New York has 3 minutes
remaining, and the Senator from Iowa has 6 minutes remaining.
Mr. GRASSLEY. Mr. President, we have a speaker on his way. Senator
Sessions wants to speak.
Mr. REID. Mr. President, I am wondering. Senator Leahy, the ranking
member of the committee, could speak. Until everyone is ready, why
don't we suggest the absence of a quorum so the time is reserved. I
suggest the absence of a quorum and ask unanimous consent that the time
not be charged to the respective sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I ask unanimous consent, given we don't
have any other business scheduled until 11 o'clock--we have other
Members coming from both sides who wish to speak--that each side be
given an additional 10 minutes.
The PRESIDING OFFICER. Is there objection?
Mr. GRASSLEY. I object to that. Let's wait until we use our time and
make that decision at that particular time.
The PRESIDING OFFICER. Objection is observed. The absence of a quorum
has been suggested, and the clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. LEAHY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEAHY. Mr. President, will the Senator from New York yield 2
minutes?
Mr. SCHUMER. I am happy to yield 2 minutes to the distinguished
ranking member of the Judiciary Committee, who has been a guiding
inspiration.
The PRESIDING OFFICER. The Senator from Vermont is recognized.
Mr. LEAHY. Mr. President, I very proudly cosponsored the amendment of
the Senator from New York. Senator Schumer's amendment on debts
incurred through the commission of violence to health service clinics
is a good one. It closes a real-life loophole in our bankruptcy code
because some people are using the bankruptcy laws to avoid paying debts
arising from clinic violence.
That is a dangerous precedent that Congress should stop. It would be
the same if somebody was doing this using the bankruptcy laws to escape
paying bills for violence against anybody, whether groups with which I
agree or groups with which I disagree.
We should not use the bankruptcy laws for this. It is wrong to allow
court judgments under the Freedom of Access to Clinic Entrances Act to
be discharged under our bankruptcy laws. In fact, 12 individuals who
created the Nuremberg Files web site filed bankruptcy to avoid their
debts under the law.
If I could make a personal note on this, at a time when a doctor was
murdered in New York because his name was on the Nuremberg Files,
within days they determined that the chief suspect was a man from
Vermont. I went to the Nuremberg Files. My name was listed among those
to be shot.
The PRESIDING OFFICER. The time of the Senator from Vermont has
expired.
Mr. LEAHY. I ask for another 30 seconds.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEAHY. This was a very chilling thing for both me and my family.
To think somebody could use laws to escape any penalties they might
receive under their use of our bankruptcy laws is wrong.
I agree with the Senator from New York.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
If no one yields time, it will be charged equally between the two
sides.
Mr. SCHUMER. Mr. President, might I renew the request of Senator Reid
that we have a quorum call not to be counted against either side until
Senator Sessions can get here? Is there a way?
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. We have done it that way already.
Mr. REID. I am sorry. I sure wasn't in on the request.
Mr. SCHUMER. If I might answer the question--Mr. President, may I
respond to Senator Reid's question?
The PRESIDING OFFICER. Is the Senator from New York suggesting the
absence of a quorum without the time being charged to either side?
Without objection, it is so ordered.
The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. SCHUMER. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I discussed this with the Senator from
Iowa, and he has graciously agreed to 1\1/2\ additional minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Then all time will have expired. Is that right? OK.
I thank the Senator from Iowa.
The PRESIDING OFFICER. The Senator from Iowa has 6 minutes.
Mr. GRASSLEY. We will take care of ours. We will yield it.
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. Mr. President, I say in conclusion to my colleagues that
this is an extremely important amendment to keep a bipartisan law, the
FACE law, alive and well. If we don't pass this amendment, there will
be hundreds and hundreds of instances where people perpetrate violence,
and violate the FACE law, and they will not be held accountable.
Let me repeat again what the Nuremberg Files people, who list Members
of this body as people who ought to be looked at, say:
The judgment in this case, in my view, is not only . . .
non-priority unsecured debt but fully dischargeable debt.
Even a car loan has priority over your judgment.
That makes a mockery of the rule of law in this country. This is not
a pro-choice or a pro-life law. This is the law that says those who
seek violence, threat, and intimidation against legal clinics in
America because they somehow feel they have a moral superiority to
every one of us will be punished for their actions.
It is a desperately needed proposal. I urge my colleagues to support
it.
I yield the floor.
Mr. L. CHAFEE. Mr. President, clinics that provide family planning
services and counseling as well as abortions are engaged in an honest,
law-abiding activity. These services enable women to exercise their
right to make reasoned and informed decisions about their reproductive
futures. Yet, given the escalating culture of violence surrounding
these clinics, abortion providers and clinic workers risk their lives
coming to work each day.
In my own state of Rhode Island, I have heard troubling reports of
clinic violence from people such as Pablo Rodriguez M.D., medical
director of Planned Parenthood Rhode Island.
[[Page S232]]
Although Congress has made strides to stem clinic violence by passing
the Freedom of Access to Clinic Entrances Act (FACE), this statute has
not been a panacea. While FACE empowered those victimized by clinic
violence to sue, many plaintiffs found liable in civil court for clinic
violence seek refuge under our nation's bankruptcy law to avoid paying
the financial penalties levied against them.
Providing women's health services is legal; clinic violence is not. I
believe we must do anything we can to discourage these horrible acts of
violence. Senator Schumer's amendment closes a loophole that allows
perpetrators of clinic violence to escape the consequences of their
actions.
The bankruptcy code was intended to provide a fresh start for honest
debtors, not those who have violated the law and endangered innocent
lives. Therefore, I urge my colleagues to vote in favor of Senator
Schumer's amendment.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, I ask unanimous consent the 10 minutes set
aside for the Harkin amendment be given to Senator Kennedy to speak on
the bill.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Following the statement by Senator Kennedy, the amendment
will be withdrawn.
The PRESIDING OFFICER. The Harkin amendment is not pending.
Mr. REID. I ask unanimous consent the amendment that is now pending
be set aside and the Harkin amendment be in order.
The PRESIDING OFFICER. For 10 minutes?
Mr. REID. Yes, and following the statement by Senator Kennedy, the
amendment be withdrawn. And, of course it goes without saying, the time
of the majority would be reserved, not be taken as a result of this
unanimous consent request.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. REID. I thank the Chair.
Amendment No. 2770
(Purpose: Invalidating hidden security interests on nearly valueless
household liens)
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Nevada [Mr. Reid], for Mr. Harkin,
proposes an amendment numbered 2770.
Mr. KENNEDY. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place in the bill, add the following
section:
SEC. . (A) INVALIDATING HIDDEN SECURITY INTERESTS AND
NEARLY VALUELESS HOUSEHOLD LIENS
(1) Exempt Property.--Section 522(f) of title 11, United
States Code, is amended by adding at the end the following:
``(4) A lien held by a creditor on an interest of the
debtor in any item of household furnishings, household goods,
wearing apparel, appliances, books, animals, crops, musical
instruments, or jewelry held primarily for the personal,
family, or household use of the debtor or a dependent of the
debtor shall be void unless--
``(A) the holder of the lien files with the court and
serves on the debtor, within 30 days after the meeting of
creditors or before the hearing on confirmation of a plan,
whichever occurs first, a sworn declaration that the purchase
price for the particular item that is subject to such lien
exceeded $1,000 or that the item was purchased within 180
days prior to the filing of the bankruptcy petition, and
``(B)(i) the debtor does not timely object to such
declaration; or
``(ii)(I) the debtor objects to such declaration; and
``(II) the court finds that the purchase price of the item
exceeded $1,000 or that the item was purchased within 180
days prior to the filing of the bankruptcy petition and that
such lien is not avoidable under paragraph (f)(1) of this
section.''.
(2) Conforming Amendments--Section 104(b)(1) of title 11,
United States Code, is amended by inserting `522(f),' after
`522(d)'.
The PRESIDING OFFICER. The Senator from Massachusetts is recognized
for 10 minutes.
Mr. KENNEDY. I thank the leaders.
Mr. President, I yield myself 8 minutes at this time.
The PRESIDING OFFICER. The Senator will be recognized for 8 minutes.
Mr. KENNEDY. Mr. President, as the Senate completes its work on the
bankruptcy bill, we are more aware than ever of the potential impact of
this legislation on American citizens and businesses.
This legislation purports to reform the bankruptcy system and
eliminate debtor abuses, and the banking and credit card industries
have been urging action on it for the past two years. They argue that
during this time of economic expansion, Congress should deal with the
increase in bankruptcy filings by curtailing pervasive debtor fraud. If
Congress doesn't act, they say, the economy will suffer.
But the industry's cure is worse than the disease. First, they fail
to acknowledge a key fact--the steady decline in bankruptcy filings.
Without any action by Congress, the number of bankruptcy filings is
going down. Filings have dropped in 42 states. Overall, there were
112,000 fewer personal bankruptcies in 1999 than in 1998--the largest
one-year drop on record.
Leading economists believe that the bankruptcy crisis is self-
correcting. The significant drop in filing is ample indication that a
harsh bankruptcy bill is not needed.
It is abundantly clear that the bill before us is unnecessarily
harsh. As House Judiciary Committee Chairman Henry Hyde acknowledged,
it contains dozens of provisions that favor creditors, and it fails to
address the serious problems that often force citizens into bankruptcy.
The bill will make it more difficult for thousands of debtors who
file for bankruptcy because of the layoffs and corporate downsizing
that take place after mergers, and that are ordered by businesses to
improve profits.
This bill also makes it more difficult for families already torn
apart by divorce--particularly divorced women, who are four times more
likely to file for bankruptcy than married women or single men.
The bill would also have a devastating effect on the millions of
Americans who have no health insurance or substandard coverage. For
almost 20 percent of those filing for bankruptcy protection, a health-
related problem led to their economic problems.
Earlier in the debate we took the time of the Senate to go through
each of those categories, the numbers of people who went into
bankruptcy as a result of the mergers and downsizing of major companies
and corporations. These are American men and women who have worked hard
all of their lives and through no fault of their own were put in very
difficult economic straits and run into bankruptcy.
Because of the escalation of divorce, large numbers of single women
are particularly vulnerable, because of their credit situation, to run
into problems with bankruptcy. We have seen with the decline of health
care coverage, particularly among older workers in their fifties,
before they are eligible for Medicare, they have been the increasing
targets of bankruptcy. These are groups of Americans who have been
hard-working all of their lives and now are going to be caught up in
this particular legislation which I think is particularly harsh on
these individuals, and needlessly so.
In addition, this bill fails to significantly address the serious
problems created by the credit card industry. In an average month, 7
percent of all households in the country receive a credit card
solicitation. In recent years, the credit card industry has also begun
to offer new lines of credit targeted at people with low incomes--
people they know cannot afford to pile up credit card debt.
Facts such as these have reduced the economic stability of millions
of families, and have led many of them to file for bankruptcy. Two out
of every three bankruptcy filers have an employment problem. One out of
every five has a health-care problem. Divorced or separated people are
three times more likely than married couples to file for bankruptcy.
Working men and women in economic free fall often have no choice except
bankruptcy.
Although the Senate spent two weeks debating and amending the
bankruptcy
[[Page S233]]
bill last year and several additional days this year, this bill still
does not acknowledge the problems that force so many Americans into
bankruptcy. It remains heavily tilted toward the financial services
industry, and many needed amendments were defeated.
Simultaneously, amendments were adopted that should be an
embarrassment to the Senate. By a one-vote margin, the Senate adopted
an amendment that provides for school vouchers, as well as harmful
changes in the nation's anti-drug policy.
The Republican leadership offered a watered-down minimum wage
increase, tied to a poison pill that cuts overtime pay, and an enormous
$71 billion in tax breaks that disproportionately benefit the
wealthiest Americans. Those provisions are now part of this bankruptcy
bill--making a bad bill even worse.
By failing to increase the minimum wage last year, Congress failed
the American people. It is time--long past time--to raise the minimum
wage.
Our proposal is modest--a one dollar increase in two installments--50
cents now, and 50 cents a year from now. Over 10 million American
workers will benefit. Our position is clear, it's ``50-50 or fight!''
Our Democratic proposal to increase the minimum wage by a dollar over
the next year will make a significant difference in the lives of all
workers who earn the minimum wage and their families.
Unlike the Republican proposal, our Democratic proposal will give
minimum wage workers the pay raise they need and deserve, so that they
can care more effectively for their families and pay for the food and
clothing and housing they need.
We shouldn't delay an increase. We shouldn't stretch it out. We
shouldn't use it to slash overtime pay. We shouldn't use it as an
excuse to give tax breaks to the wealthy.
Raising the minimum wage is an issue of fairness and dignity. No one
who works for a living should have to live in poverty.
Before casting our final votes on this legislation, we have the
opportunity to adopt several very important amendments that deserve our
support. Yesterday, we started debate on the Levin-Durbin gun
amendment, which would prevent gun manufacturers from abusing the
bankruptcy system.
Today, Senator Schumer offered an amendment that eliminates a loop-
hole currently being exploited by perpetrators of clinic violence.
Senator Schumer's proposed amendment is neither a prochoice amendment
nor an anti-choice amendment. At its heart, it is not about abortion at
all. Rather, it is about accountability for violent, illegal acts. It
is about preventing those who use tactics of violence and intimidation
against reproductive health clinics from using the bankruptcy laws as a
shield from financial liability for their unlawful acts.
In response to a wave of violence which included murder, arson,
bombing and harassment, Congress enacted the Freedom of Access to
Clinic Entrances Act in 1994. That Act established criminal penalties
and financial penalties for violence and intimidation directed against
reproductive health service patients and providers.
I'm proud to be the Senate author of that legislation because since
its passage, incidents of clinic violence have declined significantly.
In addition, under the act and other federal and state laws, victims of
clinic violence have been able to obtain remedies, and perpetrators of
unlawful clinic violence have paid substantial fines and civil
penalties.
Unfortunately, some of these offenders are attempting to evade their
liability by exploiting the bankruptcy system.
For example, last year a federal judge ordered two anti-abortion
groups and twelve individuals to pay in excess of $107 million for
anti-choice activities and threats. However, within the last few
months, five of those defendants, who collectively owe more than $45.5
million in clinic-violence debts, filed for bankruptcy to avoid the
judgments.
For over 100 years, our bankruptcy system has enabled honest debtors
to receive a fresh start--but, the bankruptcy laws were never intended
to be a safe haven for the deliberate disregard of Federal or State
laws.
The Schumer amendment preserves the integrity of the bankruptcy laws,
and I urge my colleagues to support it.
The Schumer amendment, the Levin amendment, and others are critical
in the needed effort to salvage this bill. Our goal is to enact
responsible bankruptcy reform, not a sweetheart deal for the credit
card industry.
Mr. President, at the appropriate time, I intend to offer a motion to
instruct the conferees on the bankruptcy bill to fix the deeply flawed
minimum wage proposal contained in the bill. The watered-down wage
proposal in this bill is an insult to the hard-working men and women
earning the minimum wage. In this time of plenty, we must not
shortchange these workers. We should provide a 50-cent raise now and 50
cents a year from now.
Finally, it is fair to ask when we look at any piece of legislation
we do who is going to benefit and who is going to lose. As has been
demonstrated during the hearings and during the debate, just about
every thoughtful person who has studied the bankruptcy bills remarks
about how Congress, over the history of our Nation, has proposed
bankruptcy bills which have been balanced between the debtor and the
creditor, with the understanding that there are so many millions of
Americans who may fall onto hard times briefly but are hard-working,
decent people.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. REID. Mr. President, I ask unanimous consent that 2 minutes of
the time that has been set aside for Senator Feingold be allotted to
Senator Kennedy. I have cleared this with Senator Feingold.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from Massachusetts is recognized for 2 minutes.
Mr. KENNEDY. Mr. President, it has been remarkably balanced, with the
exception of this legislation.
Finally, when you come down to it, one has to ask who benefits and
who loses. It is very clear the winners in this are the credit card
companies and the losers are the hard-working men and women who have
fallen on difficult times, in most instances due to no fault of their
own. They are men and women who have been downsized as a result of
mergers. They are men and women who have fallen into serious economic
times because of the failure of their health insurance to cover those
individuals. They are primarily women who, as a result of their
personal relationships, have been divorced and find it difficult to
maintain a system of credit.
One can look back over all of these and find they are the victims of
this legislation and they are the ones who are going to suffer the
harsh penalties of it. It is fundamentally wrong. We have not had the
opportunity in this debate to see protections for children and mothers.
The reason for the Dodd amendment is to give special protections which
historically have been a part of our bankruptcy laws. That has been
defeated, as well as the amendments to remedy some of the harsh
provisions of the means test.
This legislation is not the legislation that passed the Congress a
little over a year ago in which I joined others in supporting. This is
not balanced legislation.
For those reasons, plus the fact we have $73 billion of tax breaks
for wealthy individuals in here and a denial to the hardest working
Americans for fairness in treating them with a minimum wage, it ought
to be voted down.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I yield 6 minutes, or whatever he
consumes of the time I have remaining on the Schumer amendment, to the
Senator from Alabama. What he does not use I will yield back.
The PRESIDING OFFICER. The Schumer amendment is now pending. The
Senator from Alabama is recognized.
Amendment No. 2650, As Further Modified, As Previously Agreed To
Mr. SESSIONS. Mr. President, my good friend Senator Reed and I have
worked together for quite some time now to adopt a provision involving
reaffirmations, amendment No. 2650. We have a few technical corrections
to which we have agreed, and we have reached an agreement to make these
technical corrections.
[[Page S234]]
I send to the desk a modified amendment which includes the technical
corrections. I ask unanimous consent that the original amendment No.
2650 be vitiated and that the modified amendment be accepted,
substituted, and adopted in its place.
The PRESIDING OFFICER. Under the agreement, the Senator has that
right. The Senator from Nevada.
Mr. REID. I have checked with the staff of Senator Reed and the floor
staff on this side, and there is no objection to the unanimous consent
request of the Senator from Alabama.
Mr. REED. Mr. President, I rise to speak briefly on a technical
amendment offered by myself and Senator Sessions. Senator Sessions and
I are offering this technical amendment merely to correct some
provisions which we felt were needed in order to avoid an unintended
reading of the amendment. Reaffirmations are essentially agreements
between creditors and consumers whereby the consumer agrees to continue
to repay the debt owed the creditor, even after all other debts may be
discharged in bankruptcy. Unfortunately, there have been many instances
in the past in which consumers have not been well-informed going into
these agreements, and in some cases have been coerced into signing
them. As some of my colleagues may recall, in offering our original
amendment on reaffirmations, Senator Sessions and I had two major
goals: the first was to improve consumer's understanding of what they
are doing when they agree to reaffirm a debt that they were entitled
to, under the law, have discharged. The second goal was to promote
efficient handling of reaffirmations in the bankruptcy process. Our
November amendment developed a uniform disclosure form that is to be
filed with the court along with the reaffirmation agreement into which
the consumer is entering. The amendment also expands the authority of
the bankruptcy court to review those reaffirmations that are most
likely to fail, such as debtors whose income and other expenses clearly
indicate that they do not have the ability to repay the debt which they
are reaffirming. In that respect, the Reed-Sessions amendment seeks to
provide courts with the information they need to determine quickly and
efficiently whether these reaffirmations are appropriate or not. The
specific changes that we are making today to our original amendment
simply clarify certain points we felt may be open to misinterpretation.
For example, we want to make it clear that the debt a consumer is
reaffirming includes two totals: First is the total amount of the debt
the consumer owes, and second is the total amount of any other costs
accrued by the consumer since the date they were given the disclosure
statement. At another point, we wanted to make clear to the consumer
that the payments they would be making on the reaffirmed debt are
subject to change, based on their reaffirmation or original credit
agreement.
In the part of the amendment detailing certain steps the consumer
needs to undertake, we wanted to make clear that consumers would not be
penalized if their attorney decides not to sign the reaffirmation
agreement and the disclosure statement.
We also want to make clear to consumers that in certain
circumstances, they can also redeem the item, rather than reaffirming
the debt they have on it. to redeem it, they can simply make one
payment equal to the actual value of the item.
All of these mostly minor changes will make the original amendment
that much more clear and easier for the consumer to understand when
they are going through the unpleasant process of bankruptcy. With all
that said, it was my hope to have another point included in the final
version of this amendment, but I have agreed not to push for its
inclusion at this time. This last piece that I was seeking deals with
the amount of time one has to file reaffirmations. I would first like
to make it clear that it is not my intention to suggest that the
original Reed-Sessions amendment was unclear about the need for timely
filing of reaffirmations and the new disclosure form with the court.
However, in the course of discussions with consumer advocacy groups,
there were strong arguments that it could be interpreted that way.
Therefore, I sought what I thought was a judicious approach, which was
to create a 50-day window--between the first meeting a debtor has with
creditors until the time of discharge--to enter into a reaffirmation
agreement. The original Reed-Sessions amendment goes to some length to
carefully define the information that must be presented to the debtor,
the instructions that the debtor must receive, and the conditions under
which this information must be presented to the courts. However, I
think we will all recognize that this information is most useful to the
courts if it can be provided in a timely manner.
The underlying bill already contains a number of provisions that
outline certain deadlines for actions that the consumer must undertake
within the course of bankruptcy. Therefore, this new deadline would be
entirely consistent with those others already present in the bill. I
believe a deadline of some kind is necessary in this case as we have
seen certain abuses in the past, most notable in the case of Sears,
where there appeared to be no effort to file these reaffirmation
agreements with the court, yet all the while consumers continue to pay
as if they had been. I would also like to point out that several
advocates and bankruptcy judges were consulted on the timing issue,
notably Judge Eugene Weedoff of Chicago and Judge Thomas Carlson of
California, as well as Professor Elizabeth Warren of Harvard
University. However, I'm pleased to say that I have come to an
agreement with Senator Sessions on the technical amendment and on
addressing the timing issue with regard to filing reaffirmations.
Therefore, I would urge the support of this amendment.
The amendment (No. 2650), as further modified, as previously agreed
to, reads as follows:
SEC. 1. REAFFIRMATION.
In S. 625, strike section 203 and section 204(a) and (c),
and insert in lieu of 204 (a) the following--
``(a) In general.--Section 524 of title 11, United States
Code, as amended by section 202 of this Act, is amended--
(1) In subsection (c) by striking paragraph (2) and
inserting the following:
``(2) the debtor received the disclosures described in
subsection (i) at or before the time the debtor signed the
agreement.
(2) By inserting at the end of the section the following--
``(i)(1) the disclosures required under subsection (c)
paragraph (2) of this section shall consist of the disclosure
statement described in paragraph (3), completed as required
in that paragraph, together with the agreement, statement,
declaration, motion and order described, respectively, in
paragraphs (4) through (8) of this subsection, and shall be
the only disclosures required in connection with the
reaffirmation.
``(2) Disclosures made under this paragraph shall be made
clearly and conspicuously and in writing. The terms ``Amount
Reaffirmed'' and ``Annual Percentage Rate'' shall be
disclosed more conspicuously than other terms, data or
information provides in connection with this disclosure,
except that the phrases ``Before agreeing to reaffirm a debt,
review these important disclosures'' and ``Summary of
Reaffirmation Agreement'' may be equally conspicuous.
Disclosures may be made in a different order and may use
terminology different from that set forth in paragraphs [(2)
through (8)], except that the terms ``Amount Reaffirmed'' and
``Annual Percentage Rate'' must be used where indicated.
``(3) The disclosure statement required under this
paragraph shall consist of the following--
``(A) The statement: ``Part A: Before agreeing to reaffirm
a debt, review these important disclosures:'';
``(B) Under the heading ``Summary of Reaffirmation
Agreement'', the statement: ``This Summary is made pursuant
to the requirements of the Bankruptcy Code'';
``(C) The ``Amount Reaffirmed'', using that term, which
shall be (I) the total amount which the debtor agrees to
reaffirm and (II) the total of any other fees or cost accrued
as of the date of the disclosure statement.''
``(D) In conjunction with the disclosure of the ``Amount
Reaffirmed'', the statements
(I) ``The amount of debt you have agreed to reaffirm''; and
(II) ``Your credit agreement may obligate you to pay
additional amounts which may come due after the date of this
disclosure. Consult your credit agreement'';
``(E) The ``Annual Percentage Rate'', using that term,
which shall be disclosed as --
``(I) If, at the time the petition is filed, the debt is
open end credit as defined pursuant to the Truth in Lending
Act, title 15 United States Code section 1601 et. seq., then
``(aa) the annual percentage rate determined pursuant to
title 15 United States Code section 1637(b)(5) and (6), as
applicable, as disclosed to the debtor in the most recent
periodic statement print to the agreement or, if no such
periodic statement has been provided the debtor during the
prior six months, the annual percentage rate as it
[[Page S235]]
would have been so disclosed at the time the disclosure
statement is given the debtor, or to the extent this annual
percentage rate is not readily available or not applicable,
then
``(bb) the simple interest rate applicable to the amount
reaffirmed as of the date the disclosure statement is given
to the debtor, or if different simple interest rates apply to
different balances, the simple interest rate applicable to
each such balance, identifying the amount of each such
balance included in the amount reaffirmed; or
``(cc) if the entity making the disclosure elects, to
disclose the annual percentage rate under (aa) and the simple
interest rate under (bb).
``(II) if, at the time the petition is filed, the debt is
closed end credit as defined pursuant to the Truth in Lending
Act, title 15 United States Code section 1601 et. seq., then
``(aa) the annual percentage rate pursuant to title 15
United States Code section 1638(a)(4) as disclosed to the
debtor in the most recent disclosure statement given the
debtor prior to the reaffirmation agreement with respect to
the debt, or, if no such disclosure statement was provided
the debtor, the annual percentage rate as it would have been
so disclosed at the time the disclosure statement is given
the debtor; or to the extent this annual percentage rate is
not readily available or not applicable, then
``(bb) the simple interest rate applicable to the amount
reaffirmed as of the date the disclosure statement is given
the debtor, or if different simple interest rates apply to
different balances, the simple interest rate applicable to
each such balance, identifying the amount of such balance
included in the amount reaffirmed; or
``(cc) if the entity making the disclosure elects, to
disclose the annual percentage rate under (aa) and the simple
interest rate under (bb).''
``(F) If the underlying debt transaction was disclosed as a
variable rate transaction on the most recent disclosure given
pursuant to the Truth in Lending Act, title 15, United States
Code, section 1601 et. seq, by stating ``The interest rate on
your loan may be a variable interest rate which changes from
time to time, so that the annual percentage rate disclosed
here may be higher or lower.''
``(G) If the debt is secured by a security interest which
has not been waived in whole or in part or determined to be
void by a final order of the court at the time of the
disclosure, by disclosing that a security interest or lien in
goods or property is asserted over some or all of the
obligations you are reaffirming and listing the items and
their original purchase price that are subject to the
asserted security interest, or if not a purchase-money
security interest then listing by items or types and the
original amount of the loan.''
``(H) At the election of the creditor, a statement of the
repayment schedule using one or a combination of the
following--
``(I) by making the statement: ``Your first payment in the
amount $___ is due on___ but the future payment amount may be
different. Consult your reaffirmation or credit agreement, as
applicable.'', and stating the amount of he first payment and
the due date of that payment in the places provided;
``(II) by making the statement: ``Your payment schedule
will be:'', and describing the repayment schedule with the
number, amount and due dates or period of payments scheduled
to repay the obligations reaffirmed to the extent then known
by the disclosing party; or
``(III) by describing the debtor's repayment obligations
with reasonable specificity to the extent then known by the
disclosing party.
``(I) The following statement: ``Note: When this disclosure
talks about what a creditor ``may'' do, it does not use the
word ``may'' to give the creditor specific permission. The
word ``may'' is used to tell you what might occur if the law
permits the creditor to take the action. If you have
questions about your reaffirmation or what the law requires,
talk to the attorney who helped you negotiate this agreement.
If you don't have an attorney helping you, the judge will
explain the effect of your reaffirmation when the
reaffirmation hearing is held.'';
``(J) The following additional statements:
``Reaffirming a debt is a serious financial decision. The
law requires you to take certain steps to make sure the
decision is in your best interest. If these steps are not
completed, the reaffirmation agreement is not effective, even
though you have signed it.
``1. Read the disclosures in this Part A carefully.
Consider the decision to reaffirm carefully. Then, if you
want to reaffirm, sign the reaffirmation agreement in Part B
(or you may use a separate agreement you and your creditor
agree on).
``2. Complete and sign part D and be sure you can afford to
make the payments you are agreeing to make and have received
a copy of the disclosure statement and a completed and signed
reaffirmation agreement.
``3. If you were represented by an attorney during the
negotiation of the reaffirmation agreement, the attorney must
have signed the certification in Part C.
``4. If you were not represented by an attorney during the
negotiation of the reaffirmation agreement, you must have
completed and signed Part E.
``5. The original of this disclosure must be filed with the
court by you or your creditor. If a separate reaffirmation
agreement (other than the one in Part B) has been signed, it
must be attached.
``6. If you were represented by an attorney during the
negotiation of the reaffirmation agreement, your
reaffirmation agreement becomes effective upon filing with
the court unless the reaffirmation is presumed to be an
undue hardship as explained in part D.''
``7. If you were not represented by an attorney during the
negotiation of the reaffirmation agreement, it will not be
effective unless the court approves it. The court will notify
you of the hearing on your reaffirmation agreement. You must
attend this hearing in bankruptcy court where the judge will
review your agreement. The bankruptcy court must approve the
agreement as consistent with your best interest, except that
no curt approval is required if the agreement is for a
consumer debt secured by a mortgage, deed of trust, security
deed or other lien on your real property, like your home.
``Your right to rescind a reaffirmation. You may rescind
(cancel) your reaffirmation at any time before the bankruptcy
court enters a discharge order or within 60 days after the
agreement is filed with the court, whichever is longer. To
rescind or cancel, you must notify the creditor that the
agreement is canceled.
``What are your obligations if you reaffirm the debt? A
reaffirmed debt remains your personal legal obligation. It is
not discharged in your bankruptcy. That means that if you
default on your reaffirmed debt after your bankruptcy is
over, your creditor may be able to take your property or your
wages. Otherwise, your obligations will be determined by the
reaffirmation agreement which may have changed the terms of
the original agreement. For example, if your are reaffirming
an open end credit agreement, the creditor may be permitted
by that agreement and/or applicable law to change the terms
of the agreement in the future under certain conditions.
``Are you required to enter into a reaffirmation agreement
by any law? No, you are not required to reaffirm a debt by
any law. Only agree to reaffirm a debt if it is in your best
interest. Be sure you can afford the payments you agree to
make.
``What if your creditor has a security interest or lien?
Your bankruptcy discharge does not eliminate any lien on your
property. A ``lien'' is often referred to as a security
interest, deed of trust, mortgage or security deed. Even if
you do not reaffirm and your personal liability on the debt
is discharged, because of the lien your creditor may still
have the right to take the security property if you do not
pay the debt or default on it. If the lien is on an item of
personal property that is exempt under your state's law or
that the trustee has abandoned, you may be able to redeem the
item rather than reaffirm the debt. To redeem, you make a
single payment to the creditor equal to the current value of
the security property, as agreed by the parties or determined
by the court.''
``(4) To form of reaffirmation agreement required under
this paragraph shall consist of the following--
``Part B: Reaffirmation Agreement. I/we agree to reaffirm
the obligations arising under the credit agreement described
below.
``Brief description of credit agreement:
Description of any changes to the credit agreement made as
part of this reaffirmation agreement:
Signature: Date:
Borrower:
Co-borrower, if also reaffirming:
Accepted by creditor:
Date of creditor acceptance:'';
``(5)(i) The declaration shall consist of the following:
``Part C: Certification by Debtor's Attorney (If Any)
I hereby certify that (1) this agreement represents a fully
informed and voluntary agreement by the debtor(s); (2) this
agreement does not impose an undue hardship on the debtor or
any dependent of the debtor; and (3) I have fully advised the
debtor of the legal effect and consequences of this agreement
and any default under this agreement.
Signature of Debtor's Attorney: Date:'';
(ii) In the case of reaffirmations in which a presumption
of undue hardship has been established, the certification
shall state that in the opinion of the attorney, the debtor
is able to make the payment.''
``(6) The statement in support of reaffirmation agreement,
which the debtor shall sign and date prior to filing with the
court, shall consist of the following--
``Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
1. I believe this agreement will not impose an undue
hardship on my dependents or me. I can afford to make the
payments on the reaffirmed debt because my monthly income
(take home pay plus any other income received) is $_____, and
my actual current monthly expenses including monthly payments
on post-bankruptcy debt and other reaffirmation agreements
total $____, leaving $____ to make the required payments on
this reaffirmed debt. I understand that if my income less my
monthly expenses does not leave enough to make the payments,
this reaffirmation agreement is presumed to be an undue
hardship on me and must be reviewed by the court. However,
this presumption may be overcome if I explain to the
satisfaction of the court how I can afford to make the
payments here:__________
2. I received a copy of the Reaffirmation Disclosure
Statement in Part A and a completed and signed reaffirmation
agreement.'';
``(7) The motion, which may be used if approval of the
agreement by the court is required in order for it to be
effective and shall
[[Page S236]]
be signed and dated by the moving party, shall consist of the
following--
``Part E: Motion for Court Approval (To be completed only
where debtor is not represented by an attorney.) I (we), the
debtor, affirm the following to be true and correct:
``I am not represented by an attorney in connection with
this reaffirmation agreement.
``I believe this agreement is in my best interest based on
the income and expenses I have disclosed in my Statement in
Support of this reaffirmation agreement above, and because
(provide any additional relevant reasons the court should
consider):
``Therefore, I ask the court for an order approving this
reaffirmation agreement.''
``(8) The court order, which may be used to approve a
reaffirmation, shall consist of the following--
``Court Order: The court grants the debtor's motion and
approves the reaffirmation agreement described above.'';
``(j) Notwithstanding any other provision of this title--
``(1) A creditor may accept payments from a debtor before
and after the filing of a reaffirmation agreement with the
court.
``(2) A creditor may accept payments from a debtor under a
reaffirmation agreement which the creditor believes in good
faith to be effective.
``(3) The requirements of subsections (c)(2) and (i) shall
be satisfied if disclosures required under those subsections
are given in good faith.
``(k) Until 60 days after a reaffirmation agreement is
filed with the court (or such additional period as the court,
after notice and hearing and for cause, orders before the
expiration of such period), it shall be presumed that the
reaffirmation agreement is an undue hardship on the debtor if
the debtor's monthly income less the debtor's monthly
expenses as shown on the debtor's completed and signed
statement in support of the reaffirmation agreement required
under subsection (i)(6) of this section is less than the
scheduled payments on the reaffirmed debt. This presumption
must be reviewed by the court. The presumption may be
rebutted in writing by the debtor if the statement includes
an explanation which identifies additional sources of funds
to make the payments as agreed upon under the terms of the
reaffirmation agreement. If the presumption is not rebutted
to the satisfaction of the court, the court may disapprove
the agreement. However, no agreement shall be disapproved
without notice and hearing to the debtor and creditor and
such hearing must be concluded before the entry to the
debtor's discharge.''
SEC. 2. JUDICIAL EDUCATION.
Add at the appropriate place the following:
``( ) Judicial Education.--The Director of the
Administrative Office of the United States Courts, in
consultation with the Director of the Executive Office for
United States Trustees, shall develop materials and conduct
such training as may be useful to courts in implementing the
act, including the requirements relating to the 707(b) means
test and reaffirmations.''
The PRESIDING OFFICER. The Senator from Alabama still has the floor.
REAFFIRMATIONS
Mr. SESSIONS. Mr. President, I would like to address an issue that
Senator Reed and I have been working on for many months. We have sought
to reform the process of reaffirmations, to fully inform debtors of the
details and consequences of reaffirming debts, to prevent abuse of this
process by dishonest debtors and creditors, and protect honest
individuals who wish to enter a reaffirmation agreement. Senator Reed
and I have worked for months to reach this point, and we have tried to
craft a balanced amendment that protects the interests of everyone
involved. That amendment passed the Senate last year. At this point,
Senator Reed and I have agreed on a few technical changes, and
identified one substantive issue that remains outstanding. The
substantive issue concerns the time limit for reaffirmation agreements
to be approved by the court. Current law provides 90 days, and Senator
Reed would prefer 50 days. Given the support for the underlying
amendment, Senator Reed and I were most concerned with making the
technical changes to ensure that the agreement that was reached
accurately represented the common intent and to reserve the timing
issue for conference.
Mr. REED. Mr. President, my friend from Alabama is correct. I believe
that we have an honest, fair reform to the reaffirmation process and
procedure. I know there has been a great deal of work dedicated to this
end, and I am pleased we have arrived at this common ground. I have
some concerns about the time limits for approval of these reaffirmation
agreements. I had hoped this timing issue would be resolved, but I
share Senator Sessions' desire to see this amendment passed with the
technical corrections. I would ask my friend if he shares my interest
in addressing this timing issue in conference?
Mr. SESSIONS. I believe your concern is reasonable, and I will work
with you to see that this issue is addressed in conference. I am
confident that we can reach a consensus on the timing issue, and that
all sides will be able to accept the change.
Mr. REED. I thank the Senator.
Mr. SESSIONS. Mr. President, I will briefly say in response to the
comments made by the distinguished senior Senator from Massachusetts
that this is a fair and balanced bill. It does a number of good things
to help those who have financial difficulties. It closes loopholes and
ends unfairness in provisions that are being abused and making a
mockery out of legitimate bankruptcy law.
For example, children or those who are eligible to receive child
support and alimony are raised to the highest possible level, even
above attorney fees and trustee fees in bankruptcy. They are the
highest possible level. If an individual owes a number of debts and one
of those is for child support, the child support is to be paid first.
There is nothing in this bill that is harsh. Any American making
below the median income level will fundamentally find their bankruptcy
filing procedure under the needs-based rule has not changed. It is only
for those who make above the median income that a question will be
raised as to whether or not they can pay back some of their debts.
There are literally thousands of individuals in America today who owe
limited debts, who may have incomes of $80,000, $90,000, or $200,000,
and choose to file for bankruptcy. Under the current law, they can wipe
out all their debts, even those owed to people much less wealthy than
they, and not pay any debts.
Under this provision of law, if you have an income above the median
income level, the bankruptcy court may conclude you can pay some of
your debts, and if you can, you are given 5 years to pay some of those
debts to somebody from whom you have received a benefit or else you
would not have a debt.
I thank Senator Grassley for his work on this bill. I am troubled
that anyone would say it is unfair and does not help make this system
better. I yield the floor.
Mr. GRASSLEY addressed the Chair.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. We have now yielded back all time on the Schumer
amendment. It is my understanding this side has 10 minutes reserved
under the Harkin amendment.
The PRESIDING OFFICER. The Senator from Iowa is correct.
All time has expired on the Schumer amendment.
Amendment No. 2770
Mr. GRASSLEY. I yield myself such time as I might consume on the
Harkin amendment. I will not use all of the time because I want to
encourage Senator Feingold or Senator Levin to go ahead with their
amendments.
Mr. REID. I say to my friend from Iowa, as soon as the Senator
completes his statement the Senator from Michigan is ready to proceed.
Mr. GRASSLEY. I thank the Senator.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. GRASSLEY. I wish to respond to what the Senator from
Massachusetts spoke about so passionately. I probably do not speak with
the same passion he does, but I do want to say that he has it
completely wrong. You cannot ignore the fact that since 1980
bankruptcies have increased from around 330,000 in that year to just
under 1.4 million in 1999. That is a fact that cannot be ignored.
Consequently, it seems to me to be completely wrong for some other
Senator to say we do not have a bankruptcy problem in the United
States. Congress ought to deal with it, and changing the law will help.
I do not pretend changing the law is going to entirely respond to that
problem, but the extent to which it does, we should do it because this
increase in bankruptcies is a huge increase. The small dip in the
filings that Senator Kennedy has referred to will not erase this very
basic, fundamental problem we have in our economy with the bankruptcy
laws. We have a real bankruptcy crisis on our hands. We cannot ignore
that.
[[Page S237]]
Perhaps the Senator from Massachusetts does not remember what his own
President said in the State of the Union Address. The President of the
United States said, just a few days ago, these are prosperous times.
People are not in bankruptcy then because of hard times. If this is a
problem when we have very prosperous times, what sort of a bankruptcy
problem are we going to have when we have a recession or a depression?
One other point that the Senator from Massachusetts spent a great
deal of time on is how he sees the problems of minimum wage in this
bill. There is a minimum wage increase in this bill. It isn't there
because we Republicans sought to join minimum wage with the bankruptcy
bill. We were going to debate minimum wage at another time. We were
going to increase minimum wage at another time, but it was the
Democratic Party that made a decision to put minimum wage on the
bankruptcy bill.
I do not even like nongermane things being included on other pieces
of legislation, but it is a pattern too often adopted and too readily
accepted in the Senate. So it is done. But on this side of the aisle, I
argued that we should not mix minimum wage with bankruptcy. I do not
want the weight of that issue, as important as increasing the minimum
wage is, with the issue of reforming the bankruptcy code. But on the
other side of the aisle they chose to do it. So what do we hear?
Now we are hearing complaints about the minimum wage bill on the
bankruptcy bill. We are hearing threats about instructing conferees to
do something about it. If it is a problem, it is a problem because the
other side of the aisle made it a problem by including it. I remind
them that they ought to be very careful what they wish for because
sometimes they get it.
The Senator from Massachusetts has asked who will win and who will
lose. Under this bill, the honest American people, who have to pay the
higher prices because other people go into bankruptcy and do not pay
their bills--because we have deadbeats out there--are the ones who will
win by this legislation.
We still preserve the historic principle of our bankruptcy laws that
some people who are in debt, through no fault of their own, are
entitled to a fresh start. But when it comes to this basic principle of
economics that there is no free lunch, there is no free lunch in
bankruptcy, either. Somebody pays.
In this particular instance, the honest American consumer is paying
$400, for a family of four, to cover debts of somewhere between $30
billion and $50 billion a year that go unpaid because of people who
ought to be paying their bills. Worse yet, we have a situation where
some people who do have the ability to pay their bills are not paying
their bills, either. We are sending a clear signal that those who have
the ability to pay are not going to get off scot-free.
I relinquish the remainder of our time. Hopefully, we can proceed,
then, to the next amendment.
The PRESIDING OFFICER. Time has expired on the Harkin amendment.
Amendment No. 2770, Withdrawn
Mr. REID. Mr. President, it is my understanding that automatically,
based on the unanimous consent request previously agreed to, the Harkin
amendment is withdrawn.
The PRESIDING OFFICER. The amendment is withdrawn.
Who yields time?
Mr. FEINGOLD addressed the Chair.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Mr. President, what is the pending amendment?
The PRESIDING OFFICER. The pending business is the Schumer amendment
No. 2763.
Amendment No. 2748, As Modified
(Purpose: To provide for an exception to a limitation on an automatic
stay under section 362(b) of title 11, United States Code, relating to
evictions and similar proceedings to provide for the payment of rent
that becomes due after the petition of a debtor is filed, and for other
purposes)
Mr. FEINGOLD. Mr. President, I ask unanimous consent that amendment
be temporarily laid aside so I can call up amendment No. 2748, as
modified by amendment No. 2779.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The legislative clerk read as follows:
The Senator from Wisconsin [Mr. Feingold] proposes an
amendment numbered 2748, as modified.
Mr. FEINGOLD. I ask unanimous consent reading of the amendment be
dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 108, line 15, strike ``; and'' and insert a
semicolon.
Beginning on page 108, strike line 18 and all that follows
through page 109, line 7, and insert the following:
``(23) under subsection (a)(3) of the commencement or
continuation of any eviction, unlawful detainer action, or
similar proceeding by a lessor against a debtor involving
residential real property--
``(A) on which the debtor resides as a tenant under a
rental agreement; and
``(B) with respect to which--
``(i) the debtor fails to make a rent payment that
initially becomes due under the rental agreement or
applicable State law after the date of filing of the petition
or within the 10 days prior to the filing of the petition, if
the lessor files with the court a certification that the
debtor has not made a payment for rent and serves a copy of
the certification to the debtor; or
``(ii) the debtor's lease has expired according to its
terms and (a) or a member of the lessor's immediate family
intends to personally occupy that property or (b) the lessor
has entered into an enforceable lease agreement with another
tenant prior to the filing of the petition, if the lessor
files with the court a certification of such facts and serves
a copy of the certification to the debtor:
``(24) under subsection (a)(3) of the commencement or
continuation of any eviction, unlawful detainer action, or
similar proceeding by a lessor against a debtor involving
residential real property, if during the 1-year period
preceding the filing of the petition the debtor--
``(A) commenced another case under this title; and
``(B) failed to make a rent payment that initially became
due under an applicable rental agreement or State law after
the date of filing of the petition for that other case; or
``(25) under subsection (a)(3), of an eviction action based
on endangerment of property or the use of an illegal drug, if
the lessor files with the court a certification that the
debtor has endangered property or used an illegal drug and
serves a copy of the certification to the debtor''; and
(4) by adding at the end of the flush material at the end
of the subsection the following: ``With respect to the
applicability of paragraph (23) or (25) to a debtor with
respect to the commencement or continuation of a proceeding
described in that paragraph, the exception to the automatic
stay shall become effective on the 15th day after the lessor
meets the filing and notification requirements under that
paragraph, unless the debtor takes such action as may be
necessary to address the subject of the certification or the
court orders that the exception to the automatic stay shall
not become effective or provides for a later date of
applicability.''.
Mr. FEINGOLD. Mr. President, how much time am I allotted on this
amendment?
The PRESIDING OFFICER. The Senator from Wisconsin has 13 minutes on
this amendment.
Mr. FEINGOLD. Mr. President, this amendment is what we have referred
to in this debate on the bankruptcy bill as the ``landlord-tenant
amendment.'' We had extensive debate on this amendment in November
before we recessed for the year. We did make some progress in
identifying the areas of dispute and, I think, in narrowing our
differences as well.
To remind my colleagues, this amendment is designed to reduce the
harsh consequences of section 311 of the bill on tenants, while at the
same time protecting legitimate financial interests of landlords.
To review, current law provides for an automatic stay of eviction
proceedings upon the filing of a bankruptcy case. Landlords can apply
for relief from that stay so the eviction can proceed, but it is a
process that often takes a few months.
What section 311 of the bill does is eliminate the stay in all
landlord-tenant cases so an eviction can proceed immediately,
completely, regardless of the circumstances.
What my amendment would do is allow tenants to remain in their
apartments as they try to sort out the difficult consequences of
bankruptcy, if--and only if--they are willing to pay the rent that
comes due after they file for bankruptcy or that comes due within the
10 days before bankruptcy. If the tenant fails to pay rent, the stay
can be lifted without further proceedings 15 days after the landlord
provides notice to the court that the rent has not been paid. If the
reason for the eviction is
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drug use or property damage, the stay can also be lifted after 15 days.
Finally, if the lease has actually expired by its terms--in other
words, if there is no more time on the lease--and if the landlord or a
member of his or her family plans to move in to the property, then
again, after 15 days notice, the eviction can proceed.
There is no 15-day notice period, with a chance for the tenant to go
into court and challenge the allegations of the landlord, if the tenant
has filed for bankruptcy previously. In other words in cases of repeat
filings, the stay never takes effect, just as under section 311 in this
bill. That is the main abuse that has been alleged in Los Angeles
County, where unscrupulous bankruptcy petition preparers advertise
filing bankruptcy as a way to live ``rent free.'' So under my
amendment, a debtor can never live ``rent free.'' The debtor has to pay
rent after filing for bankruptcy. If a debtor misses a rent payment,
the stay will be lifted 15 days later. And the automatic stay does not
take effect at all if the tenant is a repeat filer.
So my amendment gets at the abuse, and it protects the rights and
economic interests of the landlord. What it eliminates is the punitive
aspect of Section 311, and the possibility that tenants who are willing
and able to pay rent once they get a little breathing room from their
other creditors will instead be put out on the street. I am frankly
disappointed that my colleague from Alabama, with whom I have had a
good debate on this issue, and the property owners organizations are
insisting on the harsh aspects of section 311 when my amendment would
get at the problems they have identified just as well.
It is also important to note that even in cases where a tenant pays
the rent that is due after filing for bankruptcy, my amendment leaves
intact the current law that allows landlords to get relief from the
automatic stay. Let me be very clear about that. My amendment does not
eliminate the ability of landlords to apply for relief from the stay
under current law. The law now gives debtors some breathing room in
legal proceedings, including eviction proceedings. But landlords can
apply for relief from the stay. It is not an abuse of the law to take
advantage of the automatic stay to get your affairs in order. Many
tenants use that time to work out a payment schedule for their back
rent so they can avoid eviction altogether.
Most landlords don't want to throw people out on the street--they
just want to be paid. My amendment requires that they be paid once
bankruptcy is filed, or the eviction can proceed immediately. But even
if the rent is paid while the bankruptcy case is pending, a landlord
can still seek relief from stay under the normal procedures and press
forward with the eviction.
I have a letter from the National Association of Realtors, a powerful
lobbying association, that is unalterably opposed to my amendment. This
letter is dated January 24, 2000, several days ago. It urges opposition
to my amendment, which it says will ``seriously weaken'' the bill. But
listen to what it says about the bill. The letter says that current law
allows for ``serious fraud and abuse.'' But my amendment deals with the
cases of fraud and abuse by disallowing the automatic stay in the case
of repeat filings. And the Realtor's letter says that current law
allows tenant to ``live rent free at the expense of the property
owner.'' But my amendment does not allow tenants to live rent free.
They have to pay rent once the bankruptcy is filed. And it says that
prospective tenants often ``have to wait 6 months or longer, as they do
now, to get into rental property units occupied by residents
overstaying their lease.'' Well that is simply not true under my
amendment. This amendment allows for expedited relief from stay in any
case where the lease has expired according to its terms and the
landlord has entered into a valid rental agreement with another tenant
prior to the filing of the bankruptcy petition.
Every single one of the arguments made by the National Association of
Realtors against the amendment is refuted by the amendment itself,
every one. Yet this group persists in urging the Senate to reject the
amendment. It says, speaking about the provisions of the bill that the
amendment will modify: ``we believe these common sense provisions will
curb abusive use of the Bankruptcy Code.'' If the Realtors were honest,
they would admit that my amendment will do exactly the same thing. It
will curb abusive use of the Bankruptcy Code. But it will also continue
to allow the code to provide protection to people who are not abusing
the system, but simply using it to get back on their feet, and keep a
roof over their heads. Those people would be treated too harshly by the
current bill, and it is unfortunate that the Realtors, in their zeal to
get as many advantages for landlords as they can, refuse to see that.
I have modified this amendment in the spirit of compromise to address
all of the concerns that the Senator from Alabama raised in debate last
year. This amendment addresses the abuse, it is fair to landlords and
makes sure they are not economically harmed when a tenant files for
bankruptcy, and it is fair to debtors who file for bankruptcy in good
faith and simply need a little breathing space to get their lives in
order.
I urge my colleagues to look carefully at this amendment, and I hope
they will support it.
I reserve the remainder of my time and yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. REID. Mr. President, the Senator from Alabama wants to speak
against the amendment of the Senator from Wisconsin and also against
the amendment of the Senator from Michigan very shortly. The manager of
the bill has asked permission that we go immediately to the Levin
amendment and reserve the remainder of the time of the Senator from
Wisconsin, and that the Senator from Alabama, Mr. Sessions, be allowed
to speak at the same time against both amendments. Does the Senator
from Wisconsin have objection to that?
Mr. FEINGOLD. I have no objection.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from Wisconsin has 6 minutes remaining on his amendment.
The Senator from Michigan.
Amendment No. 2658
(Purpose: To provide for the nondischargeability of debts arising from
firearm-related debts, and for other purposes)
Mr. LEVIN. Mr. President, what is the pending matter?
The PRESIDING OFFICER. The clerk will report the Levin amendment.
The legislative clerk read as follows:
The Senator from Michigan [Mr. Levin], for himself, Mr.
Durbin, Mr. Wyden, Mr. Kennedy, Mrs. Feinstein, Mr.
Lautenberg, and Mr. Schumer, proposes an amendment numbered
2658.
The amendment is as follows:
On page 124, between lines 14 and 15, insert the following:
SEC. __. CHAPTER 11 NONDISCHARGEABILITY OF DEBTS ARISING FROM
FIREARM-RELATED DEBTS.
(a) In General.--Section 1141(d) of title 11, United States
Code, as amended by section 708 of this Act, is amended by
adding at the end the following:
``(6) Notwithstanding paragraph (1), the confirmation of a
plan does not discharge a debtor that is a corporation from
any debt that is--
``(A) related to the use or transfer of a firearm (as
defined in section 921(3) of title 18 or section 5845(a) of
the Internal Revenue Code of 1986); and
``(B) based in whole or in part on fraud, recklessness,
misrepresentation, nuisance, negligence, or product
liability.''.
(b) Automatic Stay.--Section 362(b) of title 11, United
States Code, as amended by section 901(d) of this Act, is
amended--
(1) in paragraph (27), by striking ``or'' at the end;
(2) in paragraph (28), by striking the period at the end
and inserting ``; or''; and
(3) by inserting after paragraph (28) the following:
``(29) under subsection (a) of this section, of--
``(A) the commencement or continuation, and conclusion to
the entry of final judgment or order, of a judicial,
administrative, or other action or proceeding for debts that
are nondischargeable under section 1141(d)(6); or
``(B) the perfection or enforcement of a judgment or order
referred to in subparagraph (A) against property of the
estate or property of the debtor.''.
The PRESIDING OFFICER. The Senator from Michigan is recognized for 20
minutes.
Mr. LEVIN. I thank the Chair.
This amendment, which is cosponsored by a number of our colleagues,
provides that gun manufacturers and
[[Page S239]]
distributors cannot evade responsibility for damages that are caused by
their reckless or negligent conduct or their fraudulent conduct by
seeking reorganization in bankruptcy court. It is that straightforward.
We already have about 18 provisions in the bankruptcy law based on
public policy which provide that certain kinds of debts are not
dischargeable.
For instance, we have in the law a provision that says if you drive
while drunk and you injure somebody, you cannot discharge that
obligation by going bankrupt. Senator Danforth made an eloquent
statement on this floor arguing for justification for that particular
exception, that nondischargeability, when he said:
Today there exists an unconscionable loophole in the
bankruptcy statute which makes it possible for drunk drivers
who have injured, killed or caused property damage to others
to escape civil liability for their actions by having their
judgment debt discharged in Federal bankruptcy court. This
loophole affords opportunities for scandalous abuse of the
judicial process.
Following Senator Danforth's and others' pleas that we make liability
resulting from drunken driving nondischargeable in bankruptcy, this
Congress added another nondischargeable obligation in our bankruptcy
law. We have about 18 of those provisions. We have a provision that
says if you have an obligation to the Government for a student loan,
you are not going to be able to get rid of that by going bankrupt. We
have a provision in the bankruptcy law which says if you have an
obligation to a co-op or to a condo for a fee you owe to them, under
certain circumstances that is not going to be dischargeable in
bankruptcy.
And what we are saying now in this amendment is that where a gun
manufacturer or a distributor, through his own reckless, negligent, or
fraudulent conduct causes damages to individuals or our communities,
they should not be able to reorganize in bankruptcy court and get rid
of that debt.
This is the public policy purpose beyond this particular provision.
It has the support of many organizations such as Handgun Control, which
is Sarah Brady's group, has written in support of this amendment,
saying:
Gun manufacturers, distributors, and dealers should not be
able to evade these legitimate claims for damages.
In 1996, Lorcin Engineering Company, one of the chief manufacturers
of Saturday night specials, or junk guns, filed for chapter 11
bankruptcy. Other gun manufacturers such as Davis Industries and
Sundance Industries have followed Lorcin's lead and have filed for
bankruptcy to avoid liability. We must not allow other companies to
take advantage of this bankruptcy system.
We have an unusual provision in the law that exempts the gun industry
from safety and health regulation. It is the only industry that is
explicitly exempt from health and safety regulations and from the
jurisdiction of the Consumer Product Safety Commission. No agency has
safety oversight over manufacturers who have produced unsafe firearms,
and so litigation serves as the only mechanism that can hold the
industry responsible.
What this amendment says is that where there is damage caused by
fraud or reckless or negligent conduct of a manufacturer or
distributor, that manufacturer or distributor should not be able to
reorganize itself out of accountability, away from responsibility by
going to bankruptcy court. The public policy purpose behind this
amendment is a powerful one, indeed.
In addition to Sarah Brady's organization, which I have mentioned,
the National League of Cities supports this amendment. They have
written a letter dated November 16:
Like debts incurred by drunk driving, Congress must send a
clear and convincing message that it will not permit debtors
to escape debts incurred by improper conduct. It is crucial
that the Federal Government do all that it can to help local
law enforcement effectively address gun violence with
commonsense legislation that curtails access to firearms,
including altering the bankruptcy code.
Too many of these companies have already said they are going to try
to reorganize to escape liability. It is a tactic they are using. That
is not what the bankruptcy law is all about. The bankruptcy law is not
intended to provide that kind of a haven for companies that have
engaged in reckless conduct or negligent conduct, to evade
responsibility for their obligations.
Now, the reasons the National League of Cities has taken this
position are many, but one of them is that 30 cities and counties have
filed lawsuits against gun manufacturers or distributors alleging
reckless, negligent, or fraudulent conduct on the part of those
manufacturers or distributors. New Orleans, LA; Chicago, IL; Miami, FL;
Atlanta, GA; Cleveland and Cincinnati, OH; Detroit, MI; San Francisco,
CA; St. Louis, MO; and other cities and communities have filed lawsuits
alleging reckless conduct, negligent conduct, or fraudulent conduct on
the part of a gun manufacturer or distributor. They very strongly
support this amendment, as does the U.S. Conference of Mayors and the
Violence Policy Center.
The Violence Policy Center issued a statement saying that this
amendment is necessary to ensure that firearm manufacturers, which are
exempt from Federal health and safety regulation--and I emphasize the
only group that is exempt from Federal health and safety regulation
explicitly is the firearms manufacturers. They have gotten that
exemption. Yet when it comes to trying to close a loophole in the
bankruptcy law, which they are using tactically to evade
responsibility, they claim they are being singled out. Indeed, they
have singled themselves out in gaining exemption from Federal health
and safety regulation, and the only way in which they can be held
accountable is through the civil justice system. That is why the
Violence Policy Center has written a letter of support, indicating that
lack of health and safety regulation means the civil justice system is
the only mechanism available to regulate the conduct of gun
manufacturers.
Mr. President, this amendment is in response to a tactic that has now
been declared by a number of gun manufacturers, that when faced with
allegations or judgments based on damages caused by reckless or
negligent misconduct, they will seek protection through reorganization
in the bankruptcy courts. We are trying to reduce the level of gun
violence in this country, and one way to do it, a way to support the
cities and the mayors and the individuals who have been victimized by
reckless or negligent manufacture or distribution, is to close a
loophole in the bankruptcy system which a number of gun manufacturers
have explicitly said they will use tactically to try to evade
responsibility for their misconduct.
Mr. President, how much time do I have remaining?
The PRESIDING OFFICER (Mr. Campbell). The Senator has 11 minutes
remaining.
Mr. GRASSLEY. Mr. President, I yield such time as he consumes to the
Senator from Alabama.
The PRESIDING OFFICER. The Senator from Alabama is recognized.
Amendment No. 2748, As Modified
Mr. SESSIONS. Mr. President, Senator Feingold has again presented an
amendment involving landlords and eviction cases. It is one of the
biggest problems we have in the bankruptcy code. He has made some
progress from his original amendment, but it still basically makes a
Federal case out of eviction proceedings. Under Senator Feingold's
amendment, when a lease has expired, tenants can go to bankruptcy court
to delay and file motions and have hearings that can draw out the case
even longer than the time that the Senator has suggested would normally
occur. That ought to be done in State systems where eviction cases are
traditionally litigated--not in Federal Bankruptcy court.
Every State has a procedure and remedies and rights for tenants being
evicted. That is where those cases ought to be handled, not in
bankruptcy court. We know that 3,886 people filed bankruptcy in Los
Angeles County in 1996 simply for the purpose of defeating eviction. We
have seen advertisements in newspapers saying, ``hire us as your
bankruptcy lawyer and we can delay your eviction for 7 months.'' This
is the kind of thing that is not healthy, the kind of thing that has
disrupted and distorted bankruptcy law. I believe bankruptcy law upsets
legitimate landlords, many of whom are retirees and people who have
only a few apartments or a duplex that they manage, when they can't get
a tenant out.
[[Page S240]]
So this amendment that he proposes, in effect, continues the process
of allowing the tenant to take his eviction case to bankruptcy court.
This is what has been happening and what will continue to happen if the
Senator's amendment is adopted. A tenant contests an eviction in State
court, and as he moves toward the conclusion of that case, he then has
his bankruptcy lawyer file bankruptcy. An automatic stay would occur
even with this notice Senator Feingold proposes, at least for 2 weeks.
Then they would be eligible for a hearing in bankruptcy court on the
certification that had been submitted, and then that would delay
things.
After the landlord eventually wins, for example, in a case in which
the lease has expired, the case still then has to go back to State
court and has to be revived because it is at the bottom of the judge's
docket. The landlord has to go back to the State court lawyer to
proceed with it. I think that is a completely unworkable proposal. I do
understand the Senator's concern. We ought to do all we can to help
those who are homeless. We have many provisions for dealing with
homeless people, but mandating private landlords to provide housing for
people who do not have a valid lease is not the right approach, in my
view.
Mr. President, with regard to the gun issue, I think we need to think
clearly about what we are doing. We are talking about removing
bankruptcy protection from two kinds of judgments: Judgments incurred
by people who ``potentially'' violate the law near an abortion clinic
and judgments incurred by firearms manufacturers or dealers when some
third party breaks the law by using a firearm to injure another person.
Each of us has a special responsibility, I believe, to this Senate
and our constitutional responsibilities to create a coherent, fair
justice system for allowing citizens' debts to be discharged. That is
what bankruptcy is. Every time someone declares bankruptcy, someone
whom he or she justly owes is not paid--a store owner, a doctor, a
bank, or whoever.
So most of us are here to achieve honest bankruptcy reform. These
amendments, however, involving the abortion clinic exception and the
gun manufacturers exception have all the earmarks of partisan injection
of politics into the bankruptcy code and an attack on people who are
unpopular, particularly groups or institutions that are unpopular with
the political left. These political attacks come at the expense of the
integrity and consistency of our bankruptcy system. We should not allow
these kinds of attacks to happen. It is our duty to create a legal
system for all Americans and not just to pursue special interest
politics.
One Senator who proposed this amendment said, well, if it is
political, it is popular. I do not believe it would be popular if we
had a group of citizens and we explained exactly with regard to the
abortion clinic or with regard to the gun manufacturers how they were
being targeted specifically in ways that similar businesses and
institutions were not being targeted and were not being given an
exemption from bankruptcy.
I suggest that this is not a targeting of violence. These amendments
are basically targeting political enemies. The amendments create an
exception to the generally applicable bankruptcy protections for two
specific classes: Pro-life activists who are overzealous and may
violate Federal law, and firearms manufacturers that in general adhere
to the law with great attention and, as a matter of fact, do what they
are supposed to do and sell firearms according to Federal regulations.
Remember that by the established rule of law, any debt that arises
from ``wilful or malicious'' conduct by any institution today is not
dischargeable in bankruptcy. In other words, if you commit an action
that is malicious or willful and you go into bankruptcy court, you
can't wipe out that debt; you still have to pay it.
If we remove the general bankruptcy protection for court judgment
against these targeted groups, why aren't we eliminating these
protections for other types of debtors whose acts other people may not
like in this country? If the goal were to stop violence and protect
children from exposure to bad products, you might expect my colleagues
who support this amendment to offer amendments that remove generally
applicable bankruptcy protections from other entities.
For example, I don't see them proposing to remove protections for
union leaders who may acquiesce in strike violence around a plant, or
environmental terrorists or their organization who may damage the
equipment of logging companies. They are not proposing we provide
special protections for Hollywood production companies that inundate
our children with smut and violence.
Take, for example, the Hollywood entertainment industry. Through
pornographic, violent movies and other activities, this industry pumps
violent images into the minds of our people, especially children.
Michael Carneal, the high school student in Paducah, KY, who killed
several of his classmates, stated that the violent Hollywood movie,
``The Basketball Diaries,'' which featured a disaffected high school
student who shoots a gun into a classroom of students, influenced him
to commit his horrible crime.
Eric Harris and Dylan Klebold--the killers in the Littleton, CO,
Columbine High School--were avid players of the video game ``Doom'' in
which they hunted down and shot their victims. As the New York Times
stated, ``the search for the cause in the Littleton shootings
continues, and much of it has come to focus on violent video games.''
Will there be lawsuits against those companies?
Who can forget Ted Bundy, a serial killer who preyed on young co-eds,
who was convicted and sentenced to death in the electric chair? He
confessed that he became addicted to pornography and that pornography
played a major role in developing his homicidal fantasies that led to
his violent and horrific crimes.
As Senator Hatch's recent Report entitled, ``Children, Violence, and
the Media'' noted: ``The debate is over,'' begins a position paper on
media violence by the American Psychiatric Association, ``[f]or the
last three decades, the one predominant finding in research on the mass
media is that exposure to media portrayals of violence increases
aggressive behavior in children.'' In the words of Jeffrey McIntyre,
legislative and federal affairs officer for the American Psychological
Association, ``To argue against it is like arguing against gravity.''
But Hollywood and other activist groups are not targets of these
bankruptcy penalties. Why? Because they are friends of some of the
people proposing these amendments.
After criticizing Hollywood in public for violent movies and video
games that could be responsible for tragedies such as the one at
Columbine High School, President Clinton that same day went to a
fundraiser in which Hollywood contributors gave $2 million to the
Democratic Party.
Supporters of this amendment say they want to stop those who peddle
violence to children; that is, punish gun manufacturers, they say. But
what about these others who could be sued and have judgments against
them? I could say let's provide an exception to them. But, really, that
is not the right approach for us to take. We ought not to be carving
out exceptions and protections and targeting groups we don't like. We
need to create a basic bankruptcy law that treats all lawful businesses
the same.
It certainly strikes me as odd that we would want to target people
who feel deeply about an issue such as abortion and who, through
perhaps excess zeal, may potentially violate the law when protesting
against abortion. But what about other groups? Union leaders are also
picketing. Civil rights groups, ACLU groups--why aren't they being
singled out by this amendment?
These amendments do not represent a high-minded, moral stance against
the marketing of violence or against violence itself. Instead, the real
reason behind these proposals, it appears to me, is to attack political
enemies of certain people.
I could consider offering amendments to include groups such as
pornographers, but I don't think that is the right approach. I believe
we ought to stay with the historic general principles of law that say
those who are willful and those who are malicious cannot discharge
their debt.
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I would like to say a couple of things about the gun manufacturer
lawsuits.
Mr. REID. Mr. President, will the Senator withhold?
Mr. SESSIONS. I will.
Mr. REID. We had a number of Senators calling to find out when the
votes are going to occur. I think we are in a position now where we
could, with the courtesy of the Senator from Alabama, ask unanimous
consent to set a time for the votes.
The PRESIDING OFFICER (Mr. Roberts). The Senator from Utah.
Mr. HATCH. Mr. President, I ask unanimous consent the amendments be
voted in the order in which they were debated today, with 4 minutes
prior to each vote for explanation, divided equally.
I ask unanimous consent the remaining parameters of the consent
agreement then be in place.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATCH. Therefore, a series of votes will shortly occur in the
following order, with passage the last in this series: Schumer
amendment No. 2763, Feingold amendment No. 2748, Levin amendment No.
2658, and the Schumer amendment No. 2762.
I might mention that on the last amendment there is a possibility we
may be able to resolve that amendment. If we do, then there will only
be three votes and final passage. If we cannot resolve it, we will have
four votes and final passage.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Was that a unanimous consent request?
Mr. HATCH. Yes. We already had that.
Mr. LEAHY. I beg the indulgence of the Senator from Alabama. I am
hoping we can resolve the last amendment of the Senator from New York.
I think it is one that makes sense and one that has broad agreement on
both sides.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. SESSIONS. I thank the Senator from Arizona.
The PRESIDING OFFICER. Alabama.
Mr. SESSIONS. Pardon me, that is not the Senator from Arizona.
The PRESIDING OFFICER. The Senator from Alabama is not the Senator
from Georgia, and the acting Presiding Officer apologizes to the
distinguished Senator from Alabama.
Mr. SESSIONS. I thank the Presiding Officer from----
The PRESIDING OFFICER. Kansas.
Mr. SESSIONS. I trust we will remember next time.
The argument was made previously that we target and provide an
exception in the bill for drunk drivers and drunk boaters. Yes, the
current law does do that. But drunk drivers and drunk boaters are the
people who conduct themselves in a reckless and endangering way. They
ought to be punished. It is legitimate for us to give them a different
treatment. But the proposed amendment dealing with gun manufacturers
does not target the illegal or irresponsible gun user. It targets a
responsible, federally licensed, law-abiding gun manufacturer. That is
a big difference.
I have not heard any of my colleagues across the aisle argue that
automobile and boat manufacturers should have their product liability
debt classified as ``nondischargeable.'' And they should not be.
Because those manufacturers, as firearm manufacturers, are not at
fault. It is the irresponsible driver or the irresponsible shooter.
Briefly, I will say this. With regard to the suits against gun
manufacturers, I think it is very instructive to note the Department of
Justice, the Presidentially appointed Attorney General, has not agreed
to file these lawsuits. The reason is there is no legal basis for them.
Two of them have already been dismissed. They have conjured up a
political appointee in HUD, the Department of Housing and Urban
Development, to come up with this idea that if you sell a gun precisely
according to Federal law, with all the regulations and do everything
you can possible, and then the buyer goes out and uses it illegally,
the seller or manufacturer is liable. That is not going to hold up in a
court of law. If they want to make that law, let's pass a law, let's
put it on the floor and vote for it. We have to stop utilizing the
litigation process to set public policy in this country. And that is
what this is. It is a dangerous trend.
Indeed, a number of institutions which you would not expect, and
individuals, have commented on this. The Washington Post, which is
absolutely committed to gun control in America, as much as any
institution I know of, wrote this recently, on the threats of HUD to
file a lawsuit. The Post said:
It seems wrong for an agency of the Federal Government to
organize other plaintiffs to put pressure on an industry--
even a distasteful industry--to achieve policy results the
administration has not been able to achieve through normal
legislation and regulation.
They went on:
It is an abuse of a valuable system, [the legal system] one
that could make it less valuable [the legal system could be
less valuable] as people come to view the legal system as
nothing more than an arm of policymakers.
I remember a number of years ago, Hodding Carter, who used to serve
President Jimmy Carter, said on a national TV program, we liberals have
gotten to the point where we want to use the legal system to carry out
our agenda we can no longer win at the ballot box.
Robert Reich, President Clinton's former Secretary of Labor, has
characterized these tactics as:
. . . blatant end-runs around the democratic process . . .
and nothing short of a faux legislation, which sacrifices
democracy to the discretion of administrative officials
operating under utter secrecy. . . .
Mr. Reich goes on to say:
The way to fix everything isn't to turn our backs on the
democratic process and pursue litigation as the
administration [his former administration] is doing.
That is precisely what we are doing. A lawsuit by lawyers who file
these actions to set public policy is dangerous because they were not
elected to set that policy. They are not accountable to the people, as
we are. If we want to pass a law to burden gun manufacturers further,
so be it. We are accountable to the American people and we are
responsible for the law. But who are these people who, through lawsuits
and secret negotiations, are going do that? That is how we got into
this. I don't think these lawsuits are going to be successful, but I
certainly do not believe we ought to provide a particular exception,
that if somehow they are successful and judgments are rendered so the
companies have to go into bankruptcy, somehow they cannot even go into
bankruptcy and discharge their debts. That is what we are talking
about.
With regard to both of these amendments, they are targeted. They have
the earmarks of having a political agenda behind them. They interfere
with the objectivity and fairness of the bankruptcy code. We ought not
pass them. We ought to reject them both, and we ought to reject the
Feingold amendment on rent because we do not need to continue to
provide a Federal court trial of matters involving eviction.
I yield the floor.
The PRESIDING OFFICER. Does the distinguished Senator from the great
and sovereign State of Alabama, where he served as attorney general,
the great State of Alabama, wish to be recognized any further?
Mr. SESSIONS. The Senator from Alabama yields the floor and thanks
the Chair.
Mr. FEINGOLD. Mr. President, I will oppose the Levin-Durbin
amendment, which would make certain judgments against gun manufacturers
nondischargeable in Chapter 11 bankruptcy proceedings. I appreciate the
sincere views of my friends from Michigan and Illinois who have
proposed this amendment as a way to highlight the serious issues of gun
violence in this country. I do not believe, however, that this
amendment is necessary, and I think it has the potential to set a
dangerous precedent in our business bankruptcy system.
First, there is a real question of whether this amendment is
necessary. Chapter 11 business bankruptcy is not like Chapter 7
personal bankruptcy where debts are simply wiped out by the bankruptcy
decree. In a Chapter 11 bankruptcy, a business's reorganization plan
must receive the approval of the court and of the other creditors. It
is far from clear that the kind of judgments that are at issue in the
Levin amendment will automatically be discharged in a bankruptcy
reorganization.
[[Page S242]]
In addition, Chapter 11 bankruptcy often provides a useful forum for
making sure that all claimants against a company are treated fairly. We
have seen that happen with respect to suits against asbestos and IUD
manufacturers. Without it, plaintiffs may end up in a race to the
courthouse to try to claim the limited assets of a company.
Because I have some doubt that the amendment is necessary, and
whether it is advisable even from the point of view of potential
plaintiffs against gun manufacturers, I am reluctant to set the
precedent of using the business bankruptcy system in this way. I
believe this amendment is different from some of the non-
dischargeability provisions already applicable to personal bankruptcies
or that will be voted on here before we complete this bill. Whereas we
can say to someone who is contemplating personal bankruptcy that it is
our judgment that certain debts simply should not be discharged because
of the circumstances or culpability that led to the bankruptcy in the
first place, it is hard to see how delivering that message in this
particular narrow business bankruptcy context accomplishes the same
goal. I will therefore vote against this amendment.
Mr. BYRD. Mr. President, I oppose this amendment offered to the
bankruptcy reform bill by Senator Levin that would prohibit gun
manufacturers from discharging debt associated with firearm sales.
Currently, the families of victims who have been harmed by a firearm
can sue the gun manufacturer for financial damages in civil court. The
bankruptcy code allows for the gun manufacturer to file for bankruptcy
protection and discharge the debt that the manufacturer may owe to the
victim's family. This amendment would prohibit a gun manufacturer from
discharging that debt.
I am voting against this amendment because, at this time, I have not
received significant evidence to suggest that gun manufacturers are
abusing loopholes in the bankruptcy code to avoid paying their
liabilities. Additionally, this amendment is not narrowly tailored to
gun manufacturers who are illegally selling firearms. It targets the
industry as a whole, and would set an unfortunate precedent by legally
separating this industry from other industries in the bankruptcy code.
While I understand the concerns of people who would argue that gun
manufacturers are abusing the bankruptcy code, I cannot support the
separate treatment of certain industries under our nation's bankruptcy
laws absent more significant evidence of actual abuse.
The PRESIDING OFFICER. Who yields time? The distinguished Senator
from New York.
Mr. LAUTENBERG. Mr. President, the Senator from New Jersey seeks
recognition.
The PRESIDING OFFICER. The Senator is recognized.
Mr. LAUTENBERG. I thank the Senator from Kansas for his recognition.
Mr. President, I rise in strong support of the amendment being
offered by my friends and colleagues, Senators Levin and Durbin. It
would prevent gun manufacturers from using the bankruptcy system to
evade responsibility for the damage caused by their deadly products.
It is time for this Congress to catch up with the American people.
The public is demanding an end to the epidemic of gun violence that has
turned parts of this country into shooting galleries. Criminals are
amassing arsenals of deadly weapons and using them to gun down whole
groups of people, from Hawaii to Seattle, from Texas to Kentucky, yet
Congress has failed to see the lesson in these tragedies.
As a result, the American people in cities across the country are
turning to the legal system, desperate for help. Thirty cities and
counties are suing gun manufacturers for death and injuries caused by
firearms. Individual families are suing to hold gunmakers accountable
for the loss or harm brought to loved ones.
These lawsuits are already making significant headway against the
formidable power of the gun industry. In the case of Hamilton v.
Accutek, a jury in Brooklyn, NY, found several gun manufacturers
responsible for the damage caused by that product.
In Georgia, a judge allowed a suit filed by Atlanta against the gun
industry to move forward.
In California, a Federal judge barred gun manufacturers from using
bankruptcy as a shield when their products caused death or injury.
It was not long ago that gunmakers would laugh when you suggested
they take some responsibility for the devastation firearms have caused.
But the tears of our citizens have finally wiped away the smile now
that 30 cities and counties across the country are taking them to
court.
Today, gun manufacturers are talking about making safer firearms and
working to keep guns away from criminals, things they never would have
considered discussing just a year ago.
They are making these changes because gun victims are holding them
accountable in court. Families, friends, and neighbors of gun victims
are using the legal system to seek some measure of solace. Congress
ought not to get in the way. The Levin-Durbin amendment sends a clear
message that the gun industry must face up to its responsibilities,
that it will not find an easy escape in the bankruptcy court when
families bring valid lawsuits.
And this Congress has to do more to stop gun violence. It is
disgraceful that the Congress has not passed reasonable gun safety
measures, including my amendment that requires criminal background
checks at gun shows. It is especially troublesome when one stops to
consider that the Nation's largest gun manufacturer, Sturm, Ruger and
Co., has expressed concern about the sale of its guns at gun shows.
The gunmakers themselves are seeing the light, but Congress is still
fumbling for the switch. Most Americans assumed the horrific shootings
in Columbine would be enough. Most Americans thought the vision of two
high school students systematically killing 12 classmates and a teacher
and wounding 23 others would finally spur this Congress to action.
April 20 will mark one year since that terrible tragedy at Columbine,
and it would be outrageous for Congress to let that day pass without
having passed a single piece of gun safety legislation. The Senate did
pass sensible gun safety measures as a part of the juvenile justice
bill, including the amendment I offered that would prevent criminals
from getting guns at gun shows, but we simply need to finalize a good,
tough bill and send it to the President.
While this legislation is technically stuck in conference, I am
afraid it is being held hostage by the extremists at the National Rifle
Association, and we should not allow that to continue. I am going to
continue to speak on the Senate floor. I will take whatever other steps
are necessary to engage Congress in that action.
When the Congress wants to act quickly, it does. We often push
legislation through the process in a matter of days, but not
legislation aimed at reducing gun violence. Those measures run into one
delay after another, even though the vast majority of the American
people are pleading for action. Failing to act by that horrible
anniversary date, April 20, will be a travesty. How will we be able to
answer the families who ask what we have done to stop the killing?
I urge my colleagues to join me and others in bringing this
nationwide epidemic under control. The forces on the other side are
powerful, but we have to help keep our families and communities safe
and make the gun industry accountable. Support the Levin-Durbin
amendment, and then we ought to complete the work on the gun safety
measures in the juvenile justice bill.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The distinguished Senator from Iowa is
recognized.
Mr. GRASSLEY. Mr. President, how much time is left for this side on
the Levin amendment?
The PRESIDING OFFICER. The Senator has 8 minutes remaining.
Mr. GRASSLEY. I yield such time as he might consume to the Senator
from Idaho.
The PRESIDING OFFICER. The distinguished Senator from Idaho is
recognized.
Mr. CRAIG. I thank the distinguished Presiding Officer from Kansas
for recognizing the Senator from Idaho.
Mr. President, I said yesterday--and I meant it most sincerely--that
I am very respectful of the Senator from
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Iowa and the Senator from Utah who have tried to reshape bankruptcy law
in this country to be fair and equitable and representative of those
who find themselves in desperate straits as a result of debt and the
need to reorganize and reshape that and, in some instances, to
discharge it altogether. We have said historically that those who
willfully, maliciously, or recklessly cause endangerment cannot do
that. That has been the standard, and that ought to remain the
standard.
Today, there is an attempt by the Senator from Michigan to use the
bankruptcy code to be politically correct, to be more political than
substantive as it relates to the law; that is, to single out an
industry and that industry's legal distributors as somehow being
separate, special, and unique and, therefore, not being allowed to use
the bankruptcy law.
It is a great mistake for the Senate to begin to play that kind of
game. That is raw politics, and we have not done that in the past. I am
not sure we should ever do it for any reason other than the ones we
have already said: a willful, malicious kind of action.
They say this is for gun manufacturers, those folks whom they attempt
to paint as a very evil group who produce a legal and legitimate
product and sell it through federally licensed dealers. Somehow they
are all wrong now because the Senator from Michigan and the Senator
from New Jersey say the American people sweepingly demand that we
change. The American people do not sweepingly demand this change; they
demand that the Justice Department enforce the laws, which we know they
have not, and, as a result, some misuse of firearms has certainly gone
on in our country.
The issue is not with the Kmarts, it is not with the Wal-Marts, it is
not with the local hardware dealer, and it should not be with the
manufacturer. But for some reason today, for political correctness in
this Chamber, that is exactly what they are attempting to do. I hope my
colleagues understand and recognize that we are not shielding somebody
who acts willfully and maliciously but who acts knowing their action
endangers others. They are not going to be exempt because they are not
now and they will not be later.
The Senator from Alabama is right; judges are already dismissing
these kinds of frivolous, politically motivated lawsuits, and they will
keep filing them hoping someday they can find a judge on whom they can
hang it and he will say OK.
If that happens, then what happens? If a company that finds itself in
this situation is not allowed to use chapter 11 to reorganize, then
they will use chapter 7. What does that mean? It means they will go
bankrupt, they will liquidate, they will go overseas, if they need to,
to manufacture their product, and jobs on Main Street in a lot of our
communities can and will be lost.
Is this a jobs issue? It can be when you straitjacket the law, when
you pick winners and losers, when you want to play the politically
correct game against someone who, by their judgment, has fallen out of
favor with the American people. I hope we do not use bankruptcy law or
any other part of the Federal code of this country for that kind of
political gamesmanship.
Last year, my colleagues on the other side of the aisle worked
overtime trying to make guns an issue, and they failed. The reason they
failed is that the American people said: Wait a moment; there are
tragedies being perpetrated out there and guns being used in those
tragedies, and there are 60,000 gun laws in America and the Justice
Department is not enforcing them.
Somehow we just stack more laws up and the world becomes safer? No.
The American people are way ahead of us by last year's polling and this
year's current polling. They say: Don't do that. More laws do not a
safer world make unless the laws are effectively enforced and
administered against the criminal element of our society or those who
would misuse their rights.
Here the Senator from Michigan is deciding who is going to be
criminal and who is going to be malicious by standing in this Chamber
and saying: I think I will find these people less than popular in my
judgment because back home it might be politically correct with my base
of support.
That is not good policy. It may be good politics. We have already
found even that politics is not working very well.
I ask my colleagues to join in a motion to table. We should not mess
up the bankruptcy law. It ought to be used for the purposes it is being
used, and those who find themselves misusing the laws of our land or
acting in a reckless, willful, malicious way are going to be treated
appropriately within the law; that is, to not discharge their debt or
their liability if they find themselves in this kind of an environment.
I yield the floor.
Mr. GRASSLEY addressed the Chair.
The PRESIDING OFFICER. The distinguished Senator from Iowa is
recognized.
Amendment No. 2762, As Modified
Mr. GRASSLEY. Mr. President, I have an opportunity to avoid one vote
by sending to the desk a modified amendment. It is amendment No. 2762.
So I send it to the desk and ask unanimous consent that the amendment
be modified and that the modified amendment be agreed to, and the
motion to reconsider be laid upon the table. If necessary, I ask
unanimous consent to lay the pending amendment aside.
The PRESIDING OFFICER. Is there objection?
Mr. LEVIN. No objection on this side.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 2762), as modified, was agreed to, as follows:
On page 14, strike lines 8 through 14 and insert the
following:
``(5)(A) Only the judge, United States trustee, bankruptcy
administrator, or panel trustee may bring a motion under
section 707(b), if the current monthly income of the debtor,
or in a joint case, the debtor and the debtor's spouse, as of
the data of the order for relief, when multiplied by 12, is
equal to or less than--
``(i) the national or applicable state median family income
reported for a family of equal or lesser size, whichever is
greater; or
``(ii) in the case of a household of 1 person, the national
or applicable State median household income last reported by
the Bureau of the Census for 1 earner, whichever is greater.
``(B) Notwithstanding subparagraph (A), the national or
applicable State median family income for a family of more
than 4 individuals shall be the national or applicable State
median family income last reported by the Bureau of the
Census for a family of 4 individuals, whichever is greater,
plus $583 for each additional member of that family.''.
Nothing in this title shall limit the ability of a creditor
to provide information to a judge, U.S. trustee, Bankruptcy
administrator or panel trustee.
Mr. GRASSLEY. Does the other side of the aisle have speakers?
Mr. LEVIN. Mr. President, I think we are ready to yield back whatever
time we have, if the other side is ready to yield back whatever time
they have.
I withdraw that.
Mr. FEINGOLD addressed the Chair.
The PRESIDING OFFICER. The distinguished Senator from Wisconsin is
recognized.
Amendment No. 2748, As Modified
Mr. FEINGOLD. I believe I have 6 minutes remaining, is that correct?
The PRESIDING OFFICER. The Senator has 6 minutes remaining on his
amendment.
Mr. FEINGOLD. I ask if I can use a portion of that time at this point
to respond on the landlord-tenant amendment.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. I wish to respond briefly to the short remarks the
Senator from Alabama made with regard to the landlord-tenant amendment.
I want to reiterate, as the Senator from Alabama acknowledged, that
he raised a whole series of concerns out here on the floor in the
course of our debate on the amendment a few months ago. And he does not
dispute that we addressed every single one of those concerns, as we
modified the amendment. We have been very attentive to the fact there
were aspects of the amendment that made the Senator, and others,
uncomfortable. We made changes in the spirit of compromise in order to
try to get something done.
By eliminating the automatic stay, section 311 of this bill is an
enormous change in the law in favor of landlords. What the Senator does
not make clear is that we are not undoing that change with this
amendment. What our amendment does is streamline the process for
lifting the automatic stay, rather than eliminating the stay
altogether. So instead of a 6- or 8-week period, or longer, to get the
stay lifted,
[[Page S244]]
our amendment provides a 15-day period, and the State eviction
proceedings go forward. But those proceedings cannot go forward when
the tenant is paying rent.
All we are saying is that if a person is truly trying to get his or
her act together, and is willing, from the time of the bankruptcy
filing forward, to pay rent every month, on time, then in those cases
the stay should be in place. I think that is enormously reasonable.
For the Senator to suggest this is somehow federalizing this area is
the opposite of what is going on. In fact, this bill, as it will
undoubtedly pass, will remove Federal court, in effect, in an awful lot
of cases that currently are protected by Federal bankruptcy proceedings
because of the automatic stay. And so will our amendment. If a tenant
misses a rent payment, or is damaging the apartment, all the landlord
has to do is file a simple one page certification to that effect with
the bankruptcy court and the stay is lifted.
All we are saying is, in some cases there still needs to be that stay
in place where someone is honestly trying to stay in that apartment,
someone is truly trying to get their life together, and is willing to
make the rent payments.
So it is simply incorrect to say this is going to gut the provision
in the bill. Our amendment still is a dramatic change from current law.
It is a change that is very pro-landlord. All we are saying is, let's
be fair.
It is not accurate when the Senator from Alabama says there is
automatically going to be a hearing at the end of the 15 days. That is
not the case. Yes, it is conceivable that tenants could come and seek a
hearing if they claimed that the landlord's certification was
inadequate or mistaken, but there is no automatic right to a hearing.
If those 15 days lapse, that is it. The State eviction proceeding goes
ahead, the automatic stay is lifted.
In summary, I think this is a classic case of where, instead of there
being a fundamental disagreement that we cannot bridge, we tried very
hard to add a few elements of fairness to the bill. I think the Senator
from Alabama would have to concede we did do that. It would be
appropriate for Members to take a good look at this modified amendment
and adopt it to make sure we do not have an unduly harsh change in the
law. I cannot believe even the harshest landlord would want to have
some of the consequences that could result if we do not adopt the
reasonable modifications contained in this amendment.
Mr. President, with that, I ask, how much time is remaining?
The PRESIDING OFFICER. The distinguished Senator has 3 minutes
remaining.
Mr. FEINGOLD. Mr. President, with the understanding the other side
will yield their time, I will yield my time, as well. But if, instead,
they wish to speak again, I will keep the 3 minutes.
Mrs. FEINSTEIN. Mr. President, after much deliberation, I am voting
in favor of tabling the Feingold amendment on the use of the automatic
stay in eviction proceedings.
In California, we have had very serious problems with bankruptcy
mills, fly-by-night firms that have advised tenants to avoid eviction
by filing for bankruptcy. These firms have even gone so far as to place
ads in newspapers which encourage renters to ``stop evictions from one
to six months by filing for bankruptcy,'' or promise to ``legally stop
your eviction for up to 120 days at rock bottom prices.''
In 1996 alone, the Los Angles County Sheriff's Department reported
3,800 cases in which the tenant filed for bankruptcy after all state
eviction proceedings were exhausted--causing an extra $ 6 million in
costs.
While the Feingold amendment is well-intentioned, it does not
adequately address the misuse of the ``automatic stay'' in eviction
proceedings.
Let me explain why:
First, once an individual files for bankruptcy, the Feingold
amendment only permits an eviction to go forward if the tenant
subsequently fails to pay rent again. Thus, a debtor could refuse to
pay debts for many months, and when the landlord begins the eviction
proceeding, the landlord's hands would be tied if the debtor then
starts paying the rent.
This in effect gives a renter the ability not to pay rent, go through
bankruptcy, and, by agreeing to pay future rent, get to keep the
apartment even if no back rent is paid. In the meantime, he could have
had eight or ten or twelve months of free rent.
Second, the amendment gives landlords the incentive to evict tenants
immediately upon non-payment. If, according to the Feingold amendment,
the landlord begins eviction proceedings more than 10 days after non-
payment of rent and then the tenant files bankruptcy, the eviction
would be subject to the automatic stay. This quirk in the amendment
could deter landlords from entering into negotiations with tenants and
lead to quicker evictions.
Finally, I have concerns about the impact of this amendment on small
landlords. I have received letters from small, private landlords about
the burden of current bankruptcy law. These landlords, who may own just
one or two apartments, report that the non-payment of rent by tenants
threatens their own ability to meet mortgage payments.
I believe strongly in protecting the rights of tenants. However, the
Feingold amendment tips the scales too far. A more balanced approach is
needed.
Mr. GRASSLEY. Mr. President, how much time do we have on the
amendments?
The PRESIDING OFFICER. The Senator has 15 minutes.
Mr. GRASSLEY. I yield myself 2 minutes.
The PRESIDING OFFICER. The Senator is recognized.
Mr. GRASSLEY. Mr. President, I wish to take this particular time to
not speak on either one of the amendments before us but to speak about
the necessity of passing this bill. Because we have votes on two or
three amendments and then final passage, I will not take the time of
the Senate at the time of final passage.
As we prepare for final passage on this bankruptcy bill, I remind all
my colleagues what we are voting for and on. The most fundamental
question we face with this bill is whether or not people should repay
their debts.
This bill says that when someone can repay their debts, they are not
going to be able to take the easy way out. This bill will end the free
ride for wealthy freeloaders and deadbeats who walk away from their
debts and pass the bill on to the rest of us, to the consumers, who are
honest and who should not pick up the tab for those who are not.
We have a real bankruptcy crisis in need of action. This bill does it
without violating the principle that people who are entitled to a fresh
start have that fresh start.
As a result of an amendment offered by Senator Torricelli and myself,
this bill contains the most sweeping, wide-ranging set of consumer
protections the Senate has enacted in a long time.
Those of us from farm country have an extra reason to vote for this
bill since it contains crucial protections for family farmers who may
face bankruptcy due to low commodity prices. Chapter 12 will expire in
June unless we pass this bill. Under this bill, farmers in chapter 12
will get significant tax relief when they sell off assets.
Mr. President, this bill is fair and balanced and deserves to be
passed by an overwhelming vote.
Mr. President, I ask unanimous consent that two newspaper articles on
the subject of bankruptcy be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Des Moines Register, May 20, 1999]
The Bankruptcy Paradox
If you are a single parent in Iowa whose spouse takes the
family can, takes the family bank account and takes a powder,
society will provide you with something over $300 per month,
plus health care and food stamps while you hunt a job. If you
don't get on your feet in the alloted time, society may take
action to take your kids away.
If you have some assets but have managed to go thousands of
dollars in debt by losing big at the casino, society will
forgive your debt immediately and let you keep the house and
car and continue to gamble. If you're back in the red in a
few years, society will bail you out again. And again.
That's the paradox posed by bankruptcy laws. The average
American declaring bankruptcy is forgiven $11,000 in debt
with no obligation to pay it back. Instead, society pays it.
The deadbeat's debts show up in the higher prices you pay and
the higher interest on borrowed money.
Don't look for help from the consumer groups or the civil-
rights groups or the bankruptcy attorneys. They're fighting
against
[[Page S245]]
efforts to hold debtors more responsible, and blaming the
credit-card industry for luring the reckless into bankruptcy.
No question but that the industry is guilty of inviting
deadbeats to go into debt by its indiscriminate pushing of
credit cards. For the industry to now complain because some
are defaulting is the height of chutzpah.
Their critics argue that the lenders simply want the
government, by tightening bankruptcy laws, to become a
collection agency for them.
There's plenty of blame for everyone. Too many Americans
are flat-out irresponsible in handling money; too many
lenders are equally irresponsible in taking advantage of that
irresponsibility, and our bankruptcy laws are too eager to
make responsible society pay for the mess. As usual.
It's impossible to legislate responsibility. But steps
could be taken. We could discourage the credit-card industry
from offering credit without checking creditworthiness. We
could require that lenders describe credit terms exactly, and
explain why paying only the ``minimum balance'' is like owing
your soul to the company store. We could eliminate ``Chapter
7'' bankruptcies, which free debtors of any responsibility.
Legislation tightening up the bankruptcy law has cleared
the House, with ``yea'' votes from the entire Iowa
delegation. Unfortunately, it lets state bankruptcy laws
continue to allow the bankrupt to keep their homes, no matter
how expensive. Millionaires can still sell their homes, buy
mansions in certain states like Florida and Texas, and become
``bankrupt'' millionaires, paying their creditors nothing.
The saddest aspect of the credit mess is in its indictment
of the integrity of modern culture. Today's society no longer
sees bankruptcy as carrying any stigma, seems no longer to
attach any guilt to financial irresponsibility, and teaches
that when anything goes wrong in one's personal affairs, it
is someone else's fault, and the bailout is someone else's
duty.
The price we will eventually pay for this collective soft-
headedness could be staggering.
____
[From the Omaha World-Herald, May 10, 1999]
Bankruptcy Is for the Needy
The ability to declare bankruptcy and dump one's debts
should not become regarded as merely another financial
management tool to facilitate irresponsible spending. Such a
remedy should be limited to people who truly cannot repay
their creditors. That is one of the principles underlying
legislation passed by the House despite a veto threat by the
White House.
The proposal is an attempt to slow a flood of bankruptcies
in the United States. Nearly 1.4 million people filed for
personal bankruptcy protection last year, an increase of 95
percent since 1990.
Bankruptcy is a substantial problem. While no official
figures exist, creditors have said that the amount of debt
that gets wiped out by bankruptcy proceedings each year
totals between $30 billion and $50 billion. Some people might
say that's good. But such a view would be uninformed. Debts
that the law forces creditors to forgive are ultimately paid
by others in the form of higher prices.
All sides in the debate agree that current law allows debts
to be written off even though the debtor is capable of
partial repayment. Studies by the Justice Department and the
American Bankruptcy Institute, a nonpartisan think tank in
Alexandria. Va., indicate the figure is between $800 million
and $1 billion. A study paid for by major credit-card
companies came up with $3 billion.
The legislation, pushed by credit card companies, would
make it nearly impossible for people earning more than the
national median income ($50,000 for a family of four) to wipe
out their debts entirely. Rather, the higher income family
would have to gradually repay its debts on a schedule set by
the court.
Blame for the surge in bankruptcies can be spread widely.
Lenders suggest that the number has risen because the laws
making it easier to take cover under the bankruptcy laws.
Consumer organizations have asserted that lenders,
particularly credit-card issuers, are largely at fault
because they aggressively push credit--even households with
marginal financial resources are targeted by many companies
these days.
Clinton administration officials object to the legislation,
arguing that it would hurt people who are not capable of
repaying their debts.
Debtor attorneys and some bankruptcy experts have said that
the new law would bring increased paperwork, raising the cost
of filing bankruptcy and making it more difficult for low-
income families to take advantage of it.
The problems seem small, however, in relation to the worthy
principle that would be strengthened. Anyone who can repay
his debts should do so. Period, Bankruptcy should not be an
easy out for people who live it up beyond their means. The
proposed legislation would redirect the law to cut off their
escape route.
Mr. GRASSLEY. I yield the floor and reserve the remainder of my time.
The PRESIDING OFFICER. Who seeks time?
Mr. GRASSLEY. Mr. President, before we have a quorum call, I have a
message from Senator Sessions, that Senator Sessions is willing to have
me yield back our time on our side if Senator Feingold is willing to
yield back the time on his side.
Mr. FEINGOLD. With that understanding, I yield back my remaining
time.
Mr. GRASSLEY. We yield back the time on our side.
The PRESIDING OFFICER. All time has been yielded back.
Mr. REID. Mr. President, parliamentary inquiry: Would the Chair
inform the Senators how much time remains? It is my understanding
Senator Levin has approximately 4 minutes on his amendment. Is that
true?
The PRESIDING OFFICER. The time remaining is 4 minutes for the
distinguished Senator from Michigan and 2 minutes for the distinguished
Senator from Iowa.
Mr. REID. What other time is remaining on the amendments?
The PRESIDING OFFICER. All of the other time has expired.
Mr. REID. I suggest the absence of a quorum, with the time running
against both the majority and minority.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATCH. Mr. President, at the end of this matter we are going to
vote on these amendments. Then we will have a managers' amendment and
finish the bill.
I want to personally express my respect for and appreciation of both
Senators Grassley, Torricelli, and others for the hard work they have
done in bringing this bill through the subcommittee and through the
Judiciary Committee and on to the floor. Senator Sessions has been a
very solid supporter of good bankruptcy legislation, as well as others
on the Judiciary Committee--I hate to leave anybody out--but especially
Senators Grassley and Torricelli. They deserve a lot of respect for
what was a very difficult bill to bring through even a subcommittee,
let alone the full committee and the floor.
I am hopeful we will get this bill all the way through and signed by
the President. It is a bill that will make a great deal of difference
in everybody's lives and, I think, will set the bankruptcy code in the
direction it should go and stop some of the fraud and some of the
misuses of bankruptcy that are going on currently in our bankruptcy
system.
There are some things we will have to work on in conference; there is
no question about that. We will try to perfect this bill as best we
can, hopefully, so that both sides are pleased with it. There are some
problems that naturally do exist, but we will work with our friends on
the other side and see what we can do to resolve any conflicts we have.
Again, I thank the distinguished ranking member on the Judiciary
Committee, Senator Leahy. He and his staff have played an excellent
role, along with the staffs of Senators Grassley and Torricelli, in
helping to bring this about.
I thank my own staff for the work they have done. All of these staff
members have worked diligently to do what is a very good job on
bankruptcy.
Having said that, I suggest the absence of a quorum.
Mr. REID addressed the Chair.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, there are 4 minutes remaining for the
Senator from Michigan.
The PRESIDING OFFICER. The Senator is correct.
Mr. REID. I yield those to the Senator from Vermont, ranking member
of the committee.
The PRESIDING OFFICER. The distinguished Senator from Vermont is
recognized.
Mr. LEAHY. Mr. President, I intend to vote for the Bankruptcy Reform
Act to send it to conference in the hope that we can continue to
improve the bill so that a balanced bankruptcy reform bill can be
signed into law by President Clinton this year.
We have adopted 45 amendments during the floor debate on this bill--
[[Page S246]]
amendments offered by Republicans and Democrats.
During the course of our floor debate, Senators from both sides of
the aisle have come forward to made bipartisan progress to improve this
bill from that reported by the Judiciary Committee. I want to thank
Chairman Hatch and Senator Grassley for working with us, with me and
Senator Reid and Senator Torricelli, and with the proponents of many
amendments. This debate has not been easy with more than 300 amendments
filed to the bill back in November. We have worked through those
amendments.
Let there be no confusion: This is certainly not the bill that I
would have drafted, even now after the amendment process. This is not
as good or as balanced a bill as that which the Senate passed by a 97
to one vote in 1998. Still, it has been significantly improved in its
bankruptcy provisions through a bipartisan amendment process.
We have worked in good faith with the Republican managers to have an
open debate. This is how the Senate works and how it should work. From
a total of 320 amendments, we have now worked through them all. That is
a bipartisan accomplishment of which we can all be proud.
I have tried during the course of this consideration to protect the
rights of Democratic Senators to offer and debate their amendments.
While we have not always prevailed after a vote, we have at least been
faithful to our Senate tradition and preserved the opportunity to
offer, debate and vote in relation to those amendments.
In some significant regard, we have been successful in improving this
bill. Over the course of the last three years we have been able to help
reshape the bill to protect child support payments as a priority in
bankruptcy.
We added modest but essential credit industry reforms to the bill.
The millions of credit card solicitations made to American consumers
the past few years have caused, in part, the rise in consumer
bankruptcies. The credit card industry should bear some responsibility
for these problems. The improvements to the Truth In Lending Act that
we have been able to add to this measure provide for more disclosure of
information so that consumers may better manage their debts and avoid
bankruptcy altogether.
We adopted other important amendments to improve the bill, as well.
Indeed, we adopted amendments during Senate debate on this bill. I want
to list just a few of these important amendments for the record.
The Senate overwhelmingly voted to close the homestead exemption
loophole in the Bankruptcy Code. By a vote of 76 to 22, the Senate
adopted the Kohl-Sessions amendment to cap any homestead exemption at
$100,000. In States such as Florida and Texas, debtors have been
permitted to take an unlimited exemption from their creditors for the
value of their home. This has lead wealthy debtors to abuse their State
laws to protect million dollar mansions from creditors. This has been a
real abuse of bankruptcy's fresh start protection.
We adopted the Leahy-Murray-Feinstein amendment to clarify that
expenses to protect victims of domestic abuse are necessary expenses in
a bankruptcy proceeding. We adopted a Feingold amendment to clarify the
long-term expenses of a debtor caring for a nondependent parent or
relative are necessary expenses in a bankruptcy proceeding. We adopted
the Kennedy amendment to protect a debtor's Social Security benefits in
a bankruptcy proceeding. These are good amendments that improve the
bill.
We adopted the Grassley-Torricelli-Specter-Feingold-Biden amendment
to provide bankruptcy judges with the discretion to waive filing fees
for low-come debtors. Bankruptcy is the only civil proceeding without
in forma pauperis filing status and this amendment corrects that
anomaly. And we adopted the Feingold-Specter amendment that struck the
bill's requirement that a debtor's attorney must pay a trustee's
attorney fees if the debtor is not ``substantially justified'' in
filing for chapter 7. That requirement could have discouraged honest
debtors from filing for chapter 7 for fear of paying future attorney
fees. Together these amendments improve the fairness of bankruptcy
proceedings.
We adopted the Leahy amendment that struck the bill's mandate for all
debtors to file past tax returns and instead permits parties in
interest to request tax information if needed. The wasteful provision
stricken by my amendment should save taxpayers an estimated $24 million
over the next five years by cutting down on unnecessary storage costs
and paperwork burdens.
We adopted the Reed-Sessions amendment to protect debtors by giving
them adequate information for decisions about reaffirmations of
unsecured and low-value secured debt. We adopted the Sarbanes-Durbin
amendment on disclosure of consumer credit information.
Forty-three amendments were adopted to the Committee bill, many made
important improvements, many on a bipartisan basis.
Unfortunately, while we made progress on the underlying bill in many
regards, it still lacks the balance that it needs to become good law
and remains tilted too far toward making taxpayers and the bankruptcy
courts pay for the excesses of the credit industry. It is my hope that
with the help of the Administration and the continuing cooperation of
Chairman Hatch and Senator Grassley and our House counterparts that we
can continue to improve this measure during the course of a House-
Senate conference and report a consensus bill that we can all proudly
support.
Most threatening to the prospects of this bill becoming law are the
nonrelevant, nongermane amendments adopted last November to this bill.
Last year, Senate adoption of those nonrelevant, nongermane amendments
quite properly led to a presidential veto threat. I will work in the
House-Senate conference to have those amendments removed from the
conference report and final bill. If they are not, I have grave doubt
whether any bankruptcy reform bill can become law this year.
Regrettably the Senate rejected the Kennedy amendment to provide a
real minimum wage increase and, on a virtual party line vote, chose to
adopt an amendment that includes unpaid tax breaks and a watered down
increment in the minimum wage for working people. The President noted
that the Republican majority used its amendment ``as a cynical tool to
advance special interest tax breaks.''
Last year, the Senate also adopted by a one-vote margin, a poison
pill amendment regarding sentencing policy. I opposed this amendment
because it attempted to solve the unfair discrepancy between sentences
for powder and crack cocaine in precisely the wrong way--by increasing
the use of mandatory minimums for those who possess, import,
manufacture, or distribute powder cocaine, without taking any steps to
reduce the use of disproportionate mandatory minimums for those who
commit crack cocaine offenses.
I have repeatedly stated my objections to the shortsighted use of
mandatory minimums in the battle against illegal drugs, and my
objections are all the more grave when an attempt is made to increase
the use of mandatory minimums through provisions placed in the middle
of a unrelated bill offered at the end of a session. Returning to the
failed drug policies of the recent past is not the way to enact a fair
and balanced bankruptcy reform bill.
The bipartisan methamphetamine legislation included in that amendment
was passed separately at the end of the last session. Accordingly, the
only portion of that amendment worth voting for has already been passed
separately. That nonrelevant, nongermane amendment should also be
jettisoned in conference.
The Senate's actions last year in adopting the two Republican
nonrelevant and nongermane amendments were both unfortunate and unwise.
I hope the House-Senate conference committee will discard these two
poison pill amendments as we craft a final bankruptcy reform bill that
can become law.
I look forward to working with the Senate and House conferees to
improve the Bankruptcy Reform Act in conference. I hope the majority
has learned from the mistakes made during the bankruptcy reform
conference in the last Congress two years ago. This year, we should
work together to make further improvements and add balance to the
Bankruptcy Reform Act.
Finally, I want to commend Chairman Hatch and Senator Grassley for
[[Page S247]]
their management of this bill and thank Senator Reid, our Assistant
Democratic Leader, for all his effort and assistance in connection with
this matter.
Senator Grassley has persevered in this effort when lesser men would
have given up and he continues to work with us in good faith to craft
reform legislation.
Chairman Hatch has returned to his important leadership
responsibilities in the Senate without missing a step. He is a
legislator of the first order with whom I am glad to work on many
matters. Today we culminate our work together on initial Senate passage
of the Bankruptcy Reform Act so that we can continue our efforts in a
House-Senate conference.
Senator Reid has worked with me to protect the rights of Democratic
Senators and to improve the bill. I have thanked him many times in the
days and weeks that we have been on the Senate floor together working
to improve this bill and do so, again, today.
I look forward to working together with Chairman Hatch, Senator
Grassley, Senator Torricelli, the House conferees, and the Clinton
Administration on a conference report that leads to enactment of a fair
and balanced Bankruptcy Reform Act.
I yield the floor.
The PRESIDING OFFICER. The distinguished Senator from Iowa.
Mr. GRASSLEY. Mr. President, we yield back the remainder of the time
on our side.
Mr. LEAHY. We will on this side, too.
Amendment No. 2763
The PRESIDING OFFICER. By previous agreement, the amendment pending
is on the Schumer amendment No. 2763, with 4 minutes equally divided
for final argument and explanation. Who seeks time?
Mr. HATCH. Mr. President, the distinguished Senator from New York is
coming to the floor. I suggest the absence of a quorum until we start
the 2 minutes of debate on each side.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The VICE PRESIDENT. Without objection, it is so ordered. The Senator
from New York is recognized.
Mr. SCHUMER. Mr. President, I reiterate to my colleagues how
important this amendment is. Six years ago, the rule of law was
challenged in this country because some who believed that they had more
moral authority than the rest of us could take the law into their own
hands and commit acts of violence against clinics, against doctors,
against health care workers. They could harass; they could threaten;
they could blockade, because they thought they had more moral authority
than the rest of us.
The FACE law, a bipartisan law even supported by Henry Hyde, caused
that violence to decline significantly. Now they have found a new way
against these clinics; that is, once a judgment is made against them
because they have violated the law, to hide behind the false shield of
bankruptcy.
We will see violence increase. We will see a woman's right to choose
impinged upon if we don't pass the Schumer-Reid-Snowe-Jeffords
amendment. This is not an issue of simply pro-choice or pro-life. This
is an issue about violence against women. This is an issue about the
rule of law in America. I urge my colleagues to support the Schumer
amendment and preserve a woman's right to make her own decision on the
issue of choice.
The VICE PRESIDENT. The Senator from Utah is recognized.
Mr. HATCH. Mr. President, many Members have come to different
conclusions as to the need for this amendment concerning the
dischargeability of debts related to abortion clinic violence. It is
clear from today's debate, nobody in the Congress supports violence at
abortion clinics, or at any other venue. Those of us who support
bankruptcy reform do not believe that the bankruptcy laws should be
used to shield any acts of violence.
Many of us believe that current law already precludes those found
guilty of violent activities at abortion clinics from discharging debts
arising from such activity in bankruptcy. But apparently the sponsors
of the amendment believe there is more than can be done in this area.
Although I believe this amendment to be tremendously flawed, the
majority leader, Senator Grassley, and I recommend that members on both
sides vote for this amendment. We will, in good faith, in conference
correct the amendment and resolve these problems at that time. With
this amendment accepted, nobody will be able to politically demagogue
this issue in the context of true bankruptcy reform.
We pledge to work with our friends on both sides of the aisle who are
interested in this issue during conference to make sure that the law is
clear, that with due respect for the first amendment, debts arising
from violent acts cannot be discharged in bankruptcy.
Mr. President, have the yeas and nays been ordered?
The VICE PRESIDENT. They have not.
Mr. HATCH. I ask for the yeas and nays.
The VICE PRESIDENT. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the amendment of the Senator from New
York.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. FITZGERALD (when his name was called). Present.
Mr. NICKLES. I announce that the Senator from Montana (Mr. Burns) and
the Senator from Arizona (Mr. McCain) are necessarily absent.
I further announce that, if present and voting, the Senator from
Montana (Mr. Burns) would vote ``no.''
The result was announced--yeas 80, nays 17, as follows:--
[Rollcall Vote No. 2 Leg.]
YEAS--80
Abraham
Akaka
Ashcroft
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Bryan
Byrd
Campbell
Chafee, Lincoln
Cleland
Cochran
Collins
Conrad
Coverdell
Craig
Crapo
Daschle
Dodd
Domenici
Dorgan
Durbin
Edwards
Feingold
Feinstein
Frist
Gorton
Graham
Grassley
Gregg
Hagel
Harkin
Hatch
Hollings
Hutchison
Inhofe
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lott
Mack
McConnell
Mikulski
Moynihan
Murkowski
Murray
Reed
Reid
Robb
Rockefeller
Roth
Santorum
Sarbanes
Schumer
Shelby
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thurmond
Torricelli
Warner
Wellstone
Wyden
NAYS--17
Allard
Brownback
Bunning
DeWine
Enzi
Gramm
Grams
Helms
Hutchinson
Kyl
Lugar
Nickles
Roberts
Sessions
Smith (NH)
Thompson
Voinovich
ANSWERED ``PRESENT''--1
Fitzgerald
NOT VOTING--2
Burns
McCain
The amendment (No. 2763) was agreed to.
Mr. GRASSLEY. Mr. President, I move to reconsider the vote.
Mr. HATCH. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. LEAHY. Mr. President, could we have order, please.
The VICE PRESIDENT. The Senate will be in order. Senators will cease
all conversation or retire to the Cloakrooms.
The Senator from Iowa.
Mr. GRASSLEY. I ask unanimous consent the next series of votes be
limited to 10 minutes in length.
The VICE PRESIDENT. Is there objection?
Mr. LEAHY. Mr. President, reserving the right to object.
The VICE PRESIDENT. The Senator from Vermont.
Mr. LEAHY. Mr. President, reserving the right to object, and I will
not object, I did want to thank the Presiding Officer. I know he has
had a busy day and evening and night. I thank him for coming back and
joining those of us who supported this amendment.
I will not object.
The VICE PRESIDENT. Without objection, it is so ordered. There
remains 4 minutes equally divided on the Feingold amendment.
The Senator from Wisconsin is recognized.
[[Page S248]]
Mr. FEINGOLD. Mr. President, my amendment is designed to lessen the
harsh effects of section 311 of the bill on tenants, while at the same
time protecting the legitimate financial interests of landlords.
Mr. WELLSTONE. Mr. President, could we have order in the Chamber,
please?
The VICE PRESIDENT. Senators will cease audible conversation. Even on
the dais.
The Senator from Wisconsin.
Mr. FEINGOLD. Mr. President, current law provides for an automatic
stay of eviction proceedings upon the filing of a bankruptcy case.
Landlords can apply for relief from that stay so eviction can proceed,
but under current law the process often takes several months. Section
311 of the bill eliminates the stay in all landlord-tenant cases so
eviction can proceed immediately.
My amendment would allow tenants to remain in their apartments as
they try to sort out the difficult consequences of bankruptcy, if and
only if they are willing to pay the rent that comes due after they file
for bankruptcy. If the tenant fails to pay the rent, the stay can be
lifted 15 days after the landlord provides notice to the court that the
rent has not been paid. So no hearing and no delay. If the reason for
the eviction is drug use or property damage, the stay can also be
lifted after 15 days. Under the amendment, this 15-day notice period
does not apply if the tenant has filed for bankruptcy previously. In
other words, in the case of repeat filings, the automatic stay would
never take effect, just as under section 311 in the bill.
Under my amendment, therefore, you could never live rent free as some
of the opponents suggest. The debtor has to pay rent after filing for
bankruptcy. If a debtor misses a rent payment, the stay will be lifted
after 15 days. So the amendment gets at the abuse and it protects the
rights and economic interests of the landlord. What it does eliminate
is the punitive aspect of the bill. We have modified this so it is
fair. The major reform in favor of landlords still holds, but there has
to be some fairness and balance with regard to the effect of the bill
on evictions. That is what I am trying to protect through this
amendment.
I yield the floor.
The PRESIDING OFFICER (Mr. Roberts). The time allotted to the
distinguished Senator has expired. The Senator from Iowa is recognized
for 2 minutes. The Senate will be in order.
The Senator from Iowa?
Mr. GRASSLEY. I yield my time to the Senator from Alabama.
The PRESIDING OFFICER. The distinguished Senator from Alabama is
recognized.
Mr. SESSIONS. I thank the Chair. You got it right.
Mr. President, I must register my strongest opposition to this
amendment. It continues the one thing that causes so much grief. It
makes a Federal case out of eviction proceedings. We know that in Los
Angeles 3,886 bankruptcy cases were filed in 1996 simply to delay the
eviction cases that were pending in the State court. In other words, if
you file for eviction, under the current law when a person files
bankruptcy, that eviction case is stayed. It then goes to bankruptcy
court.
The landlord, many of whom are individual people without great
wealth, have already hired a lawyer to handle the eviction and now has
to hire a Federal court bankruptcy lawyer to go into Federal court.
After they win, as they always do because an expired lease is not an
asset of the estate and cannot be subject to the control of the
bankruptcy judge, they have to then go back to State court, ask the
State judge to pick up the litigation, and proceed.
The 15-days that the Senator suggests is better than his first
amendment, but it does in no way deny the person from going to Federal
court. They can then have a hearing after the 15 days. They can contest
whether the tenant used drugs or not in Federal court. They are
evicting them from the apartment because of drug use or other reasons.
We simply should not do this. The true fact is that eventually all
these contests in bankruptcy court are eventually lost. Why go through
the process? Let the State court eviction proceedings hold sway and
make the decisions where they have always been made.
Mr. FEINGOLD. I ask for the yeas and nays.
The PRESIDING OFFICER (Mr. Bunning). The yeas and nays have been
requested. Is there a sufficient second?
Mr. GRASSLEY. Mr. President, I move to table the amendment and ask
for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to amendment No. 2748, as modified. The
clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. FITZGERALD (when his name was called). Present.
Mr. NICKLES. I announce that the Senator from Montana (Mr. Burns) and
the Senator from Arizona (Mr. McCain) are necessarily absent.
I further announce that, if present and voting, the Senator from
Montana (Mr. Burns) would vote ``yea.''
The result was announced--yeas 54, nays 43, as follows:
[Rollcall Vote No. 3 Leg.]
YEAS--54
Abraham
Allard
Ashcroft
Bennett
Bond
Brownback
Bunning
Campbell
Chafee, Lincoln
Cochran
Collins
Conrad
Coverdell
Craig
Crapo
DeWine
Domenici
Enzi
Feinstein
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Kyl
Lieberman
Lincoln
Lott
Lugar
Mack
McConnell
Murkowski
Nickles
Roberts
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Stevens
Thomas
Thompson
Thurmond
Voinovich
Warner
NAYS--43
Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Breaux
Bryan
Byrd
Cleland
Daschle
Dodd
Dorgan
Durbin
Edwards
Feingold
Graham
Harkin
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Mikulski
Moynihan
Murray
Reed
Reid
Robb
Rockefeller
Sarbanes
Schumer
Specter
Torricelli
Wellstone
Wyden
ANSWERED ``PRESENT''--1
Fitzgerald
NOT VOTING--2
Burns
McCain
The motion was agreed to.
Mr. CRAIG. Mr. President, I move to reconsider the vote.
Mr. GRASSLEY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2658
The PRESIDING OFFICER. Under a previous order, there are 4 minutes
divided on the Levin amendment. Who yields time?
The Senator from Michigan.
Mr. LEVIN. Mr. President, my amendment very simply provides that gun
manufacturers or distributors cannot evade responsibility for damages
which are caused by their reckless or negligent conduct or their
fraudulent conduct by reorganizing in bankruptcy.
The question has been raised, why single out one industry? The answer
is, there are 18 exemptions in the bankruptcy law. We have singled out
18 different instances where public policy is such that we have decided
people should not be able to discharge their debts. For instance,
students who take out student loans cannot discharge their obligations
in bankruptcy. So where public policy indicates we should say something
is not dischargeable, we have done that on 18 different occasions.
This amendment is strongly supported by the League of Cities and by
the Conference of Mayors. About 30 cities have initiated lawsuits,
cities from all parts of the country: New Orleans, Chicago, Atlanta,
Cleveland, Cincinnati, St. Louis, and San Francisco being among them.
This is a response to a tactic which is being used by a number of gun
manufacturers that are being sued for reckless or negligent or
fraudulent conduct, saying: No, we are going to hold you accountable.
You cannot reorganize
[[Page S249]]
yourself in bankruptcy out of accountability and responsibility for the
damages that have been caused by your own reckless or negligent
conduct.
I hope this amendment will pass. It has the support of the Violence
Policy Center which points out that the gun industry is the only
industry that is exempt from Federal health and safety regulations.
There is no other industry explicitly exempt except for firearms
manufacturers. Insisting they not be able to escape liability for their
own reckless or negligent conduct is certainly in keeping with the
exemption they sought from Federal health and safety regulations since
judicial liability is the only way in which they can be held
accountable.
The PRESIDING OFFICER. The time of the Senator has expired.
The Senator from Utah.
Mr. HATCH. Mr. President, I have said before, this amendment bars
firearm manufacturers and sellers, including retailers, from business
reorganization under the bankruptcy code by not allowing the discharge
of debts that might result from one of these recently filed tort suits.
That means a major retailer could go bankrupt and would not be able to
reorganize to be able to pay off their debts. It would just gradually
be sold off to meet the needs of this particular amendment.
Manufacturers that could pay off injured parties substantially in full
over time would simply not be able to do so under this amendment.
Instead, they would be forced into liquidation.
It is both poor policy and a dangerous precedent to single out an
unpopular industry for unfavorable treatment under the bankruptcy code.
This is political correctness gone awry. As I recall, there are 18
exemptions on the personal side but none on the corporate side in this
bill so far. Let us keep the bankruptcy laws nondiscriminatory in the
sense of attacking and loading it up on an unpopular business just for
political purposes. That is the wrong political correctness to be used.
In this particular case, it just doesn't make sense. We ought to want
them to go into reorganization so the debts could be paid and the
business might be able to survive. That is why this amendment needs to
be voted down.
I urge my colleagues to oppose this amendment.
The PRESIDING OFFICER. All time has expired.
Mr. HATCH. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to amendment No. 2658. The clerk will
call the roll.
The legislative clerk called the roll.
Mr. FITZGERALD (when his name was called). Present.
Mr. NICKLES. I announce that the Senator from Montana (Mr. Burns) and
the Senator from Arizona (Mr. McCain) are necessarily absent.
I further announce that, if present and voting, the Senator from
Montana (Mr. Burns) would vote ``no.''
The result was announced--yeas 29, nay 68, as follows:
[Rollcall Vote No. 4 Leg.]
YEAS--29
Akaka
Biden
Boxer
Chafee, L.
Cleland
Daschle
Durbin
Feinstein
Graham
Harkin
Hollings
Inouye
Johnson
Kennedy
Kerry
Kohl
Lautenberg
Levin
Mikulski
Moynihan
Murray
Reed
Reid
Rockefeller
Sarbanes
Schumer
Torricelli
Wellstone
Wyden
NAYS--68
Abraham
Allard
Ashcroft
Baucus
Bayh
Bennett
Bingaman
Bond
Breaux
Brownback
Bryan
Bunning
Byrd
Campbell
Cochran
Collins
Conrad
Coverdell
Craig
Crapo
DeWine
Dodd
Domenici
Dorgan
Edwards
Enzi
Feingold
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Jeffords
Kerrey
Kyl
Landrieu
Leahy
Lieberman
Lincoln
Lott
Lugar
Mack
McConnell
Murkowski
Nickles
Robb
Roberts
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Voinovich
Warner
ANSWERED ``PRESENT''--1
Fitzgerald
NOT VOTING--2
Burns
McCain
The amendment (No. 2658) was rejected.
Mr. GRASSLEY. Mr. President, I move to reconsider the vote.
Mr. LEAHY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The question is on the engrossment and third
reading of the bill.
The bill (S. 625) was ordered to be engrossed for a third reading and
was read the third time.
bankruptcy judgeships
Mr. COVERDELL. Mr. President, the Judicial Conference recommends that
Congress authorize 24 new bankruptcy judgeship positions in districts
where bankruptcy filings and judicial caseloads are particularly
burdensome. S. 625 authorizes 18 of these judgeships; these same
positions were included in the conference report to the bankruptcy
legislation in the 105th Congress. S. 625 does not, however, include
six positions that the Judicial Conference submitted to Congress on
March 24, 1999.
I thank the chairman of the Subcommittee on Administrative Oversight
and the Courts for working so closely with me in my efforts to include
these judges in the pending legislation. The chairman conducted a joint
hearing with the House Judiciary Committee on November 2, 1999 to
consider these six additional judgeships and has given them appropriate
scrutiny. I have consulted with the Chairman both before and after this
hearing regarding these judgeships, and I believe I have his commitment
to address these positions when S. 625 is conferenced with the House.
Mr. GRASSLEY. If the Senator from Georgia will yield. I can assure
him that during the conference with the House on S. 625, I will in good
faith address the Judicial Conference's recommendation for the
additional judgeships. The hearing in November was indeed useful in
helping us assess the merits of authorizing these additional
judgeships. Subsequent to that hearing, my staff and I have engaged in
discussions with the Administrative Office to clarify some remaining
questions and concerns. I can report that most of my requests have been
satisfactorily addressed. However, I am still awaiting some additional
information, and so I am reluctant to add these positions to S. 625 at
this time.
Mr. COVERDELL. I thank the Chairman for his efforts and assurances.
As a fiscal conservative myself, I understand and appreciate his
dedication to ensuring that these positions are truly warranted.
One of these new judgeships would help address a judicial caseload
problem in Georgia. This new position would actually provide relief to
two Georgia districts where caseloads far exceed the national average.
By authorizing a new judgeship for the Southern District, an existing
judgeship that is currently split between the Southern and Middle
districts would move full-time to the Middle District.
Mr. GRASSLEY. I thank the Senator for his statement and for his
efforts in moving this issue forward.
Mr. MOYNIHAN. Mr. President, I rise today to voice my concern over
the bankruptcy bill that is before the Senate. I do this not because I
am an expert on bankruptcy law, but because I have been involved with
social policy for almost a half-century and can tell you that this is
no way to reform the bankruptcy system.
A May 9, 1999, New York Times editorial said that the House bill is
``bankruptcy reform that spares the wealthy . . . and makes life harder
for poor and middle-class people who file for bankruptcy.''
Representative Henry Hyde (R-IL) said the bill is ``truly tilted toward
the creditors.'' The Senate bill is not much better. The effect of the
bill is not complicated--the wealthy benefit, the poor suffer. After
the President signed the Personal Responsibility and Work Opportunity
Act of 1996--the so-called welfare reform bill--I stated that ``this
act terminates the basic Federal commitment of support for dependent
children in hopes of altering the behavior of their mothers.'' That
bill broke the Social Contract of the 1930s. We would care for the
elderly, the unemployed, the dependent children. Drop the latter;
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watch the others fall. We broke the social contract then, and will
again if this bill passes.
We were born a nation of debtors. A large number of early European
settlers came here indentured. The British rejection of debtor relief
laws in Massachusetts and Virginia was one of the precipitating factors
of the Revolutionary War. In justifying its actions, the British Board
of Trade noted that 9 out of every 10 creditors resided in Great
Britain--the Americans were the debtors. Shays' Rebellion, which
followed the War of Independence, was a direct response by farmers to
the courts' attempt to imprison fellow farmers for their debts.
Daniel Webster understood the tension and possible dangers that could
arise between debtor and creditor. Speaking in Congress on the
Bankruptcy Act of 1841, the Massachusetts statesman remarked on the
post-Revolutionary crisis:
The relation between debtor and creditors, always delicate,
and always dangerous, whenever it divides society, and draws
out the respective parties into different ranks and classes,
was in such condition in the years 1787, 1788, and 1789 as to
threaten the overthrow of all government; and a revolution
was menaced, much more critical and alarming than that
through which the country had recently passed.
In an attempt to address the relationship between debtor and
creditor, the U.S. Constitution was adopted with explicit bankruptcy
authority granted to Congress. Congress came up with the Bankruptcy Act
of 1800, which was similar to the English law in effect at the time of
independence. The 1800 Act was repealed in 1803. One of the unfortunate
stories from this period was that of Robert Morris, who had the honor
to sign the Declaration of Independence, the Articles of Confederacy,
and the U.S. Constitution. After creating the budget for the early
American government and heading the Yorktown campaign, he experienced
considerable misfortune speculating on land out West, incurring debts
that landed him in Philadelphia's Prune Street Jail from 1798 to 1801.
Morris was eventually relieved by the Bankruptcy Act of 1800.
Following the devastating Panic of 1837, the controversial Bankruptcy
Act of 1841 became law. It was repealed 18 months later. The 1841 Act
for the first time in British or American law allowed the debtor to
file for bankruptcy. Until this time, only creditors could put a debtor
into bankruptcy, which made it easier to collect their debts. Although
the Supreme Court did not address the 1841 Act before it was repealed
in 1843 because of political resistance, its constitutionality was
upheld at the circuit level, bringing voluntary bankruptcy by non-
merchants within the scope of Congress' bankruptcy power.
Under the 1841 Act, 33,739 debtors were adjudicated bankrupt, of whom
only 765 were denied a discharge. (If you were to declare bankruptcy in
Illinois, your attorney very likely would have been Abraham Lincoln.)
The panic of 1857 and the devastation of the Civil War brought
enactment of the Bankruptcy Act of 1867, repealed in 1878. The 1867 Act
allowed the debtor to retain increased exempt property under state or
Federal exemptions and required a 50 percent distribution to creditors
and creditor consent as preconditions to a discharge. But, the 1867 Act
contained so many grounds for denying discharge that fewer than one-
third of the debtors filing under the Act ever received one discharge.
These three laws were born and died amid controversy. But taken
together, they contained grand innovations that greatly helped ordinary
American debtors: Individual debtors were given voluntary access to
bankruptcy relief, to broader state exemptions, and to the discharge of
their debts with less creditor approval.
The Bankruptcy Act of 1898, largely with us today in concept although
supplanted by the 1978 Bankruptcy Reform Act and subsequent amendments,
consolidated and improved many of these innovations for the benefit of
debtors.
In 1934 the United States Supreme Court encapsulated the American
view toward the discharge of individual debtors through bankruptcy as
follows:
One of the primary purposes of the Bankruptcy Act is to
relieve the honest debtor from the weight of oppressive
indebtedness and permit him to start afresh free from the
obligations and responsibilities consequent upon business
misfortunes. This purpose of the act has been again and again
emphasized by the courts as being of public as well as
private interest, in that it gives to the honest but
unfortunate debtor who surrenders for distribution the
property which he owns at the time of bankruptcy, a new
opportunity in life and a clear field for future effort,
unhampered by the pressure and discouragement of pre-existing
debt.
America is truly the land of the second chance. To repeat the Supreme
Court, our nation believes in a bankruptcy system that ``gives the
honest but unfortunate debtor who surrenders for distribution the
property which he owns at the time of bankruptcy, a new opportunity in
life and a clear field for future effort, unhampered by the pressure
and discouragement of pre-existing debt.'' This nation has been blessed
with a hard-working, independent, creative, and risk-taking citizenry.
We also have embraced a free-market economy that has brought us great
wealth and prosperity. But with this economic system comes great risks
(and opportunities) for our citizens, and relatively meager safety nets
are provided. The fresh start that bankruptcy provides is one of those
safety nets. Let's not shred that safety net with this bill.
The bill before us contains an arbitrary means test that makes it
harder for low to moderate income people to wipe out their debts and
start clean, includes provisions favoring the credit card industry,
provides inadequate consumer protections, incorporates insufficient
privacy safeguards, and will have a disproportionately negative impact
on individuals with lower incomes, minorities, and older Americans.
This bill punishes the wrong people. We seem hell-bent to punish
elderly people who incur unexpected health bills or individuals who
unexpectedly lose their jobs. Instead, why don't we address the credit
card industry's predatory practices? Credit card issuers mailed out
3.45 billion--not million but billion--solicitation letters last year.
Professor Elizabeth Warner of Harvard Law School said that banks make
so much money on unpaid credit card balances--thanks to interest rates
much higher than those of home mortgages, car loans or other forms of
``secured'' debt--that they deliberately lure people into borrowing
beyond their means. Now, they are trying to get Congress to rig rules
so their own loan losses will be reduced. This is special interest
legislation at its worst.
Locke wrote that government has a fiduciary responsibility to act in
the best interest of the people. If we pass this bill, we will be
breaching that duty and undermining the fundamental sense that our
government is founded on the twin principles of decency and fairness, a
unique system that believes in extending a helping hand rather than a
boot across the throat.
Mr. DURBIN. Mr. President, the Senate has been debating, S. 625, the
bankruptcy reform bill for weeks. I am happy to say that many
Democratic amendments have been accepted which have brought much needed
balance to the bill.
The issue of bankruptcy is a highly technical and convoluted area of
our law replete with terms like cram downs, reaffirmations, panel
trustees, automatic stays, nondischargeable debt, priority debt,
secured debt, and even something known as a ``superdischarge.''
And the bankruptcy code is not only complex and arcane. It is the
fulcrum point of a delicate balance. When you push one thing, almost
invariably something else will give. That's because no matter how hard
you try there is a limited resource pie. All we do many times is
increase the fighting over the small pie--and usually no one really
wins that fight.
The Senate made several improvements to ease the burdens on low
income debtors while making sure that wealthy debtors pay their fair
share. The Senate adopted my amendment to allow debtors to attend
mandatory credit counseling by telephone or over the Internet, which
will make it easier for debtors with transportation difficulties. By
adopting a cap on the homestead exemption of $100,000, Congress will
continue the longstanding policy of giving a debtor a fresh start--not
a windfall.
Improvements were also made to make the bill more cost effective and
less expensive for taxpayers. My
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amendment to streamline the means test for debtors between 100 and 150%
of the median income was adopted and will save the taxpayers $8 million
a year in administrative costs. In addition, Senator Leahy's amendment
to exempt certain debtors from the requirement of filing 3 years of tax
returns will reduce both costs and undue burdens on low income debtors.
Finally, tremendous progress was made on the bill in the area of
credit card disclosure. If we are going to make it harder for people to
file for bankruptcy, then we need to provide them enough information to
ensure they are making informed decisions about their credit.
I was happy to join Senator Sarbanes in an effort to require
creditors to warn consumers about interest costs and provide toll free
numbers where debtors can learn how long it will take to eliminate a
credit card balance by making only the minimum monthly payment.
I will be watching the bankruptcy conference closely to ensure that
all of the hard fought amendments adopted on the Senate floor remain in
the bill through conference. If these provisions are stripped out in
conference, then this bill will likely face the same fate as last
year's bill--it will never become law.
Because of improvements in areas of concern to me, I will vote for
the underlying bankruptcy legislation, but I want to make clear my
opposition to the Republican minimum wage measure. It was clear from
last year's debate and it's clear today that the Republican minimum
wage does little to help America's lowest wage earners. In fact, it's a
slap in the face for all of our hardworking citizens who strive every
day to lift themselves out of poverty and into a better way of life.
Over the next three years, a minimum wage worker would receive over
$1,200 less under the GOP version than the Democratic proposal. Let's
break that down, Mr. President, into real terms. For America's lowest
wage earners: $1,200 a year translates into over four months worth of
groceries, over three months of rent, almost half a year worth of
utilities. For the lucky ones, that's one full year of tuition and fees
at a two-year college. Yet, the Republicans want to deny their
constituents this opportunity and I can't understand why.
Mr. President, this Republican minimum wage proposal sounds vaguely
familiar to us. You may recall how the other side of the aisle tried to
stretch out tax refunds for our lowest income workers under the Earned
Income Tax Credit. We grant tax relief to those that need it most and
then the Republicans turn around and try to delay their refunds. These
types of delaying tactics didn't work for the EITC and they certainly
won't work for an increase in the minimum wage.
Something I've heard very little about, and maybe it's because the
Republicans don't want you to know about it, is Section Two of their
amendment that effectively repeals overtime pay provisions of the Fair
Labor Standards Act that have been the law for over 60 years. This
provision would eliminate the requirement that bonuses, commissions,
and other compensations based on productivity, quality, and efficiency
be considered part of a worker's ``regular rate'' of pay for purposes
of calculating overtime pay. Because overtime pay is based on one and a
half times regular pay, overtime pay is lower if a worker's regular pay
is lower. Today, almost 73 million Americans are entitled to overtime
pay and the GOP provision jeopardizes their overtime benefits. Think
about it. If employers can pay less for overtime, they have a financial
incentive to require workers to work overtime without getting the pay
they deserve. That's another slap in the face on top of the one they
get from this half-hearted attempt to raise their wages from $5.15 an
hour.
Mr. President, it's clear that the Democratic bill would do a better
job at getting a pay increase to those who need it most. On our side of
the aisle, we believe it's not only our obligation, but our duty to
help those who need it the most. It is my hope that the conference
committee will wake up and remedy this malady that will be imposed on
the American people by the Republicans should this bill become law.
Mr. ROBB. Mr. President, I would like to begin by thanking my
colleagues, Senators Torricelli and Grassley, for their leadership in
putting together the bankruptcy legislation that is before us today. I
was one of the co-sponsors of the initial bankruptcy bill and continue
to support the legislation that is before us today. I'm concerned,
however, that we are including a tax provision which runs counter to
the entire essence of the bill.
As we finish debate on this measure, we ought to focus on one
overriding theme: responsibility. In the context of bankruptcy, this
includes both financial and social responsibility. Debtors need to be
more responsible when making decisions about purchasing goods or
services. And just as we expect those who purchase goods and services
to pay for these benefits, we expect lenders and sellers to be
responsible in their business practices. This is going to be a
difficult balancing act--both sides are going to have to give a little
bit. Right now, I hope that we are closer to fixing many of the
problems that needed to be addressed.
Financial responsibility, however, is not just relevant for our
debate today--it needs to become a theme for this Congress. This
bankruptcy bill is based on a simple premise: if you are able to pay
your debts, you should. I believe this premise should also be applied
to the federal government. For decades, the government spent more than
it took in. It ran up a $5 trillion debt. We are now in a position to
pay our debts. Before we go on a massive tax-cutting or spending binge,
we should focus on reducing our debt. It rings hollow for us to insist
upon financial responsibility from individuals and then fail to
exercise financial responsibility ourselves.
We should start this session exercising fiscal restraint, and we
should begin with this bill. It is ironic that this bill contains a tax
cut that costs more than it should and fails to hit its target.
Although the tax package contained in this bill is being described as
helping small businesses, it is poorly targeted and will provide little
help to the businesses that will be most affected by the minimum wage
bill.
If minimum wage legislation continues to move forward, I urge my
colleagues to look once again at S. 1867, The Small Business Tax
Reduction Act of 1999, the bill that Senator Baucus and I introduced
last November. This tax package offers real relief to those employers
who will be most affected by the minimum wage increase. That was the
purpose of the minimum wage tax bill, and our bill accomplishes that
goal.
For instance, our bill would accelerate the full deduction for self-
employed health insurance so that it takes effect immediately instead
of delaying it for several more years. Our bill would increase the
expensing limit for small businesses so they can purchase new and
better equipment. We would also raise the business meals deduction from
50% to 60% to help restaurants accommodate increased labor costs.
At the same time, we would provide estate tax relief for small
family-owned farms and businesses. Death is an inappropriate catalyst
for the forced sale of a family-held business or farm. Farmers would
benefit as our bill would be sure that income averaging does not
increase a farmer's potential Alternative Minimum Tax liability. We
also provide farmers with a longer period to use their net operating
losses if they have them. These are real tax provisions that help real
people.
The Small Business Tax Reduction Act of 1999 also contains provisions
targeted to geographic areas with the greatest need of economic
assistance. The New Markets proposal, for example, would reward
employers who operate in economically distressed areas, where the
minimum wage is the most prevalent. It also includes a credit that
encourages employers to give their lower income employees information
technology training. We also expand current empowerment zones credits
so that more communities and more people are able to take advantage of
these credits. These are all provisions that will provide assistance to
areas that are most in need of help.
Moreover, the pension provisions in our bill are designed to address
the needs of small employers struggling to
[[Page S252]]
develop effective retirement plans for their employees. For example, we
would allow small businesses to take plan loans as large businesses
can, and we have included Senator Baucus' proposal to provide a credit
for new small business pension plans. Everyone benefits when small
businesses are better able to offer their employees retirement plans.
In short, the tax package I offered accomplishes the purpose of
providing relief to those employers who will have higher costs when the
minimum wage increases. And it is responsible. It does not squander the
surplus that we have fought so hard to achieve, but rather maintains it
for debt reduction. At the same time, it protects Social Security Trust
Funds from being misallocated to other programs and expenditures. The
tax package that is currently contained in the bill is not responsible
and must be substantially improved in conference. We are going to face
several tough issues this year. I hope that our colleagues agree that
this is the time to start.
Mr. KOHL. Mr. President, I rise today to express my guarded support
for the Bankruptcy Reform Act currently before the Senate. The
troubling and dramatic rise in the number of bankruptcy filings demands
our careful attention, and this legislation--if balanced and fair--will
shore up the most significant cracks in our current system, but still
grant a ``fresh start'' to those debtors who truly deserve it.
One of the ways this bill works to eliminate the most egregious
abuses of the bankruptcy code is by finally placing a federal cap on
the unlimited homestead exemption. This provision, which I introduced
with Senators Sessions and Grassley, would close an inexcusable
loophole which currently allows millionaire deadbeats to keep their
luxury homes while their legitimate creditors get left out in the cold.
A cap is not only the best policy, it sends the best message: that
bankruptcy is a tool of last resort, not a tool for financial planning.
And don't just take my word for it: ask my colleagues in the Senate.
At the end of last session, we passed our $100,000 homestead cap by an
overwhelming margin of 76-22.
However Mr. President, if this legislation comes out of Conference
unbalanced, rest assured that I will be happy to vote against final
passage of the bill, as I did last Congress. A major factor in my
determination of what constitutes ``balance'' will be the status of the
homestead cap.
That said, I support this bill today because I believe it will repair
and improve our bankruptcy system, and help restore the stigma to
bankruptcy. But without the homestead cap, this bill will likely fall
short of its goal.
Mr. LEVIN. Mr. President, in the 105th Congress, the Senate passed a
meaningful bankruptcy reform bill by an almost unanimous vote. I voted
for that bill because I thought it was a well-balanced reform bill that
would discourage abuse of the system and provide enhanced protections
and reasonable information to consumers. The final version of that bill
was not approved in the 105th Congress, and so, once again, we engaged
in debate over how to restructure the nation's bankruptcy laws. When we
started debate on this bill, it was substantially different from the
moderate, bi-partisan bill of last Congress. I was particularly
concerned with the provisions relative to the means-test and consumer
credit card disclosures. However, over the course of this debate, the
Senate has adopted more than 40 amendments, making this a more
reasonable approach to bankruptcy reform.
As reported out of the Judiciary Committee, the bankruptcy reform
bill did not include consumer protections providing reasonable
disclosures of unsecured credit such as credit cards. Studies show that
bankruptcy filings increase as household debt increases. High debt-to-
income ratios makes working Americans more vulnerable to financial
emergencies. I am pleased that the Senate accepted an amendment to
provide enhanced access to consumer credit information. Creditors will
be responsible for warning debtors about potential dangers of paying
only minimum monthly payments and will make a toll free number
available to the debtor for more specific information. Although this is
not as helpful as the Senate's 1998 bill, it is a step in the right
direction. The previous bankruptcy bill gave specific information to
consumers about the months and years it would take for consumers to pay
off their debts by paying the minimum payment and provided them with
their total costs in interest and principle. A more detailed disclosure
regarding minimum monthly payments will help families exercise personal
responsibility and limit financial vulnerability.
In addition, the Senate has made modest steps relative to the
bankruptcy bill's means-test. The purpose of a means-test is to prevent
consumers, who can afford to repay some of their debts, from abusing
the system by filing for Chapter 7. Directing so-called abusive debtors
away from Chapter 7, where debts are forgiven, and into Chapter 13,
where the debtor must enter into a debt repayment plan, makes sense.
But an inflexible means test, with virtually no exceptions, will, in
the words of Henry Hyde, ``deprive debtors and their families of the
means to pay for their basic needs.'' I hope that in conference, the
Senate-House conferees will work toward establishing a more flexible
means-test, one that makes allowances for basic expenses such as
transportation, food and rent.
I am pleased that two amendments I sponsored, a credit card redlining
study and the prohibition of retroactive interest charges, were
accepted by the Senate. The redlining amendment requires the Federal
Reserve to conduct a study and report to the Banking committee about
whether financial institutions use place of residence as a factor in
determining credit worthiness. It is an important study that will bring
to light the problem of unequal credit opportunity.
My other amendment seeks to clarify what credit card companies refer
to as a ``grace period.'' Credit card lenders use complicated
definitions to explain that ``grace periods'' only apply if the balance
is paid in full. For example, assume that a consumer charges an average
of $1000 each month and always repays in full on time. If one month,
due to an error he writes a check that is $10 less than the full amount
he owes, but which is paid on time and is within the ``grace period,''
he probably would expect to pay the $10 charge and the interest on the
$10 unpaid balance. However, he is really charged retroactively on the
full $1,000 balance to the date the charges were made, even though he
had paid 99% of the balance. This consumer's $10 error ends up costing
him up to four times that in interest charges.
Current practice by these companies undermines reasonable consumer
expectations about what how a grace period for their payment works and
results in monetary penalties from the application of interest charges.
This amendment makes clear that the definition of a grace period is one
where a consumer is extended credit. No finance charge can be imposed
on the amount paid before the end of the ``grace period.''
I have decided to support this bill. However, I am very concerned by
the inclusion of non-germane tax provisions which spend $76 billion of
the projected non-Social Security surplus over the next ten years.
While some of the provisions included in this package make sense, it is
premature and unwise for the Congress to begin spending a surplus which
is uncertain before we have begun to pay down the national debt and
assured that our priorities in protecting Social Security and Medicare,
investing in education, and considering other types of tax cuts have
been met. For that reason, should this legislation come back from
conference with some of these tax provisions or without the modest
amendments we adopted in the Senate, I will consider opposing the bill
at that time.
Mr. BYRD. Mr. President, I shall vote in favor of S. 625, the
Bankruptcy Reform Act of 1999, in order to restore fiscal
responsibility to the nation's bankruptcy code. Last year, a record 1.4
million people declared bankruptcy, which was almost triple the number
in 1988 (549,612) and five times the number in 1980 (287,057). That the
number of households in severe financial difficulty has risen so
dramatically is perplexing, given the prosperous economy, and suggests
that some filers are abusing the bankruptcy code to erase debts they
are able to pay. The dramatic rise in bankruptcy filings may also
suggest
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that there is no longer a stigma attached to bankruptcy filers, and
that the bankruptcy laws are seen more as a financial planning tool
rather than a system of last resort. This bill would curb potential
abuses of the bankruptcy code by channeling debtors away from chapter 7
liquidation, where a debtor's liabilities are erased, and towards
chapter 13 repayment, where debts are reorganized under a repayment
plan. While I am not satisfied that this bill will decrease the
bankruptcy rate as dramatically as advocates claim, I am convinced that
S. 625 is a worthwhile effort in restoring fiscal responsibility.
However, during the bankruptcy debate, the Republican-controlled
Senate passed an amendment that would attach $75 billion in tax cuts
over ten years to the bankruptcy bill. These tax cuts were adopted in
lieu of targeted cuts that would have benefitted low-income and rural
families, which I supported, and that would have been fully paid-for by
closing down tax loopholes that would force businesses to pay their
fair share of taxes. Instead, the Senate adopted a tax package that
would not have been paid-for, and would largely benefit high-income
taxpayers. This means that Congress may have to borrow needed money or
cut spending to vital programs that benefit hundred of thousands of
West Virginians in order to pay for these tax cuts. It is almost ironic
that Congress attached these unpaid-for tax cuts to the bankruptcy
bill. Here we are today voting on a bill that would demand financial
prudence of debtors at the same time that Congress is providing for $75
billion in unpaid-for tax cuts.
In addition to these tax cuts, the Senate rejected a minimum wage
proposal by Senator Kennedy, which I supported, that would have raised
the minimum wage from $5.15 to $6.15 over two years. Instead, the
Senate adopted a one dollar rise in the minimum wage over three years
that was proposed by Senator Domenici. This would effectively delay a
pay raise to minimum wage workers, and cost year-round, full-time
minimum wage workers approximately $1,200 over three years. I have
always supported the minimum wage because of the 11.4 million workers
who rely on it to support their families. The two-year minimum wage
proposal would have provided an additional $2,000 a year for 11.4
million minimum wage workers. That $2,000 translates into an additional
seven months of groceries, five months of rent, almost ten months of
utilities, and eighteen months of tuition and fees at a two year
college.
My hope and expectation is that the three year minimum wage hike and
$75 billion tax cut provisions will be replaced with a two year minimum
wage rise and more targeted tax package when the conferees from the
House of Representatives and the Senate meet in the coming months to
work out the differences between the House- and Senate-passed versions
of this legislation. Consequently, I have joined with forty-four other
senators in sending a letter to the bankruptcy conferees urging that
they remove the Domenici provisions and accept the Kennedy proposal.
Mrs. LINCOLN. Mr. President, I voted for final passage of the
Bankruptcy Reform Act today because bankruptcy reform has been
desperately needed in this country and I have worked throughout my
public career to bring it about. This bill, however, is not without its
problems. It is my sincere hope that the Bankruptcy bill that emerges
from the Conference Committee will be just that, a Bankruptcy Bill. I
believe that the non-bankruptcy and poison pill riders that were added
to the bill on the floor should be stripped, or at least reformed in
Conference, so that we can move forward on bankruptcy. Our country
needs, and we owe to our constituents, a bankruptcy bill that the
President will sign.
Mr. President, we made various amendments to this bill which should
be readdressed in Conference and changed. For instance, I am pleased
that this body passed an increase in the minimum wage for working
families in Arkansas. However, I urge my Colleagues in Congress to
strengthen this provision in Conference implementing the $1.00 increase
over two years instead of three.
I also support tax cuts, however, the tax cuts in this bill are not
paid for and will do nothing to help small business and working people.
I am especially disappointed that this body failed to pass the needed
estate tax relief for family farms and small businesses that was
included in the tax amendment offered by the Minority.
The Senate also agreed to an amendment during consideration of this
bill designed to combat the spread of methamphetamine use in rural and
urban areas. While I agree we must do something to stop the terrible
spread of meth use in our country, I voted against that amendment
because, as the language stands, it will allow federal education
funding to be spent for tuition at private and religious schools.
Everyone wants to fight the scourge of drugs. Let's have a clean
amendment so we can move forward as a nation and fight against
methamphetamine with a concerted effort.
These are just a few examples of what needs to be fixed in this bill.
If we really want bankruptcy reform to become a reality we have to
craft a bill that the President will sign. Without a hard working
conference and bipartisan efforts, this can't possibly happen. I urge
my colleagues to work together to bring a clean bill back from the
conference, and to bring needed bankruptcy reform home to the American
people.
Mrs. FEINSTEIN. Mr. President, I rise to support the underlying goal
of the bankruptcy bill, which is to promote personal financial
responsibility. Bankruptcy filings have increased at an astonishing
pace since the last overhaul of the Bankruptcy Code in 1978. In 1978,
there were 182,000 consumer bankruptcy filings. Twenty years later in
1998, 1,444,812 people filed for bankruptcy. Bankruptcy has become so
commonplace that more than one in a hundred households will file for
bankruptcy this year.
The rise in bankruptcy filings is particularly disconcerting given
the record expansion of our economy, which this week became the longest
expansion in our Nation's history.
Bankruptcy should be a last-resort legal option, and not a vehicle
for avoiding personal responsibility. People should not be able to file
bankruptcy if they can easily pay back their debts.
Another key aspect of bankruptcy reform is the need to address the
growth of consumer credit. It's a simple matter of arithmetic. The
typical family filing for bankruptcy in 1998 owed more than one-and-a-
half times its annual income in short-term, high-interest debt. This
means the average family in bankruptcy with a median income of just
over $17,500, and $28,955 in credit card and other short-term high
interest debt.
There are over a billion credit cards in circulation--a dozen credit
cards for every household in the country. Three-quarters of all
households have at least one credit card. Credit debt has doubled
between 1993 and 1997 to $422 billion from just over $200 billion.
A constituent from Lakewood, California describes the situation
aptly: ``What really bugs me about this is that credit card companies
send out these solicitations for their plastic cards and then when they
get burned, they start crying foul. They want all kinds of laws passed
to protect them from taking hits when it's their own practices that
caused the problem.''
This legislation has taken some steps to address the problem of
consumer credit, but more needs to be done.
One of the major reasons that I am supporting the bill is that it
includes my amendment to require the Federal Reserve Board to
investigate the practice of issuing credit cards indiscriminately,
without taking steps to ensure that consumers are capable of repaying
their debt, or in a manner that encourages consumers to accumulate
additional debt.
The amendment allows the Federal Reserve Board to issue regulations
that would require additional disclosures to consumers, and to take any
other actions, consistent with its statutory authority, that the Board
finds necessary to ensure responsible industry-wide practices and to
prevent resulting consumer debt and insolvency.
In addition, I am pleased that the bill requires credit card
companies to warn consumers about interest costs, and provide a toll-
free phone where they can find out how long it would take to
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eliminate a balance when just paying the minimum balance each month.
Credit card companies also are required to better explain teaser rates
and late fees in their solicitations.
The Senate also has made important improvements to this bill, both in
the Judiciary Committee and on the floor. In my home state of
California, for example, we have suffered from the abusive practices of
bankruptcy mills including price gouging of debtors, incompetent
service, and fraud. The bill includes an amendment to curb this abusive
practice.
However, I remain very concerned about the minimum wage and tax
amendments attached to this bill. Let me first say that I am strong
supporter of raising the minimum wager. In the four years since
Congress last past a minimum wage increase, the U.S. economy has
continued to surge at an unprecedented rate.
Nine million new jobs have been added to the economy. More than a
million of those are in the retail sector. Unemployment is down and the
number of jobs for women, African-Americans, Hispanic Americans, and
teenagers has grown. Clearly the increase in the minimum wage has
helped working families and it is time to do so again.
The problem with the minimum wage increase in this bill is that it is
spread out over too long a period of time. The amendment would raise
the minimum wage by $1 in three steps of 35 cents, 35 cents, and 30
cents.
California's minimum wage is $5.75. Under this proposal, working
families there would not benefit at all in the first year, receive only
a 10 cent wage increase in the second year, and would not feel the full
increase until 2003. That is simply unacceptable.
The time to raise the minimum wage is not when the economy is ailing.
It's when the economy is flush and that time is now.
Congress should raise the minimum by $1 over two years as proposed by
Democrats and we should do it now.
The bill also contains a $77 billion tax package whose benefits are
skewed toward upper-income taxpayers. Specifically, the package has
health insurance and long-term care provisions which would
disproportionately benefit higher income taxpayers. I am also concerned
about the fairness of the package's pension provision which would
principally benefit highly-compensated employees.
In summary, I think there is a lot of good in the bankruptcy bill,
and I intend to vote for it because it can still yield a worthwhile
final product. However, extensive improvements are still needed in
conference. The Conference negotiations must resolve the minimum wage
and tax problems, and other deficiencies is the bill.
I need to work with my Senate colleagues to implement these needed
changes.
Mr. KERRY. Mr. President, today we will vote overwhelmingly in
support of a measure to dramatically reform the bankruptcy system. I
join my colleagues in support of this bill, because I believe it is
time we repair the bankruptcy system and I believe that this bill
should progress to conference. However, the bill we support today is
seriously flawed. It is my hope that some of the bill's more serious
problems will be addressed in conference.
The Bankruptcy Reform Act fails to provide disclosures which would
tell consumers how long it would take to pay off their balance at the
minimum rate and what their total costs in interest and principle would
be. Without this simple provision, American consumers will not receive
the kind of specific information that will encourage them to pay their
balance off more quickly, and avoid falling into debt in the first
place.
I am also concerned that this bill fails to protect women and
children who are entitled to child support and alimony. The bill
increases the amount of debt for which debtors will remain liable
through the creation of new types of nondischargeable debts to credit
card companies and by permitting coercive ``reaffirmation'' agreements.
With more competition for limited debtor resources, the bill fails to
insure that parents and children will prevail over credit card
companies and banks.
This bill includes an arbitrary and inflexible means test to
determine which debtors must file Chapter 7 bankruptcy instead of
Chapter 13. It is based on IRS standards not drafted for bankruptcy
purposes that do not take into account individual family needs for
expenses like transportation, food and rent. If we are going to shift
individuals from Chapter 7 to Chapter 13 bankruptcies, we must ensure
that we are taking into account individual needs and do not
inadvertently harm those who need bankruptcy protections the most.
The bill also contains a number of nongermane provisions that concern
me. The methamphetamine amendment increases the sentences for powder
cocaine, thereby causing further overcrowding in prisons and increasing
the representation of young minority males in prisons. I am also
opposed to another provision that authorizes the use of public funds to
pay for private school tuition for students who were injured by violent
criminal offenses on public school grounds.
Despite its flaws, which I sincerely hope will be addressed in
conference, the bill has a number of provisions I support, I take this
opportunity to thank the managers of this bill, Senators Grassley,
Torricelli, and Ranking Member Leahy for their consideration and
assistance in accepting three amendments that I believe are important
to fishermen in Massachusetts and small businesses across America.
First, I believe that the small business provisions originally in
this bill establish too short a time for small businesses that must
resort to bankruptcy. These provisions are counter to this country's
long held policy of fostering small business creation and expansion.
The amendment to the bill which was accepted will increase the time for
small businesses to develop a reorganization plan to 300 days. This
will allow small businesses to continue to have adequate time to
develop a reorganization plan during bankruptcy proceedings. The
amendment will also allow bankruptcy judges more discretion to develop
an appropriate time frame for small business reorganization.
I thank Senator Collins and her staff for their fine work in
developing an amendment which was accepted to make Chapter 12 of the
Bankruptcy Code, which now applies to family farmers, applicable for
fishermen. I was proud to be the lead Democratic cosponsor of this
amendment that will make bankruptcy a more effective tool to help
fishermen reorganize effectively and allow them to keep fishing while
they do so.
The final amendment which was accepted allows the expansion of the
credit committee membership under Chapter 11 bankruptcies to include a
small business when it is determined that the small business' claims
are disproportionally large to its gross revenues. This will ensure
better access to information for those small businesses not included in
the committee by allowing the committee to be open for comment and
subject to additional reports or disclosures.
It is my hope that each of these amendments will be included in the
Conference Report for the Bankruptcy Reform Act of 1999. I look forward
to working with the Managers of the bill during Conference on these and
other issues.
Mr. HATCH. Mr. President, S. 625, the Consumer Bankruptcy Reform Act,
is one of the most important legislative efforts to reform the
bankruptcy laws in decades.
I want to thank a few of the people who have worked on this bill. Let
me first acknowledge the Majority Leader, who has worked very hard to
keep this bill moving forward. Given the demanding Senate schedule, it
would have been easier for him to have refused to take up the bill, but
because of his dedication to the important reforms in this bill, we now
have legislation that makes enormous strides in eliminating abuse in
the bankruptcy system. I am also grateful to the assistant majority
leader, Senator Nickles, along with Senators Daschle and Reid for their
efforts in working with us to move the legislation forward.
Let me also acknowledge the Ranking Member of the Senate Judiciary
Committee, Senator Leahy, who has worked tirelessly to reach agreement
on many of the bill's provisions, and who ably managed the bill for his
side of the aisle. I also want to commend
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my colleagues, Senators Grassley and Torricelli, the Chairman and
ranking minority member of the Subcommittee on Administrative Oversight
and the Courts, respectively, for their tremendous efforts in crafting
this much needed legislation. I particularly appreciate the dedication
they have shown in making the passage of this bill an inclusive and
bipartisan process.
Also, let me express my thanks to Senator Sessions who has shown
unwavering dedication to accomplishing the important reforms in this
bill, to Senator Biden for his efforts over the past two years in
helping see sensible reform through the Senate, and to the many other
members of the Senate for their hard work and cooperation.
At the Committee staff level, let me acknowledge a few people who
have worked very hard on this bill. Kolan Davis and John McMickle of
the Administrative Oversight and the Courts Subcommittee staff, along
with Ed Haden, Kristi Lee and Sean Costello of the Youth Violence
Subcommittee staff deserve praise for their impressive efforts on this
legislation. In addition, Judiciary Committee Counsels Makan Delrahim,
who was the lead counsel on this bill, Rene Augustine, and Kyle
Sampson, as well as staff assistant Karen Wright, are to be commended
for their hard work on this important bill. Thanks as well should be
given to the Judiciary Committee's Chief Counsel and Staff Director,
Manus Cooney, one of the most able and hard-working Chief Counsels the
Committee has had.
On Senator Leahy's Committee staff, I want to acknowledge Minority
Chief Counsel Bruce Cohen, along with counsel Ed Pagano for their
efforts. In addition, I want to recognize the tireless efforts of Eric
Shuffler and Jennifer Leach of Senator Torricelli's staff, as well as
the hard work of Jim Greene of Senator Biden's staff, the Youth
Violence Subcommittee's Minority Chief Counsel Sheryl Walter, as well
as Ben Lawsky of Senator Schumer's staff.
I also want to commend Jim Hecht of the majority leader's staff,
Stewart Verdery, Eric Ueland, and Matt Kirk of the assistant majority
leader's staff, Jonathan Adelstein of Senator Daschle's staff, and
Eddie Ayoob and Peter Arapis of the Minority Whip's staff for their
efforts on this legislation.
The compelling need for this reform is underscored by the dramatic
rise we have seen over the past several years in bankruptcy filings.
The Bankruptcy Code was liberalized back in 1978, and since that time,
consumer bankruptcy filings have risen at an unprecedented rate.
Mr. President, the bankruptcy system was intended to provide a
``fresh start'' for those who truly need it. We need to preserve the
bankruptcy system within limits to allow individuals to emerge from
severe financial hardship. What we do not need is to preserve the
elements of the system that allow it to be abused--that allow some
debtors to use bankruptcy as a financial planning tool rather than as a
last resort. I firmly believe that by allowing people who can repay
their debts to avoid their financial obligations, we are doing a
disservice to the honest and hardworking people in this country who end
up paying for it.
Mr. President, again I would like to applaud the bipartisan efforts
of my colleagues who have made S. 625 a broadly-supported bill. The
impact of this important legislation not only will be to curb the
rampant number of frivolous bankruptcy filings, but also will be to
give a boost to our economy.
The PRESIDING OFFICER. The clerk will report the House bill.
The bill clerk read as follows:
A bill (H.R. 833) to amend title 11 of the U.S. Code, and
for other purposes.
The Senate proceeded to consider the bill.
The PRESIDING OFFICER. Without objection, all after the enacting
clause of H.R. 833 is stricken and the text of S. 625, as amended, is
inserted in lieu thereof.
The question is on the third reading of the bill.
The bill (H.R. 833), as amended, was ordered to a third reading and
was read the third time.
Mr. GRASSLEY. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The bill having been read the third time, the question is, Shall it
pass?
The clerk will call the roll.
The bill clerk called the roll.
Mr. FITZGERALD (when his name was called). Present.
Mr. NICKLES. I announce that the Senator from Montana (Mr. Burns) and
the Senator from Arizona (Mr. McCain) are necessarily absent.
I further announce that, if present and voting, the Senator from
Montana (Mr. Burns) would vote ``yea.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
who desire to vote?
The result was announced--yeas 83, nays 14, as follows:--
[Rollcall Vote No. 5 Leg.]
YEAS--83
Abraham
Akaka
Allard
Ashcroft
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Breaux
Bryan
Bunning
Byrd
Campbell
Chafee, Lincoln
Cleland
Cochran
Collins
Conrad
Coverdell
Craig
Crapo
Daschle
DeWine
Domenici
Dorgan
Durbin
Edwards
Enzi
Feinstein
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hollings
Hutchinson
Inhofe
Inouye
Jeffords
Johnson
Kerrey
Kerry
Kohl
Kyl
Landrieu
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
Mack
McConnell
Mikulski
Murkowski
Murray
Nickles
Reid
Robb
Roberts
Rockefeller
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner
Wyden
NAYS--14
Boxer
Brownback
Dodd
Feingold
Graham
Harkin
Hutchison
Kennedy
Lautenberg
Moynihan
Reed
Sarbanes
Schumer
Wellstone
ANSWERED ``PRESENT''--1
Fitzgerald
NOT VOTING--2
Burns
McCain
The bill (H.R. 833), as amended, was passed.
Mr. GRASSLEY. Mr. President, I move to reconsider the vote, and I
move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. Under the previous order, the Senate insists
on its amendment and requests a conference with the House. S. 625 is
returned to the calendar.
The Senator from Iowa.
Mr. GRASSLEY. Mr. President, the Senate has taken an important step
toward real bankruptcy reform on a bipartisan basis. None of this would
have been possible without the hard work and cooperation of the ranking
member on the subcommittee, Senator Torricelli. We introduced the bill
together.
We have a good bill that will restore personal responsibility and
crack down on abuses of debt collectors and provide key information to
credit card customers about the problems of minimum payment.
I believe we go into conference in a strong position. I think our
bill in the Senate is better than the House companion. We will have a
spirited conference, I believe, but this year will be easier than last
year since the bills are much closer.
In any event, the Senate has done a good job. I thank Senators Hatch,
Sessions, Reid, Torricelli, Biden, and Leahy for the strong support
they showed for reform.
I also thank Rene Augustine and Makan Delrahim of Senator Hatch's
staff; Jennifer Leach and Eric Shuffler of Senator Torricelli's staff;
Jim Greene of Senator Biden's staff; Eddie Ayoob of Senator Reid's
staff; and Kolan Davis and John McMickle of my own staff for their hard
work on this bill.
I also thank Ed Haden and Sean Costello of Senator Sessions' staff.
Of course, this bill would not be here if not for Senator Reid
working with us on the floor and Senators Hatch and Leahy helping steer
this very difficult bill through the Senate as they helped get it out
of the Senate Judiciary Committee. Of course, in this regard, I also
thank the people who supported our legislation.
Most important, if anybody had asked me when we adjourned last year
if we could have passed the bill this early this year, if at all, I
would have
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been very pessimistic about it. But because of the cooperation we have
had on the other side of the aisle, it was possible. Once again, in a
very generic sense, I thank all who made this a bipartisan effort and
made it possible to accomplish this goal.
I yield the floor.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, I thank the Senator from Iowa for his kind
remarks. He has persevered in this effort. He and I talked about this
last fall when we were about ready to recess. We both committed
ourselves to the fact that if this came back up this year, we would try
to make it work. We told our respective leaders, Senator Lott and
Senator Daschle, that we would continue to work whittling down
amendments. We were able to dispose of, I believe, well over 300
amendments.
The distinguished Senator from New Jersey, Mr. Torricelli, and the
distinguished Senator from Utah, Mr. Hatch, worked so hard on this.
Lesser people might have given up. They did not. They continued on.
The chairman, Senator Hatch, returned to his important leadership
responsibilities without missing a step. I have been glad to work with
him on this. We culminated our work on initial Senate passage of this
bankruptcy act. Now we can go to conference.
Senators Torricelli and Grassley will have their work cut out for
them, as well as the rest of us, in trying to work that out. We will
not have the help of the distinguished Senator from Nevada, Mr. Reid,
in removing a lot of amendments for us as he did on the floor. He has
been tremendous in working that out.
On this side of the aisle, he worked to protect the rights of
Democratic Senators and to improve the bill, and he has worked with his
counterparts on the other side of the aisle in our joint effort to get
amendments off this bill.
As the Senator from Iowa and I discussed earlier, we both have been
here long enough to know we did have an enormous number of amendments
to a bill, but we also know many are called but few are chosen.
So we will work together with Chairman Hatch, Senator Grassley,
Senator Torricelli, the House conferees, and the Clinton administration
on a conference report that I think will be well worthwhile.
I hope we will not make the mistake of the past Congress where we
came out of conference with something that never went anywhere. We have
demonstrated in the Senate now twice, in lopsided votes, that we can
pass a bankruptcy reform act. I hope we will come out of the conference
with something that we can pass.
Lastly, I know a number of staff members, all of whom deserve praise,
have been mentioned on this floor, but it is often said Senators are
usually only constitutional necessities to the staff who really do the
work around here. In that regard, Bruce Cohen and Ed Pagano of the
Senate Judiciary Committee staff have worked long hours, many weekends,
and late nights to get us this far, and they deserve a great deal of
credit.
I see my good friend from New Jersey, the ranking member of the
subcommittee, who told us it would be possible to get a bill through
here back when many thought it would not be possible. He was right. He
worked very hard. He deserves a great deal of credit.
I yield the floor to him.
Mr. TORRICELLI. I thank Senator Leahy for his very kind comments and
leadership in bringing this legislation to the floor, as well as,
certainly, Senator Grassley, who began this effort so long ago and
worked so very hard. So many Senators have played an important role
that I think it bears some analysis of how we came to this point. And
there are some provisions of the bill that should be mentioned before
we go to conference in order to set our clear agenda.
I know there are those from the outset who doubted whether, indeed,
real reform of bankruptcy law could be achieved in this Congress. There
was some reason to be skeptical because there were some conflicting
provisions. Some of us had some very real needs that had to be met
before the beginning legislation could ever be enacted.
The PRESIDING OFFICER (Mr. Hutchinson). If the Senator would suspend,
there is a previous order. It will take unanimous consent for the
Senator to continue.
Mr. TORRICELLI. I ask unanimous consent that the order be postponed
for 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. TORRICELLI. Most important of these objectives, in my mind, was
dealing with the need for some consumer credit protection because,
indeed, while there may be abuses in bankruptcy by debtors, to be
certain, there are clearly problems in the credit industry.
I believe several important amendments have achieved this goal. Most
importantly, in my mind, was the adoption of the Grassley-Torricelli
disclosure amendment. Other important amendments were additions by
Senators Schumer and Sarbanes that will together provide real consumer
protection.
All three amendments are based on the belief that if consumers have
knowledge, they will make rational choices. Simply providing
information will avoid many credit problems from which the American
people are currently suffering. These include--if you look at the
Torricelli-Grassley, Schumer, and Sarbanes amendments--a combination of
disclosing prominently on credit documents: The effects of only making
minimum payments on your account every month; second, when late fees
will be imposed; and, third, the date on which introductory or teaser
rates will expire and what the permanent rate will be upon that
expiration.
Additionally, the Grassley-Torricelli amendment includes a provision
authored by Senator Jack Reed prohibiting the canceling of an account
because the consumer pays the balance in full every month. That was a
growing problem where people with good credit and good bill-paying
habits were being penalized unnecessarily. That provision is now in the
bill.
For all of these good additions that have made this better
legislation, there are some problems which I hope and trust can be
resolved in conference so that this can genuinely be bipartisan
legislation, broadly accepted, and signed by the President.
The principal obstacle between what we want to achieve and that
reality is obviously the minimum wage provisions in this legislation.
Mr. President, 12 million Americans continue to earn the minimum
wage. Although they work all day, every day, throughout the year, they
are in a daily struggle simply to survive. A mother of two working at
the minimum wage earns only $10,712 per year, 22 percent below the
poverty line, a wage at which it is impossible to provide housing and
food and clothing for a child, no less two children--or even a person,
no less a family. It is not a minimum wage; it is a poverty wage.
In the last 15 years, inflation rose by 86 percent, but the minimum
wage rose by only 37 percent. The fact remains that the United States
is allowing a standard of living by working people below what those who
stood in this institution only 15, 20, and 25 years ago were permitting
by law.
We in America are allowing the establishment of a near-permanent
underclass of working people doomed to poverty and children who do not
have a chance of breaking out of these circumstances, who are likely to
enter life malnourished, poorly clothed, inadequately housed, knowing
only poverty.
We need to reach the same judgment that our grandparents and our
parents have reached for 70 years: A working, fair minimum wage.
With the proposed new minimum wage, a full-time worker will have an
annual income of $12,700, an increase of $2,000 a year. The problem
with our bill is that this change is brought over the course of 3 years
rather than 2 years, as many of us have proposed.
If it is the right thing to do, upon which most Senators seem to
agree, it is the right thing to do now. Leaving millions of American
children in poverty for this extra time makes no sense, and it is
indefensible.
Indeed, during that extra time it denies $1,200 to families who are
struggling trying to work their way out of poverty.
I can think of no better addition to legislation dealing with debts
and the struggling realities of American economic life in this reform
of bankruptcy
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legislation than including a real minimum wage.
It is obviously my hope that when the bill returns from conference we
will return to a 2-year increase in the minimum wage rather than the 3-
year provisions in this legislation.
The second area of concern--for all that we have achieved in this
legislation--is the creation of a new school voucher program which was
contained in a Republican antidrug amendment.
I want to make clear that I voted against this amendment last fall. I
did so not because of objections to the underlying amphetamine
prevention legislation, which I voted for in the Judiciary Committee,
but to the voucher program.
When we considered this provision in the Judiciary Committee, it did
not have this voucher provision. It actually was dealing with narcotics
problems in schools with younger people. It was a good provision. It
has now been changed on the floor to include this voucher program. It
is a simple diversion of desperately needed public moneys in the public
schools, which can only make the problem worse. Money that would go to
children at risk to deal with many problems, including narcotics
problems, would now be removed from the schools. This provision does
not make sense. It should be removed.
I believe if these objections are dealt with, we can return to this
floor with a conference committee report of which we can all be proud.
For all the divisions we might have faced when this legislation
began, I think we all now understand there is a problem with bankruptcy
abuse in the United States. In 1998, 1.4 million Americans sought
bankruptcy protection. Something is wrong. There either are not
adequate credit protections to ensure people under the circumstances
when they borrow money, or the law does not properly deal with their
filings for bankruptcy, or both and other factors. In my judgment, it
is all of these things.
Currently, 70 percent of bankruptcy petitions are filed in chapter 7,
which provides relief from most unsecured debt. Just 30 percent of
petitions were filed under chapter 13, which requires a repayment of
debt.
More than anything else, in addition to consumer protection, we will
assure that people who can pay back part of these debts will do so.
That is not simply a benefit to the financial industry; it is also a
benefit to every mom-and-pop store, every small business in America
that is being abused by these unnecessary filings for bankruptcy.
Indeed, it is estimated by the Department of Justice that 182,000
people every year can afford to pay back some of the debts they are now
escaping by inappropriate filings. This means $4 billion to creditors,
financial institutions, to be sure, but also many small businesses that
cannot afford losing these funds.
I conclude, once again, by thanking Senator Grassley for his
extraordinary leadership, Senator Leahy for his patience through this
process, Senator Hatch in chairing our committee and bringing us to
this point, and the very great contributions made by Senators Biden,
Reid, Schumer, and Senator Durbin who worked on this legislation so
tirelessly in the last Congress.
This is good legislation. We can be proud of it. With modest
adjustments, we can, indeed, make it something that both parties in
both Chambers can bring to the President for his signature.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mr. GORTON. Mr. President, I understand we are about to go into
executive session for the consideration of the nomination of Alan
Greenspan. I wish to speak on another subject, so I ask unanimous
consent that the order be set aside and I be permitted to speak for up
to 10 minutes as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
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