[Congressional Record Volume 146, Number 127 (Thursday, October 12, 2000)]
[House]
[Pages H9826-H9840]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     CONFERENCE REPORT ON H.R. 2415, BANKRUPTCY REFORM ACT OF 2000

  Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 624 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 624

       Resolved, That upon adoption of this resolution it shall be 
     in order to consider the conference report to accompany the 
     bill (H.R. 2415) to enhance security of United States 
     missions and personnel overseas, to authorize appropriations 
     for the Department of State for fiscal year 2000, and for 
     other purposes. All points of order against the conference 
     report and against its consideration are waived. The 
     conference report shall be considered as read.

  The SPEAKER pro tempore (Mr. Pease). The gentleman from Texas (Mr. 
Sessions) is recognized for 1 hour.
  Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentleman from Texas (Mr. Frost), 
pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.
  Mr. Speaker, the resolution before us provides for the consideration 
of H.R. 2415, legislation that will reform our Nation's bankruptcy 
laws. This rule waives all points of order against the conference 
report and against its consideration. The rule provides that the 
conference report may be considered as read.
  The underlying legislation is important legislation that 
fundamentally reforms the existing bankruptcy system into a needs-based 
system. I am very proud of the tireless efforts of the Members of both 
the House and the Senate who have worked to reach this bipartisan 
agreement to ensure that our bankruptcy laws operate fairly, 
efficiently and free of abuse.
  There is a strong support for bankruptcy reform. The House version of 
this bill passed with more than 300 votes earlier this year. The Senate 
passed their version with 88 votes. There is a great need for this 
legislation. A record 1.42 million personal bankruptcy filings were 
recorded in 1998. This is a stunning increase of 500 percent since 
1980. Despite an unprecedented time of economic prosperity, low 
unemployment and rising disposable income, personal bankruptcies are 
rising, costing over $40 billion in the past year.
  Without serious reform of our bankruptcy law, these trends promise to 
grow each year costing business and consumers even more in the form of 
losses and higher costs of credit.
  Mr. Speaker, the bankruptcy reform that we will consider is based 
upon two important tenets: number one, the bankruptcy system should 
provide the amount of debt relief that an individual needs, no more and 
no less; and, point two, bankruptcies should be the last resort and 
financial crisis, not the first resort using it as a financial planning 
tool.
  A record 1.4 million personal bankruptcies were filed in 1998. That 
is one out of every 75 households in America.

[[Page H9827]]

The debts that remained unpaid as a result of those bankruptcies cost 
each American family that did pay their bills over $500 a year in the 
form of higher costs for credit, goods, and services. Unfortunately, 
the debt was eventually passed on to consumers last year and the cost 
to consumers is what bankruptcy filers have added on to the system.

                              {time}  1145

  That is why it is so important that we pass real bankruptcy reform.
  Opponents of this bill have tried to divert the discussion away from 
the merits of the bill, and to claim that it would make it more 
difficult for divorced women to obtain child support and alimony 
payments. However, nothing could be further from the truth. This 
bankruptcy reform bill protects the financial security of women and 
children by giving them a higher priority than under the current law.
  The legislation closes loopholes that allowed some debtors to use the 
current system to delay or evade child support and alimony payments. 
The bill recognizes that no obligation is more important than that of a 
parent to his or her children.
  Currently, child support payments are the seventh priority, behind 
such things as attorney's fees. Make no mistake, this bankruptcy bill 
puts women and children first, well ahead and at the top of that list. 
We should provide greater protection to families who are owed child 
support, and this bill will do just that.
  One important part of this legislation is known as the homestead 
provision. Protection of one's home is something that is very important 
to myself and my constituents in Texas. The homestead provision in this 
legislation maintains the long-held standard that allows the States to 
decide if homesteads should be protected, yet stops these purchases or 
purchase of a home before filing bankruptcy as a means to evade 
creditors.
  The bill also addresses other problems, including needs-based 
bankruptcy. The heart of this legislation is a needs-based formula that 
separates filers in Chapter 7 or Chapter 13 based upon their ability to 
pay.
  While many families may face job losses, divorce, or medical bills 
and therefore legitimately need the protection provided by the 
bankruptcy code, research has shown that some Chapter 7 filers actually 
have the capacity to repay some of what they owe.
  The formula directs into Chapter 13 those filers who earn more than 
the national median income, which is roughly $51,000 for a family of 
four, if they can pay all secured debt and at least 20 percent of the 
unsecured non-priority debt.
  This bill recognizes the need for customer education and protection. 
It includes education provisions that will ensure that debtors are made 
aware of their options before they file for bankruptcy, including 
alternatives to bankruptcy such as credit counseling, and the bill 
cracks down on bankruptcy mills, which are law firms and other entities 
that push debtors into bankruptcy without fully explaining the 
consequences.
  The bill also imposes new restrictions and responsibilities upon 
creditors with the goal of preventing borrowers from getting in over 
their heads. For example, the bill requires creditors to disclose more 
about the effect of paying only the minimum payment, and establishes 
new creditor penalties designed to encourage good-faith pre-bankruptcy 
settlement with debtors.
  I believe Congress has a special responsibility to address this issue 
and to ensure that our bankruptcy laws operate fairly, efficiently, and 
free of abuse.
  Mr. Speaker, this conference report meets those two tenets I 
mentioned earlier. It allows those who truly need a fresh start, and 
compels those who can pay back part of their debt to do so.
  I urge my colleagues to support this rule and the underlying 
legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I support passage of bankruptcy reform, and so, in order 
for it to pass before the adjournment of the 106th Congress, I will 
vote for this rule and for the conference report.
  But the reason the Republican leadership has been forced to resort to 
this kind of parliamentary game is because the Republican majority in 
this Congress has left unfinished the agenda that matters most to the 
people of this country.
  It is October 12, Mr. Speaker, and there is not an end in sight to 
this Congress, and there is little hope left that the real American 
agenda will be finished. Thus, in order to pass legislation which has 
overwhelming bipartisan support, the Republican leadership has resorted 
to using tricks and games, rather than regular order.
  Were this situation not so sad, Mr. Speaker, it would be laughable. 
Mr. Speaker, for 2 years Democrats in this body have asked the 
Republican leadership for the opportunity to address the issues that 
matter most to Americans: real Medicare prescription drug coverage, 
real help for America's schools, a real and meaningful Patients' Bill 
of Rights, an increase in the minimum wage, campaign finance reform, 
saving social security and Medicare, paying down the national debt.
  These are real issues that matter to real people. But in those 2 
years, what have my Republican colleagues done? They have brought 
forward legislation that does everything but what the American people 
want. When the Republican leadership's position has been soundly 
defeated on a bipartisan basis, they have simply shelved the wishes of 
the bipartisan majority in this House.
  For example, in August of 1999, the House passed a real Patients' 
Bill of Rights, a bipartisan Patients' Bill of Rights, passed it by a 
vote of 275 to 151. It took the Speaker until November 3 of 1999 to 
appoint conferees. When he did, he failed to appoint a single 
Republican conferee who supported the bill that passed the House, not a 
single one.
  Today that conference has still not reported back to either the House 
or Senate. The Patients' Bill of Rights sits on a shelf.
  In September of last year, the House passed a bipartisan campaign 
finance reform bill by a bipartisan vote of 252 to 177. That bill has 
also disappeared into the legislative dustbin of the 106th Congress.
  The Democrats in this body, as well as in the Senate, have repeatedly 
asked for further consideration of that legislation. But our requests 
have gone unanswered.
  Mr. Speaker, yet another meaningful bill sits on the shelf in the 
Republican leadership's closet. We asked that the House consider 
legislation that would give seniors a real Medicare prescription drug 
benefit, but we were prevented from getting a vote on the Democratic 
version of the bill.
  We have asked that the Congress consider legislation which would 
provide more well-trained teachers for schools across the country in 
order to reduce class size. We have been ignored. We have asked for a 
clean vote on increasing the minimum wage, and our Republican 
colleagues loaded up the bill with tax cuts that would benefit the 
wealthiest while begrudgingly offering a $1 an hour over 2 years wage 
increase for Americans who are at the very low end of the income scale.
  We have asked repeatedly for this Congress to consider issues that 
really matter to real Americans, the people who pay mortgages, who pay 
rent, who make car payments, who send their children to school, that 
they want to be safe.
  But we have been ignored, Mr. Speaker, so we find ourselves in this 
situation today. While the House has rules which regulate how and when 
legislation and amendments can come to the floor, the other body does 
not. As a consequence, the refusal of the congressional Republican 
leadership to consider real legislation that would mean something to 
real Americans, the refusal of the congressional Republican leadership 
to sit down and work on a bipartisan basis with the Democrats in the 
House and Senate and with the President of the United States, has 
resulted in the need to play these kinds of legislative games we are 
engaged in today.
  Mr. Speaker, I have long supported reform of our bankruptcy laws. I 
support this conference report. It will allow Americans who need a 
fresh financial start to get one, but it will also prevent those who 
have indebted themselves and who are able to pay those

[[Page H9828]]

debts from just walking away from their obligations.
  This bill affords new protections for consumers by requiring that 
credit statements include more detailed disclosures. It protects the 
homes of individuals who live in States with homestead exemptions, but 
not those who move there simply to claim the exemption in a bankruptcy.
  It gives permanent Chapter 12 relief to farmers.
  Mr. Speaker, many Members are concerned about the process. Quite 
frankly, I share their views. It is not proper that the House should be 
considering this important legislative reform within a shell of a bill 
that has already been passed and signed into law.
  But given the hour, given the inability of the Republican leadership 
to manage the business of this House and the Congress any better than 
it has in the past 6 years, I will reluctantly vote for this rule so we 
may at least pass some meaningful legislation before the end of this 
Congress.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I, too, would like to have this House not only consider 
important pieces of legislation, as we are doing today, but also, as 
the gentleman from Texas has outlined, that there are a good number of 
things that we have yet to do that have not been done, just as we have 
not seen the ability to take social security to a lockbox that is being 
held up in the Congress of the United States because of the Democrat 
party.
  There are frustrating things that are occurring every day. The fact 
of the matter is, and I would remind my colleague, we are working 
together. We are going to continue until we have resolved the 
differences that we have. This is part of the bipartisan approach, but 
the fact of the matter is that rather than us sitting here and 
bickering, we need to get our job done on this important piece of 
legislation that has been passed numerous times.
  Mr. Speaker, I will once again remind my colleagues, this bankruptcy 
reform passed with more than 300 votes from this body. I am proud of 
the work that we are doing. We have not gone home, we are working 
together feverishly, not only among our House colleagues but also with 
the other body and our colleagues there, as well as the White House, on 
things that are of great importance not only to America but to families 
and to Members of Congress.
  Mr. Speaker, I yield 5 minutes to the gentleman from Virginia (Mr. 
Goodlatte).
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman for yielding time 
to me, and for his help in bringing this very important piece of 
legislation to the floor. I rise in strong support of the legislation 
and the rule on this conference report.
  Mr. Speaker, I want to particularly commend the gentleman from 
Pennsylvania (Mr. Gekas), the chairman of the Subcommittee on 
Commercial and Administrative Law of the Committee on the Judiciary 
where this legislation originated, because he has been working on this 
legislation for years now trying to break the gridlock that has kept 
this very, very important reform of our bankruptcy laws from being 
signed into law.
  I think we are now getting very close to accomplishing that if we can 
get this conference report passed today, as I am confident we will, 
with the same kind of overwhelming support, bipartisan support, that we 
have already had.
  Our bankruptcy laws are in grave need of reform. We are at very, very 
high levels of bankruptcy filings in this country, and part of this 
problem is that all of the incentives exist for people to file 
bankruptcy and none of the responsibilities for people to consider the 
consequences of their actions and to pay something when they indeed 
have the ability to pay a part of those debts.
  The reason for that is that today a debtor has a complete opportunity 
to choose whether they have a Chapter 7 bankruptcy, where they can file 
all of their debts and discharge them and walk away, or a Chapter 13 
bankruptcy, where they are required to make payments.
  This legislation reforms that in a very, very important way by 
allowing people who are responsible consumers to not have to bear this 
debt themselves. That is what happens today. Every time a bankruptcy is 
filed, all of those consumers who are responsible, who pay their 
payments on a monthly basis, who keep good credit ratings, are picking 
up, in the increased costs of goods and services, in the increased 
costs of consumer and other types of loans, the difference in the cost 
of all of those people who file bankruptcies who could make some 
payments.
  This bill is reasonable in its approach. People who make less than 
$50,000 a year will not be required to participate in what are called 
mandatory Chapter 13s, but people with significant income but who do 
not have a lot of other assets and therefore are not worried about 
filing a Chapter 7 because they are not worried about those assets 
being taken by a bankruptcy creditor or the trustee to sell and 
distribute to the creditors right now have the ability to do that and 
walk away. They should not be able to do that if they are able to pay a 
portion of those obligations. This will be a significant reform in the 
law to do just that.
  Mr. Speaker, I just want to make the point that this legislation 
helps protect people who are receiving child support payments by 
increasing the priority level of protection for those folks.
  This is important legislation. I thank the gentleman from 
Pennsylvania for his leadership and his perseverance on this issue. I 
thank the gentleman from Texas for bringing forward this excellent 
rule, and I hope that people will support both the rule and final 
passage of this conference report.

                              {time}  1200

  Mr. FROST. Mr. Speaker, I yield 4 minutes to the gentleman from North 
Carolina (Mr. Watt).
  Mr. WATT of North Carolina. Mr. Speaker, I thank the gentleman for 
yielding me the time.
  Mr. Speaker, I rise in opposition to the rule, and I am going to try 
to shield as best I can my absolute disappointment, indeed outrage, at 
the process by which this bill has come to the floor and at the rule 
under which it is coming to the floor. And if the Members would just 
kind of put themselves in my position, perhaps they will understand the 
outrage that I feel about the process.
  I am a member of the subcommittee of the Committee on the Judiciary 
that considered the House bill for bankruptcy. I sat through almost all 
of the hearings, discussions, the markups in the subcommittee. The bill 
then went to the full committee, and I sat there and dealt with the 
bill.
  Then the bill came to the floor, and it passed the House. Then all of 
a sudden, yesterday afternoon conferees were appointed who never met 
and out of the shadows of the back room, a bill emerges and gets 
substituted in the place of a State Department authorization, so that a 
bill where we thought we were going to debate American embassy security 
and State Department matters ends up being a bankruptcy bill, and then 
the Committee on Rules then turns around and waives all points of order 
against the bill.
  What are we as members of the committee supposed to think under those 
circumstances? Notwithstanding the substance of the bill, we cannot 
even get to the substance of the bill when the House is being operated 
in such a sinister and backhanded way, when the authorizing committee 
and the committee that is supposed to consider the substance of the 
bill gets cut out of the process.
  The conferees never get an opportunity to meet to discuss what is 
going to be brought to the floor. How should we as members of the 
committee feel other than disappointment and outrage? And I think we 
ought to send a resounding message to the leadership here that this 
process is unacceptable.
  We ought to vote this rule down, and then we can talk about the 
substance of the bill, which I have some reservations about, too. But 
right now, we are talking about the process by which this bill got to 
the floor, and we should all be outraged.
  We should not be here considering a bill that brings itself here as 
an embassy security matter, as a State Department authorization bill 
and ends up being a bankruptcy bill which has nothing to do with the 
title of the bill that we are considering. We should be

[[Page H9829]]

outraged by this, and we should not conduct this body like this.
  Mr. Speaker, I ask my colleagues to oppose the rule and let us at 
least send this bill through the regular process and get some regular 
order in this House.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to forthrightly address the issues that 
have been talked about, the outrage from my colleagues on the left. The 
process that we are going through was done in the light of day. It was 
a bipartisan agreement. It was initiated on behalf of the Senate.
  I have the signature of one of the most distinguished Members of the 
United States Senate who happens to be a Democrat, who fully supported, 
not only this process, but agreed that this should be a way that we 
should get this done.
  Bankruptcy reform is important for us to do, and I am proud that 
Members from the other body forthrightly approached the issue.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, will the gentleman yield?
  Mr. SESSIONS. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentleman for his 
explanation. I think the one difference or the one response to the 
gentleman's point is that yesterday, I believe, the House voted 
enthusiastically for there to be an open conference with full 
opportunity for presentation or viewing by the public and media 
present. I do not believe in the last 18 hours, I do not even think it 
has been 24 hours, that we have had that to occur, that a conference 
opportunity has happened. Now the bill is on the floor, for a vote.
  Mr. SESSIONS. Mr. Speaker, reclaiming my time, I have great respect 
for what the gentlewoman from Texas (Ms. Jackson-Lee) talks about. It 
would be untruthful to suggest this was not a bipartisan agreement. It 
is a bipartisan agreement on a very important piece of legislation, and 
I believe that the truth should not be held hostage on this issue.
  Mr. Speaker, I yield 5 minutes to the gentleman from Pennsylvania 
(Mr. Gekas), the chairman of the Subcommittee on Commercial and 
Administrative Law.
  Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding the time.
  Mr. Speaker, I was intrigued by the opening statement of the 
gentleman from Texas (Mr. Frost), who with my gratitude, asserts that 
he is going to support the rule and the bill to bring to fruition our 
efforts on bankruptcy reform.
  But then he went on to, in a sense, modify his own position by saying 
that, implying that it is not important to the American people like the 
matters which the minority have obstructed, like patients' bill of 
rights, like they have obstructed versions of Medicare reform, like 
they have obstructed other things. Those things are more important to 
him, implying that this is not important to the American people.
  Let me tell my colleagues this, everyone should recognize that the 
consumers of our country, the private citizens, the families of our 
country are affected by bankruptcy. When someone files bankruptcy, the 
price paid for goods at the supermarket, for the cereals and the 
oranges and the beefsteak, all of those are subject to price rises 
because someone has failed to pay a debt, and that has to be made up by 
the general consuming public.
  Mr. Speaker, not only that, but when someone goes bankrupt and a 
consumer, an average citizen, wants to buy an automobile and contracts 
to pay over a period of time, the interest rate that he pays, or she, 
for that automobile is impacted by a bankruptcy, which potentially 
makes that interest rate rise in cost.
  So the consumers are hurt in just two ways that I mentioned: one, 
prices at the supermarket; and, two, interest rates for goods that the 
family requires, like an automobile or a refrigerator.
  Are not those bankruptcies harmful to the consumer, to the people of 
our country? That is why we were able to get 313 votes in the House, 
because the people who represent the consumers back home voted in favor 
of bankruptcy reform, to make it possible for some of this debt to be 
recovered, where it can be recovered.
  Furthermore, what about the consumer who is also a taxpayer, the 
taxpayer-consumer, and they are inextricably intertwined in most cases 
in our country, suffers when someone files bankruptcy, because the 
taxing authorities, like the State or a school board or a township or 
some municipality in their inability to recover monies from someone who 
is declared bankrupt, that means that that uncollected tax from an 
individual has to be spread among everybody else?
  All of a sudden, we have the consumer-taxpayer having to pay 
additional taxes. We have the consumer paying extra for the cereal, 
extra for interest rates to purchase an automobile, and extra monies to 
make up for losses by a taxing authority from someone who has gone 
bankrupt and has put into that pot, under today's law, the taxes that 
he owes to a particular entity.
  What happens if there is a shortfall of the school district's taxes 
by $10,000, shall we say, that someone has failed to pay and gone 
bankrupt to try to avoid? Where do they make up that $10,000? That is 
correct, from the pockets of the consumer taxpayer.
  So I say to the gentleman from Texas (Mr. Frost) that he is correct 
in voting for the rule. He is correct in voting for the conference 
report, and he will have to understand and perhaps acknowledge that the 
people of our Nation will also be benefited from the bankruptcy reform 
at our hands here this afternoon.
  Mr. Speaker, I ask every Member to keep in mind the two themes of 
bankruptcy reform, each one of which is supremely important: the first 
is that every single soul who files bankruptcy who needs a fresh start 
so overwhelmed by debt, so burdened by the obligations that there is no 
way out but bankruptcy, that person is guaranteed a fresh start under 
this bankruptcy reform bill. That is extremely important.
  Then the other balancing feature is that those individuals who file 
bankruptcy who have an ability to repay some of the debt over a period 
of time will be compelled to do so with the mechanism that we place in 
the bankruptcy reform bill.
  With those two balancing features, there is no reason why we cannot 
match the 313 votes by which this legislation passed the last time it 
was presented to the Members of the House.
  Mr. FROST. Mr. Speaker, I yield 4 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Speaker, might I take the opportunity 
to correct the gentleman from Pennsylvania (Mr. Gekas), my good friend 
and colleague, the chairman of the Subcommittee of Commercial and 
Administrative Law, and offer to say to him that this is a travesty. It 
is hypocrisy. Let us call it what it is.
  We hope that those of us who disagree will have the opportunity to 
represent our constituents, represent Americans in this debate. 
Yesterday we were on the floor of the House, and we asked simply to 
have a conference committee that would be open and that would have a 
meeting and that would have the opportunity for the public to be 
present, so we can see whether this is really reform or a sham.
  We did this at 6:22; the House voted almost unanimously. At 8:20 
p.m., this conference report was sealed, signed, and delivered. I might 
say it might not have been signed. I have lived with this issue for 
almost 4 years, and I am gratified to say that because of the economy, 
bankruptcies have gone down. There is not the crisis that we thought 
there was some years ago.
  In addition, the bankruptcy judges and trustees oppose this 
legislation. It is not reform. Interestingly enough, as we look at what 
this legislation says, even the bankruptcy commission did not agree for 
means testing. What does that mean? That means before you can file 
bankruptcy, good hard-working citizens, senior citizens who have 
catastrophic illnesses, divorced individuals who have fallen upon hard 
times, you must submit data to be determined whether you can even go 
into court. It is called a means test, and those hard-working Americans 
who may have missed the standardized formula, by the way, designed by 
the IRS, will be

[[Page H9830]]

kicked out and cannot even go to reconstruct their lives.
  Mr. Speaker, $40 million was utilized to lobby for this law; but yet 
in States like Texas, where our home is our life and our land, they did 
not even allow language that states who had their own provisions on 
homestead could opt out States rights. That is not even in the 
legislation. So if your parents have lived in a home that has increased 
in value, but they have fallen upon hard times because of bad health, 
they cannot even utilize the homestead exemption if, in fact, it is 
more than $100,000 under this bankruptcy bill.
  In this economy we know that has occurred if families have lived in 
homes for over 40 years. Our divorcees that need child support, in 
Chapter 13, the child support payments are put in along with credit 
cards. Can you imagine that? Who is going to be able to be the winner, 
the child needing child support, the parent who cannot get a lawyer, or 
the credit card company that says you better pay my credit card debt 
before you pay child support or alimony?
  In Chapter 7, for example, there are no assets, and mostly you pay 
administrative costs. How will someone pay alimony or child support 
unless it is isolated?
  Let me share with my colleagues what the gentleman from Illinois (Mr. 
Hyde), chairman of the Committee on the Judiciary, said, ``to say that 
substituting a reasonably necessary standard, providing some 
flexibility in determining what a debtor can live on, because what this 
bill does, it tells you while you are in bankruptcy, you have to be 
governed by the Internal Revenue Service expenses.'' Can you imagine 
that?

                              {time}  1215

  The chairman says, why are we using the IRS standards? This is the 
only place in town, this bankruptcy bill, where the IRS is popular.
  When he got to the floor of the House and he was arguing about this 
bill, in the Congressional Record on May 5, 1999, the gentleman from 
Illinois (Chairman Hyde) said, ``Lastly, let me pay my respects to the 
creditor lobby. They are awesome.''
  I only ask that we respect the American people. We know that the 
American people believe in responsibility. That is what this Nation was 
founded on. We work every day. We pay our bills. We pay our mortgages.
  But I tell my colleagues if one had a catastrophic illness, a tragic 
accident, which some of my constituents have had, devastating car 
accident, one cannot work and one falls upon hard times, does one need 
the IRS telling one what one can live on? Does one need one's house 
being taken away from one. Does one need the credit card people telling 
one they are more important than one?
  I am voting against this rule, against the bill, and I ask my 
colleagues to stand up for the American people.
  Mr. SESSIONS. Mr. Speaker, may I ask how much time is remaining on 
both sides, please.
  The SPEAKER pro tempore (Mr. Simpson). The gentleman from Texas (Mr. 
Sessions) has 10 minutes remaining. The gentleman from Texas (Mr. 
Frost) has 17\1/2\ minutes remaining.
  Mr. SESSIONS. Mr. Speaker, I appreciate the dialogue from the 
gentlewoman from Texas (Ms. Jackson-Lee). I would like to, once again, 
ask the gentleman from Pennsylvania (Mr. Gekas) to respond.
  Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania 
(Mr. Gekas).
  Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding to me.
  Mr. Speaker, it is peculiar to hear the argument against our 
provisions on homestead exemption and the modification we made to it. 
If we do nothing, if we pass no bankruptcy reform at all, the opponents 
of the current bankruptcy reform say we like the present system, well, 
the present system is the one against which the President has railed as 
being one where the rich can go to these homestead exemption States and 
escape their obligations. He is opposed to that kind of an exemption 
for the rich.
  So now we offer a compromise which preserves the homestead exemption 
status of the States that employ it and then put into place a reform 
measure that discourages the rich from shopping to go to a homestead 
just for the purpose of avoiding bankruptcy.
  But now we hear the gentlewoman from Texas (Ms. Jackson-Lee) 
criticizing the homestead exemption. Does she want us to stay where we 
are, to benefit the rich, as the President of the United States has 
said? That is a salient question.
  On the homestead exemption, I think I am going to engage in a 
colloquy later with people who are interested in the specifics of that, 
and I will be glad to engage in that. But the other point that the 
gentlewoman from Texas attempted to make about the stand up for the 
American people, that is what we did; 313 of us stood up for the 
American consumer, the people who suffer at the hands of people who go 
bankrupt and have to pay higher costs at the supermarket and interest 
rates and the taxes and all of that.
  The priorities that we set for women and children are very important 
and high priorities. The gentlewoman from Texas would say that she is 
not satisfied with those priorities. She wants what is the current law 
to prevail here. If that is the case, then she should recognize and we 
should be truthful about the fact that the current law gives no 
priorities to that.
  Mr. FROST. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Conyers).
  Mr. CONYERS. Mr. Speaker, I thank the gentleman from Texas for 
yielding time to me, and I yield to the gentlewoman from Texas (Ms. 
Jackson-Lee).
  Ms. JACKSON-LEE. Mr. Speaker, I will not take all of the gentleman's 
time. I thank the ranking member very much, and I thank him for working 
on this issue.
  Let me just say to the gentleman from Pennsylvania (Mr. Gekas) I 
appreciate his work on this bill. But he is inaccurate.
  What happens in the discharge of alimony and child support? They are 
lumped in with credit card debt. It is a big lump of prioritization. 
What those of us who oppose this bill are asking for is to put credit 
card debt below that of alimony and child support, which represents 
real life or death issues in the lives of children and families.
  All this bill does is give the single parent, man or woman, with 
limited resources an opportunity to fight to get child support and 
alimony. We know who is going to be the victor in that fight against 
the big credit card companies.
  The other thing is, just on the homestead issue, let me be very 
clear, the language in the conference report does not have the opt-out 
language that protects State rights to allow them to opt out if they 
have other homestead exemptions. That is hurting senior citizens who 
have lived in their home for 50 years and the value of their homes are 
assessed at more than $100,000 because the value has increased. That is 
what I am crying out against. This is not reform. This bill is punitive 
to many Americans.
  Mr. CONYERS. Mr. Speaker, as more and more Members begin to examine 
this, I think the awesome power of the credit lobby is becoming very, 
very clear. We are making a bill that makes bankruptcy worse. So for 
the chairman of the subcommittee to be telling us that, because we 
oppose this bill, we want to go back to the existing circumstance is 
inaccurate at least for my part. What we want is a better set of 
provisions than the ones that exist now, and this bill does not contain 
them.
  Mr. SESSIONS. Mr. Speaker, the gentleman from Texas (Mr. Frost), my 
colleague on the Committee on Rules, indicates he does not have further 
speakers. I have indicated back that I do have two additional speakers. 
I am well aware there is an imbalance on time on both sides. I will 
proceed with that understanding. I will proceed with two additional 
speakers, then I will offer the gentleman from Texas (Mr. Frost) the 
opportunity to close, and then I will do the same.
  Mr. Speaker, I yield 4 minutes to the gentleman from Del Mar, 
California (Mr. Cunningham).
  Mr. CUNNINGHAM. Mr. Speaker, I was not even going to speak on this 
issue until I heard the Democrat leadership's partisan attacks which 
has flowed through these Chambers over the last year.
  When one takes a look at the Democrat leadership and their interest 
to recapture the majority and gridlock this

[[Page H9831]]

House and fight against every single thing that we try and do, campaign 
finance reform was mentioned. The other night when the Presidential 
debate went forward and Vice President Gore looked at Governor Bush and 
said, ``would you sign the McCain-Feingold,'' I wanted to jump in the 
television and ask Governor Bush to ask Vice-President Gore would he 
sign the Paycheck Protection Act to control the unions. Gore would say 
no of course.
  I went in 18 different congressional districts over the last few 
weeks. The minimum amount that the union goons had spent against our 
vulnerable candidates was a million dollars each. But yet my colleagues 
on the other side, because their campaign coffers are filled by the 
union bosses, will they do that? Absolutely not.
  So when my colleagues talk about campaign finance reform and their 
extreme rhetoric, no, we will not support those kinds of things.
  The Patients' Bill of Rights was mentioned that the Democrats push. 
It would be so easy for this House to come together. Instead, in an 
election year, they choose to try to make it a partisan issue. The 
Patients' Bill of Rights not only has unlimited lawsuits, but unlimited 
amounts with the intention of killing HMOs. If one kills an HMO, what 
is left, only a Hillary Clinton government type of health care plan. If 
one demonizes insurance companies, what is left for prescription drugs? 
A government-controlled health care system. They say, well, it is under 
Medicare, but yet the cost would be driven up instead of having 
insurance.
  I had pneumonia last year. My wife is a teacher. I used her 
insurance. I went down and needed augmentin, and I went to the 
prescription place, and I got augmentin for a much reduced price. That 
is an insurance company, but which my colleagues tend to demonize and 
talk about their patients' bill of rights.
  The second aspect of that, they then, the liberal trial lawyers who 
also fill their campaign coffers, then go down and sue the small 
businesses with unlimited lawsuits, the people that hire in good faith 
those HMOs or those organizations to provide health care for their 
workers. Absolutely not, we are not going to go along with the liberal 
Democrat leadership agenda.
  One takes a look in NFIB and the Chamber of Commerce who produce the 
jobs in this country they fight it.
  Talk about education. Talk about school construction. Why do my 
colleagues think they want school construction to come out of the 
Federal Government instead of local, because all Federal monies go down 
and have to go at the prevailing Davis-Bacon union wage. Again, quote 
the union boss wage which costs 35 percent more money to build our 
schools.
  Does one think that my colleagues, if we had a bill that said, hey, 
we will support your construction bill, waive Davis Bacon and the Union 
wage, and let us put 35 percent more in building schools, but does one 
think they would do that, no, because it upsets the unions and the 
money going to their campaign coffers.
  It makes me sick on this house floor. Like I said, I had not planned 
on even speaking on this. In 1993, did you have a minimum wage 
increase? You had the White House, House and the Senate. Absolutely 
not.
  What did you do? You tried to government control health care, you 
increased the tax on Social Security, you stole every dime, your 
leadership took every dime out of the Social Security Trust Fund. Al 
Gore was the deciding vote on that.
  Mr. SESSIONS. Mr. Speaker, I appreciate the gentleman from California 
taking time to discuss this with us.
  Mr. Speaker, I yield 3 minutes to the gentleman from Addison, 
Michigan (Mr. Smith).
  (Mr. SMITH of Michigan asked and was given permission to revise and 
extend his remarks.)
  Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman very much 
for yielding me this time.
  Mr. Speaker, I think this legislation is very important and it is so 
important that we move ahead and send it to the President. I became 
interested and concerned with bankruptcy laws when I became chairman of 
the Michigan Senate Agricultural Committee back in the early 1980s.
  Farmers came to me with their frustrations and I note those were 
tough times for farmers. Farmers came to me with their frustration that 
they were not allowed to reorganize. They were forced to sell their 
equipment and then told, well, if you can find a way to pay your way 
out of this, fine. With out their equipment it didn't work.
  I met with my congressman, wrote many others and it was in 1986 that 
we first came up with chapter 12 to allow special considerations for 
farmers. In 1992 and 1993, when my son Brad Smith became a law clerk 
with Judge Edith Jones in Houston, Texas with the Fifth Circuit Federal 
Court of Appeals. I become more aware of problems with the federal law, 
talking to my son Brad and Judge Jones. If bankruptcy is to easy 
lenders raise interest rates for everybody else. Because thru 
bankruptcy it was too easy for many to get out of paying what they owed 
somebody else other borrowers are charged more to cover the unpaid 
bills.
  So there must be a balance. One wants to be fair, but on the other 
hand, one does not want to punish everybody to make it too easy so a 
few people can declare bankruptcy and not pay what they owe.
  I have two bills that I introduced that are now incorporated in this 
bankruptcy law. One is the child support payments that are owed to 
local units of government. They have been dischargeable. Now, under my 
amendment and this legislation they are not.
  The other, of course, is making section 12 of the bankruptcy law 
permanent. In tailoring chapter 12 to meet the economic realities of 
family farming, this bill has eliminated many of the barriers that 
family farmers have faced when seeking to reorganize successfully under 
either chapter 11 or chapter 13 of the Bankruptcy Code.
  For example, chapter 12 is more streamlined. It is less complicated. 
It is directed towards family farmers, not the giants, not the 
corporation, but family farmers. It provides that they can reorganize 
in such a way that they do not have to sell their tractors, their plows 
and their corn planter. It gives them a chance to get back on their 
feet. Chapter 12 provisions no longer exist in current law. Farmers are 
not allowed to use these provisions, because they have expired.
  This bill, this legislation makes chapter 12 permanent. I hope we 
move ahead and support this rule and the bill.
  Mr. SESSIONS. Mr. Speaker, I have indicated this would be the 
remaining speakers that we have in line with the agreement that the 
gentleman from Texas (Mr. Frost) and I had, and I would like to let him 
know we have now finished our speakers.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FROST. Mr. Speaker, I yield 1 minute to the gentleman from 
Michigan (Mr. Conyers), the ranking member on the committee, and then 
we are prepared to close.
  Mr. CONYERS. Mr. Speaker, I would like to ask the gentleman from 
Michigan (Mr. Smith), would he join me in pushing legislation to pass a 
freestanding bill to make chapter 12 permanent should this bill not 
succeed in the Senate as most expect? Right now, chapter 12 is being 
held hostage to this bill.
  Mr. Speaker, I yield to the gentleman from Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Speaker, I ask the gentleman from Michigan 
(Mr. Conyers) to repeat the question.
  Mr. CONYERS. Mr. Speaker, would the gentleman from Michigan join me 
in supporting legislation in a freestanding bill to make chapter 12 
permanent should this bill not succeed in the Senate as most expect 
that it will?
  Mr. SMITH of Michigan. Yes, Mr. Speaker. But I certainly hope the 
other provisions that are so important, such as the discharge of those 
debts owed in child support, et cetera, somehow need to be corrected. 
But, yes, I have introduced such a bill. It is very important to 
farmers. I would hope we would pass the provisions in this bill.

                              {time}  1230

  Mr. FROST. Mr. Speaker, I yield myself such time as I may consume to 
simply state once again, as I indicated in my opening statement, that I 
intend to vote for this rule and I intend to vote for the bill. We 
would have preferred that it come up under a regular

[[Page H9832]]

procedure; and obviously, we would prefer that other matters obviously 
be voted on by this House, but I will vote in favor of the rule.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume 
to tell my colleague, the gentleman from Texas (Mr. Frost), that I 
appreciate his support. I too would ask Members to vote for this rule.
  Mr. Speaker, I have no further requests for time, I yield back the 
balance of my time, and I move the previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  Mr. GEKAS. Mr. Speaker, pursuant to House Resolution 624, I call up 
the conference report on the bill (H.R. 2415) to enhance security of 
United States missions and personnel overseas, to authorize 
appropriations for the Department of State for fiscal year 2000, and 
for other purposes.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Simpson). Pursuant to House Resolution 
624, the conference report is considered as having been read.
  (For conference report and statement, see proceedings of the House of 
October 11, 2000 at page H 9723.)
  The SPEAKER pro tempore. The gentleman from Pennsylvania (Mr. Gekas) 
and the gentleman from Michigan (Mr. Conyers) each will control 30 
minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Gekas).
  Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
  It is important, for the purpose of the Congressional Record and for 
the purpose of reenlightening the Members of the House as to the 
purpose of the mammoth effort that we expended over the last 3 years 
and more to bring about needed, necessary and cogent bankruptcy reform, 
to outline the two main theses that apply and on which we banked our 
experience and our intent to bring about bankruptcy reform. They are 
worthy of repetition and rerepetition. And every ounce of prevention 
that we can add to this debate about all those who oppose the concepts 
that we are employing we repeat and will repeat time and time again.
  Everyone and anyone who becomes so flooded with and burdened with and 
overextended by reason of obligations for a variety of reasons, whether 
it be divorce or drinking or gambling or overextension of credit in its 
many different forms, whatever the reason might be that someone became 
hopelessly indebted and found no reason to do anything except to file 
bankruptcy, that person, who is so overburdened will find at the hands 
of the bankruptcy system a fresh start. We guarantee that. That is one 
of the purposes of bankruptcy from its first usage back in colonial 
days. The fresh start will be available to every American who needs it.
  But by the same token, we cannot permit people to use the bankruptcy 
system as a mechanism for financial planning for themselves. If we take 
an objective look at someone's resources, their status in society, 
their earning power, their status in the financial system of which our 
economy is a part, if we, upon examination, determine, through the 
bankruptcy system that we put in place, that there is an ability on the 
part of this individual to repay some of the debt, albeit not all of 
it, and not immediately, but over a period of years, then we should 
compel that individual, through a sympathetic system of transferring 
that obligation or set of obligations from Chapter 7 to Chapter 13, we 
should allow that individual to work his way out of that debt. We do 
not demand that he pay every penny back, but that he return some of the 
money to the general wheel that keeps our economy going.
  It is unfair for such an individual, who could repay, to be absolved 
of any obligation and then lay his burden at the footstep of every 
other consumer and taxpayer in the country. Because our country is so 
wealthy, it is difficult to portray how one bankruptcy that loses in a 
stream of commerce just $10,000 truly matters. One might say, well, 
what is that? But that $10,000 of debt unpaid has to be made up somehow 
in the general economy. And who makes it up? The consumer, the seeker 
of credit, the purchaser of large items, like automobiles, homes, et 
cetera.
  So this is not an issue that is out there in the ether someplace, 
that has no connection with everyday living in our communities and the 
struggles of every family. This touches the heart of the pocketbook of 
every family. To dismiss it as being a giveaway to somebody or other, 
or that benefits only one segment of society, one must take a look at 
individual cases of bankruptcy.
  I defy anyone to comment or to assert that our bankruptcy reform 
crashes down on the poor or the low-income people, when the very 
threshold upon which the bankruptcy system begins under our reform 
measure exceeds the median income. Therefore, people under the median 
income, in whatever quarter in our country, if it is below that 
standard, there is almost an automatic fresh start accorded that 
individual when he or she files bankruptcy.
  That is a magnanimous view of the low-income stratum of our society. 
And we say that when that individual from that stratum does find 
himself or herself overburdened, we are going to help. That fresh start 
will be available. So I reject contentions that this is a bill biased 
towards any segment of our society. Rather it is biased, if it is 
biased at all, towards rectitude, towards balancing the equation in the 
economy in which we find ourselves.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. CONYERS asked and was given permission to revise and extend his 
remarks.)
  Mr. CONYERS. Mr. Speaker, this measure imposes indiscriminate means 
tests to determine the eligibility for bankruptcy relief and the amount 
a bankruptcy filer is required to pay a creditor. This test does not 
account for such items as child care payments, most health care costs, 
and the costs of caring for individuals unable to care for themselves. 
Further, families will be required to go through a series of means 
tests to justify their medical bills and other expenses. These 
standards are so extreme that they have been rejected by the Internal 
Revenue Service.
  So when the chairman of the subcommittee, the gentleman from 
Pennsylvania (Mr. Gekas), says that the two themes of this bill is to 
give people a fresh start and then to have, number two, some 
accountability for those who can and should pay, this bill flunks the 
test right from the beginning on both counts. It does not allow for a 
fresh start, and the accountability is so extreme that we are using 
standards that even the Internal Revenue Service rejected.
  The proposal is highly damaging to a single mother's access to the 
bankruptcy system. It would treat an individual's credit card debt on 
the same level of obligation as there is to paying child support or 
alimony. So, therefore, I would argue that it does not make 
accountability an important consideration because, as again we see the 
awesome power of the creditor lobby, they have now elevated credit card 
obligations to the same level as those for child support or alimony. 
Now, how that meets theme two is beyond my understanding.
  So, therefore, a mother who relies on payments to feed or clothe her 
children would be competing from the same pool of money as a major 
credit card company. Thanks a lot, I say to the gentleman from 
Pennsylvania. That really makes accountability a strong theme in this 
so-called reform measure.
  Next, the business provisions of the proposal will impose harsh time 
deadlines, massive new legal and paperwork burdens on businesses, real 
estate concerns and, by design, will lead to premature liquidation and 
job loss. So much for theme one of the so-called reform and fresh start 
of the gentleman from Pennsylvania. Thanks a lot. By leading to 
premature bankruptcy or liquidation and job loss, we are giving folks a 
fresh start. Well, my colleagues, there is the awesome power of the 
creditor lobby working again.
  Instead of giving businesses a fresh start and a chance to 
reorganize, this would cripple an organization and defeat the true 
purpose of a bankruptcy process, even the one that we have now. At the 
same time, the conference report addresses the alleged rampant 
bankruptcy abuse by debtors. It gives

[[Page H9833]]

next to no attention to the lending industry.
  By the way, are bankruptcy filings going up or down? Is there any 
Member in this body that does not know that they are going down? We 
have tables to show that the decrease in bankruptcy filings, personal 
bankruptcy, in the period ending June 30 of this year, ran 8.29 percent 
below the year earlier levels, and per capita personal bankruptcy rates 
ran 9.15 percent below the year earlier levels.
  So as the bankruptcy courts themselves tell us, the bankruptcy 
filings are down, not up, according to their figures. So what are we 
doing here? Well, I think we are genuflecting to the awesome power, as 
the chairman of the Committee on the Judiciary says, the awesome power 
of the creditor lobby. So what we have, due to deregulation of credit 
cards and the resulting deluge of credit card solicitations, is that 
customer debt has skyrocketed to more than $1.3 trillion.
  But what attention do we give to the lending lobby, the lending 
industry, which has encouraged this? Is there anyone that does not get 
one or two a week or a month of credit cards that say this card is 
operative, it is for you; if you need it, use it? They send them to 
students in colleges in their dorms. They are being flooded with them. 
So our response to this irresponsible activity of the creditor industry 
is to say that we are going to make it tough by making it harder to get 
started again, and then hold at the same level the family's need for 
their support of children. We are going to elevate the credit card 
obligation to the same as the ones of people who have families in need.

                              {time}  1245

  And so the conference report fails in yet another respect. It fails 
to require credit card companies to fully disclose the total amount of 
time it takes an individual to complete payment on a credit card 
balance if only the minimum is paid.
  The conference report also omits an important Senate provision that 
would prevent protesters found guilty of violence and of harassment at 
abortion clinics from declaring bankruptcy to avoid paying court 
judgments.
  And so, without such a provision, I say to the subcommittee chairman, 
we are allowing the abortion bombers to intimidate, maim and kill women 
without suffering any adverse financial consequence. And so, Mr. 
Speaker, I obviously oppose the conference reports before us.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEKAS. Mr. Speaker, I yield 4 minutes to the gentleman from 
Tennessee (Mr. Bryant) a former member of our Committee on the 
Judiciary who, notwithstanding the fact that he abandoned us, I am 
still willing to yield to him to talk about bankruptcy reform.
  Mr. BRYANT. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, I do want to thank the gentleman and commend him and 
other Members and especially the staff who have worked so closely with 
us over the last 4 years to make this bankruptcy reform a reality. I 
know a lot of hard work and compromise went into this legislation, and 
I am confident that the consumers and the creditors will be better off 
because of it.
  In recent years, bankruptcy has truly become a first stop rather than 
a last resort. In 1998, approximately 1.4 million people filed for 
bankruptcy, which is the equivalent of more than one in 100 households 
across this country. This increase in the bankruptcy filings costs the 
American families, those of us who do not file bankruptcy, on average 
$400 a year because of these higher prices for their credit and 
consumer needs that have to be made up because of these filings.
  The reform agreement before us today will protect responsible 
consumers while cracking down on abusive bankruptcy practices.
  Now, the object of this bill is to reduce repeat filings and to 
prevent the gaming of the bankruptcy system, that is running up credit 
card bills right before they file bankruptcy or filing and dismissing a 
bankruptcy case and refiling as a stalling tactic. Also, this bill 
hopes to improve the administration of bankruptcy cases in providing 
debtors with information about alternatives to bankruptcy such as 
credit counseling services.
  This bill also maintains a needs-based test, a means test so to 
speak, and it provides safeguards for women and for children and it 
assists farmers who may be forced into Chapter 7 bankruptcies by 
extending that particular Chapter 7.
  Now, I do want to mention something about this means testing. I sat 
through a lot of debate this morning on this particular rule and on the 
general debate and I hear from the other side the opponents, the people 
who oppose this reform, saying that it is means testing, it is harmful 
to people who are poor. But then I hear other people from that same 
side oppose it because it fails to protect the homestead exemption on 
houses, $250,000 is not enough.
  It strikes me kind of strange that we are talking about bankruptcy 
here and a concern about people who live in houses that have equity of 
more than $250,000. I think that is an inaccurate figure, too, I might 
add. Because it is not right that people who file bankruptcy ought to 
be able to keep houses regardless of how much they have in it or have a 
value of $250,000.
  We have reduced that, in a compromise spirit, down to a $100,000 
where it is obvious that they bought the house with the intention of 
trying to protect their equity and mess over all those creditors out 
there.
  But let me go on to say, too, that I am also pleased to point out 
that this bill, H.R. 2415, offers my State of Tennessee specific relief 
by providing additional bankruptcy judges, one in the Western District 
of Tennessee that is a permanent judge, and a temporary judge in the 
eastern part of the State.
  For example, in the Western District, talking about the tremendous 
number of bankruptcies cases, we have four judges and it is the highest 
filing district in the Nation. And we believe these four judges have 
worked too hard for too long. In fact, when we case-weight the numbers 
in the Western District based on filings through June of 1999, each 
judge has had 2,380 cases. And I would point out that 1,500 cases per 
judge is the level that they should be working at according to their 
own Judicial Conference.
  So by providing this additional judgeship, we can at least reduce 
their caseloads down to 1,904 cases, still well above the recommended 
level.
  Mr. Speaker, this bill does provide common sense reform and I urge 
its adoption.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I thank the ranking member very 
much for yielding me the time. I think he knows how fond I am of him 
personally and how much I respect his intellect and his heart. But I 
rise today in support of H.R. 2415 and the much needed bankruptcy 
reform measures contained in this legislation.
  The American people find it unacceptable and inherently unfair that 
those who do pay their bills have to foot the bill for those who in 
many instances have the ability to pay but choose not to. It has been 
conservatively estimated that personal bankruptcies cost every American 
family $400 per household per year and it takes 15 responsible 
borrowers to cover the cost of one bankruptcy of convenience.
  The system will continue to be unjust if debtors persist in using it 
as a tool of first resort rather than a tool of last resort when all 
other financial options have been exhausted.
  Clearly, this Nation's bankruptcy system is broken when it enables 
individuals to avoid paying their debts despite their ability to do so. 
What this Congress must do is to undertake genuine needs-based 
bankruptcy reform to require those who have the ability to repay a 
portion of their debts to enter a Chapter 13 repayment plan while also 
preserving the historic fresh start in Chapter 7 for those people who 
have truly fallen on hard economic times.
  The goal of our bankruptcy system should be to protect those who need 
protecting, to provide those who experience genuine and serious 
financial hardship the opportunity to wipe the slate clean. What we 
must do is return our system back to its original fair and 
compassionate mission through a simple legislative fix.

[[Page H9834]]

  Bankruptcy reform is not a Republican or a Democratic issue. It is a 
consumer issue. According to a recent National Consumer League survey, 
76 percent of Americans believe that individuals should not be allowed 
to erase all of their debts in bankruptcy if they are able to repay a 
portion of what they owe. This survey merely reflects the American 
public's belief that individuals should be responsible for their own 
action.
  This bill would help to remedy the glaring problems of today's 
bankruptcy system by creating a needs-based system, subject to judicial 
oversight, which would similarly continue to protect the rights of 
those citizens who need a fresh start, while at the same time requiring 
those who do not to meet their personal responsibilities.
  H.R. 2415 represents a true compromise product between the House and 
Senate-passed bankruptcy reform bills. Both Chambers passed bankruptcy 
reform by strong bipartisan margins. The House passed their version 
last June by a vote of 314-108 with the support of 96 Democrats. The 
Senate passed theirs by 83-14.
  This bill contains a number of pro-consumer items, including a host 
of new disclosure requirements for credit card companies. Specifically, 
it requires credit card statements to disclose late payment fees. It 
also mandates that statements must include a toll free number for 
consumers to receive estimates on how long it would take to repay their 
existing balancing by making only the minimum monthly payments.
  The legislation also requires improved disclosures on introductory 
rates and prohibits creditors from closing an account solely if the 
customer does not incur finance charges.
  We need to pass this legislation, and I urge my colleagues to support 
it.


                             General Leave

  Mr. GEKAS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on H.R. 2415.
  The SPEAKER pro tempore (Mr. Simpson). Is there objection to the 
request of the gentleman from Pennsylvania?
  There was no objection.
  Mr. GEKAS. Mr. Speaker, it gives me pleasure to yield 5 minutes to 
the gentleman from Virginia (Mr. Boucher).
  (Mr. BOUCHER asked and was given permission to revise and extend his 
remarks.)
  Mr. BOUCHER. Mr. Speaker, I thank the gentleman from Pennsylvania for 
yielding me the time, and I want to congratulate him on his fine work 
in bringing this measure to the floor today.
  Mr. Speaker, I am pleased to rise in support of the conference 
agreement and to urge its approval by the House. With this measure, we 
bring to conclusion a process that we launched 3 years ago to bring a 
much needed reform to the Nation's bankruptcy laws.
  In an era in which disposable incomes are growing, unemployment rates 
are low, and the economy is strong, consumer bankruptcy filings should 
be rare. Contrary, however, to this expectation, there are now more 
than 1.4 million annual bankruptcy filings, a 40 percent increase from 
1996 and a 95 percent increase over the number of filings 1 decade ago.
  Bankruptcies of convenience are driving this increase. Bankruptcy was 
never meant to be used as a financial planning tool, but it is 
increasingly becoming a first stop rather than a last resort, as many 
filers who could repay a substantial part of what they owe are using 
the complete liquidation provisions of Chapter 7 of the Bankruptcy Code 
rather than the court supervised repayment plans that are provided for 
in Chapter 13.
  The legislation that we bring to the floor today would direct more 
filers to use Chapter 13 plans. Those who can afford to make a 
substantial repayment of what they owe would be required to do so.
  This is a consumer protection measure. As the gentleman from Virginia 
(Mr. Moran) just indicated, the typical American family is paying a 
hidden tax of at least $400 every year arising from the increased cost 
of credit and the increases in the prices for goods and services 
occasioned by the discharge of more than $50 billion annually in 
consumer bankruptcy filings. By requiring that people who can repay a 
substantial part of their debt do so in Chapter 13 plans, we will 
lessen substantially that hidden tax.
  Another key point should be made about the provisions of this 
conference report. The alimony or the child support recipient is 
clearly better off under this conference agreement than she is under 
current law. At the present time, she stands number seven in the rank 
of priority for payment of claims in bankruptcy proceedings. This 
conference report places her number one. Her priority is elevated from 
number seven in current law to number one in this conference agreement. 
Her claim will be first in line for payment, and other provisions of 
the conference agreement make it easier for her to execute against the 
assets of the estate of the bankrupt person than under current law.
  In May of last year, this reform passed the House by the overwhelming 
vote of 315-108. A similar reform was approved in the other body by the 
vote of 83-14. The consensus in support of this reform is broad and it 
is bipartisan.
  I would note that the conference agreement we consider today actually 
moves in the direction of the bankruptcy filer. It contains a means-
testing threshold for the use of Chapter 7 that is more generous to 
bankruptcy filers than the provision in the House bill. It provides 
that the filer can still use Chapter 7 if he cannot repay at least 25 
percent of his unsecured debt over a 5-year period, and that is after 
accounting for his normal and necessary living expenses. The House 
provision was a somewhat less generous 20 percent.
  The conference agreement also provides that the filer can still use 
Chapter 7 unless he can repay at least $6,000 of what he owes over a 5-
year period, and that also is after necessary living expenses. And that 
$6,000 figure over 5 years is compared to the less generous $50 per 
month over that same period in the House bill.
  The conference agreement also contains the credit card consumer 
disclosure guarantees that were in the Senate bill and assure that 
consumers have a better understanding of the consequences of only 
paying the minimum amount on their credit card statement.

                              {time}  1300

  I want to commend the gentleman from Pennsylvania (Mr. Gekas) for his 
leadership on this and the gentleman from Florida (Mr. McCollum), who I 
was pleased to join as the original cosponsor of the first bankruptcy 
reform that we introduced. I want to commend the gentleman from 
Virginia (Mr. Moran) for his excellent work in support of this effort 
and say that this is a balanced bipartisan measure which will provide a 
substantial reform and deserves the support of this House.
  I am pleased to urge approval of the conference report.
  Mr. CONYERS. Mr. Speaker, I yield myself 2 minutes, because my dear 
friend the gentleman from Virginia (Mr. Boucher) whom I tried to get on 
the conference as a conferee has made a case that on the surface sounds 
pretty good. But those who are concerned about the payment of alimony 
and child support have expressed strong opposition to this bill.
  Now, why? The proposed legislation does not live up to its billing. 
It fails to protect women and children adequately. And I think we ought 
to have a thorough discussion on that part of the report. The child 
support provisions of the bill fail to ensure that the increased rights 
the bill would give to commercial creditors do not come at the expense 
of families owed support. And so what we are saying is that this is a 
bill that does not improve the status of women and children in 
bankruptcy proceedings. Absolutely not. That is also why the National 
Organization for Women is strongly opposed to the measure. The National 
Partnership for Women and Families is unalterably against this bill. 
The National Women's Law Center is opposed to the bill. The National 
Conference of Bankruptcy Institute is opposed to the bill. And one of 
the main reasons they are opposed to the bill is that contrary to the 
assertion that it allows a fresh start and a better fresh start than 
the existing legislation is that it does not. It would raise up the 
credit card creditor to the same status as those who are seeking 
alimony and child support

[[Page H9835]]

payments, and that is precisely why the women's organizations are 
seriously opposed to this measure.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEKAS. Mr. Speaker, it pleases me to yield 2 minutes to the 
gentleman from South Carolina (Mr. Graham).
  Mr. GRAHAM. I thank the gentleman for yielding me this time.
  Mr. Speaker, I, too, would like to echo my congratulations to the 
gentleman from Pennsylvania (Mr. Gekas) and all those who have worked 
so hard to bring this bill to the floor. We are in the last hours of 
the Congress and I believe we are on the verge of doing something good 
for the American consumer and business community. This bill is the 
reaction to a problem. Under the old bankruptcy code, there were people 
throughout the land running up hundreds of thousands of dollars of 
debts, making incomes of $100,000, being able to file bankruptcy and 
walk away from their obligations, leaving a lot of the American 
business community holding the bag.
  This bill has a balance to it. It is going to change the culture of 
our country. It is going to allow people to start over in a very fair 
fashion but it is going to ask people, if you can pay, to pay your 
debts the best that you can. Chapter 7 if you get under that provision, 
you discharge all of your debts and you basically walk away. This bill 
is saying, Wait a minute. If your income is such after you take your 
food, your clothing, private school expenses, necessary living expenses 
in a liberal fashion and compute it, that if you can afford to pay $100 
a month over a 5-year period to your creditors, pay it. Because that is 
good for the American business community. It is good for the economy. I 
think it is good for America, to try to get people who owe something to 
someone else back on their feet without leaving anybody hanging.
  I disagree with my friend the gentleman from Michigan (Mr. Conyers). 
Child support payments are elevated in this bill. That is the balance 
that we need. From being seventh you are now first. And you cannot get 
discharged from Chapter 13 if you file under that chapter if you do not 
keep your child support payments current. We tell the credit card 
community, you are just not going to be able to inundate people with 
free credit. You have to inform them better. There is a debtor's bill 
of rights that tells people options to bankruptcy and ways to make your 
payments and try to get people together so you do not have to file 
bankruptcy.
  This is long overdue. This is not only good for our business 
community, good for consumers, it is going to change our culture. I am 
proud to have been a part of it. I urge its passage.
  Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Texas (Mr. Bentsen).
  (Mr. BENTSEN asked and was given permission to revise and extend his 
remarks.)
  Mr. BENTSEN. Mr. Speaker, I would like to enter into a colloquy with 
the gentleman from Pennsylvania if I might to understand the homestead 
provisions in this. The House had adopted my amendment earlier in the 
proceedings that would have allowed the States to opt out. Now, as I 
understand it there is a 2-year residency requirement under section 322 
of the conference report. So a homeowner who purchased their home and 
files a petition for bankruptcy within 2 years would be subject to a 
Federal cap but after that 2 years, would not be subject to a Federal 
cap?
  Mr. GEKAS. If the gentleman will yield, that is exactly correct. The 
purpose is to say to someone who would move into Texas, if you move 
into Texas, purchase a property and within 2 years file bankruptcy, you 
would still preserve a $100,000 exemption but you would not have a 
total exemption.
  Mr. BENTSEN. But after that 2 years you would be under State law?
  Mr. GEKAS. After that he is a true Texan and does not have to worry 
about anything except the State law.
  Mr. BENTSEN. The other question is after you have exceeded the 2-year 
period and you increase the value of your home through addition or 
property values rise, are you under a new 2-year period?
  Mr. GEKAS. No. After 2 years, the person under our provisions and 
under the intent and under the law generally, after 2 years that 
individual is a true Texan for all purposes of residency and lives 
under the homestead exemption laws of your State.
  Mr. BENTSEN. And to the extent that one after the 2 years changes 
residence within the State, the equity they roll over, as I understand 
it, would be an exempt item under the State homestead law. Would it be 
additional equity rolled into the new purchase that would be under the 
$100,000 cap for 2 years or not?
  Mr. GEKAS. It would not.
  Mr. BENTSEN. I thank the gentleman.
  Mr. GEKAS. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from 
Ohio (Mr. Chabot).
  (Mr. CHABOT asked and was given permission to revise and extend his 
remarks.)
  Mr. CHABOT. Mr. Speaker, I rise in support of this very pro-consumer 
bankruptcy reform conference report. This vital legislation protects 
individuals and businesses from having to pick up the tab for 
irresponsible debtors, debtors who are capable of paying off a 
significant portion of their debts.
  This bankruptcy reform bill establishes a clear causal link between a 
debtor's ability to pay and the availability of Chapter 7 bankruptcy 
super-discharge. It requires those who can afford to pay their debts to 
honor their commitments.
  Let me emphasize at the outset that individuals who make below the 
median income will not be forced into Chapter 13 under this bill, 
although they may still voluntarily choose to file there. What this 
bill does do is require individuals who make above the median income 
and are determined to have significant repayment capabilities to file 
in Chapter 13.
  Mr. Speaker, there are people who truly have a legitimate need to 
declare bankruptcy. No one is denying this. At times hardworking people 
come up against special circumstances that are beyond their control. 
Family illness, disability, or the loss of a spouse may necessitate the 
need to seek relief. This legislation effectively protects these 
individuals. Too frequently, however, people who have the financial 
ability or earnings potential to repay their debts are simply seeking 
an easy way out of repaying debts. While this may prove convenient for 
the debtor, it is not fair to their friends and neighbors who are 
ultimately stuck with the bill.
  Estimates show that the average American pays as much as $550 per 
year as a bad debt tax in the form of higher prices and increased 
consumer credit interest rates to cover the economic costs associated 
with the excessive bankruptcy filings of others. Nationally, consumer 
bankruptcies reached a record 1.4 million in 1997 and those numbers 
have remained high. What makes these statistics particularly alarming 
is the fact that this trend began in 1994 during a time of solid 
economic growth, low inflation and low unemployment, during an 
unprecedented peacetime boom in our economy.
  The primary culprit of this dramatic increase in bankruptcy filings 
is a system that allows consumers to evade personal responsibility for 
their debts. Under this legislation, individuals who can pay their 
debts will be moved to Chapter 13 where they will be given a generous 5 
years to establish a fair repayment plan and get their financial houses 
in order.
  I would like to take this opportunity to thank the gentleman from 
Pennsylvania (Mr. Gekas) and the gentleman from Florida (Mr. McCollum) 
for their leadership in this area, and I urge its passage.
  Mr. CONYERS. Mr. Speaker, I am happy to yield 3 minutes to the 
gentlewoman from New York (Mrs. Maloney).
  Mrs. MALONEY of New York. I thank the gentleman for yielding time and 
for his leadership.
  Mr. Speaker, it is with great regret that I come to the floor in 
opposition to this bill. I supported this bill when the House first 
voted on it. Unfortunately, the majority has taken a bill in which I 
thought we had made good progress and chosen to railroad it through the 
House without really holding a conference and by tying it to a totally 
unrelated embassy bill.

[[Page H9836]]

  Furthermore, I appreciate the comments and would like to be 
associated with the gentleman from Michigan's comments about the many 
leading women's organizations that oppose the bill. Also, the majority 
has deleted a critical provision that Senator Schumer added to the 
bill. This provision prevents those who commit acts of violence at 
reproductive health clinics from escaping paying penalties for these 
actions. Clinic bombers should not be allowed to excuse penalties 
assessed on them by the courts through bankruptcy. This bill would 
allow them to excuse these debts and to walk away from these penalties.
  Mr. Speaker, bankruptcy reform is important to the American people, 
but so is protecting women's safety and reproductive freedom. This is a 
growing problem that the majority is ignoring. Between 1993 and 2000, 
three doctors, two clinic employees, one clinic escort and one security 
guard have been murdered in acts of violence at clinics. There have 
been 16 attempted murders since 1991. More than 2,400 acts of violence 
have been reported at clinics since 1997. These included bombings, 
arsons, death threats, kidnappings, and other acts of harassment. The 
Senate approved this amendment by a vote of 80-17. Why has the majority 
now excluded it? Why should clinic bombers be allowed to excuse their 
penalties by declaring bankruptcy?
  I urge all Members who care about women's safety to vote against this 
bill for this reason and also because of the abusive procedure under 
which it has been brought to the floor.
  Mr. Speaker, I include for the Record a letter from John Podesta, 
chief of staff to the President, in which he writes that the President 
will veto the bill because, and I quote, it gets the balance wrong.

                                              The White House,

                                 Washington, DC, October 12, 2000.
     Hon. J. Dennis Hastert,
     Speaker of the House of Representatives,
     Washington, DC.
       Dear Mr. Speaker. I understand that the House will take up 
     today the conference report on H.R. 2412, which apparently 
     incorporates the text of S. 3186, a recently filed version of 
     bankruptcy legislation. If this bankruptcy legislation is 
     sent to the President, he will veto it.
       Over the last few months, this Administration has engaged 
     in a good faith effort to reach agreement on a number of 
     outstanding issues in the bankruptcy legislation. The 
     President firmly believes that Americans would benefit from 
     reform legislation that would stem abuse of the bankruptcy 
     system by, and encourage responsibility of, debtors and 
     creditors alike. With this goal in mind, we have pursued 
     negotiations with bill proponents on a few key issues, 
     notwithstanding the President's deep concern that the bill 
     fails to address some creditor abuses and disadvantages all 
     debtors to an extent unnecessary to stem abuses by a few.
       An agreement was reached in those negotiations on an 
     essential issue--limiting homestead exemptions--with 
     compromises made on both sides. Unfortunately, H.R. 2412 
     fails to incorporate that agreement, instead reverting to a 
     provision that the Administration has repeatedly said was 
     fundamentally flawed. The central premise of this legislation 
     is that we must ask debtors, who truly have the capacity to 
     repay a portion of their debts, to do so. This would benefit 
     not only their creditors but also all other debtors through 
     lower credit costs. Unlimited homestead exemptions allow 
     debtors who own lavish homes to shield their mansions from 
     their creditors, while moderate-income debtors, especially 
     those who rent, must live frugally under a rigid repayment 
     plan for five to seven years. This loophole for the wealthy 
     is fundamentally unfair and must be closed. The inclusion of 
     a provision limiting to some degree a wealthy debtor's 
     capacity to shift assets before bankruptcy into a home in a 
     state with an unlimited homestead exemption does not 
     ameliorate the glaring omission of a real homestead cap.
       Moreover, the President has made clear that bankruptcy 
     legislation must require accountability and responsibility 
     from those who unlawfully bar access to legal health 
     services. Yet the conference report fails to address this 
     concern. Far too often, we have seen doctors, health 
     professionals and their patients victimized by those who 
     espouse and practice violence. Congress and the States have 
     established remedies for those who suffer as a result of 
     these tactics. However, we are increasingly seeing the use of 
     the bankruptcy system as a strategic tool by those who seek 
     to promote clinic violence while shielding themselves from 
     personal liability and responsibility. It is critical that we 
     shut down this abusive use of our bankruptcy system and 
     prevent endless litigation that threatens the court-ordered 
     remedies due to victims of clinic violence. The U.S. Senate 
     was right in voting 80-17 to adopt an amendment that would 
     effectively close down any potential for this abuse of the 
     Bankruptcy Code. We fail to understand why the bill's 
     proponents refuse to include this provision and shut down the 
     use of bankruptcy to avoid responsibility for clinic 
     violence.
       I repeat President Clinton's desire to see balanced 
     bankruptcy reform legislation enacted this year. The 
     President wants to sign legislation that addresses these 
     known abuses, without tilting the playing field against those 
     debtors who turn to bankruptcy genuinely in need of a fresh 
     start. He will veto H.R. 2412 because it gets the balance 
     wrong.
           Sincerely,
                                                     John Podesta,
                                  Chief of Staff to the President.

  Mr. GEKAS. Mr. Speaker, I yield 3 minutes to the gentleman from Texas 
Mr. Bentsen for the purpose of wrapping up a colloquy.
  Mr. BENTSEN. I thank the gentleman for yielding me this time.
  Mr. Speaker, to follow up where we were, a question that I think is 
extremely important is the question of homeowners today in Texas and 
other States which have a broader homestead exemption.

                              {time}  1315

  Are these provisions prospective in nature in that if one has resided 
in their home for 2 or more years today, or of the date of enactment, 
if this bill is to become enacted into law, would they thus be exempted 
from the Federal cap provided for in this bill? Would they be under 
State law at that time and any subsequent purchase they make using the 
equity from the home they own today be exempted from that cap?
  Mr. GEKAS. In the hypotheticals that the gentleman pronounced, it 
would come under State law. The only time that there is a look-back is 
the initial 2 years of residency in a homestead-exemption State.
  So 2 years, and thereafter the State laws would apply.
  Mr. BENTSEN. Including today. So one who has resided today in their 
home for at least 2 years is under State law and would not be under 
this cap?
  Mr. GEKAS. That is exactly correct.
  Mr. BENTSEN. The other is on section 308, the 7-year look-back 
provision which is designed, as I understand it, to prevent the 
diversion of nonexempt assets into exempt property, is the burden of 
proof on the debtor or the creditor?
  Mr. GEKAS. It is on the creditor, and that really conforms to the 
general state of the law in such cases. There has to be affirmative 
evidence of fraud having been committed so that the creditor must come 
forth.
  Mr. BENTSEN. The question is raised on the roll-over period and the 
prospective nature talks about interest acquired. The bill reads the 
homestead as interest acquired by the debtor, and this is getting 
somewhat technical or minute, I guess, during that 2-year period, would 
interest be assumed to include such things as routine principal 
payments or rise in property value?
  Mr. GEKAS. Does the gentleman mean during the 2 years for a look-back 
in the 2 years?
  Mr. BENTSEN. Right, during the 2-year look-back.
  Mr. GEKAS. I would have to say yes, that in the look-back it would 
generally be determined what the value was of the claimed exemption and 
the $100,000 would apply.
  Mr. BENTSEN. To close, for general purposes after 2 years of 
residency and so long as one is a resident of a State, regardless of 
where they live or how many places they live, the first 2 years exempts 
them from the Federal cap for the equity that they gain?
  Mr. GEKAS. That is correct. The State laws apply.
  Mr. BENTSEN. Any appreciation that applies in equity?
  Mr. GEKAS. Yes, on anything that occurs after 2 years.
  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
New York (Mrs. Lowey).
  Mrs. LOWEY. Mr. Speaker, I thank the gentleman from Michigan (Mr. 
Conyers) for yielding me this time, and I thank him for his leadership 
on this issue.
  Mr. Speaker, I rise in opposition reluctantly to this conference 
report because I am shocked, frankly, and outraged about the way in 
which this bill was brought to the floor of the House. After months of 
negotiations on this bill, we have been given a day's notice to 
consider a measure that does not represent a true compromise and is 
still in the process of being worked out. I support efforts to ensure 
that those

[[Page H9837]]

who are able to pay their debts are required to do so and to ensure 
that creditors extend and manage credit in a responsible manner; and I 
would like to see balanced, fair legislation that protects Americans 
from predatory lending practices and protects the assets of creditors 
from those who would abuse bankruptcy to avoid their debts; but this 
bill is lacking in a number of areas, and I would like to focus on one 
in particular.
  The Senate version of the bankruptcy bill included a provision 
requiring accountability from those who terrorize reproductive health 
clinics, their employees and the women who need their services. This 
provision, which received 80 votes, eight zero votes, in the Senate, 
would prevent those who are convicted of a crime from hiding behind the 
bankruptcy system in order to shield themselves from paying the 
consequences of their actions.
  Now, despite the fact that the President has said, again, that the 
clinic violence language must be included in final bankruptcy 
legislation for it to win his support, the provision was dropped. The 
proponents of the bill claim it will stop people from abusing the 
bankruptcy system; but by excluding the Schumer amendment individuals 
and organizations found to violate FACE, the Freedom of Access to 
Clinic Entrances law, will have carte blanche to abuse the system. This 
is wrong. It does not make sense.
  Mr. Speaker, let us agree on a simple principle: violence and 
harassment have no place in our democratic system and using the 
bankruptcy code to evade the law, any law, is wrong and should not be 
tolerated.
  FACE passed with a broad bipartisan consensus. It has dramatically 
reduced violent incidents at health clinics, but we need the tools to 
fully enforce it, and any bankruptcy bill that does not hold these 
criminals accountable for their actions is a disgrace. So I urge my 
colleagues to oppose this conference report.
  Mr. GEKAS. Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I will have a motion to recommit the entire conference 
report to the committee of conference to insist that according to the 
motion to instruct conferees that we have at least one meeting of the 
conference committee as required by House rule XXVIII, clause 6. I 
intend to do that.
  What we have found in the course of the study of this bankruptcy 
anti-reform measure are three myths. One is that it is a pro-consumer 
bill. It clearly is not.
  Two, that it will permit a fresh start for people that are brought 
into bankruptcy. It actually precludes a start as efficacious as the 
one that already exists in the existing bankruptcy law. It is a move 
backwards from fresh start.
  The myth of a fair accountability has been destroyed completely in 
the course of this discussion.
  In other words, this is a one-sided measure that is guaranteed to 
empower the creditors' lobby in a fine new way. Of course, the reality 
of where this bill is going is known to many of the Members on the 
Committee on the Judiciary, perhaps not a lot of other Members in the 
body. That is to say that it is going to again be subject to some 
delaying tactics in the Senate and that the President has promised to 
veto on this measure.
  So I think that that would be an appropriate conclusion to this 
measure and give us a chance in the next Congress to begin again.
  The bill fails to address the unlimited homestead cap, which is 
currently enjoyed by Texas and Florida, even though there is a 2-year 
wait before it kicks in. It imposes a nominal cap on homestead 
exemptions, but it is so filled with loopholes as to be next to 
meaningless.
  Anyone who lives in a State for more than 2 years will be able to 
thumb their noses at their creditors and remain in their multimillion 
dollar mansions, and this goes contrary to a provision that we had that 
would have cured this.
  So this measure before us in the form of a conference report, shot 
through with all kinds of process defects, is mean-spirited, will have 
a negative impact on the most vulnerable elements of our society and so 
is appropriately opposed by the United Automobile Workers, the AFL-CIO, 
AFCSME, a raft of consumer organizations, women and family 
organizations. I think it is very clear that we should now vote against 
this measure, and I hope that many of the Members who supported the 
bill in an earlier vote will reconsider and vote no when this 
conference report comes for a vote.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEKAS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Texas (Mr. Sessions), which that is a reward that I am 
granting him on the basis that he has been tremendously helpful to this 
chairman on many separate issues in this bankruptcy reform bill, 
primarily what we have discussed thoroughly, the homestead exemption. 
We owe a great deal to the gentleman from Texas (Mr. Sessions).
  Mr. SESSIONS. Mr. Speaker, I appreciate the chairman, the gentleman 
from Pennsylvania (Mr. Gekas), for his thoughtfulness in allowing me an 
opportunity to stand up to respond to my colleague, the gentleman from 
Michigan (Mr. Conyers).
  Mr. Speaker, I have been a student of this process. Perhaps I could 
be accused of changing what was the Democrat option on this bankruptcy. 
I appeared before the Committee on the Judiciary. The prior amount was 
$100,000. It is very clear that the Democrat Party wanted to take 
people's homes from them for as little as $100,000 of a home. The 
Democrat Party, as exemplified by the chairman, wants to make it easier 
for the middle class of this country to lose their homes if they are 
engaged in a bankruptcy. I stood up before the Committee on the 
Judiciary, and I said millionaires and billionaires are talked about 
taking advantage of this circumstance and it is blamed on people that 
have a home worth $100,000. I understand the gentleman from Michigan 
(Mr. Conyers) disagrees with me. I understand the Democrat Party 
disagrees with me. The fact of the matter is, is that that figure has 
been moved to $250,000. The gentleman from Massachusetts (Mr. Delahunt) 
agreed with me that day as a result of testimony back in the Committee 
on the Judiciary. That is why we are at $250,000. $100,000 is a wrong 
amount, and I believe that we should be forthright in understanding 
that a figure of $100,000 would mean that the middle class of this 
country, if faced with a bankruptcy, could then be thrown out of their 
own home. That is the reason why we have made the changes. That is the 
reason why it is what is in the best interest of people not only in 
Texas but all across this country.
  It preserves the States' rights, but the most important thing is that 
we aim at the problem. The problem is not the middle class of this 
country attempting to get out of paying their bills. It is about a 
problem of someone hiding their money in an asset or a resource like a 
home and trying to hide from their creditors. The problem, I believe, 
has been amply addressed.
  I disagree with the gentleman's assessment and would ask that we 
support this because it is the right thing for America.

                              {time}  1330

  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I think the three myths that have been the basis of this 
bill's long life have now been exposed. There is no fresh start. The 
accountability is very severe. This is a very definitely an anti-
consumer bill.
  People of all incomes are subject to new coercive creditor motions, 
including being able to challenge the discharge of even small cash 
advances. In this bill, it defines current monthly income as the 
previous 6 months' income, even if they have lost their job.
  I say, thanks a lot. I just sort of thank the generous, thoughtful, 
sympathetic people that wrote that into the bill. I will repeat it for 
the subcommittee chairman's benefit. It defines current monthly income 
as the previous 6 months' income, even if they lost that job and will 
not have the income in the future, thereby skewing the whole means 
test.
  If the expenses exceed what the IRS says they should, they have to go 
to court and litigate it. Thanks a lot. That was a very thoughtful and 
sympathetic and moving provision, because they are telling an honest 
bankrupt to

[[Page H9838]]

go in and litigate in another court any questions about expenses that 
exceed the IRS limit.
  It is just the idea, it is just an indication of the great concern 
and touching sympathy that the other side has for the people of limited 
means that go into bankruptcy court.
  ``Disclosure of how deep you are getting into debt, and how long it 
would take you to pay the balance at the minimum payment.'' There is 
just an 800 number. And then, 80 percent of all the banks would be 
exempted from even that requirement.
  Mr. Speaker, this is a mean-spirited bill. This is a measure that 
does not meet the tests of anybody.
  Finally, I would like to just reiterate the comment made by my good 
friend, the member of the Committee on the Judiciary, the gentleman 
from Virginia (Mr. Boucher), about moving child support from the 
seventh to the first priority. That is meaningless. It does it, but the 
order of priorities apply only in Chapter 7 among unsecured creditors 
during the bankruptcy proceeding.
  Ninety-six percent of all the consumer debtors do not have any assets 
to distribute to prior unsecured creditors, so that has no meaning. It 
is a fig leaf. It is phony. It does not improve child support, for 
those who need the child support at all, because it moves the credit 
card debtors to the same priority as those who need child support.
  Sorry to have to tell everyone about this at the end of this 
discussion, but I am afraid that those are the sad and sorry 
consequences of a bill that has the earmarks of the creditor lobby, 
that awesome creditor lobby that has had such an undue influence on the 
measure before us.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I do this for one small purpose, to reiterate for the 
record, for the Members of the House, that every contention made by the 
gentleman from Michigan (Mr. Conyers), every action taken by those who 
oppose bankruptcy reform, every debate that they offered over the 
course, every one of them has been thoroughly discussed, thoroughly 
debated, and each one of them considered in the overwhelming vote 
granted bankruptcy reform by the Members of the House.
  Mr. BEREUTER. Mr. Speaker, this Member rises today to express his 
support for the Conference Report of H.R. 2415, which is amended with 
the Bankruptcy Reform Act. It is important to note that this Member is 
an original cosponsor of H.R. 833, the Bankruptcy Reform Act, which 
passed the House on May 5, 1999, by a vote of 313-108.
  First, this Member would thank the distinguished gentleman from 
Pennsylvania (Mr. Gekas), Chairman of the Judiciary Subcommittee on 
Commercial and Administrative Law, for introducing the House bankruptcy 
legislation (H.R. 833). This Member would also like to express his 
appreciation to the distinguished gentleman from Illinois (Mr. Hyde), 
the Chairman of the Judiciary Committee, for his efforts in getting 
this measure to the House Floor for consideration.
  This Member supports the Bankruptcy Reform Act for numerous reasons; 
however, the most important reasons include the following:
  First, and of preeminent importance to the nation's agriculture 
sector, this Member supports the provision in H.R. 2415 which 
permanently extends Chapter 12 of the Bankruptcy Code for family 
farmers. Chapter 12 bankruptcy allows family farmers to reorganize 
their debts as compared to liquidating their assets. Chapter 12 
bankruptcy has been a viable option for family farmers nationwide. It 
has allowed family farmers to reorganize their assets in a manner which 
balances the interests of creditors and the future success of the 
involved farmer.
  If Chapter 12 bankruptcy provisions are not permanently extended for 
family farmers, this will have a drastic impact on an agricultural 
sector already reeling from low commodity prices. Not only will many 
family farmers have to end their operations, but also land values will 
likely plunge downward. Such a decrease in land values will affect both 
the ability of family farmers to earn a living and the manner in which 
banks, making agricultural loans, conduct their lending activities. 
This Member has received many contacts from his constituents regarding 
the extension of Chapter 12 bankruptcy because of the situation now 
being faced by our nation's farm families--although the U.S. economy is 
generally healthy, it is clear the agricultural sector is hurting.
  Second, this Member supports the provision in H.R. 2415 which 
provides for a means testing (needs-based) formula when determining 
whether an individual should file for Chapter 7 or Chapter 13 
bankruptcy. Chapter 7 bankruptcy allows a debtor to be discharged of 
his or her personal liability for many unsecured debts. In addition, 
there is no requirement that a Chapter 7 filer repay many of his or her 
debts. However, Chapter 13 bankruptcy filers, on the other hand, commit 
to repay some portion of his or her debts under a repayment plan.

  Some Chapter 7 filers actually have the capacity to repay some of 
what they owe, but they choose Chapter 7 bankruptcy and are able to 
walk away from these debts. For example, the stories in which an 
individual filed for Chapter 7 bankruptcy and then goes out takes a 
nice vacation and/or buys a new car are too common. Moreover, the 
status quo is costing the average American individual and family in 
increased costs for consumer goods and credit because of the amount of 
debt which is never repaid to creditors.
  As a response to these concerns, the needs-based test of H.R. 2415 
will help ensure that high income filers, who could repay some of what 
they owe, are required to file Chapter 13 bankruptcy as compared to 
Chapter 7. This needs-based system takes a debtor's income, expenses, 
obligations and any special circumstances into account when determining 
whether he or she has the capacity to repay a portion of their debts.
  Third, this Member supports the additional monthly expenses that are 
not considered as a factor under the needs-based test of H.R. 2415 
which determines whether a person can file Chapter 7 or 13 bankruptcy. 
These expenses include the following: reasonable expenses incurred to 
maintain the safety of the debtor and debtor's family from domestic 
violence, an additional food and clothing allowance if demonstrated to 
be reasonable and necessary; and reasonable and necessary expenses for 
the care and support of an elderly, chronically ill, or disabled member 
of the debtor's household or immediate family.
  In closing, for these aforementioned reasons and others, this Member 
would encourage his colleagues to support the Conference report of H.R. 
2415.
  Ms. DeLAURO. Mr. Speaker, I regret I was absent from the floor of the 
House on October 12. Had I been present, I would have voted for the 
motion to instruct conferees to have an open conference on bankruptcy 
reform.
  I look forward to this conference. An issue as crucial as this 
deserves a full and fair debate. Bankruptcy reform should expect 
responsible efforts from both debtors and creditors that extend credit 
far beyond what individuals are capable of paying back.
  Mr. CONYERS. Mr. Speaker, the following is a letter which clarifies 
what will happen to child support obligations if this bill passes. It 
answers the myth that this bill will not harm children.

                                  National Women's Law Center,

                                     Washington, DC, June 7, 2000.
     Hon. Robert Menendez,
     Cannon House Office Building,
     Washington, DC.
       Dear Representative Menendez: The undersigned organizations 
     are long-time advocates for women and children, including 
     economically vulnerable single parents and their families. We 
     are writing in response to your May 24 letter to your 
     colleagues which criticizes the recent TIME magazine article 
     on bankruptcy and asserts that the pending bankruptcy bill 
     would help children obtain child support. We must 
     respectfully, but emphatically, disagree. The bill would give 
     many creditors, including credit card companies, finance 
     companies, auto lenders and others, greater claims to a 
     debtor's limited resources than they have under current law. 
     This would intensify the competition for scarce resources 
     between children owed child support and sophisticated 
     commercial creditors both during and after bankruptcy.
       Your letter characterizes as a ``myth'' the statement in 
     the TIME Magazine article that: ``The proposed legislation 
     would treat a bankrupt man's credit card debt the same as his 
     obligation to pay child support.'' However, the effect of 
     several provisions of the bill, taken together, would indeed 
     have this result. As the National Association of Attorneys 
     General, commenting on a similar, earlier version of the 
     bankruptcy bill warned, it:
       Would encourage credit card companies to treat all debts as 
     secured even though the resale value of the personal property 
     charged on such cards would rarely approach the amount of the 
     debt and even though the interest rates charged for such debt 
     are set in recognition of the fact that such debts are 
     essentially unsecured; and
       As a consequence, could allow credit card debt to be 
     elevated to the same or a higher level than domestic support 
     claims and make it far more difficult to ensure that debtors 
     will be able to satisfy their obligations to their spouses 
     and children. (Emphasis added) (Resolution of the National 
     Association of Attorneys General, March, 1999)
       Your letter states the following ``fact'':
       Bankruptcy reform moves child support to the number one 
     priority position in bankruptcy proceedings. Currently it is 
     priority number seven, behind things like attorney

[[Page H9839]]

     fees! Just as important, the reform bill ends the ``automatic 
     stay'' provision, which currently allows bankruptcy filers to 
     avoid paying child support while their cases are pending--and 
     which gives filers and their attorneys an incentive to drag 
     out the process. Finally, the bill prevents a debtor from 
     discharging their debt under Chapter 13 until all child 
     support payments are made.
       Unfortunately, the child support provisions that you 
     mention in your letter would not solve the serious problems 
     the rest of the bill would create for children in need of 
     support.
       Moving child support from seventh to first priority sounds 
     good, but is virtually meaningless. This order of priorities 
     only applies in Chapter 7, among unsecured creditors, during 
     the bankruptcy proceeding. Even today, fewer than five 
     percent of consumer debtors in Chapter 7 have any assets to 
     distribute to priority unsecured creditors after secured 
     debtors receive the value of their collateral. Under the 
     bill, there would be even less for priority unsecured 
     creditors in Chapter 7 cases. Only the poorest debtors will 
     have access to Chapter 7 under the means test, and the claims 
     of secured creditors, who are paid before even ``priority'' 
     unsecured creditors, will be increased. Thus, in effect, 
     children owed support will have ``first priority'' to 
     nothing. And, once the Chapter 7 proceeding is over, these 
     priorities have no effect. Under current law, child support 
     and alimony obligations are among the few debts that cannot 
     be discharged in bankruptcy. However, under the bill, many 
     more debts, including credit card debts, will survive 
     bankruptcy and compete for the debtor's resources.
       In Chapter 13, current law already requires child support 
     owed to families to be paid in full. (The major change in 
     this section of the bill would be an increase in the rights 
     of States to be paid in Chapter 13 for child support that was 
     assigned to them as reimbursement for public assistance.) 
     However, other provisions of the bill would make it less 
     likely that children would actually receive all the child 
     support they are due in Chapter 13. For example, the bill 
     would require debtors in Chapter 13 to pay many other 
     creditors in full--including credit card companies claiming 
     security interests in property of little or no value. The 
     bill may say that debtors must pay all these debts in full; 
     but if there is not enough money to go around, it simply will 
     make it less likely that children will get the support they 
     need during the Chapter 13 proceeding, much less afterward.
       Under current law, the ``automatic stay'' does not allow 
     bankruptcy filers to avoid paying child support while their 
     cases are pending; relief from automatic stay for child 
     support enforcement is routinely granted, and some 
     jurisdictions do not even require the filing of a motion. The 
     elimination of the automatic stay would simplify the process 
     of collecting child support during bankruptcy in some 
     cases. However, the potential benefit of this provision is 
     outweighed by the hundreds of pages of other provisions 
     that increase the rights of commercial creditors, during 
     and after bankruptcy, at the expense of children.
       Our organizations are committed to making sure that 
     children get the support they need and deserve. We have 
     opposed this Bankruptcy Reform Act because it will reduce the 
     ability of parents to pay their most important debt--their 
     debt to their children.
           Sincerely,
     ACES (Association for Children for Enforcement of Support)
     American Association of University Women
     Business & Professional Women/USA (BPW/USA)
     International Women's Insolvency & Restructuring 
         Confederation (IWIRC)
     National Association of Commissions for Women
     National Center for Youth Law
     National Organization for Women
     National Partnership for Women & Families
     National Women's Law Center
     NOW Legal Defense and Education Fund
     The Woman Activist Fund, Inc.
     Women Employed
     Women's Institute for Freedom of the Press

  Mr. HOBSON. Mr. Speaker, I support the long-awaited bankruptcy reform 
legislation included in H.R. 2415. As a small businessman, I know the 
importance of improving the bankruptcy system for Americans.
  While the bankruptcy process should continue to be a life preserver 
for those who have debt that is insurmountable, this bill makes the 
needed for reforms to prevent abuse of the system. Not reforming the 
system amounts to a hidden tax on American consumers, who currently 
subsidize individuals who walk away from mountains of debt, yet can 
afford to pay back a portion of their debts.
  The number of bankruptcies has trended upwards, despite the economy's 
overall good health. In 1997, the figure climbed to 1.35 million, more 
than triple the number recorded in the early 1980s. The rise in 
bankruptcy filings is often attributed to a rise in household debt 
burdens. Since 1980, household debt has risen from about 61 percent to 
85 percent of total disposable personal income.
  This bill provides for the increased use of Chapter 13 bankruptcy, 
which allows for the repayment of some debts. This is an appropriate 
step to ensure that our bankruptcy laws ensure that individuals who can 
repay a portion of their debts, pay their fair share. I commend my 
colleagues for their hard work and years of effort to reduce the 
``abuse'' of the bankruptcy system while continuing to protect low-
income consumers.
  Ms. PRYCE of Ohio. Mr. Speaker, I am in strong support of this 
conference report. We have before us a fair and even-handed conference 
report that will allow us to consider this important legislation to 
reform the nation's bankruptcy system.
  Procedure in the House is not always all that we might want it to be, 
but when we are presented with legislation that is so needed and so 
desired by the American people, we must take hold of it and champion it 
to see that it becomes law.
  This bankruptcy reform legislation will remedy weaknesses in existing 
law that allow higher income taxpayers to escape their responsibilities 
even when they are able to repay a portion of what they owe. This bill 
will take steps to eliminate the ``bankruptcy of convenience.''
  At the same time, this legislation will protect those who truly need 
a second chance and maintain their ability to obtain a fresh start. 
Further, this legislation contains important protections for children 
and spouses who are owed child support or alimony.
  By equipping state child support collection agencies with the 
necessary tools and codifying the importance of child support and 
alimony obligations, this legislation will increase our commitment to 
children and families, and will hold parents, husbands, and wives to 
their responsibilities.
  Over 70 percent of Americans have indicated their desire for 
bankruptcy reform. We can do no less than what the American people have 
overwhelmingly asked of us.
  I urge your support of this important legislation, and yield back the 
balance of my time.
  Mr. CASTLE. Mr. Speaker, I rise today in strong support of the 
bankruptcy reform conference report.
  This legislation has been a long time coming. Since 1980, 
bankruptcies have risen 400 percent, imposing a heavy burden on 
American families. Some estimate that bankruptcies cost each household 
$400 a year in the form of higher interest rates on their credit cards, 
car loans, school loans, and mortgages.
  The means testing approach championed by my colleague, George Gekas, 
will make bankruptcy abuse much harder in the future. Wealthy 
individuals who can hire savvy lawyers will no longer be able to game 
the bankruptcy system at the expense of the American consumer.
  What this bill says is that if you file bankruptcy, you will not be 
able to walk away from your debt if after all your reasonable monthly 
expenses are taken into account, you still have $166 in your pocket. If 
you are one of these people, then you will have to enter into an 
agreement to repay at least part of your debt in a 5 year plan, unless 
you can prove special circumstances to the judge. That is taking 
responsibility for your debt instead of imposing the cost on other 
consumers.
  I also want to thank Chairman Gekas for his support in helping my 
home State of Delaware receive an additional bankruptcy judgeship. As I 
testified before a joint House-Senate Judiciary Committee hearing 
earlier this year, Delaware's bankruptcy judges have the highest 
average bankruptcy caseloads in the Nation according to the U.S. 
judicial conference. The need for relief has reached critical levels 
and Chairman Gekas has been quick to recognize this.
  Recognition also must go to Speaker Hastert and Majority Leader 
Armey, who fulfilled their commitment to finding an appropriate vehicle 
that would allow the will of the House and the will of the Senate to 
proceed on this legislation. They did the honorable thing by taking our 
unrelated riders from both sides of the aisle and presenting this body 
with a clean bill for us to vote on. I thank them for their leadership.
  Finally, I want to thank Chairman Gekas for his support in removing a 
provision in the bill that would have eliminated a business' place of 
incorporation as an acceptable venue for filing a bankruptcy. 
Delaware's bankruptcy judges and the Delaware bar are among the finest 
in the Nation in resolving bankruptcies quickly, fairly and 
efficiently. We need to keep the courtroom doors open in Delaware.
  Therefore, I urge my colleagues to support this clean, balanced 
bankruptcy reform conference report.
  Mr. GEKAS. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the conference report.
  The previous question was ordered.


               Motion to Recommit Offered by Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the conference 
report?
  Mr. CONYERS. Yes, sir, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.

[[Page H9840]]

  The Clerk read as follows:
       Mr. Conyers moves to recommit the conference report on the 
     bill (H.R. 2415) to the committee of conference with 
     instructions to the managers on the part of the House to 
     insist on conducting at least one meeting of conferees as 
     required by House Rule XXII, cl. 12, and in accordance with 
     the motion to instruct conferees approved by the House of 
     Representatives yesterday by a vote of 398 to 1, before 
     making any report on the bill.

  Mr. GEKAS (during the reading). Mr. Speaker, I ask unanimous consent 
that the motion be considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The motion to recommit was rejected.
  The SPEAKER pro tempore. The question is on the conference report.
  The conference report was agreed to.
  A motion to reconsider was laid on the table.

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