[Congressional Record Volume 146, Number 140 (Monday, October 30, 2000)]
[Senate]
[Pages S11379-S11381]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               BANKRUPTCY

  Mr. WELLSTONE. Mr. President, I don't think I will even need to take 
5 minutes tonight. There will be time tomorrow to discuss this 
conference report. Then, if there should be cloture, we will see. There 
is also up to 30 minutes for postcloture debate. There are a number of 
Senators who will have a lot to say about this bill.
  I make one point tonight for colleagues because there will be plenty 
of opportunity to talk about it substantively later. This piece of 
legislation that comes before the Senate is what I call the invasion of 
the body snatchers. This was a State Department authorization bill that 
has been completely gutted. There is not one word about the State 
Department in this bill. The only thing that is left is the bill 
number. Instead of the bankruptcy bill, it was put into this conference 
report. This is hardly the way to legislate.
  Mr. SCHUMER. Will the Senator yield?
  Mr. WELLSTONE. I am happy to yield to the Senator.
  Mr. SCHUMER. As I understand it, the conferees who were originally 
appointed to the foreign aid bill were not even informed of the 
conference. Not every conferee was informed of the new conference; am I 
correct in assuming that?
  Mr. WELLSTONE. I say to the Senator from New York that is my 
understanding.
  Mr. SCHUMER. I thought that was an important point that our own 
conferees were not told there was a conference to move this along.
  Mr. WELLSTONE. This conference report is worse than the bill that 
passed the Senate. The Schumer provision was taken out. The Kohl 
provision was taken out. It is absolutely amazing to me that we would 
try to jam through a bill, which I believe is very harsh toward the 
most vulnerable citizens, which purports to deal with the abuse--the 
American Bankruptcy Institute states, at best, a 3-percent abuse--but, 
at the same time, enables people who have millions of dollars to buy 
luxurious homes in some States in the United States of America and 
shield all their assets from bankruptcy.
  We do great for people who have millions of dollars to buy luxury 
homes and shield themselves from any liability, but we are going to 
pass a piece of legislation--and I will have the documentation tomorrow 
from bankruptcy professors, law professors, and judges across the 
country that have roundly condemned a piece of legislation that is one-
sided--that doesn't call for the credit card companies to be 
accountable at all, is harsh in its impact on the most vulnerable 
citizens, is opposed by the civil rights community broadly defined, 
women's organizations, consumer organizations, labor organizations, and 
a good part of the religious community because of its one-sidedness. It 
is so harsh in its impacts on the most vulnerable citizens. I will lay 
this case out because it claims to deal with the problem of widespread 
abuse. The American Bankruptcy Institute tells us at best we are 
talking 3 percent. I have seen no high figures presented by anybody.
  The bill now is worse than what Senators voted on on the floor of the 
Senate. Again, the process is absolutely outrageous. A State Department 
bill, on which hardly anybody was consulted, was completely gutted, and 
a bankruptcy report put in instead.
  I hope my colleagues will defeat this piece of legislation. I come to 
the floor tonight to let Senators know there are a number of Senators 
ready to debate. We will have much to say tomorrow. If there should be 
cloture--we will see--we will have much to say after that cloture vote 
as well. The more people in this country know the substance of this 
piece of legislation and the outrageous way this is being done, I think 
the angrier people will become. It is important people in this country 
know what this piece of legislation is about and the harsh impact it 
will have on so many citizens--women, low-income people, moderate-
income people, working income people.

  On this conference report, Senators who decided to do this, dared not 
do anything about a family being able to take millions of dollars and 
shielding themselves from liability.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New York is recognized for 5 
minutes.
  Mr. SCHUMER. Mr. President, I augment what my friend from Minnesota 
said about the bill. Aside from the procedural problems, I have never 
seen anything like this in the 20 years I have been in this Congress. 
Aside from the other provisions, I want to talk about the amendment I 
have added to this bill. Let's not forget, Senators, 80 Members voted 
for that provision. I think 17 voted against the provision.
  The bill that comes back is a different bill. The provision that I 
wrote into the bill which is so important deals with the use of 
bankruptcy as a way to violate the laws of this country.
  Very simply, we passed a law a while ago called a face law. It gave 
women who sought to have abortions the ability to actually have what 
their lawful rights are. Blockaders started blockading the place. Then 
they actually used violence to stop the right to choose, a 
constitutionally given right.
  The face law simply said the clinic could sue those who used violence 
or threat of violence against them--not people peacefully protesting; 
that is their American right. I defend that no matter how much I 
disagree with their position. All of a sudden, the right to choose was 
restored. It had not been available in 80 percent of the counties in 
this country because of the blockaders who believed, since they were 
getting their message from God, they superseded the rest of us. That, 
of

[[Page S11380]]

course, is dangerous thinking. Any one could believe if we have a 
message from God we ought to impose it on someone else, and we all have 
different views of what God is telling us.
  In any case, now they have found a new way to violate the law. That 
is to declare bankruptcy. Let me inform my colleagues of one case, the 
so-called Nuremberg files. The group put together on the Internet names 
and addresses of doctors, of their wives, of their children. When a 
doctor was killed, as Dr. Slepian, in my home State of New York, near 
Buffalo, NY, they put an ``X'' next to his name. If a doctor was 
injured, his named was shaded.
  Those people were sued under the face law. Of course, the Oregon 
court in which they had the trial ruled they had violated the law. To 
not pay judgment, each of them went back to their own States and 
declared bankruptcy. Whether the bankruptcy issue is held or not, this 
little clinic does not have the ability to go back to 12 or 13 
different States and pursue the same litigation all over again.
  All our provision says is that you can't use bankruptcy for this. It 
was never intended for this, just as you couldn't use it as a shield if 
you were sued because of drunk driving. It is not pro-life or pro-
choice.
  My lead cosponsor is Harry Reid, my friend and colleague, who 
believes as strongly in the pro-life movement as I believe in the pro-
choice movement. It is not partisan. Immediately, Senators Snowe, 
Jeffords, and Collins joined us in cosponsoring the amendment. It 
passed in this body, supported by both pro-choice and pro-life 
Senators, 80-17.

  This new little provision--it was taken out. To me, it is the most 
important provision in this bankruptcy bill. Yes, we need to change our 
bankruptcy laws for the better. I do not disagree with that. But to do 
it and do it in this way and not give the Senate its voice says to me: 
Let's go back to the drawing board and scrap it.
  This is an issue that relates to the Constitution of the United 
States itself, the rule of law. This is an issue that says if the 
Constitution grants you a right, we are not going to let cowards use 
the bankruptcy law to hide behind, avoiding their just civil 
punishment. As the Senator from Minnesota said, you will hear from us 
on this. If the people who were managing this bill cared so much about 
passing it, they should have kept the so-called Schumer amendment in 
there. It would have been a lot easier to get things done. But that did 
not happen, they could not and would not.
  Because the amendment I have added addresses head-on this fundamental 
use of the bankruptcy system, I will not rest until we do everything 
procedurally possible to make sure that a bankruptcy reform package 
without it fails.

  I yield the floor and yield back my time.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I am disheartened to hear the Senator 
from New York would take such a strong position on this bill since he 
had been an original promoter of it. It passed this body by 90 votes, 
at least twice, I think three different times--88 or 90 votes. It is 
good to see Senator Grassley here, who was the prime sponsor of the 
legislation. To have it die over this one issue is really unbelievable, 
particularly since Senator Grassley and others have offered several 
different ways we could meet the objections on the abortion clinic 
language, which I consider to be awfully insignificant in the line of 
the legislation except for the important philosophical and legal 
points. I think it will be a tragedy if we do not.
  This bill passed this body by around 90 votes, over 90 votes one 
time--three different times. It has been debated in committee. If I am 
not mistaken, the vote was 18-2 in committee, the Judiciary Committee, 
on which Senator Grassley and I served and brought that bill out. It is 
a bipartisan bill.
  I, along with Senator Reid, got involved with working with the White 
House not long ago on reaffirmations, the one issue they said was left 
to settle, and we settled that issue to the satisfaction of the White 
House.
  Now what do we have? A move to kill, once again, good bipartisan 
legislation that has been overwhelmingly supported in this Senate. It 
is a shame and a disgrace. It is outrageous that somehow, some way, we 
passed this with veto-proof majorities and we are not able to get it up 
for a last vote or get it passed.
  I feel strongly about that. Maybe now we can get it out of here and 
the President will see fit to sign it. The homestead language Senator 
Wellstone mentioned, I agree with him. I think we ought to make bigger 
changes in the provisions that say people can put all the money they 
want to in a homestead and not have it taken from them in bankruptcy. 
You could put $10 million in 160 acres and a mansion and you would not 
have to give it up to pay your just debts to your doctor, to the gas 
station down the street, to the friends from whom you borrowed money. 
That is not right.
  We made, though, for the first time, over the vigorous objections of 
several key States that have those kinds of provisions in their State 
Constitutions--Texas, Florida, Kansas--they fought tenaciously for 
that, but we made historic progress in limiting the ability of a debtor 
to hide his assets in a multimillion-dollar mansion. That was a great 
step forward. To say we ought to keep current law, which has no 
controls whatsoever, and not pass this bill, that has the first 
historic steps to control debt abuse, is really cutting off your nose 
to spite your face. That is the kind of thing we are hearing.
  Let me tell you what this bill fundamentally does. It says if you are 
of median income--that is, $44,000 for a family of four--if you are a 
family of four and you are making below that $44,000, you can be 
bankrupt and not pay any of your debts, just as the current law says. 
But if you are making above that and the judge concludes you can pay a 
part of your debts--10 percent or more--then he can order you to go 
into chapter 13 and pay back some of the debts that you can pay back.

  What is wrong with that? We have had a doubling of filings in 
bankruptcy over the last 10 years. We have over a million bankruptcies 
filed per year. It is being done primarily because lawyers are 
advertising. Turn on your TV anytime at night and you will see they are 
there: ``Solve your debt problems, call Old John, 1-800. We will take 
care of your debts.''
  Do you know, if you owe $60,000 and you really don't want to pay that 
$60,000 debt, and today you are making $80,000, you can go down to a 
bankruptcy lawyer, file chapter 7, and wipe out that debt and not pay 
one dime of it? You can do that. There is no control. It is being done 
all over America today and it is not right. What does that say to a 
good, hard-working family who sits down around the kitchen table, pray 
tell, and tries to figure out how they can pay their debts? This family 
does not buy a new car, does not go on a vacation, does everything 
right, they pay their debts, and clever John goes down to the 
bankruptcy lawyer and doesn't pay his debt. Something is wrong in 
America when we allow that kind of abuse to occur time and time again.
  It is true--I do not believe it is 3 percent--the majority of people 
who file bankruptcy will not be affected by this bill. But those who 
are abusing it will be. If you are a doctor and you are making $150,000 
a year and you owe $300,000 in student loans and other debts, and you 
can pay $50,000 of that, shouldn't you be required to pay it? We have 
examples of physicians declaring bankruptcy against all their debts 
when they could have easily paid a substantial number of them. Why 
shouldn't they pay what they can pay?
  In America, we believe if you are hopelessly in debt and you cannot 
pay out, we give people--and we always have--the right to file 
bankruptcy. It is just that it has become so common, the process of 
advertising and filings. The numbers are going up. While the economy is 
hitting records we have never had before, filings in bankruptcy keep 
going up. What is going to happen when we have a serious problem in 
this country?
  We have worked hard. I put in a provision that says before you file 
bankruptcy, you ought to talk to a credit counseling agency. Credit 
counseling agencies actually help people who are in debt. They help 
them set up budgets, they advise them whether or not they can pay off 
their debts. If not, they will go to a lawyer and file bankruptcy. But 
if they could pay it off, pay down the

[[Page S11381]]

high interest notes first, negotiate with creditors, set up a payment 
plan, get the whole family in--if there is a drug problem, gain 
treatment; if there is a mental health problem, get treatment. Gamblers 
Anonymous can be used for people who have these problems. A lot of 
these things are driving bankruptcy.
  None of that is occurring in bankruptcy court. Lawyers come in, they 
claim a $1,000 fee, or $2,000, or whatever, and their secretaries fill 
out the forms. They don't even meet the client until they get to court. 
The judge declares all their debts wiped out, and they walk out of 
court. That is not helping treat the root cause. But credit counseling 
does. It says: We respect you, American men and women. We want to help 
you get your financial house in order, and if you can avoid bankruptcy, 
we will show you how and help you do that. That is a good step in the 
right direction.

  There are a lot of other things in this bankruptcy bill that improve 
the law. It has not been changed in over 25 years. We have new 
experience with the law. We have seen a host of abuses of the law, 
loopholes through which people are driving trucks. We closed those 
loopholes.
  For the most part, it has been overwhelmingly received by everybody 
in this body. Over 90 Senators in this Senate have voted for it, 
Democrats and Republicans. The White House has approved all of these.
  We have a problem with bankruptcy. We can do better. This bill is 
fair. It raises protections for women and children far above anything 
before.
  Before, lawyers and other debts were paid before child support. In 
this bill, alimony and child support are raised to the highest level. 
The first money paid goes to pay child support. That is a big, positive 
change. By killing this bill, that will not happen. The old rules will 
be in effect and children and women will not get that preferential 
treatment.
  We can do better. This is a good bill. I think the President will 
reconsider. He has been involved in this process for well over 3 years, 
as we have been wrestling with it, having hearings and debates on this 
floor and in the House. To say this is sneaking the bill in is really 
unbelievable. It has been a source of regular debate and bipartisan 
agreement, and now we get to the very last of this session and see an 
effort to derail it over this odd idea that out of all the activities 
in America, if you get sued by an abortion clinic, you cannot file for 
bankruptcy.
  One of the suggestions I made and others have made is, what about a 
union group that tears down a business? What about a group of 
environmental activists that tears up and protests and illegally does 
business? Do they get to claim bankruptcy against their debts, but not 
those who go to an abortion clinic because they are religious, I 
suppose?
  Why should we have such a double standard, a political law in 
bankruptcy? That is a political act, not something that ought to be in 
the bankruptcy court of America.
  I said if you either take it out or draw it broadly and it covers 
similar acts by other groups, then I will support it, but I am not 
going to vote for a law that simply targets one group that one Senator 
does not like. What is right about that? How is that good law? Some 
Senators and the President do not like abortion protesters. I guess he 
thinks they are too religious, so they do not get to claim bankruptcy, 
but everybody else does. People who put metal spikes in trees that 
injure people in the forest business, I guess they do not count.
  That is where we are on this. That is such an infinitesimal problem 
which we can overcome, unless the real agenda is to see bankruptcy does 
not pass. I hope that is not so. We have gone too far. We have worked 
too hard. We have a bill that has bipartisan support. I am hopeful yet 
that the President will sign it, and it will be good for America.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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