[Congressional Record Volume 146, Number 141 (Tuesday, October 31, 2000)]
[Senate]
[Pages S11404-S11405]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               BANKRUPTCY

  Mr. WELLSTONE. Mr. President, first of all, let me thank Senator 
Harkin for his presentation. Let me thank other Senators who have 
spoken, both about what has happened to the Labor, Health and Human 
Services appropriations bill and also about this bankruptcy bill. I say 
to my colleague from Iowa, to tell you the truth, this is part of the 
same pattern. He is talking about abuse of the legislative process, 
talking about a complete breakdown of bipartisanship, a complete 
breakdown of trust. That is exactly what you have here when you have a 
State Department bill, a conference report that is completely gutted, 
not a word in there any longer about it, the only thing left is the 
number, and then what is put in, instead, is a bankruptcy bill. 
Democrats were not consulted at all, in an effort to jam it through. 
That is the same principle.
  I would think and hope every member of the minority party who cares 
about our rights, who cares about an open legislative process, who 
cares about integrity of the political process, would vote against 
cloture tomorrow because my colleague is talking about the same 
process.
  It might sound very much like an inside thing to people who are 
following this. I know everything is focused on the election. But 
honest to God, American people, it is not. When these kinds of 
decisions can be made by a few people with no sunlight, no scrutiny, no 
exposure, you have a real abuse of the process. What can happen is that 
usually the people who are hurt are the little people.
  Let me tell you, the people who are involved in this kind of process, 
the behind-the-doors process, sticking stuff in in conference 
committees, gutting conference reports, are folks who are well heeled, 
who have the lobbyists who know how to work this process for them. But 
the people who get hurt are not involved at all. That is what I want to 
talk about. I want to talk about the way in which this conference 
report, this bankruptcy bill harms the most vulnerable citizens in this 
country, people who find themselves in desperate economic 
circumstances.

  Please remember, Senators, 50 percent of the people who file for 
chapter 7 do it because of a medical bill that puts them under. Please 
remember: There but for the grace of God go I.
  You can be as frugal as possible. You can be prudent. You can try to 
manage your family finances. And then you can have a medical bill that 
can put your family under. It took my family, my parents, 20 years to 
pay off a medical bill of years ago. Many people cannot do that. They 
find themselves in a horrible situation and then as a last resort, in 
order to rebuild their finances and sometimes just stop the harassment 
by creditors, in order to get back on their feet, people file for 
bankruptcy. That is what this piece of legislation is all about--making 
it impossible for people who, through no fault of their own, find 
themselves in terrible financial circumstances, unable to rebuild their 
lives and instead wind up essentially in debt slavery for the rest of 
their lives.
  I think one of the things that has helped us in this debate--because 
I am confident Senators now see some of the harshness in this 
legislation--was a May 15, 2000, issue of Time magazine. The cover 
story was entitled ``Soaked By Congress.'' It deals with this 
bankruptcy bill.
  Although, frankly, not as harsh a version--it was a better version 
that Time magazine talked about--this article was written by reporters 
Don Bartlett and Jim Steele, who have, I think, won a Pulitzer for 
their work. They do great investigative research. It is a detailed look 
at the true picture of who files for bankruptcy in America.
  You will find a far different picture in this Time magazine than the 
skewed version that has been used to justify this mean-spirited and 
harsh legislation. This article carefully documents how low- and 
middle-income families, increasingly headed by a single person, usually 
a woman, are denied the opportunity of a fresh start if this punitive 
legislation is passed. I hope Senators will vote against cloture.
  As Brady Williams, who is chairman of the National Bankruptcy Reform 
Commission, notes in the article, the bankruptcy bill would condemn 
working families:

       . . . to what essentially is a life term in a debtors 
     prison.

  Proponents of this legislation have tried to refute the Time magazine 
article. Indeed, during these final days of debate you will hear the 
bill's supporters claim that low- and moderate-income debtors will be 
unaffected by this legislation. Colleagues, if you listen closely to 
their statements, you will hear that they only claim that such debtors 
will not be affected by the bill's means test. Not only is that claim 
demonstrably false, the means test and the safe harbor have been 
written in a way that will capture many working families who are filing 
chapter 7 relief in good faith, but it ignores the vast majority of the 
legislation which still imposes needless hurdles and punitive costs on 
all families filing for bankruptcy, regardless of their income. Nor 
does the safe harbor apply to any of these provisions.
  You might ask, why has the Congress chosen to be so hard on ordinary 
folks down on their luck? How is it that this bill is so skewed against 
their interests and in favor of big banks and credit card companies? My 
colleague, Senator Feingold from Wisconsin, spoke to that. It is 
because these families do not have the million-dollar lobbyists 
representing them before Congress.
  They do not give hundreds of thousands of dollars in soft money to 
the Democratic and the Republican Parties. They do not spend their days 
hanging outside the Senate Chamber waiting to bend a Member's ear. 
Unfortunately, it looks as if the industry got to us first. 
Unfortunately, that is what this is all about.
  The proponents of this bill argue that people file because they want 
to get out of their obligations, because they are untrustworthy, 
because they are dishonest, because there is no stigma in filing for 
bankruptcy, but any look at the data tells us otherwise.
  In the vast majority of cases--again, 50 percent of the cases--it is 
a medical bill that has put people under or the main income earner has 
lost his or her job. There is a sudden illness, a major injury, major 
medical expenses, someone has lost their job, there has been a divorce, 
and what we are saying to these people is: We make it impossible for 
you to rebuild your lives. But when it comes to the lenders and the 
credit card companies, oh, it is a very different story.
  In the interest of full disclosure, something that the industry is 
not very good at, I want my colleagues to be aware of what the credit 
card industry is practicing, even as it preaches its sermon of 
responsible borrowing. After all, debt involves a borrower but also a 
lender. Poor choices or irresponsible behavior by either party can make 
the transaction go sour. So how responsible has the industry been?
  I suppose it depends on how you look at it. On the one hand, consumer 
lending is terrifically profitable, with high credit card cost lending, 
the most profitable of all, except for maybe the higher cost credit 
such as payday loans. I guess by the standard of responsibility to the 
bottom line, this credit card industry has done a great job.
  On the other hand, if you define responsibility by promoting fiscal 
health among families, educating on the judicious use of credit, 
ensuring that borrowers do not go beyond their means, then it is hard 
to imagine how the financial services industry could be bigger 
deadbeats.

[[Page S11405]]

  According to the Comptroller of the Currency, the amount of revolving 
credit outstanding, the amount of open-ended credit by credit cards 
being extended increased seven times during 1980 and 1995 and between 
1993 and 1997. During the sharpest increase in bankruptcy filings, the 
amount of credit card debt doubled. It does not sound as if lenders 
were too concerned about the high number of bankruptcies. At least it 
did not stop them from pushing credit cards like Halloween candy.
  All of us know it: Our children are the ones who are solicited; our 
grandchildren are the ones who are solicited. It is unbelievable. This 
industry feels no responsibility, it feels no accountability, and in 
this one-sided, unjust piece of legislation, there is absolutely no 
standard they are asked to live up to.
  I again say to my colleagues that the case has been made that we have 
people in the country who are abusing the system, but I have not seen 
any report that has reported higher than 13 percent, and the American 
Bankruptcy Institute says 3 percent. So much for that argument.
  Then we have an argument that somehow these are people who feel no 
stigma, feel no shame. I have talked to colleagues--I cannot believe 
it--and they say: Paul, my gosh, shouldn't people manage their 
financial affairs, and if they don't, shouldn't they be held 
accountable? Yes. Pass a piece of legislation that does that, but do 
not pass a piece of legislation that says to a family which is in 
difficult, horrible financial circumstances, through no fault of its 
own, because of a major medical illness or because someone has lost 
their job or because there is a divorce, do not make it impossible for 
them to file chapter 7 and then unable to make it through chapter 13 
and then essentially live a life of constant debt servitude, a life 
basically full of debt with no opportunity to rebuild lives.

  We are stripping away the major safety net, not just for the poor but 
for middle-class people as well. That is why so much of the religious 
community opposes this. That is why so many women and children 
organizations oppose it. That is why every consumer organization 
opposes it. That is why the civil rights community is opposed to it.
  The argument is then made that this is a reform piece of legislation. 
How can it be a reform bill when it is so one sided? How can it be a 
reform bill when it is so punitive? How can it be a reform bill when, 
in the name of going after abuse--only a tiny percentage of the 
population--it casts such a broad net and will make it so difficult for 
so many families, especially middle-income, low- and moderate-income 
families headed by women to rebuild their lives? And how can it be 
called ``reform'' when it is so one sided and does nothing whatsoever 
to call this credit card industry and these lending institutions to 
accountability?
  This legislation is unfortunately perfectly representative of an 
imbalance of power in America where some people--and I see the Chair is 
now looking at me. I appreciate that because he extends that courtesy 
to all of us. I never mean my arguments personally, especially of 
colleagues I trust at a personal level. In an institutional way, some 
people march on Washington every day. They are so well connected. They 
have the lobbyists. They have the money. They make the arguments. They 
have the prestige. They have the status. And that is what happened 
here.
  Up until this Time magazine expose, there were so many stereotypes 
and a lot of information about this legislation that was not accurate. 
As it turns out, it is imbalanced; it is unfair; it is unjust; it is 
too harsh, too punitive, and it is not right. This piece of legislation 
should not go forward tomorrow. I have tried to make arguments to 
defend this proposition, and other Senators have as well.
  What Senator Feingold said is true. In a lot of ways, 
institutionally, not one on one, this is also an example of an industry 
that has poured a tremendous amount of money into elections, an 
industry which has tremendous financial clout. What in the world is 
someone to do when her family or his family is going under because of a 
medical illness? Fifty percent of bankruptcy cases are filed as a 
result of that, and we are going to make it impossible for these people 
to rebuild their lives?
  What is someone to do when the low- and moderate-income earners do 
not have this clout and do not have these connections? What are single-
parent homes to do, almost always headed by a woman?
  We should pass a bankruptcy reform bill, but this does not represent 
reform.
  One final thing, and I doubt whether I am going to get any Republican 
support, but I wish I would. I am not making a payback argument, and if 
I end up behaving differently, then call me a hypocrite, but this is no 
way to legislate.
  In the Senate, minority rights count. You should not be able to take 
a conference report and then--it is not even a question of putting a 
provision in, I say to the Chair, that is unrelated to the conference 
report. In this case, it is a State Department conference report, 
completely gutted--invasion of the body snatchers--not a word left 
about the State Department. The only thing left is a bill number. Now 
it is bankruptcy sent over here. The minority was not even consulted. 
Senators should vote against cloture for that reason alone because the 
minority one day is the majority the next and vice versa, and we should 
respect each other's rights.
  Someone can say to me: Senator Wellstone, you hypocrite. When you 
were in the majority, you did exactly the same thing; you, Paul 
Wellstone, were involved. I do not know of this having been done. I 
cannot remember. I certainly never did it; never would.

  I appeal to my colleagues on the basis of fairness. You might not 
agree with me on the substantive arguments--although this bankruptcy 
bill is now worse than it was before; and I went over two provisions 
that have been taken out--but you might agree with me just in terms of 
the rights of a legislator and the way in which this process ought to 
work.
  This is an affront to this legislative process. This makes a mockery 
of this legislative process. This is a reform issue. You wonder why 
people are so disillusioned and turned off about politics in the 
country? Here is one good reason why. People do not quite understand 
how a State Department bill all of a sudden becomes a bankruptcy bill, 
with a whole new set of provisions put in unrelated to the original 
bill. And then an effort is made to jam it through here. People do not 
get that.
  It might be clever, I say to the majority leader and others, but it 
does not meet the test of representative democracy. It does not meet 
the test of the Senate as a great institution. It does not meet the 
test of what this legislative process should be all about. It does not 
meet the test of how we can become good legislators and good Senators. 
For that reason, I hope colleagues will vote against cloture.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SMITH of New Hampshire. 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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