[Congressional Record Volume 146, Number 141 (Tuesday, October 31, 2000)]
[Senate]
[Pages S11413-S11415]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               BANKRUPTCY

  Mr. GRASSLEY. Mr. President, we had an opportunity to listen to 2 
hours of debate and speeches from some on the other side of the aisle 
earlier this afternoon trashing a piece of legislation and the process 
connected with that legislation that originally passed the Senate 83-14 
earlier this year.
  I have heard the Senator from Minnesota and others complain about the 
process of getting the bankruptcy bill to the floor. It seemed to me, 
as I listened to what he said that it is almost an unbelievable thing 
for him to say that. The Senate passed the bankruptcy bill after weeks 
of debate and after disposing of literally hundreds of amendments. The 
Senator from Minnesota objected to going to the conference committee in 
the regular order. We tried to do things in the regular way, but he was 
one of those Senators who blocked our efforts to get to conference.
  I think the speeches we have heard this afternoon, particularly from 
the Senator from Minnesota, are misleading. It is very misleading for 
Senator Wellstone to pretend he is not the reason for this bill not 
moving in the regular way and then to find fault with the 
unconventional way in which we finally did it.
  Also, looking at that process, there are few conference committees 
around here that have an equal number of Democrats and Republicans. 
This conference committee had three Democrats and three Republicans. So 
obviously Democrats had to sign the conference report, or we would not 
even have it before us. But that is the way this process has been--not 
only this year but last year and the year before and the year before.
  We have been trying to bring about badly needed bankruptcy reform. It 
has been done in a bipartisan way. The best evidence of that 
bipartisanship, both from the standpoint of substance and the 
standpoint of the process, is the 83-14 vote by which the original bill 
passed the Senate and Democrats signing the conference report that is 
now before us. So I am glad we finally have a chance to get to debate 
on the merits of the bankruptcy reform conference report.
  Today is Halloween. That is an appropriate day to take the bill up 
because of our liberal friends who have tried to dress the bankruptcy 
bill in a scary costume in a tired effort to frighten the American 
people for crass political purposes. The fact is, the bankruptcy reform 
bill we are going to vote on tomorrow will do a lot of good for the 
American people and for the economy.
  Remember, we are talking about 1.4 million bankruptcies. Remember, we 
are talking about a very dramatic explosion of bankruptcies just in the 
last 6 or 7 years. Remember, the last time we had bankruptcy reform, 
there were about 300 thousand bankruptcies filed per year.
  That is up to 1.4 million. It is a cost to the economy for every 
working family in America of paying $400 per year more for goods and 
services because somebody else is not paying their debt.
  I want to summarize a few things that this bill will do that my 
colleagues may not know about as a result of the disinformation 
campaign waged by our liberal opponents.
  Right now, for instance, farmers in my State of Iowa, and for that 
matter in Minnesota and all across the country, have no protections 
against foreclosures and forced auctions. That is because chapter 12 of 
the bankruptcy code, which gives essential protections for family 
farmers, expired in June of this year.
  Why did chapter 12 expire leaving farmers without a last-ditch safety 
net? The answer is that chapter 12 ceased to exist because the Senator 
from Minnesota blocked us from proceeding on this bankruptcy bill we 
have before us.
  The bankruptcy bill will restore chapter 12 on a permanent basis. 
Never again will Iowa farmers or even Minnesota farmers be left with no 
defense against foreclosures and forced auctions. Congress will fail in 
its basic responsibilities to the American farmer if we fail to restore 
chapter 12 as a permanent part of the bankruptcy code.
  The bankruptcy bill does more for farmers than just make protections 
for farmers permanent. The bankruptcy bill enhances these protections 
and makes more Iowa farmers, more American farmers, and even more 
Minnesota farmers eligible for chapter 12. The bankruptcy bill lets 
farmers in bankruptcy avoid capital gains taxes. This will free up 
resources that would have otherwise been forced to go to the Federal 
Treasury, that would otherwise go down the black hole of the IRS, to be 
invested in farming operations.
  We have a real choice. The Senate can vote as the Senator from 
Minnesota wants us to vote and the Senate can kill this bill, or we can 
stand up for American farmers and Minnesota farmers. We can do our duty 
and make sure that family farms are not gobbled up by giant corporate 
farms. We can give our farmers a fighting chance. I hope the Senate 
will stand up for our farmers. I hope the Senate does not give in to 
the bankruptcy establishment that has decided to fight bankruptcy 
reform no matter who gets hurt, including the Iowa farmer, the 
Minnesota farmer--the American farmer.
  What else is in this conference report? The bankruptcy bill will give 
badly needed protection for patients in bankrupt hospitals and nursing 
homes. About 10 percent of the nursing homes in America are in 
bankruptcy, so this is a real problem for senior citizens of America. 
The Senate protected these people by unanimously adopting an amendment 
which I offered. Again, my colleagues may be unaware of the importance 
of this provision because the opponents of bankruptcy reform do not 
want us to realize what killing the bankruptcy reform bill will really 
do for those people who are in bankrupt nursing homes.
  I had hearings on patients in bankrupt nursing homes. As my 
colleagues know, Congress is trying to put more money into nursing 
homes through the Medicare replenishment bill. Because we have so many 
nursing homes that are in bankruptcy, the potential for harm is very 
real.
  Through the hearing process in committee, I learned of a situation in 
California where a bankruptcy trustee simply showed up at a nursing 
home on a Friday evening and evicted the residents. The bankruptcy 
trustee did not provide any notice that this was going

[[Page S11414]]

to happen. He literally put these frail, elderly people out into the 
street and changed the locks so they could not get back into the 
nursing home. The bankruptcy bill that we will vote on tomorrow will 
prevent this from ever happening again. If we do not stand up and say 
that the residents of nursing homes cannot just be thrown out into the 
street, then Congress will have failed in its duty to the senior 
citizens of America.
  Again, we have a choice: We can vote this bill down and tell nursing 
home residents and their families that they can just go fly a kite. I 
hope the Senate is better than that. I hope the Senate stands for 
nursing home residents and not for inside-Washington liberal special 
interest groups that are trying to make a case against this bill but 
just cannot make a case against the bill. We have not heard them 
talking about helping farmers through chapter 12. We have not heard 
them talk about helping nursing home residents through the provisions 
that are in the Patients' Bill of Rights for nursing home residents.
  There is more to this bill. The bankruptcy reform bill contains 
particular provisions advocated by Federal Reserve Chairman Alan 
Greenspan and by Treasury Secretary Larry Summers. I hope the Senator 
from Minnesota takes note of those two people being appointed by the 
President of the United States, Larry Summers being a member of this 
administration as Secretary of the Treasury, to whom some from the 
other side of the aisle ought to listen.
  These provisions will strengthen our financial markets and lessen the 
possibility of domino-style collapses in the financial sector of our 
economy. According to both Chairman Greenspan and Secretary Summers, 
these provisions will address significant threats to our prosperity, 
the very prosperity that their candidate for President is out talking 
about every day saying it ought to be protected.
  Yet again, we have a choice: We can strengthen our financial markets 
by passing this bill, or we can side with the liberal establishment and 
fight reform, no matter what the cost is to our society, our economy, 
the farmers, or the people in nursing homes.
  The American people want us to strengthen the economy, not turn a 
deaf ear to the pleas for help from the Chairman of the Federal Reserve 
Board and from the Treasury Secretary. I hope the Senate decides to 
vote to safeguard our prosperity, not put it at risk.
  The Senator from Minnesota said he wanted us to learn more about the 
bankruptcy bill. I do, too. Once we look at this bill in its totality I 
am confident that the Members of this body will see this is a 
responsible approach, that we will then do the responsible thing: We 
will vote for cloture, and then we will also do final passage.
  There is an issue about how the bankruptcy bill will impact people 
with high medical expenses. Earlier this year, I addressed this very 
issue, but I want to reassure my colleagues who have remaining 
questions about this that we have taken care of the problems they have 
legitimately raised. I do not find fault with their raising them; I 
only find fault with the fact that we have taken care of them and they 
have not found it out yet. Before the vote tomorrow morning, I want 
them to find it out. I want the Senator from Minnesota and I want my 
friend and colleague from the State of Iowa who raised this issue to be 
aware of it as well.
  My friend from Iowa was quoted in the Des Moines Register Sunday as 
saying about this bill: I am not for it. I think it's a bad bill. He 
talked with bankruptcy lawyers who said that it will hit hardest those 
who rack up big bills due to medical problems.
  As to the Time magazine article that was referred to earlier by the 
Senator from Minnesota which alleged that medical expenses drove some 
of the families profiled into bankruptcy, I would just say that this is 
flat out wrong.
  To the extent any person in bankruptcy has medical expenses, the 
bankruptcy bill deals with this issue in two ways.
  The General Accounting Office to look at the provisions of this bill 
from the point of view of medical expenses. You can see from this 
report that came from the General Accounting Office that all medical 
expenses that are deducted in determining whether you have the ability 
to go to chapter 7 or chapter 13. The bill is very clear health care 
expenses are covered because of ``other necessary expenses'' include 
such expenses as charitable contributions, child care, dependent care, 
health care, payroll deductions, life insurance, et cetera. All of 
these are used in determining your ability to repay your debts.
  So anybody who comes to the floor of the Senate and says that we do 
not take medical costs into consideration in determining this--those 
colleagues have not read the bill.
  There is one additional thing. Somebody can make a case that this 
does not take care of all of the instances. I do not know how much 
clearer it can be. But we still have application to the bankruptcy 
judge, under special circumstances, to argue any case you want to of 
something that should be taken into consideration in your ability to 
repay debt. Medical expenses, obviously, fall into that category if 
this provision is not adequate. But I do not know how much clearer it 
can be than when you say medical expenses are things that are 
deductible in making your determination of ability to pay.
  Several Senators have also, today, made reference to the issue of 
whether we need to modify the bankruptcy laws to prevent violent 
abortion protesters from discharging their debts in bankruptcy court. 
Now the fact is, our current law already prevents this from happening.
  I am releasing today a memo to me from the nonpartisan Congressional 
Research Service that says, without a doubt, no abortion protester has 
ever, ever gotten away with using bankruptcy as a shield. So I hope my 
colleagues listen to this nonpartisan source and not the partisan 
political statements that were made yesterday on the Senate floor in 
regard to this.
  I want to put this in the Record, Mr. President, so I know that this 
is clearly stated. I ask unanimous consent that this memo be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                   Congressional Research Service,


                                          Library of Congress,

                                 Washington, DC, October 26, 2000.

                               Memorandum

     To: Hon. Charles Grassley,
     From: Robin Jeweler, Legislative Attorney, American Law 
         Division.
     Subject: Westlaw/LEXIS survey of bankruptcy cases under 11 
         U.S.C. Sec. 523.
       This confirms our phone conversation of October 25, 2000. 
     You requested a comprehensive online survey of reported 
     decisions considering the dischargeability of liability 
     incurred in connection with violence at reproductive health 
     clinics by abortion protesters.
       The only reported decision identified by the search is 
     Buffalo Gyn Womenservices, Inc. v. Behn (In re Behn), 242 
     B.R. 229 (Bankr. W.D.N.Y. 1999). In this case, the bankruptcy 
     court held that a debtor's previously incurred civil 
     sanctions for violation of a temporary restraining order 
     (TRO) creating a buffer zone outside the premises of an 
     abortion service provider was nondischargeable under 11 
     U.S.C. Sec. 523(a)(6), which excepts claims for ``willful and 
     malicious'' injury. The court surveyed the extent and 
     somewhat discrepant standards for finding ``willful and 
     malicious'' conduct articulated by three federal circuit 
     courts of appeals. It granted the plaintiff's motion for 
     summary judgment and denied the debtor/defendant's motion to 
     retry the matter before the bankruptcy court. Specifically, 
     the court held:
       ``[W]hen a court of the United States issued an injunction 
     or other protective order telling a specific individual what 
     actions will cross the line into injury to others, then 
     damages resulting from an intentional violation of that order 
     (as is proven either in the bankruptcy court or (so long as 
     there was a full and fair opportunity to litigate the 
     question of volition and violation) in the issuing court) are 
     ipso factor the result of a `willful and malicious injury.' 
     ''--242 B.R. at 238.

  Mr. GRASSLEY. In other words, once again, just to make it very clear 
the Congressional Research Service has searched every known case, and I 
have here, as my colleagues can read, the only case that is available, 
in which the result is that an abortion protester wasn't able to 
discharge his debts. The court was very clear that they were not able 
to get a discharge for that purpose.
  Mr. President, I see my friend from New Jersey, who is on the other 
side of the aisle but very supportive of our legislation, who needs 
time because he supports this legislation from our side of the aisle. 
So I am going to quit at this point. I ask if I can have the floor back 
after he has finished.

[[Page S11415]]

  The PRESIDING OFFICER. Is there objection?
  Mr. GRASSLEY. I ask unanimous consent to do that, so I can defer to 
the Senator from New Jersey right now.
  Mr. ENZI. Reserving the right to object----
  Mr. GRASSLEY. I will ask this way, that when the Senator from New 
Jersey has finished, to give the Senator from Wyoming the floor, and 
then me, because I want to continue presenting our case on the 
bankruptcy reform.
  The PRESIDING OFFICER. Is the Senator from Iowa yielding time to the 
Senator from New Jersey? The Republicans control the time.
  Mr. GRASSLEY. Yes. I intend to do that.
  The PRESIDING OFFICER. How much time----
  Mr. GRASSLEY. How much time does the Senator need?
  Mr. TORRICELLI. Twelve minutes.
  Mr. GRASSLEY. Twelve minutes.
  The PRESIDING OFFICER. Without objection, 12 minutes are yielded to 
the Senator from New Jersey.
  Mr. TORRICELLI. I thank the Chair.

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