[Congressional Record Volume 154, Number 104 (Monday, June 23, 2008)]
[House]
[Pages H5801-H5805]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008
Mr. CONYERS. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 4044) to amend the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 to exempt from the means test in bankruptcy
cases, for a limited period, qualifying reserve-component members who,
after September 11, 2001, are called to active duty or to perform a
homeland defense activity for not less than 60 days, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4044
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Guard and
Reservists Debt Relief Act of 2008''.
SEC. 2. AMENDMENTS.
Section 707(b)(2)(D) of title 11, United States Code, is
amended--
(1) in clauses (i) and (ii)--
(A) by indenting the left margin of such clauses 2 ems to
the right, and
(B) by redesignating such clauses as subclauses (I) and
(II), respectively,
(2) by striking ``if the debtor is a disabled veteran'' and
inserting the following:
[[Page H5802]]
``if--
``(i) the debtor is a disabled veteran'',
(3) by striking the period at the end and inserting ``;
or'', and
(4) by adding at the end the following:
``(ii) while--
``(I) the debtor is--
``(aa) on, and during the 540-day period beginning
immediately after the debtor is released from, a period of
active duty (as defined in section 101(d)(1) of title 10) of
not less than 90 days; or
``(bb) performing, and during the 540-day period beginning
immediately after the debtor is no longer performing, a
homeland defense activity (as defined in section 901(1) of
title 32) performed for a period of not less than 90 days;
and
``(II) if after September 11, 2001, the debtor while a
member of a reserve component of the Armed Forces or a member
of the National Guard, was called to such active duty or
performed such homeland defense activity.''.
SEC. 3. GAO STUDY.
(a) Comptroller General Study.--Not later than 2 years
after the effective date of this Act, the Comptroller General
shall complete and transmit to the Speaker of the House of
Representatives and the President pro tempore of the Senate,
a study of the use and the effects of the provisions of law
amended (and as amended) by this Act. Such study shall
address, at a minimum--
(1) whether and to what degree members of reserve
components of the Armed Forces and members of the National
Guard avail themselves of the benefits of such provisions,
(2) whether and to what degree such members are debtors in
cases under title 11 of the United States Code that are
substantially related to service that qualifies such members
for the benefits of such provisions,
(3) whether and to what degree such members are debtors in
cases under such title that are materially related to such
service, and
(4) the effects that the use by such members of section
707(b)(2)(D) of such title, as amended by this Act, has on
the bankruptcy system, creditors, and the debt-incurrence
practices of such members.
(b) Factors.--For purposes of subsection (a)--
(1) a case shall be considered to be substantially related
to the service of a member of a reserve component of the
Armed Forces or a member of the National Guard that qualifies
such member for the benefits of the provisions of law amended
(and as amended) by this Act if more than 33 percent of the
aggregate amount of the debts in such case is incurred as a
direct or indirect result of such service,
(2) a case shall be considered to be materially related to
the service of a member of a reserve component of the Armed
Forces or a member of the National Guard that qualifies such
member for the benefits of such provisions if more than 10
percent of the aggregate amount of the debts in such case is
incurred as a direct or indirect result of such service, and
(3) the term ``effects'' means--
(A) with respect to the bankruptcy system and creditors--
(i) the number of cases under title 11 of the United States
Code in which members of reserve components of the Armed
Forces and members of the National Guard avail themselves of
the benefits of such provisions,
(ii) the aggregate amount of debt in such cases,
(iii) the aggregate amount of debt of such members
discharged in cases under chapter 7 of such title,
(iv) the aggregate amount of debt of such members in cases
under chapter 7 of such title as of the time such cases are
converted to cases under chapter 13 of such title,
(v) the amount of resources expended by the bankruptcy
courts and by the bankruptcy trustees, stated separately, in
cases under title 11 of the United States Code in which such
members avail themselves of the benefits of such provisions,
and
(vi) whether and to what extent there is any indicia of
abuse or potential abuse of such provisions, and
(B) with respect to debt-incurrence practices--
(i) any increase in the average levels of debt incurred by
such members before, during, or after such service,
(ii) any indicia of changes in debt-incurrence practices
adopted by such members in anticipation of benefitting from
such provisions in any potential case under such title; and
(iii) any indicia of abuse or potential abuse of such
provisions reflected in the debt-incurrence of such members.
SEC. 4. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b),
this Act and the amendments made by this Act shall take
effect 60 days after the date of the enactment of this Act.
(b) Application of Amendments.--The amendments made by this
Act shall apply only with respect to cases commenced under
title 11 of the United States Code in the 3-year period
beginning on the effective date of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Michigan (Mr. Conyers) and the gentleman from California (Mr. Daniel E.
Lungren) each will control 20 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. CONYERS. Madam Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and include
extraneous material.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. CONYERS. Madam Speaker, I yield myself such time as I may
consume.
Members of the House, the National Guard and Reservists Debt Relief
Act is a part of the idea of improving the Bankruptcy Abuse Prevention
Act signed into law by President Bush 3 years ago. It effectuated a
comprehensive overhaul of bankruptcy, especially with regards to
consumers. These consumer bankruptcy amendments included the
establishment of a means testing mechanism to determine a debtor's
ability to repay debts. Under this test, a chapter 7 bankruptcy case is
presumed to be an abuse if it appears that a debtor has income in
excess of certain thresholds.
The measure before us today would exempt certain qualifying National
Guard members and Reserve members from the means test presumption of
abuse. Come to think of it, I would like to exempt some other people as
well.
But this legislation addresses the issue of fundamental fairness.
Those who find themselves in financial difficulty as a result of
service in the National Guard or being activated into it or the
aftermath of their service, particularly overseas, should not face the
additional burden of the means test.
Since September 11, 2001, almost one-half million members of the
National Guard and Reserves have been called to Iraq and Afghanistan.
Some of them have even served multiple tours of duty. And so it is easy
to understand that these unanticipated deployments disrupt their lives
and their family members and leads to financial hardship. So we are
happy for the gentlelady from Chicago, Illinois, Jan Schakowsky, who
has included an effort that has attracted our colleagues on both sides
of the aisle. I am very happy to report this from the Judiciary
Committee.
I reserve the balance of my time.
{time} 1415
Mr. DANIEL E. LUNGREN of California. Madam Speaker, I rise in support
of H.R. 4044, the National Guard and Reservists Debt Relief Act of
2008. I am happy that the House is considering today this bipartisan
legislation.
As the gentleman from Michigan, the chairman of the committee
mentioned, several years ago we passed the Bankruptcy Abuse Prevention
and Consumer Protection Act. The purpose was to ensure that bankruptcy
procedures were still allowed for those who needed them, and yet the
abuses that we had seen in the years leading up to the bill would be
reduced if not eliminated. It received bipartisan support.
Today's bill deals with a part of that scene that needs to be
addressed and addressed immediately. Republicans strongly support the
mission and appreciate the sacrifice of our dedicated reservists and
guardsmen. As many people know, we rely far more on our National Guard
and Reservists in the conflict that we have ongoing in the Middle East
today than we have in previous conflicts. That was a conscious decision
by the Congress of the United States over the last couple of decades.
As a result, many, many more dedicated reservists and guardsmen are
assuming responsibility in areas of conflict. We agree that reservists
and guardsmen who are plunged into bankruptcy by the demands of their
service should be given a helping hand under the bankruptcy code.
In committee, Republicans labored long and hard to achieve a workable
compromise that would help these serving men and women. The major issue
for committee Republicans was simple--that the bill respond to
bankruptcies attributable to a reservist's or guardsman's service.
This bill does not perfectly meet that concern. However, it is part
of the art of compromise and it meets it sufficiently for committee
Republicans to support passage.
It does this first by requiring an important study by the GAO. The
study will examine the degree to which bankruptcies benefiting from the
bill are indeed attributable to service, as we hope they will be.
The study thus will help us to be sure of whether reservists and
guardsmen are using the relief granted by the bill when it is their
service that leads to
[[Page H5803]]
bankruptcy. And the study must be completed promptly within 2 years of
enactment.
Secondly, the bill includes a 3-year sunset. When we are asked to
reauthorize the bill, we will have the GAO study and report. And we
will know for sure how the bill is working, and if it needs to be
modified, how it should be modified. It is not my expectation that it
would be abused, but if it is, we would be able to address that at the
time the reauthorization is considered.
With these requirements added, I am pleased to support passage of the
bill.
I reserve the balance of my time.
Mr. CONYERS. Madam Speaker, I reserve the balance of my time.
Mr. DANIEL E. LUNGREN of California. Madam Speaker, I yield 5 minutes
to the gentleman from California, one of the major sponsors of this
bill, active sponsor of this bill, Mr. Dana Rohrabacher.
Mr. ROHRABACHER. Madam Speaker, I rise in strong support of this
legislation.
Madam Speaker, today marks the culmination of work that should have
been finished long ago. On April 14, 2005, the House considered S. 256,
the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,
which was a much needed and responsible reform. Then in the minority,
my colleague, Ms. Schakowsky, introduced a motion to recommit so that
the bill would allow a targeted exemption from the bankruptcy means
test for those National Guard and Reservists who had been called up
after 9/11.
At the time of the floor debate, I was told by the Republican floor
manager that the Schakowsky motion was redundant, that there was
already such protection for our National Guard and Reservists under the
Service Member's Civil Relief Act. Because of this, I voted against the
motion and it failed on a party line vote, 220 yeas to 229 nays.
I soon found out that I and other Republican Members had been
misinformed, apparently to prevent the then-minority from having any
legislative success.
Yes, disabled veterans are exempt from the new bankruptcy means test,
but not activated reservists and guardsmen, the men and women torn from
their jobs and families, sent overseas to protect us were not to be
given consideration under the Republican bankruptcy law unless they
were disabled. Ms. Schakowsky's motion sought to correct that. In order
to prevent even one success by the other party, the leaders of my party
threw aside considering the well-being of our returning heroes.
A returning reservist or guardsman, who possibly left a lucrative job
to answer the call of duty, gets the same tougher means test as
everybody else. If they fail, they are presumed to be abusing the
system as specified in chapter 7 of the bankruptcy law. Yes, they can
then rebut the presumption of abuse by demonstrating a special
circumstance before the court. They can beg. They can jump through
hoops, they can hire lawyers, and then it is at the discretion of the
court to grant these homecoming heroes special circumstances and allow
them a chapter 7 filing. This should have been in the bill in the first
place, as well as Ms. Schakowsky's motion should have been accepted by
the majority. It is a shame that it wasn't.
The Schakowsky motion would not have killed the bill, as some Members
have argued since. In fact, because the motion asked the Judiciary
Committee to report the bill forthwith, we could have considered the
bill on that very same day. And even if that were not the case, as now
we hear from my side so often as we point out a motion requiring a
committee to report the bill promptly could still be brought up the
next legislative day.
No, this motion failed so long ago because of the worst type of
partisanship. It failed because Republicans did not want to admit that
the Democrats could better their bill.
When I found that there was no adequate protection for our returning
reservists and guardsmen, I pledged to work with my colleague, Ms.
Schakowsky, and make it right.
Subsequently, I introduced legislation to amend the bankruptcy law.
Unfortunately, the Republican leadership refused to bring my bill up to
the floor for a vote and it took a change in the majority for this pro-
reservist, pro-National Guard bill to be brought to the House floor
today.
This measure isn't costing any new Federal dollars. There is no new
massive appropriation. All it is is a consideration for these people
who have risked their lives for us and are coming home. But my party
couldn't get itself to provide consideration for our homecoming heroes
even though there wasn't any major cost involved.
In the meantime, party control of the House changed, and Ms.
Schakowsky and I have been working diligently to get this legislation
to the floor and get it passed into law. We are now considering this
bill under suspension which means it is pretty well recognized that
this has widespread support. It should have been voted on by the
majority or at least accepted a long time ago.
I encourage my colleagues who voted ``no'' on the motion to recommit
3 years ago because they were misled to vote in favor of this
legislation. This bill is not a wedge to reopen the bankruptcy law.
Rather, it is a narrow, targeted change modeled after existing
exemptions for disabled veterans, America's heroes in neighborhoods
throughout our country, who have been called up for deployments.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. CONYERS. I yield the gentleman 1 minute.
Mr. ROHRABACHER. This bill will ensure that America's heroes
throughout our country, who have often been called up for deployments
that are for far longer than they were initially thought, will not pay
a very high personal cost for their absence and their willingness to
step forward.
As my colleague, Ms. Schakowsky, put it, these servicemembers have
put their lives and livelihood on the line for us, and we owe them a
great debt. This is one way that we can show our deep appreciation for
the service of these people, as we should have done originally. Now it
is time for us to repay that debt in a very bipartisan way. I thank
very much my chairman and ranking member.
Mr. CONYERS. Madam Speaker, I yield myself such time as I may
consume.
First of all, I think that this bill might appropriately be renamed
the Schakowsky-Rohrabacher provision because of the hard work that our
colleague has done on the matter. I appreciate the fully bipartisan
spirit that this committee, the Judiciary Committee, had in much
evidence when we took this measure up.
And I close by asking my friends, the Blue Dogs on this side of the
aisle and most of the Republicans, my Republican colleagues on the
other side, that we might want to take a look at this means test which
presumes you did something wrong if you are broke and in trouble. I
mean, it occurs to me that under the economic circumstances we find
ourselves in as a nation, anybody could flunk the means test and then
be presumed to be irresponsible or not upstanding citizens. Credit
ratings would be damaged profusely.
And so maybe we can look at this. We don't want to offend the banking
lobby, don't get me wrong, but let's just take a peek at what we have
wrought here in the name of improving the bankruptcy law which I was
not in support of when it came forward.
Madam Speaker, with that I conclude my remarks, and I yield back the
balance of my time.
Mr. DANIEL E. LUNGREN of California. Madam Speaker, I yield myself
such time as I may consume.
Once again I would just repeat this is a bipartisan bill brought to
this floor with strong bipartisan support. Hopefully we will get a
unanimous vote in favor of it. This is something that recognizes the
unique situation our reservists and guardsmen and women are placed in
when they leave the jobs that they have, go back to the theater of war,
serve us well and run into difficulties as a result of that service
from a financial standpoint.
We all agree that they should receive relief. I would hope that we
can get people on the other side of the aisle to also agree that they
ought to get relief from these extraordinary, out-of-character,
unprecedented high gas prices that we have. What a shock it must be for
our reservists and guardsmen to leave this country and do service for
this country in a foreign land and then
[[Page H5804]]
return and find out that in the period of time they have been gone, all
of a sudden gas prices have risen $1.50, $1.70, before they were even
able to return.
So hopefully as we grant relief in this small particular area of
bankruptcy law, we might also think about the relief not only for
reservists and guardsmen but all Americans from the extraordinary costs
that they are now being called upon to pay in the area of energy.
It is not just at the gas tank, it is rippling through the economy
because transportation costs are built into the cost of just about
everything that we have, and our friends on the other side of the aisle
say, well, we will bring a lawsuit, maybe that will do something. Wind,
solar, I support those, but I have yet to find a wind-powered car in my
district, or a solar-powered car in my district.
And creeping up on us, although we are now involved in the middle of
summer, the beginning of summer, but it feels like the middle of summer
with the heat that is out there, creeping up on us is the extraordinary
increase that we are seeing in the cost of natural gas. Natural gas
supplies a good bit of the heating for the winter that we will find
come November and December.
{time} 1430
I have been informed that in California electricity is produced at
least 60 percent by natural gas. We don't have to wait for our heating
fuel. We can worry about the concerns that we have with air-
conditioning supplied by electricity.
So all I'm saying, Madam Speaker, is that as we work on worthy
legislation like this, there is other worthy legislation out there. And
all we ask is what the American people ask: Give us a vote. Give us a
chance to prove that the reserves that are available in the United
States, American reserves, American oil, American natural gas, be
utilized for Americans. If our enemy was doing this to us, we would be
in a fighting mood, but unfortunately through our Congress, we're doing
it to ourselves.
So at some point in time, hopefully in the not-too-distant future, we
might be able to prevail on the other side to understand that supply
makes a difference and help us bring those costs down as a result of
increasing the product that is available to Americans from American
sources.
Once again, Madam Speaker, I support H.R. 4044, the National Guard
and Reservists Debt Relief Act of 2008.
Mr. CONYERS. Would the gentleman yield?
Mr. DANIEL E. LUNGREN. I yield to my good friend from Michigan, the
chairman.
Mr. CONYERS. I want to thank my colleague for yielding.
I thought for a minute I was on a Special Order about ``drill drill
drill.''
Has the leadership on your side instructed everybody to insert this
subject into all of the debate this week because I would love to get
into this. You didn't mention shale to coal. There's a whole range of
opportunities for discussion here.
But I yield back, and I thank my colleague for his support.
Mr. DANIEL E. LUNGREN of California. Madam Speaker, of course I
cannot address the gentleman directly under the rules. So through the
Chair, I would just say that yes, shale oil and tar sands are
important. We happen to be the Saudi Arabia of those certain resources
of God, placed here for us to use, and yet for one reason or another,
we're almost afraid to use the world ``drill.'' So I appreciate the
chairman using the word ``drill'' three different times. That doesn't
mean going to the dentist. That means drill for oil, drill for natural
gas. That will be something which will help the American people.
So I would just say that I don't need my leadership to tell me about
it. All I need to do is go home and see the prices of gasoline. All I
need to do is listen to people. Seventy-some percent of the American
people now, by the latest Fox poll, say they want more drilling, they
want more production in America. The only group that doesn't have a 70-
some percent support of it is this group, the House of Representatives.
Either we're behind the times or we're ahead of the times. And I
suspect we're behind the times.
And all I'm doing is asking my good friend, the chairman from
Michigan, to understand that the people of Michigan suffer as much as
the people of California when we fail to understand that we have
resources that we could use. We ought to use American technology to
develop American energy rather than having it developed all around the
world.
Oh, and by the way, oil spills. They come from tankers. They come
from tankers, not from offshore rigs. We ought to understand the more
we're dependent upon foreign oil, the more tankers that supply the
oceans and a greater possibility of a problem which would cause
difficulty on our beaches and those beautiful waves that my friend from
California enjoys surfing on in California.
Ms. JACKSON-LEE of Texas. Madam Speaker, I rise today in support of
H.R. 4044, the ``National Guard and Reservists Debt Relief Act of
2008.'' This bill is important because it liberalizes the debt relief
standard for those persons who are most deserving, our Nation's heroes
that serve in the National Guard.
This bill is important because the President has made it more
difficult for people to claim bankruptcy. Specifically, the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 (2005 Bankruptcy
Act) was signed into law by President George W. Bush on April 20, 2005.
The 2005 Bankruptcy Act is the most comprehensive overhaul of
bankruptcy law in more than 25 years. The 2005 Bankruptcy Act makes
particular changes to the consumer bankruptcy. The changes to consumer
bankruptcy included, among other things, the establishment of a means
testing mechanism to determine a debtor's ability to repay debts. Under
this test, a chapter 7 bankruptcy case is presumed to be an abuse if it
appears that the debtor has income in excess of certain thresholds.
H.R. 4044 would exempt certain qualifying reserve component members
of the Armed Services and National Guard members from the means test's
presumption of abuse. This bill responds to the fact that some who
serve in the National Guard and the Reserves encounter financial
difficulties and that they should not be subject to the additional
proof requirements of the means test.
I am a co-sponsor of this bill and I urge my colleagues to support
it. This bill makes sense because often Armed Services personnel and
Reservists receive high compensation when they are away on hazardous
tours or combat zones. However, when these individuals return, their
income is not as high. Therefore, it is unfair to subject these
individuals to the means test. Simply, the means test is whether the
person has the means to pay his or her debts. Hazard pay and temporary
high pay for combat work is not necessarily a good indicator of a
person's means or ability to pay. These individuals are serving our
country and have legitimate financial concerns. I do not believe that
they should be penalized. I believe we should help our armed services
personnel for giving so much to fight for and protect this country. The
least we can do is help them.
I firmly believe that we should celebrate our National Guard and
Reservists, and I remain committed, as a Member of Congress, to
ensuring that we demonstrate our respect for them. The National Guard
and Reservists have kept their promise to serve our Nation; they have
willingly risked their lives to protect the country we all love.
As the great British leader Winston Churchill famously stated,
``Never in the field of human conflict was so much owed by so many to
so few.''
We must always remember the debt that we owe our National Guard and
Reservists that are willing to lay down their lives for us and render
the ultimate sacrifice for our freedom and security. Our gratitude must
continue to be unwavering.
In the words of President John F. Kennedy, ``As we express our
gratitude, we must never forget that the highest appreciation is not to
utter words, but to live by them.'' It is not simply enough to sing the
praises of our Nation's great veterans; I firmly believe that we must
demonstrate by our actions how proud we are of our American heroes.
I urge my colleagues to support this bill.
Mr. DANIEL E. LUNGREN of California. I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Conyers) that the House suspend the rules
and pass the bill, H.R. 4044, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
The title was amended so as to read: ``A bill to amend title 11 of
the United States Code to exempt for a limited period, from the
application of the means-test presumption of abuse under
[[Page H5805]]
chapter 7, qualifying members of reserve components of the Armed Forces
and members of the National Guard who, after September 11, 2001, are
called to active duty or to perform a homeland defense activity for not
less than 90 days.''.
A motion to reconsider was laid on the table.
____________________