[Congressional Record (Bound Edition), Volume 146 (2000), Part 9]
[Senate]
[Pages 13367-13368]
[From the U.S. Government Publishing Office, www.gpo.gov]



            EXPIRATION OF CHAPTER 12 OF THE BANKRUPTCY CODE

  Mr. GRASSLEY. Mr. President, at this time, I am seeking recognition 
in order to call to my colleagues' attention something that will happen 
today. At midnight today, bankruptcy protections for family farmers 
will disappear. Chapter 12 of the Bankruptcy Code will expire. And 
America's family farming operation will be exposed to foreclosure and 
possible forced auctions. I think this will be a clear failure on the 
part of the Congress and the President to do their duty. How did we get 
here? After all, the Senate and House have passed bankruptcy reform 
bills which made chapter 12 permanent. But a small minority of Senators 
who oppose bankruptcy reform have apparently decided that they would 
rather see America's family farmers with no last-ditch safety net than 
let the House and Senate even convene a conference committee in order 
to get the two bills reconciled.
  But even with these stall tactics, the House and Senate have met 
informally to resolve the bankruptcy bills. The informal agreement, of 
course, will make chapter 12 permanent. If we were allowed to pass this 
bill, America's family farmers would never again face the prospect of 
having no bankruptcy protections.
  That's right Mr. President, we have the power right now to give 
family farmers last-ditch protection against foreclosures and forced 
sales. But, some of our more liberal friends won't let that happen. 
Some members of this body have just decided to play political chess 
games with bankruptcy reform, and they're willing to use family farmers 
as pawns to be expended in pursuit of some larger goal.
  Mr. President, with the sluggishness we have in the farm sector, I 
think it's just plain wrong to play games with family farmers. Senator 
Lott and the Republican leadership have tried to move the bankruptcy 
bill repeatedly and have been stymied every step of the way. We need to 
help our family farmers, not play games with their futures. The 
opponents of bankruptcy reform have resorted to tactics which are 
morally bankrupt.
  Mr. President, back in the mid-1980's when Iowa was in the midst of 
another devastating farm crisis, I wrote chapter 12 to make sure that 
family farmers would receive a fair shake when dealing with the banks 
and the Federal Government. At that time, I didn't know if chapter 12 
was going to work or not, so it was only enacted on a temporary basis.
  Chapter 12 has been an unmitigated success. As a result of chapter 
12, many farmers who once faced total financial ruin are still farming 
and contributing to America's economy. As was the case in the dark days 
of the mid-1980s, some are again predicting that farming operations 
should be consolidated and we should turn to corporate farming to 
supply our food and agricultural products. As with the 1980s, some 
people seem to think that family farms are inefficient relics which 
should be allowed to go out of business. This would mean the end of an 
important part of our Nation's heritage. And it would put many hard 
working American families--those who farm and those whose jobs depend 
on a healthy agricultural sector--out of work.
  But the family farm didn't disappear in the 1980s, and I believe that 
chapter 12 is a major reason for the survival of many financially 
troubled family farms. An Iowa State University study prepared by 
professor Neil Harl found that 85 percent of the Iowa farmers who used 
chapter 12 were able to continue farming. That's real jobs for all 
sorts of Iowans in agriculture and in industries which depend on 
agriculture. According to the same study, 63 percent of the farmers who 
used chapter 12 found it helpful in getting them back on their feet. In 
short, I think it's fair to say that chapter 12 worked in the mid 
1980s, and it should be made permanent so that family farmers in 
trouble today can get breathing room and a fresh start if that's what 
they need to make it. It's shameful that some Senators who know better 
are continuing to play politics and deny a fresh start to family 
farmers.
  But the bankruptcy reform bill doesn't just make chapter 12 
permanent. Instead, the bill makes improvements to chapter 12 so it 
will be more accessible and helpful for farmers.

[[Page 13368]]

First, the definition of family farmers is widened so that more farmers 
can qualify for chapter 12 bankruptcy protections. Second, and perhaps 
most importantly, the House and Senate agreed to reduce the priority of 
capital gains tax liabilities for farm assets sold as a part of a 
chapter 12 reorganization plan. This will have the beneficial effect of 
allowing cash-strapped farmers to sell livestock, grain and other farm 
assets to generate cash flow when liquidity is essential to maintaining 
a farming operation. Together, these reforms will make chapter 12 even 
more effective in protecting America's family farms during this 
difficult period.
  Mr. President, it's imperative that we keep chapter 12 alive. Before 
we had chapter 12, banks held a veto over reorganization plans. They 
wouldn't negotiate with farmers, and the farmer would be forced to 
auction off the farm, even if the farm had been in the family for 
generations. Now, because of chapter 12, the banks are willing to come 
to terms. We must pass the bankruptcy reform bill to make sure that 
America's family farms have a fighting chance to reorganize their 
financial affairs.


                Disclosure by Section 527 Organizations

  Mr. MURKOWSKI. Mr. President, throughout the rancorous campaign 
finance reform debate I have consistently argued that the only 
reasonable solution rests in increased disclosure and the active 
enforcement of current laws. For this reason, I voted in support of 
H.R. 4762--legislation requiring 527 organizations to disclose their 
political activities and supporters.
  I want to unequivocally state, however, that I believe this bill is 
only the first step towards complete disclosure and accountability in 
campaign financing. Financing laws must be fair, and they must be 
universal. Disclosure requirements must be extended to other tax-free 
organizations as well, namely Internal Revenue Code 501(c) groups that 
have actively participated in local and national elections.
  What is the benefit of disclosure laws if they do not apply to all? I 
suggest that unbalanced and incomplete restrictions will only enhance 
efforts to manipulate campaign financing laws. 527 groups will, 
essentially, be encouraged to pack up shop and re-emerge as 501(c) 
groups. Quickly, they will be able to continue their efforts to 
influence elections with limited disclosure requirements. Clearly, more 
reform must be done.
  For this reason, I urge this body to move forward and extend 
disclosure requirements to 501(c) organizations. I doubt anyone would 
suggest that 501(c)(4) civic groups have not made efforts to express a 
political message. Earlier this year, one 501(c)(5) labor union openly 
professed its intention to spend tens of millions of dollars to 
influence House elections. And our nation's media has been awash with 
efforts by 501(c)(6) corporations to convey their political messages. 
Yet, our financing system fails to require these groups to provide 
expenditure and donor information. This is wrong.
  Recently, I cast a vote that would seem to be in conflict with my 
support of H.R. 4762. I voted against similar language in an amendment 
to the Department of Defense Authorization bill. It is important to 
note, however, that my vote was on a constitutional point of order. If 
the Section 527 amendment was included in the Defense bill, it would 
have converted the bill into a revenue measure originating in the 
Senate and caused the defense authorization bill to be blue-slipped--
essentially killed--when it is sent to the House. This is not a matter 
of mere semantics, it is mandated by the Constitution. Regardless of 
the legislation's merits, as a senator I must uphold the Constitution. 
My vote reflects this duty.
  But with H.R. 4762, the procedural obstructions were removed. I 
support active disclosure in our campaign financing system. By making 
contributions public, the American people can decide for themselves who 
they want to support. When issue ads from supposedly public interest 
groups are aired, the American public can now find out who is funding 
these ads. For example, we may now be able to learn whether ads for so-
called environmental causes are actually being financed by members of 
OPEC who want to maintain their monopoly and prevent us from exploring 
for oil in the U.S.
  I hope that we will soon extend the disclosure requirements to other 
organizations so that the American public can truly know who finances 
the public relations campaigns that influence our modern elections.
  Mr. President, a word of caution is in order. I am sensitive to the 
legitimate needs of private citizens to criticize government without 
fear of retaliation. We must never forget that we are the nation of 
Alexander Hamilton, John Jay, and James Madison. The very men who wrote 
under the anonymous name of ``Publius,'' shaping our government through 
the Federalist Papers. Would such thought and expression have survived 
if the cloak of anonymity was removed? Political speech is free speech, 
and private citizens who have not sought preferred tax status should 
not be limited in their rights of expression, their freedom to 
associate, or their right to privacy.
  Somewhere, the proper balance between complete disclosure and the 
right to free expression resides. I believe H.R. 4762 is a good first 
step in striking this balance. Clearly, those who expect tax preferred 
status to advocate their political message are within the grasp of 
disclosure laws. I reiterate my support for full disclosure, and once 
again call for quick action upon more comprehensive disclosure 
legislation.

                          ____________________