[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Senate]
[Pages 2749-2757]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     BANKRUPTCY REFORM ACT OF 2001

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now proceed to the consideration of S. 420, which the clerk 
will report.
  The bill clerk read as follows:

       A bill (S. 420) to amend title 11, United States Code, and 
     for other purposes.

  The Senate proceeded to consider the bill.
  The ACTING PRESIDENT pro tempore. The Senator from Utah.
  Mr. HATCH. Mr. President, today, I am pleased that we are proceeding 
to the consideration of bankruptcy reform legislation. Senator Grassley 
introduced S. 220 earlier this month, which is precisely the same 
legislative language that was contained in the conference report passed 
by the Senate in December by a vote of 70 to 28. That language has been 
marked up and reported out of the Judiciary Committee. It is that 
language we are considering today in S. 420, the ``Bankruptcy Reform 
Act of 2001.''
  As many of you know, we have been working on the issue of bankruptcy 
reform for a number of years now. By way of background, both Houses 
demonstrated overwhelming margins in favor of this legislation in 
December, but President Clinton pocket-vetoed the legislation and we 
simply ran out of time in the session to come back and override the 
veto. So earlier this month, rather than introducing something to serve 
as a starting point for negotiations, Senator Grassley introduced 
exactly the language that passed both houses so overwhelmingly in 
December. This language was the result of a long process of bipartisan 
negotiations last year that resulted in agreement on over four hundred 
pages of legislative language, on all but two issues. Although we were 
prepared to go directly to the Senate floor and complete this 
unfinished business of the last session, because of complaints by some 
Democrats on the committee, we held yet another committee hearing on 
the subject. Even after the hearing, some Democrats on the committee 
raised additional objections, and that is why we marked up the 
legislation in committee, instead of moving directly to the Senate 
floor for its quick consideration. We tried our best to accommodate our 
colleagues on the other side. I think we did, and I believe they 
appreciate it.
  Although some 27 democratic amendments were circulated for the 
committee markup, I am pleased that our Democratic colleagues 
ultimately limited their offering of some of the amendments because 
those of us on the Republican side of the aisle worked very hard to 
accommodate Democratic concerns with respect to substantive amendments. 
We accepted several amendments and developed compromise provisions on 
several others. It is my sincere hope that we can work constructively 
on the floor without an unnecessary flood of amendments and without 
undue delay.
  Again, this legislation was agreed to during bipartisan negotiations 
last year, with the exception of two provisions, one of which--the 
issue of the dischargeability of debts relating to violence--we worked 
in committee to resolve. I am pleased that the bill now includes a 
reasonable compromise developed by Senator Schumer and me that 
addresses the concerns of both sides in a fair manner. Let me take this 
opportunity to thank Senator Schumer for his leadership and hard work 
on this issue.
  I am also pleased to have worked with the Ranking Democratic Member 
of the Judiciary Committee, Senator Leahy, to include for the first 
time privacy protections in bankruptcy. The amendment protects 
personally identifiable information given by a consumer to a business 
debtor by adding new privacy protections to the bankruptcy code and by 
creating a consumer privacy ombudsman to appear before the bankruptcy 
court.
  Given that the language we are considering is the Senate-passed 
conference report with the only changes being ones sought in committee 
by our Democratic colleagues, I am hopeful that we can all stand by the 
compromises we reached in good faith last year. I am the first to 
acknowledge that there are things I would like to

[[Page 2750]]

see changed in the bill, but I recognize that we all have cooperated 
and compromised in order to enact this legislation that provides new 
consumer protections, helps children in need of child support, and 
makes other necessary reforms to a system that is open to abuse.
  As we move to consideration of this legislation, I am heartened, but 
not surprised, by the results of the nationwide voter poll conducted 
for the Credit Union National Association which indicates broad public 
support for reforming our bankruptcy system.
  According to the poll, the vast majority of people believe that 
individuals who file for bankruptcy should be required to pay back some 
of their debts if they have the means to do so.
  This is precisely what the bankruptcy reform legislation is designed 
to do. The late Erma Bombeck once asked her husband, ``What do you 
think I'd do if I won a million dollars?'' ``You'd spend $2 million,'' 
he said. The reason her anecdote is funny is that it rings so true. 
Many people, even during the best of economic times, do not exercise 
financial responsibility.
  The poll also shows that most people think it should be more 
difficult for people to file for bankruptcy. This finding indicates to 
me that Americans have had enough. They believe it should be made more 
difficult for people to file for bankruptcy. Fourteen percent strongly 
oppose that provision, 14 percent somewhat oppose, 24 percent somewhat 
favor it, and 40 percent strongly favor, or 64 to 28. So it is a very 
important thing when you think about it.
  I have to say that, as I have mentioned the poll shows, most people 
think it should be more difficult for people to file for bankruptcy. 
This finding indicates to me that Americans have had enough; they are 
tired of paying for high rollers who game the current system and its 
loopholes to get out of paying their fair share.
  Although this legislation does not make it more difficult for people 
to file for bankruptcy, it does eliminate some of the opportunities for 
abuse that exist under the current system. Our current system allows 
wealthy people to continue to abuse the system at the expense of 
everyone else. People with high incomes can run up massive debts and 
then use bankruptcy to get out of honoring them.
  All of us end up paying for the unscrupulous who abuse the system. In 
fact, it has been estimated that every American family pays as much as 
$550 a year in a hidden tax as a result of the actions from these 
abuses. The bankruptcy reform legislation will help eliminate this 
hidden tax by implementing a means test to make wealthy people who can 
repay their debts actually honor them. I suppose we can call this a tax 
cut for the responsible people in America.
  There are numerous examples of people who take advantage of loopholes 
at the expense of everyone else. I recently heard from the President of 
a credit union in Wisconsin who told me about a young couple who wanted 
a ``clean financial slate'' before they got married. What did they do? 
They ran up their credit card purchases. One of them prepaid on a car 
loan with the credit union to have the other cosigner released. Then, 
although they were both employed full time, they filed for bankruptcy 
to wipe out all their debt. The credit union--and its members--had to 
eat the $3,000 in credit card debt and another couple of hundred 
dollars on the car.
  Bankruptcy relief was never meant to allow this kind of abuse. That 
is a minor story compared to the millions of examples that over the 
years could be cited. Hard-working Americans, including the members of 
credit unions nationwide, have been victimized by abusers of the 
current bankruptcy system long enough.
  Bankruptcy abuse also hurts our Nation's small businesses. As Thomas 
Donahue, the president and CEO of the U.S. Chamber of Commerce, said 
recently:
  Without congressional action, losses from bankruptcy abuses will 
continue to break the banks, and backs, of the Nation's small 
businesses and retailers, which work with slim profit margins and an 
even smaller margin for error.
  Make no mistake, misrepresentations about this legislation have been 
running rampant by those who oppose any meaningful bankruptcy reform. 
Perhaps we can take some comfort in the words of former British Prime 
Minister Harold MacMillan who said:

       I have never found, in a long experience of politics, that 
     criticism is ever inhibited by ignorance.

  Despite the allegations of opponents of reform, the poor are not 
affected by the means test. The legislation provides a ``safe harbor'' 
for those who fall below the median income, so they are not subjected 
to the means test at all.
  Another misrepresentation I have heard again and again is that this 
legislation won't let people file for bankruptcy relief when they need 
it. The fact is, this legislation does not deny anyone access to 
bankruptcy relief; it just requires those who have the means to repay 
debts based on their income to do so. It is that simple.
  Opponents of this legislation have also waged the claim that it 
somehow hurts women and children. This falsehood is a particularly 
disturbing one for me to hear because I have had a long history of 
advocating for children and families in Congress. I have worked 
tirelessly, provision by provision, to make this legislation 
dramatically improve the position of children and ex-spouses who are 
entitled to domestic support.
  It can be difficult to get the word out when misrepresentations 
abound about what bankruptcy reform legislation really does. In fact, 
the bankruptcy legislation will put a stop to letting deadbeat parents 
use bankruptcy to avoid paying child support. This bill would mean 
putting an end to paying lawyers ahead of the children who rely on 
child support. Current bankruptcy law simply is not adequate, and, 
frankly, I was outraged to learn of the many ways deadbeat parents are 
manipulating and abusing the current bankruptcy system in order to get 
out of paying for their domestic support obligations. This bill is a 
tremendous improvement for children and families over current law. That 
is why there is such overwhelming support for this legislation from the 
child support professionals across the country--the very people who go 
after deadbeats to get children the support they need.
  I hope those who oppose any reform to our Nation's bankruptcy system 
will not engage in petty parliamentary tactics and try to encumber it 
with frivolous amendments. Nevertheless, I am optimistic that this 
much-needed bankruptcy reform legislation will be signed into law this 
year. We have a no-nonsense President in the White House who 
understands the importance of personal responsibility. So let's enact 
this meaningful bankruptcy reform. As I said last year, the American 
people have waited long enough for it, and it is time for us to do what 
really is in the best interest of the people at large. It is time to 
give this, in effect, tax cut to the millions of people out there who 
are paying, on the average, an extra $550 a year because of those 
abusing the system.
  I yield the floor.
  Mr. LEAHY. Mr. President, bankruptcy is a complex area of the law. It 
has competing public policy interests between debtors and creditors and 
among competing creditors.
  The complex and competing interests involved in achieving fair and 
balanced reforms of our bankruptcy system demand we work in a 
bipartisan manner throughout the legislative process. Actually, that is 
the lesson we learned from failed attempts of past reform measures, and 
it is all the more relevant with an evenly divided Senate.
  The Republican leadership in the Senate and of the Judiciary 
Committee I felt did not want the Judiciary Committee involved in 
shaping bankruptcy reform legislation this year, but over the last 
couple of weeks the committee was able to hold an informative hearing 
and a markup that began the process of improving the bill.
  In fact, when we finally started talking about amendments to greatly 
improve the bill, we spent less than 4 or 5 hours. Eight amendments 
were adopted by the Judiciary Committee during a couple hours of work 
on Tuesday and a

[[Page 2751]]

couple hours of work on Wednesday, and we improved it.
  I am pleased to learn of the majority leader's remarks on Wednesday 
when he congratulated the committee for its positive action and for 
completing its work on an expedited basis last week. The point being: 
Just put us in a room, actually have us all there, and give us a little 
time. We usually work these things out. We can do the same thing on the 
floor. If the leadership wants us to complete this bill, we can do it 
expeditiously.
  The bill the Senate begins considering today is the bill that 
originated in the Judiciary Committee, S. 420, with those important 
committee amendments already incorporated. The committee held an 
informative hearing and markup which has improved the bill in several 
key areas. I commend the Democratic members of the Judiciary Committee 
for their amendments and for their willingness to expedite committee 
action on this measure. I will give an example.
  Senator Feinstein pointed out a number of aspects of the bill need 
further refinement and our attention with respect to the harshness of 
the means test and the need for balance with regard to consumer credit 
disclosures and solicitations. In addition, she coauthored with Senator 
Feingold an amendment that the committee debated and adopted by a 10-8 
vote to provide balance and fairness to the bill's landlord-tenant 
provisions. I know the Senator from California will continue her good 
work so that the bill considered by the Senate is further improved.
  During the markup, the committee adopted a number of improvements to 
the bill. We also showed what happens when we work in a bipartisan 
fashion.
  I commend the chairman and Senator Schumer for reaching agreement on 
one of the most contentious issues in the bankruptcy debate in the last 
Congress: the discharge of penalties for violence against family 
planning clinics.
  I believe the compromise Senator Hatch and Senator Schumer worked 
out, along with help from my staff, was possible in part because of the 
powerful testimony at our committee hearing on the need to end this 
abusive practice.
  During our hearing on bankruptcy reform legislation, Maria Vullo, a 
top-rate attorney, testified about the need to amend the bankruptcy 
code to stop wasteful litigation and end abusive bankruptcy filings 
that are used only to avoid the legal consequences of violence, 
vandalism, and harassment to deny access to legal health services. I 
believe she impressed all members of the committee. I think she made 
all members of the committee realize we have to move on this issue.
  As a result of the amendment adopted by the committee last week, 
perpetrators of clinic violence will no longer be able to seek shelter 
in the Nation's bankruptcy courts.
  In addition, the committee adopted a Leahy-Hatch amendment to protect 
the personal privacy of consumers whose information is held by firms in 
bankruptcy. The amendment of the Senator from Utah and I permits 
bankruptcy courts to honor the privacy policy of business debtors and 
creates a consumer privacy ombudsman to protect personal privacy in 
bankruptcy proceedings.
  I appreciate the chairman's effort in joining me on this amendment to 
add important consumer privacy protections to the bankruptcy code.
  The irony is, the Leahy-Hatch amendment would not even be needed if 
everybody was doing what they should. The Leahy-Hatch amendment is 
needed because the customer list and databases of failed firms can now 
be put up for sale in bankruptcy without any privacy considerations, 
and even in violation of the failed firm's own public privacy policy 
against the sale of personal customer information to third parties.
  Let me explain what happens. You have an online company and they have 
a privacy policy that guarantees privacy of your family's information: 
You can give us all the details about your children, you can give us 
all this information because we promise you we will never sell it to 
anybody else; we will never give it to anybody else.
  They keep their word, but they go into bankruptcy. The bankruptcy 
court looks at the file and says the only thing you have left worth any 
money is this list of names of these children, their parents, whomever. 
It is valuable. The trustee in the bankruptcy says: I have sworn an 
oath; I have to uphold the law. I have to sell that list. Suddenly the 
list you thought was sacrosanct is sold. I will give an example.
  Toysmart.com. is a failed online toy store. It filed for bankruptcy 
last year. Its databases and customer lists were put up for sale as 
part of the bankruptcy proceeding. It went on the auction block even 
though they promised that all the information would never be allowed 
out.
  The Leahy-Hatch amendment that we adopted in committee adds privacy 
protections and a consumer privacy ombudsman to the bankruptcy code to 
prevent future cases such as Toysmart.com.
  We adopted several amendments by Senator Feingold to strengthen 
chapter 12 to help our family farmers with the difficulties they face.
  I offered another amendment that added a number of temporary 
bankruptcy judgeships to the bill, actually in line with the 
recommendations of the Judicial Conference of the United States.
  All in all, the eight amendments the committee adopted to the initial 
proposal began the process of improving the bill during this Congress. 
We worked expeditiously in the Judiciary Committee to accommodate the 
interests of the majority leader in having prompt action on this 
measure. We did so in spite of the fact that this committee has not 
taken the organizational actions necessary to adopt a budget and to 
create subcommittees.
  I thank the Members on my side of the aisle who have been willing to 
make quorums and move forward even though we have yet to organize the 
committee.
  Last Wednesday, the majority leader said on the Senate floor:

       I think the committee needs to be congratulated because the 
     committee worked yesterday, it worked again today, and it 
     completed its work. I do not know how many amendments 
     actually were considered, but they dealt in some way with as 
     many as 30 amendments and I guess voted on a whole lot of 
     them.

  I thank the majority leader for his kind words about the Judiciary 
Committee's consideration of this bill.
  The majority leader also stated on the Senate floor last week that he 
hoped ``for a full and free debate--amendments will be offered, 
considered, and voted on.''
  I agree we should have such a full and free debate. It is actually 
the best way to proceed. The irony is we have a lot of discussion about 
should the Judiciary Committee mark this bill up or not mark it up? 
Should we meet on this bill or not meet on this bill? We spent more 
time talking about meeting on the bill than we actually did when we sat 
down.
  When we sat down and followed the normal process, we considered the 
amendments, we voted them up or down and sent the bill to the floor. 
The Senate works best when it can openly and freely work its will on 
major legislation.
  Senators will return tomorrow. If we start voting on this early, 
bring up amendments, vote on this early tomorrow, go into the early 
evening, do the same on Wednesday, probably into Thursday morning, we 
can easily finish this bill so long as we don't interrupt it for other 
work.
  We made a good start in the Judiciary Committee, but there are some 
issues that have to be held to the floor. We did not address the 
homestead exemption cap. Certainly that is a huge loophole where 
somebody could dump a whole lot of money in a few States into 
multimillion-dollar mansions and then declare bankruptcy and hide it 
from creditors.
  We didn't talk about consumer credit card disclosures. Chairman Hatch 
asked that a number of these amendments be reserved for floor action. I 
agreed so as to help move this out of committee. But now we are ready 
to offer those amendments.
  I believe we can craft a balanced bankruptcy reform law that corrects

[[Page 2752]]

abuses by debtors and creditors in the current bankruptcy system. For 
example, we should provide for more disclosure of information so 
consumers may better manage their debts and avoid bankruptcy 
altogether. They must have a better idea what it means when they sign 
up for a credit card. They ought to have some idea when they are told, 
here is the minimum payment for the month. They also ought to have 
something saying, if you carry the minimum payment, here is what you 
will owe in the end, which may be many times what was paid for the item 
in the first place.
  I know Senators Levin, Durbin, Schumer, Dodd, and others share a 
commitment to include credit industry reforms in a fair and balanced 
bankruptcy bill.
  Billions of credit card solicitations made to American consumers in 
the past few years have contributed to the rise in consumer debt and 
bankruptcies, including a 7 or 8 year old receiving a credit card with 
a long line of credit, or a dog gets a credit card. Somebody puts their 
dog's name on an answer to a letter, and suddenly the dog is getting a 
credit card with an approval letter: Dear Mr. Rover Leahy: We are so 
impressed with your past credit card we are now giving you a $2,000 
credit line.
  When it comes to kids in school who can barely get enough money to go 
to the movies, credit card companies say: Dear Student: With your great 
credit card, here is $2,000, $3,000.
  The idea is if you start using it, you get hooked on using that one 
credit card. On one side we have people trying to hook kids on drugs; 
on the other side, we have credit card companies trying to hook them on 
credit cards. In fact, it is estimated that last year credit card 
companies mailed 3.3 billion solicitations. In case you wonder why your 
mail is late, it is because of the credit card solicitations.
  Many of the most controversial proposals for changing this bill are 
to benefit the credit card industry. A lot of what is driving the 
consideration of this bill is that the credit card industry is going to 
get some real big gifts. The biggest gift is to give to the credit card 
industry the taxpayer pays for bankruptcy courts and the authority of 
the Federal law to help them with the collection practices of these 
companies after they have given the credit card to your pet dog or your 
kids in school or your aging parent in a nursing home.
  Business Week recently reported Dean Witter estimated this bill would 
boost the earnings of credit card companies by 5 percent a year. Want 
to know about a gift? This bill at present would give credit card 
companies alone a 5-percent increase. I would like to become the CEO of 
one of those credit card companies, hope the bill passes, and I could 
say: Look, our earnings went up.
  One credit card company, MBNA, would make in profit--not in earnings, 
but in profit--$75 million a year, according to the Business Week 
article, if we pass this bill the way it is.
  They will make a lot of money. If some of their lobbyists are outside 
singing jingle bells, it is not just the snow that shut down the 
Washington area this morning that encouraged them; it is this bill. In 
fact, it is only fair if the credit card industry is going to get the 
profits, they ought to be involved in bankruptcy reform. They ought to 
be asked to show how the changes they seek will benefit consumers. If 
they are going to make the extra profits, if they are going around 
saying it will benefit consumers, let me see the lower interest rates. 
Let me see the lower fees.
  If this bill passes and gets signed into law, let us all ask the 
credit cards, where are the lower fees? Where are the lower interest 
rates? Who wants to bet we will see them?
  There is no guarantee the billions in credit industry profits are 
going to be passed along to the consumers. I happen to agree with 
President Bush. He underlined the importance of examining credit 
industry practices when discussing the state of America's economy.
  President Bush said he will ``remind Members of both the Senate and 
the House that there is a lot of debt at the Federal level, but there 
is a lot of debt at the private level. We've got a lot of people 
struggling to pay off credit card consumer debt.''
  I am one Democrat who says President Bush is absolutely right. I 
agree with him. I think we ought to tell the credit card companies if 
you are going to get a big windfall from the Senate and the House, give 
something back to the consumers, and stop trying to hook kids on credit 
and credit cards that they can never pay off in their lifetime. Stop 
trying to hook them when they are in college, stop trying to hook 
parents who are strapped already with more credit cards without telling 
them what it will really cost them if they get behind.
  Another improvement we should make is to address the problem of 
wealthy debtors who use overly broad homestead exemptions to shield 
assets from their creditors. Senator Kohl has been a leader on this 
issue and a champion for closing down the loophole for the rich.
  In some States, wealthy debtors have million-dollar mansions that are 
protected from bankruptcy. There has been an abuse of the bankruptcy 
fresh start protection. In the last Congress, the Senate 
overwhelmingly, Republicans and Democrats, voted to close this loophole 
of the bankruptcy code. By a vote of 76-22, the Senate adopted a 
bipartisan amendment offered by Senators Kohl and Sessions to cap 
homestead exemption at $100,000. But the giveaway bill this year guts 
that provision. We have to put it back in. We want to make this law 
have a sense of being balanced.
  At our hearing in the committee, Brady Williamson, the former chair 
of the National Bankruptcy Reform Commission, testified that ending 
homestead abuse was a key consensus recommendation of the Bankruptcy 
Reform Commission.
  I think we should remember as we go through this week what purpose 
bankruptcy serves. It is a safety net for many Americans. That is why 
it has been here since the beginning of this country. Those who use 
bankruptcy are usually the most vulnerable of the American middle 
class. They are older Americans who have lost their jobs or are unable 
to pay their medical debts. They are women attempting to raise their 
families or secure alimony and child support after a divorce. They are 
individuals struggling to recover from unemployment.
  As we move forward with reforms that are appropriate to eliminating 
abuses in the system, we need to remember the people that use the 
system, both the debtor and the creditor. We need to balance the 
interests of creditors with those of middle-class Americans who need 
the opportunity to resolve overwhelming financial burdens.
  The last two Congresses proved there are many competing interests in 
the bankruptcy reform debate that make it difficult to enact a balanced 
and bipartisan bill. By working in a bipartisan fashion from the 
beginning of the amendment process to the end, we can craft reforms and 
ensure our bankruptcy laws better serve the intended goals and correct 
abuses of the bankruptcy system by debtors and creditors. That is why I 
say let the process work through. Bring up amendments. Some will be 
adopted; some will not.
  Nobody is out here to delay it. We are just trying to make a better 
bill. Let's do something about the homestead exemption. Let's do 
something about appropriate disclosure to consumers.
  Let us make this a better bill and then send something to the 
President that he can be proud to sign, knowing it is consistent with 
what he said about a lot of people struggling to pay off credit card 
debt. The President will know that we have done something consistent 
with what he said just in the last couple of days.
  I will work with Senator Hatch and my good friend, Senator Grassley 
from Iowa, to make more improvements on the Senate floor. Let's reach a 
bipartisan consensus that can be enacted into law. Let's do it in the 
next couple of days. Let's work on this. Let's start voting early 
tomorrow on it and let's wrap it up. Let's not go off this until

[[Page 2753]]

we finish. If we do that, we can complete our work.
  Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CARPER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kennedy). Without objection, it is so 
ordered.
  Mr. CARPER. Mr. President, for the last hour or so we have been 
privileged to hear comments from Senator Hatch and Senator Leahy who 
discussed the debate of the bankruptcy reform legislation, which took 
place in the Judiciary Committee over the last several weeks. We now 
have the opportunity, today and tomorrow, to begin amending the 
bankruptcy reform legislation that was vetoed by President Clinton last 
year.
  I wish to express my own appreciation to both Democrats and 
Republicans on the Judiciary Committee for letting the process work, 
and for moving the process forward.
  I especially thank Senator Schumer and Senator Hatch for working out 
a compromise on those who would use bankruptcy as a way to avoid their 
responsibilities; or for those who have brought action against family 
planning clinics, or, frankly, any act of violence, intimidation or 
threat.
  I am appreciative of Senator Leahy and Senator Hatch for the work 
they have done in trying to make sure that consumer privacy protections 
are provided in this legislation.
  The history of bankruptcy is known by many people. For much of the 
last century, individuals and businesses have been able to seek 
protection through bankruptcy in order to put their lives back 
together, or their businesses back together. Several chapters that 
exist for bankruptcy are designed to provide a place for consumers to 
find relief.
  In the last decade we have witnessed some of the strongest economic 
expansion in our country's history--the longest economic expansion in 
our Nation's history--yet during the 1990s we have seen an alarming 
increase in the number of people filing for bankruptcy.
  Not all of those people who filed for bankruptcy had any other 
recourse. In fact, the lion's share of the people who filed for 
bankruptcy last year--or the year before that and the year before 
that--were folks who were up against the wall. They needed a way out 
and for them bankruptcy was that way out.
  There are people who lost their jobs; people whose family suffered 
illnesses; maybe catastrophic illnesses; or marriages that were 
dissolved; or relationships that came to an end. And because of those 
situations and others like them, those families need the protection of 
bankruptcy.
  Not everyone who files for bankruptcy needs the protection afforded 
them in chapter 7. For some who file, chapter 7 is not the appropriate 
venue, because they have the ability to pay at least a portion of their 
debt. If an individual can repay some of their debt, they should 
instead file under chapter 13.
  The challenge that the committees in the Senate and House faced last 
year was to try to figure out a fair way to determine who indeed had 
the ability to pay something of their debts and who did not.
  Among the other reasons why we need reform--it has been alluded to 
before, and I will touch on it briefly--is that under current 
bankruptcy law those who have an obligation to pay child support, or 
those who have an obligation to make alimony payments, in many cases 
find those priorities low on their list. And, frankly, they are pretty 
low on the list of the bankruptcy laws of our land. We need to do 
something about that. This legislation would. It would raise the 
priority of child support payments and alimony payments as well.
  Currently those who have those kinds of obligations to their 
children, or to a former spouse, also have to try to use something 
called the automatic stay as a way to avoid meeting those obligations 
while their bankruptcy case winds its way through court, and sometimes 
this can be a long period of time. This legislation would end the 
automatic stay for child support and alimony payments, making sure 
individuals are responsible for these personal obligations.
  State and local governments are affected as well. As former Governor 
of Delaware, and former chairman of the National Governors' 
Association, one of the reasons why the National Governors' Association 
supported bankruptcy reform was to make sure individuals who had the 
ability to pay some of their State and local taxes were called upon to 
do that where it was reasonable. This legislation would do that.
  In the end, when people who have the ability to pay, do not pay and 
walk away from those debts, the rest of us end up paying the costs of 
their bankruptcy. Businesses and creditors have to swallow the debt. 
Then, those of us who borrow money--whether it is for a house, or for a 
car, or for credit card purchases--in the end we pay more than we 
really ought to. This is not fair to the majority of us who pay our 
bills.
  I have only been in the Senate for about 2 months. One of the 
comments I have heard most frequently is the old adage ``don't let the 
perfect be the enemy of the good.'' My guess is we are going to hear 
that a lot on the Senate floor this week. I will be the first to say 
it.
  This bill represents in many respects so much that is needed. The 
changes don't do everything I would like. I will mention a couple of 
concerns that I have.
  I think it was Senator Leahy who spoke a few moments ago about the 
credit card applications that come to our children.
  In some cases rather young children, even to our pets. I think he 
referred to Rover, Rover Leahy. I do not know if his dog actually did 
get a credit card application. I would just say we get a lot of mail in 
our home. I am sure we all do. We probably get more credit card 
solicitations than we would like. But we simply throw them away if we 
are not interested.
  If credit card issuers or, frankly, others who are extending credit 
are so foolish as to extend credit to a pet or to a child, who does not 
have the ability to repay that obligation, that is a poor underwriting 
decision by the extender of the credit. And they deserve, in the end, 
what they will get. It is issued probably to someone who either maybe 
will not use it, or if they do use it, it is perhaps not with the 
intent of ever paying that obligation.
  For the real person who is actually extended the credit card under 
those circumstances, under this bill, if they do not have the ability 
to pay, if, indeed, their income is under a median family income, they 
have a safe harbor. If they have to declare bankruptcy, they will 
continue to have the ability to file under chapter 7 and will not have 
to pay that obligation.
  Senator Leahy also mentioned the issue of disclosure. We get our 
credit card statements whenever they come. There is a statement on the 
credit card that says: If you pay your minimum monthly amount that is 
due, you can do so and not incur any kind of penalty. The credit card 
does not say how long it is going to take you to actually pay off your 
credit card bill if you only pay the minimum.
  I wish there was some way to address that in a way that does not put 
the extender, the creditor, in harm's way with respect to class action 
lawsuits. This is a difficult situation.
  The bill that is before us this week does provide an example to those 
of us who are consumers and explains that if we only pay the minimum 
payment, it may take an extended period of time to pay our credit card 
bill. It actually uses an example, as I understand it. Creditors, in 
this case, issuers of a credit card, are to provide on the statement an 
example that if this is how much you owe, and you pay your minimum 
payment--and this is the interest rate--this is how long it will take 
you to actually pay down your obligation. They actually offer a 1-800 
number that someone can call to say: ``My

[[Page 2754]]

debt is $800. That is what my statement says. My minimum payment is $20 
a month. How long will it take me to pay it off?'' We can get an answer 
by calling the 1-800 number.
  I wish we had the ability to put a close estimate of what the debt 
would cost a consumer, and how long it would take to pay off, right on 
the credit card statement. I am told the reason why the bill out of 
committee does not do that is because of concerns about class action 
lawsuits. That is a legitimate concern but, for me, the solution is not 
a perfect one.
  The other issue I wish we could address is the homestead exemption. I 
understand Senator Kohl may try to address this issue this week. People 
roll up big debts and then go to a State that has a large homestead 
exemption, and they put a lot of money, a lot of assets therein, for 
example, a very expensive home--a quarter of a million dollars, half a 
million dollars, or million-dollar home--and then walk away from their 
other obligations and use that estate, that homestead to protect their 
assets.
  I understand Senator Kohl is going to offer an amendment that makes 
this practice somewhat more difficult to do. I welcome that provision.
  But most of the people who file for bankruptcy are not folks who seek 
to try to stiff credit card or financial institutions or department 
stores or anyone else. They are people who are left with little other 
choice. As I said earlier, they have been dealt, in many cases, a 
difficult or maybe a crippling blow in their lives. More than 90 
percent of the people who file for bankruptcy actually need the 
protection of the laws, and fewer than 10 percent actually have the 
ability to pay something back.
  But of those people who do have the ability to pay something back, I 
believe--and I suspect almost all of us believe--that they should repay 
at least a portion of their debts. I don't care if it is only 5 percent 
of the people who file who have the ability to pay something back--or 4 
percent or 3 percent--if they have the ability, they should make that 
effort. We should expect that of them and of ourselves.
  A major challenge the committee has faced, and the Congress has 
faced, in trying to craft an appropriate balance--weighing the concerns 
and rights of consumers versus those who extend the credit--is in 
relation to the tough questions that we have dealt with, such as how do 
you actually determine the ability to repay? We all come from different 
family circumstances in terms of employment, marital status, and 
illness. How do we determine who has the ability to repay? The 
committee, to its credit, has provided for a safe harbor, essentially 
to say people whose median family income falls below that of 100 
percent of the median family income with respect to their State, they 
would automatically have a safe harbor. They could file for bankruptcy 
in chapter 7, and they basically get a free pass.
  What is 100 percent of median family income? I think for a family of 
four in Delaware, it is about $45,000 a year. I think in Maryland, it 
is about $50,000 a year; and in Alabama, it is perhaps $35,000 a year.
  For those whose family income is between 100 percent of median family 
income and 150 percent of median family income, they would receive, not 
a complete pass, but a rather cursory review to see if they would not 
also qualify for that safe harbor.
  So we are talking about, in Maryland, for example, those whose income 
is between $50,000 and $75,000 would be below the 150-percent 
threshold, and I think would, for the most part, after an expedited 
review, have the right to file under chapter 7.
  I think it is appropriate to ask, for one who files for bankruptcy, 
what kind of expenses are factored in when determining whether or not a 
person has the ability to pay? We get beyond these thresholds of 100 
percent of median family income, 150 percent of median family income. 
Is anything else taken into account? As it turns out, a number of 
payments are. And they are the kind of payments we would expect for 
people to be able to hold their households together and be able to 
work.
  For example, a person who is asking to file under chapter 7, as 
opposed to chapter 13, if their income exceeds those thresholds of 100 
percent or 150 percent of median family income, they could present 
documentation to the bankruptcy court indicating how much their housing 
costs, their rent or mortgage payments are. If they have car payments, 
those would be appropriate, as well as would education expenses, 
clothing, and food allowances. Judges are given discretion to address 
special needs as well, including medical costs.
  Let me close by saying Senator Leahy, in his comments, talked about 
how many credit card solicitations are mailed out every year. I think 
he indicated the number is over 3 billion. That is a lot of mail. I 
would just remind everyone, as those credit card solicitations come 
into our mail boxes, of course, we do not have to take advantage of all 
of them. When I drive down the road in Delaware, and I go by an ice 
cream store or a doughnut shop, as much as I might be tempted to pull 
in and sample their wares, I do not always do that. We have to show 
some personal discretion regardless of how tempting those treats might 
be.
  But if financial institutions actually do make money, and if their 
bottom lines are enhanced to some extent by the adoption of this 
legislation, my guess is, in the end, they all do not keep that money. 
My guess is, in the end, if you think about the competition--and it is 
a dog-eat-dog world these days in the credit card business--if I do not 
like the interest payment that comes with my credit card, I can find 
dozens of other issuers with a lower rate. If I do not like the monthly 
fee that I am asked to pay, I can find dozens of other issuers with 
lower monthly fees.
  I would simply suggest the competitive nature of the business, 
including the credit card business, is such that for those issuers of 
credit cards who do not pass along some of those savings to consumers, 
then their competitors will. If competitors lower their interest rates 
and reduce or eliminate their monthly fees, those of us who are 
consumers will move off to take advantage of their lower interest rates 
and lower fees.
  Let me conclude with these comments. I am glad we are at this point 
in the debate. I look forward to the debate over the next several days. 
I am very pleased we are going to have this debate. And those who have 
amendments, if they want to offer them, will have the opportunity to do 
so. We will debate them, and vote on them, and then vote on final 
passage.
  I hope the amendments make the bill even a little better than it is 
today. I think it is better today than it was going into the committee 
a week or so ago. I am pleased to participate in the debate.
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from 
Massachusetts.
  Mr. KENNEDY. Mr. President, bankruptcy judges, scholars, 
practitioners, labor unions, consumer advocacy organizations, and civil 
rights groups have uniformly rejected the Bankruptcy Reform Act of 2001 
because its harsh and excessive provisions will have a devastating 
effect on working families.
  Despite their words of warning, two of the most profitable industries 
in America--the credit card industry and the banking industry--have 
insisted upon a harsh bill that will fatten their bottom line while 
unfairly penalizing vulnerable Americans.
  While we do need to pass a bill to reduce the fraud and abuse within 
the bankruptcy system, this bill will not accomplish that goal. This 
bill will hurt women, children, and hard-working American families, 
those who truly need the bankruptcy system to prevent unintended 
financial hardship.
  This is no time to pass such harsh legislation. For weeks, President 
Bush has warned the Nation about the perils of an economic downturn. 
Pointing toward layoffs and rising unemployment, decreasing consumer 
confidence, and minimal economic growth, President Bush is urging 
Congress to act to strengthen the economy. But punitive bankruptcy 
reform legislation does not fall into that category. Now more than

[[Page 2755]]

ever, we need to ensure that Americans losing their jobs or struggling 
with medical debt have the second chance for economic security that the 
bankruptcy laws are intended to provide. It makes no sense to pull the 
rug out from under them, just as the economy is weakening.
  We need to separate the myths from the facts--and focus on the real 
winners and losers under the proposed legislation. By any fair 
analysis, this bankruptcy bill is the credit industry's wish list, a 
blatant effort to increase its profits at the expense of working 
families.
  We know the circumstances and market forces that often push middle 
class Americans into bankruptcy.
  Rising unemployment and company layoffs are major parts of the 
problem. In recent months, the slowing economy has caused a noticeable 
jump in the national unemployment rate. It rose to 4.2 percent in 
January, the highest level in 16 months. The slowing economy has also 
triggered massive layoffs. Within the past weeks, Verizon announced its 
plan to cut approximately 10,000 jobs, and Daimler Chrysler announced 
it would drastically cut its workforce by eliminating 26,000 jobs over 
the next three years. Xerox plans to eliminate 800 jobs on top of the 
5,200 cut last Fall. Telecommunications giant World Com reported plans 
to lay off up to 15 percent of its workforce, a loss of 11,500 jobs. 
Sara Lee plans to lay off 7,000 employees. AOL-Time Warner wants to cut 
2,000 jobs. Lucent Technologies plans to eliminate 10,000 workers. The 
layoffs go on and on. Overall, companies have announced plans to lay 
off close to 70,000 workers--and the year has just begun.
  Often, when workers lose their current good jobs, they are unable to 
recover. In a February 2000 survey conducted by the Bureau of Labor 
Statistics that approximately one-fourth of workers displaced from 
full-time wage and salary jobs received earnings substantially lower 
than what they had received before they lost their jobs. It is all too 
common for laid-off workers to be forced to accept part-time jobs, 
temporary jobs, or jobs with fewer or no benefits at all.
  Divorce is another major cause of bankruptcy. Divorce rates have 
soared in recent decades, and the financial consequences are 
particularly devastating for women. Divorced women are four times more 
likely to file for bankruptcy than married women or single men. In 
1999, 540,000 women who head their own households filed for bankruptcy 
to try to stabilize their lives; 200,000 of them were also creditors 
trying to collect child support or alimony. The rest were debtors 
struggling to make ends meet.
  Another major factor in bankruptcy is the high cost of health care. 
Forty-three million Americans have no health insurance, and many more 
are underinsured. Each year, millions of families spend more than 20 
percent of their income on medical care. Older Americans are hit 
particularly hard. A 1998 CRS Report states that even though Medicare 
provides generally good health coverage for older Americans, half of 
this age group spend 14 percent or more of their after-tax income on 
out-of-pocket health costs, including insurance premiums, co-payments 
and prescription drugs.
  A report published in Norton's Bankruptcy Adviser says:

       The data reported here serve as a reminder that self-
     funding medical treatment and loss of income during a bout of 
     illness or recovery from an accident make a substantial 
     number of middle class families vulnerable to financial 
     collapse. For middle class people, there is little government 
     help, so that when private insurance is inadequate, 
     bankruptcy serves by default as a means for dealing with the 
     financial consequences of a serious medical problem.

  These are the desperate individuals and families from whom the credit 
card industry believes it can squeeze higher profits. The industry 
claims that these men and women are cheating and abusing the bankruptcy 
system, and are irresponsibly using their credit cards to live in a 
luxury they cannot afford.
  These Americans are not cheats and frauds, but they do constitute the 
vast number of Americans in bankruptcy. Two out of every three 
bankruptcy filers have an employment problem. Two out of every five 
bankruptcy filers have a health care problem. Divorced or separated 
people are three times more likely than married couples to file for 
bankruptcy. Working men and women in economic free fall often have no 
choice except bankruptcy. Yet, the credit card industry is determined 
to deny them the safety net they need.
  There is no doubt that large numbers of Americans will be harmed by 
this legislation. They do the right thing and play by the rules. They 
work hard and try to provide for their children. But sometimes, 
unexpected tragedy strikes, and nothing can prepare them for the 
financial difficulties they will encounter.
  The Trapp family of Plantation, FL is one of these families. They are 
not wealthy cheats trying to escape from their financial 
responsibilities. They are a middle class family engulfed in debt, 
because of circumstances beyond their control.
  Mr. and Mrs. Trapp worked as letter carriers for 12 years. Both 
worked before and after their three children were born. They had a good 
life, but an unexpected medical obstacle occurred. Their 4 year old 
daughter, Annelise, contracted a muscle disease that is similar to a 
very rare form of Muscular Dystrophy. Her muscles are very weak. She 
needs a respirator to breathe, and she also needs constant nursing 
care.
  The Trapps had good health insurance through the United States Postal 
Service. But even with this comprehensive coverage, Annelise's medical 
expenses left the family with massive debts. Their insurance has paid 
millions of dollars, but the Trapps' portion of the bills was still 
$124,000. This debt combined with $26,000 owed on a specially 
manufactured van to accommodate Annelise made it impossible for the 
family to meet its financial obligations. They were forced to declare 
bankruptcy.
  Proponents of the bill argue that the Trapp family would not be 
affected by the means test, because their current income is below the 
State median income. That is not true. Before Mrs. Trapp left her job, 
the family's annual income was $83,000 a year or $6,900 a month. Under 
the bill, the Trapp family's previous six months' income would be 
averaged, so that they would have an average monthly income of about 
$6,200--above the State median --even though their actual monthly gross 
income at the time of filing was $4,800.
  Based upon the fictitious income assumed by the legislation, the 
Trapp family would be subject to the means test. And the means test 
formula--using the IRS standards--assumes that the Trapps have the 
ability to repay more than their actual income would allow.
  This harsh legislation is an undeserved windfall for one of the most 
profitable and powerful industries in America. Credit card companies 
are engaged in massive and unseemly nationwide campaigns to hook 
unsuspecting citizens; like the elderly, college students, and the 
working poor, on credit card debt. In 1999 alone, Americans received 3 
billion--3 billion--credit card solicitations. That's more than three 
times the 900 million mailings they received in 1992.
  The average American household is carrying $7,500 worth of debt, 150 
percent higher than a decade ago. A major cause of the problem is that 
the cost of credit has gone up, and credit card companies are 
bolstering their profits through heavy penalties and aggressive 
collection practices. Credit card companies are also targeting 
marketing campaigns at those who cannot afford to pile up such debts. 
Instead of helping these individuals recover from their debts, the 
industry is supporting legislation that will only drive them deeper 
into financial despair.
  Supporters of the bill argue that it is not a pro-credit card 
industry bill. But, to deal effectively and comprehensively with the 
problem of bankruptcy, we have to deal with the problem of debt. We 
must see that the credit card industry does not abandon fair lending 
policies to fatten its bottom line, or ask Congress to become the 
collector for its unpaid credit card bills.
  The industry and congressional supporters of the bill attempt to 
argue

[[Page 2756]]

that the bankruptcy bill will help, not hurt, women and children. But 
that is false and misleading.
  Proponents of the bill praise the alimony and child support 
provisions. They say that these provisions will make child support and 
alimony payments the number one priority in bankruptcy. But this 
rhetoric masks the complexity of the bankruptcy system. When taken 
individually, some of these provisions are positive steps towards 
helping women and children collect the support to which they are 
entitled. However, they do not address the main problem created by the 
bankruptcy bill.
  Thirty-one organizations that support women and children have said, 
``Some improvements were made in the domestic support provisions . . . 
However, even the revised provisions fail to solve the problems created 
by the rest of the bill, which gives many other creditors greater 
claims--both during and after bankruptcy--than they have under current 
law.'' It is obvious that if this bankruptcy legislation is enacted, 
women and children will be the ultimate losers in the process.
  It is true that the pending legislation moves support payments to 
first priority in the bankruptcy code. But the first priority ranking 
only matters in the limited number of cases in which the debtor 
actually has assets to distribute to a creditor. As 116 professors of 
bankruptcy and commercial law have stated:

       Granting ``first priority'' to alimony and support claims 
     is not the major solution the consumer credit industry 
     claims, because ``priority'' is relevant only for 
     distributions made to creditors in the bankruptcy case 
     itself. Such distributions are made in only a negligible 
     percentage of cases. More than 95 percent of bankruptcy cases 
     make NO distributions to any creditors because there are no 
     assets to distribute. Granting women and children first 
     priority for bankruptcy distributions permits them to stand 
     first in line to collect nothing.

  Beyond the false rhetoric claiming that women and children receive 
``first priority'' lies an ugly truth--in many instances, women and 
children will be last in line. Under current law, an ex-wife trying to 
collect support has special protection. But under the pending bill, 
more debt is created that cannot be discharged after bankruptcy--credit 
card debt. This step will certainly create intense competition for the 
former husband's limited income. Under current law, he can use his 
post-bankruptcy income to meet his basic responsibilities, including 
his student loans, his tax liability, and his support payments to his 
former wife and children. But if this bill becomes law, one of his so-
called ``basic'' responsibilities will be a new one--to Visa and 
Mastercard. We all know what happens when women and children are forced 
to compete for these scare resources with these sophisticated lenders--
they lose!
  Although many of the new domestic support provisions are helpful, 
they don't solve the problem created by this bill--and some of those 
provisions undermine the ability of women to collect support payments. 
Under the bill, a prerequisite to Chapter 13 approval is the payment of 
support claims. The goal is worthwhile, but other provisions in this 
bill will drain debtors of available funds and prevent them from 
meeting the requirements of a Chapter 13 plan and from making child 
support payments. If there is not enough money to cover all 
obligations, including the new obligations created by this bill, more 
Chapter 13 plans will fail, making the provision worthless and making 
it less likely that women and children will get the support they 
deserve.
  This legislation not only unfairly targets middle class and poor 
families--it also leaves flagrant abuses in place. Any credible 
bankruptcy reform bill must include a homestead provision without 
loopholes for the wealthy.
  The pending bill does include a half-hearted loophole-filled 
homestead provision. However, it will do very little to eliminate 
fraud. With a little planning--or in some cases, no planning at all--
wealthy debtors will be able to hide millions of dollars in assets from 
their creditors. For example, Allen Smith of Delaware--a State with no 
homestead exemption--and James Villa of Florida--a State with an 
unlimited homestead exemption--were treated very differently by the 
bankruptcy system. After trying desperately to make ends meet in the 
midst of financial distress, Allen Smith eventually lost his home. 
However, James Villa was able to hide $1.4 million from his creditors 
by purchasing a luxury mansion in Florida which he was able to keep 
after bankruptcy.
  Last year, the Senate passed the Sessions-Kohl homestead amendment 
which corrected this abuse of the bankruptcy system. But that provision 
is not in this bill. Surely, a bill designed to end fraud and abuse 
should include a loophole-free homestead provision.
  For any bankruptcy reform to be effective, the homestead loophole 
must be closed permanently. It should not be left open just for the 
wealthy. Yet the bill's supporters refuse to fight for such a 
responsible provision with the same intensity they are fighting for the 
credit card industry's wish list, and fighting against women, against 
the sick, against laid-off workers, and against other individuals and 
families who will have no safety net if this unjust bill passes.
  Proponents of the bill also argue that it will help small businesses. 
This is another credit card industry myth.
  This bankruptcy reform bill is not based on any serious business 
need. In fact, its overhaul of Chapter 11 will hurt, not help, small 
businesses. Chapter 11 was enacted to serve the interests of business 
debtors, creditors, and other constituencies affected by business 
failures--particularly employees. A principal goal of Chapter 11 is to 
encourage business reorganization in order to preserve jobs. Supporters 
of the bill ride roughshod over this important goal. They create more 
hurdles, additional costs, and a rigid, inflexible structure for small 
businesses in bankruptcy. As a result, fewer small business creditors 
will be paid, and more jobs will be lost.
  It is a travesty that hard-working American families will be the 
victims of bankruptcy reform. AFL-CIO President John Sweeney said it 
well:

       This bill punishes working families who need protection 
     from financial distress--distress all too often the result of 
     the terrible financial burden of catastrophic illness or 
     other personal tragedies. It threatens jobs in financially 
     distressed companies, all while it carefully protects abuses 
     of the bankruptcy system that benefit the rich--abuses like 
     the homestead exemption.

  I agree with John Sweeney and the scores of labor, consumer, 
religious, and civil rights groups who oppose this bill. It is clear 
that the bill before us is designed to increase the profits of the 
credit card industry at the expense of working families. If the bill 
becomes law, the effects will be devastating, and I urge my colleagues 
to reject it.
  Mr. President, I want to take a few moments of the Senate's time to 
go through these charts and illustrate some of the points I mentioned 
in my earlier statement. This chart represents why Americans file for 
bankruptcy.
  Medical problems, or substantial medical debt, are the reasons for 45 
percent of bankruptcy filings. Job problems are 68.9 percent, 
effectively 70 percent. Those reasons taken together--job and medical 
problems--amount to 75 percent of all bankruptcies.
  This obviously is accelerated. For what reasons? One reason is the 
increasing softness of the economy at the current time and the 
increasing number of unemployed, particularly with many mergers leading 
to dramatic changes in income over a relatively short period of time.
  Another reason is the increasing number of Americans who do not have 
health insurance and, correspondingly, the increasing amount being paid 
for prescription drugs. If one looks behind these figures with 
reference to medical problems, one will find most of them are older 
workers in their fifties, prior to the time they are eligible for 
Medicare.
  The total number of Americans who are uninsured is increasing. All of 
that is related to the increasing number of layoffs. The increasing 
number of uninsured and the increasing costs of prescription drugs are 
reflected in this figure.

[[Page 2757]]

  Let's look at the remaining approximately 25 percent. Basically, the 
other 25 percent are women who are single, women involved in divorce. 
If we look over this chart, we see that in 1981--red representing joint 
bankruptcies, yellow the men, and blue the women--single women were 
third, behind joint filers and less than men. Joint bankruptcies 
continued. The women passed the men in 1991. In 1999, the women were 
No. 1. They came from being third, virtually about one-fifth of the 
total, to now being almost half the total.
  Who are these individuals? Who are these women? These are women who 
have not been able to claim their alimony. A great percentage of these 
are women who are unable to get child support to which they are 
entitled. What happens to them? They end up in bankruptcy.
  Then we find out how the new provisions in this bill treat them. They 
treat them much more harshly. I'm not the only one saying it, although 
I have repeated it. Virtually every single group that is an advocate 
for children, women, or workers agrees, let alone the bankruptcy 
professionals involved in this. That is what this bill is about.
  I have a list of those groups that are strongly opposed to it. The 
various women's groups include: National Women's Law Center, National 
Partnership for Women and Families, Children's Defense Fund, American 
Association of University Women, Church Women United, Coalition of 
Labor Union Women, National Center for Youth Law, Center for Child Care 
Workforce, the YMCA, and Children NOW. The labor groups include: The 
AFL-CIO, Communications Workers of America, United Steelworkers of 
America, International Brotherhood of Teamsters, and the list goes on. 
Other key groups include: Leadership Conference on Civil Rights, 
Consumers Union, Consumer Federation of America, Religious Action 
Center, Alliance of Retired Americans, and National Senior Citizens Law 
Center.
  This is just part of the list of groups whose prime responsibility is 
representing vulnerable children. That is the purpose of the Children's 
Defense Fund. The other organizations protect women in our society from 
the harshness of legislation and from the inequities of the workplace. 
All of them are universally against this legislation because they find 
it puts a harsh burden on children, women, workers, and on those who 
have experienced a significant increase in their medical bills. That is 
what is happening. This is a profile of those individuals who are going 
into bankruptcy.
  Generally at the end of the day around here, we look at pieces of 
legislation and ask on the one hand, who benefits and on the other, who 
pays. It is not a bad way of looking over legislation. If we had more 
of that around here and we looked out for average working families, we 
would come to some rather different conclusions. We certainly would on 
this one because virtually the entire bankruptcy bar, those professors 
who are teaching in law schools in the North, South, East, and West, as 
well as judges, have come to the same conclusions.
  Members of the Judiciary Committee have reviewed it as a result of 
the hearings. Advocates of the various groups have been out there time 
and time again. One might find fault with one particular group, but 
virtually all the groups that represent children and workers are 
opposed to this legislation because of its unfairness.
  Those who will benefit are the credit card industry and the banks, 
make no mistake about it. That is enormously interesting to me, as 
someone who is the prime sponsor of the minimum wage. We can find time 
for consideration of the bankruptcy bill; yet we do not have time to 
look at an increase in the minimum wage for hard-working Americans. We 
cannot find time to schedule that, but we can find time to consider 
legislation that is going to benefit some of the wealthiest and most 
powerful companies and corporations in America. Make no mistake about 
it, that is what this legislation is about.
  As this institution and its leadership is about choices, make no 
mistake what the choice is. The choice is to look after the interest of 
the credit card companies and the banks. That is first. It is early 
March, and that is where we are. I hope the American people are aware 
of this legislation and its implications.

                          ____________________