[Congressional Record (Bound Edition), Volume 149 (2003), Part 5]
[House]
[Pages 6555-6562]
[From the U.S. Government Publishing Office, www.gpo.gov]




 PROVIDING FOR CONSIDERATION OF H.R. 975, BANKRUPTCY ABUSE PREVENTION 
                  AND CONSUMER PROTECTION ACT OF 2003

  Mr. GOSS. Mr. Speaker, by direction of the Committee on Rules, I call 
up House Resolution 147 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 147

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 975) to amend title 11 of the United States 
     Code, and for other purposes. The first reading of the bill 
     shall be dispensed with. All points of order against 
     consideration of the bill are waived. General debate shall be 
     confined to the bill and shall not exceed one hour equally 
     divided and controlled by the chairman and ranking minority 
     member of the Committee on the Judiciary. After general 
     debate the bill shall be considered for amendment under the 
     five-minute rule. It shall be in order to consider as an 
     original bill for the purpose of amendment under the five 
     minute rule the amendment in the nature of a substitute 
     recommended by the Committee on the Judiciary now printed in 
     the bill. The committee amendment in the nature of a 
     substitute shall be considered as read. All points of order 
     against the committee amendment in the nature of a substitute 
     are waived. No amendment to the committee amendment in the 
     nature of a substitute shall be in order except those printed 
     in the report of the Committee on Rules accompanying this 
     resolution. Each amendment may be offered only in the order 
     printed in the report, may be offered only by a Member 
     designated in the report, shall be considered as read, shall 
     be debatable for the time specified in the report equally 
     divided and controlled by the proponent and an opponent, 
     shall not be subject to amendment, and shall not be subject 
     to a demand for division of the question in the House or in 
     the Committee of the Whole. All points of order against such 
     amendments are waived. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. Any Member may demand a separate vote in the House 
     on any amendment adopted in the Committee of the Whole to the 
     bill or to the committee amendment in the nature of a 
     substitute. The previous question shall be considered as 
     ordered on the bill and amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.

  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Florida (Mr. 
Goss) is recognized for 1 hour.
  Mr. GOSS. Mr. Speaker, for purposes of debate only, I yield the 
customary 30 minutes to the distinguished gentlewoman from New York 
(Ms. Slaughter), my friend and associate, pending which I yield myself 
such time as I may consume. During consideration of this resolution, 
all time yielded is for the purposes of debate on this matter only.
  Mr. Speaker, I am exceedingly pleased that tonight we will consider 
much-needed bankruptcy reform legislation under the direction of a fair 
and balanced rule that makes a total of five amendments in order, 
including an amendment in the nature of a substitute sponsored by the 
gentleman from Michigan (Mr. Conyers), the ranking member.
  I am proud of the tireless and extensive efforts of many Members, 
including the gentleman from Texas (Mr. Sessions), who will be here to 
address us shortly in the rule on this, and the staff who have put 
together countless hours toward the passage of this legislation over 
several years now.
  Their efforts allow us to ensure that our bankruptcy laws operate 
fairly, efficiently and free of abuse. We must end the days when 
debtors who were able to repay some portion of their debts are allowed 
to game the system. This bill is crafted to ensure the debtor's rights 
to a fresh start while protecting the system from flagrant abuses by 
those who can pay their bills.
  Congress has spoken on this issue many times before. As we all know, 
the 105th, the 106th, the 107th Congresses passed legislation 
addressing bankruptcy reform. In the 105th, the conference report 
passed the House, but time expired before the Senate voted on a final 
passage. In the 106th, the conference report received overwhelming 
bipartisan support in both Chambers; however, President Clinton chose 
to pocket veto the bill. In the 107th Congress, we came extremely close 
to final passage of a conference report, but in the end could not 
finally agree.
  So, today, due to the outstanding work and leadership of the 
gentleman from Wisconsin (Mr. Sensenbrenner), his committee and so many 
Members, we have the historic opportunity to make modern bankruptcy 
reform a reality.
  As we debate and vote today, we should keep in mind two important 
tenets of bankruptcy reform. First, the bankruptcy system should 
provide the amount of debt relief that an individual needs, no more, no 
less. Bankruptcy should be a last resort and not a first response to a 
financial crisis.
  One important part of this legislation is known as the homestead 
provision. Protection of one's homestead is something that is very 
important to me and, of course, to all my constituents, and to any 
Member and all their constituents. The homestead provision in this 
legislation maintains the long-held standard that allows the States to 
decide if homesteads should be protected, yet prohibits those who would 
purchase a home before filing bankruptcy as a means to evade creditors.
  By tightening our current laws and making it more difficult to escape 
fraud by declaring bankruptcy, we are expressing no tolerance for those 
who would game the system to make up for their wrongdoing.
  Modern bankruptcy reform has been a long and somewhat arduous 
journey. It makes the most anticipated result of our work today even 
more rewarding. It has required not only hard work, but also some 
difficult decisions on the part of Congress as we know. The result is 
what I believe to be a carefully balanced package that protects the 
women, children, family farmers, low-income individuals, and provides 
access to bankruptcy for all Americans who have a legitimate need.

[[Page 6556]]

  Today's vote I believe will finally make modern bankruptcy reform a 
reality, and, Mr. Speaker, I urge my colleagues to vote with me to 
support this fair rule and the underlying legislation which is long 
overdue.
  Mr. Speaker, I yield the balance of my time to the gentleman from 
Texas (Mr. Sessions) for the purposes of control.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I thank the gentleman from Florida for yielding me the 
customary 30 minutes.
  Mr. Speaker, this bill purports to improve the Bankruptcy Code by 
ensuring fairness for debtors and creditors. Unfortunately, this bill 
envisions fairness as choosing credit card companies over people in 
dire financial situations. This bill attempts to solve a complex 
problem with an oversimplified, one-size-fits-all solution when the 
problem really requires a sophisticated solution.
  The rhetoric around H.R. 975 paints a vivid picture of scheming 
people running up huge debts, buying extravagant houses and expensive 
cars just before they run to a local bankruptcy court to avoid paying 
their bills, but the reality is that only 3 percent of the people who 
file for bankruptcy are these kinds of cheaters.
  In order to stop the 3 percent who abuse the system, the bill takes 
the dramatic sweeping step of harming the 97 percent of people who are 
forced to seek protection under the Bankruptcy Code because of 
illnesses, unemployment or divorce. In fact, nearly half the people who 
file for bankruptcy protection do so because of medical bills and the 
financial consequences of illness or injury.
  Middle-class families are only one serious illness away from 
financial collapse, and the impact of medical cost is highest on women, 
families headed by women and older people.
  Mr. Speaker, one of the most forceful and persistent proponents of 
changing the Federal Bankruptcy Code is the credit card industry. We 
all know that credit card companies send us solicitations by the 
boatload. They mailed 5 billion of them in 2001. Each of us get three 
or four a day. They flood the mailboxes with credit card offers and 
encourage debt, and it is very hard to sympathize with these companies. 
They are actively, actively creating the problems that they now want 
this body to fix for them.
  Why does this legislation do nothing to address the culpability of 
credit card companies in the growing numbers of bankruptcies? Nothing 
in this legislation requires credit card companies to provide adequate 
information to consumers about the costs of credit. Nothing in the bill 
addresses the industry's aggressive marketing of credit to students and 
to young teenagers. Nothing in this bill deals with predatory mortgage 
loans or the high costs of so-called payday loans.
  Douglas Lustig, a bankruptcy attorney in my hometown of Rochester, 
New York, says that people are not abusing credit cards for 
extravagances. Rather, he says, most people use credit cards out of 
necessity. People are forced to use their credit cards to buy food or 
pay for rent until they get through difficult economic times, and what 
really breaks my heart is that as unemployment rates rise, this 
Congress has failed to extend the unemployment benefits in so many 
households. This is the only recourse that they have. Then if something 
awful happens to them, and the wife is laid off or the husband 
diagnosed with cancer, the family then is totally unable to meet its 
financial burdens, and this bill chooses to make sure that the credit 
card companies get paid instead of protecting the families and helping 
them dig out of financial collapse.
  What do bankruptcy judges think about this legislation? Judge A. 
Thomas Small, who recently served as president of the National 
Conference of Bankruptcy Judges and now is chairing the Federal 
Bankruptcy Rules Committee, sees problems. He says this measure will 
fail to block needless bankruptcy cases while making it a lot harder 
for people who really need bankruptcy relief to get it.
  Despite the many years that bankruptcy reform has been discussed by 
this body, many serious problems persist in this legislation. The rule 
before this body gags us and limits our right to speak fully about the 
significant legislation and its real-world effects. Republicans in the 
House Committee on Rules blocked the consideration of six substantive 
amendments to this bill. This body has the right to discuss them, to 
deliberate and to consider the changes they offer.
  One amendment would protect the Active Duty members of the Armed 
Forces, unemployed people who have exhausted their benefits, and 
victims of terrorism. Another would have prohibited credit card 
companies from issuing cards to people under the age of 21. A third 
amendment would place a $125,000 national cap on the homestead 
exemption without any of the exceptions allowed in the underlying bill. 
Still another would place reasonable limits on exorbitant retention 
bonuses, the severance package and other payments to corporate insiders 
of companies that are bankrupt or facing bankruptcy. A fifth amendment 
would crack down on the predatory lending practice known as payday 
lending.
  An amendment offered by the gentleman from Michigan (Mr. Conyers), 
the gentlewoman from Texas (Ms. Jackson-Lee) and myself would give 
bankruptcy courts the discretion to provide extra protection for people 
entitled to alimony or child support, a piece of legislation that we 
put in back in the days when Jack Brooks was chair of the Committee on 
the Judiciary. Many of us worked very hard at that time to make sure 
that child support was the first thing that a spouse had to or person 
who was paying the support had to discharge. That has changed now.

                              {time}  1230

  The reform legislation elevates the credit card companies to the same 
categories of child support. Mothers and fathers who are trying to get 
money for food and clothes for their children will have to compete with 
the major credit card companies with their legions of lawyers and 
sophisticated collection departments for the same few dollars.
  Mr. Speaker, I will enter this list of amendments left on the floor 
of the room of the Committee on Rules into the Record.
  Mr. Speaker, H.R. 975 even fails to hold perpetrators of violence 
against women's health care clinics accountable for their actions. As 
part of a coordinated strategy, perpetrators of clinic violence have 
filed for bankruptcy to avoid paying judgments against them for 
violation of Federal law. This bill will allow them to discharge these 
judgments and get away with breaking Federal law and trampling the 
constitutional rights of women.
  This rule and this legislation fail the American people. Years of 
consideration have not produced bankruptcy reform that the American 
people deserve, reform that fixes the current problems with a system 
without causing significantly more harm than this prevents.
  Mr. Speaker, we should produce legislation that strikes a balance 
between risk-taking and responsibility and shelters that 97 percent who 
deserve the Federal protection. I urge Members to vote against this 
rule and against H.R. 975.
  The previously mentioned list of amendments follows:

 Amendments Rejected by the House Rules Committee During Consideration 
 of H. Res. 147, The Rule Governing Debate on H.R. 975, The Bankruptcy 
          Abuse Prevention and Consumer Protection Act of 2003

       Amendment No. 5 Offered by Representative Delahunt--the 
     amendment places a $125,000 national cap on the homestead 
     exemption, without any of the exceptions allowed in the 
     underlying bill.
       Amendment No. 6 Offered by Representative Delahunt--the 
     amendment places reasonable limits on exorbitant ``retention 
     bonuses,'' severance packages, and other payments to 
     corporate insiders of companies that are bankrupt or facing 
     bankruptcy.

[[Page 6557]]

       Amendment No. 8 Offered by Representative Jackson-Lee--the 
     amendment cracks down on the predatory lending practice known 
     as ``payday lending.''
       Amendment No. 9 Offered by Representative Waters--the 
     amendment prohibits credit card companies from issuing cards 
     to people under 21 years of age.
       Amendment No. 10 Offered by Representative Schakowsky--the 
     amendment excludes unemployed people who have exhausted their 
     benefits, active duty members of the armed forces, and 
     victims of terrorism from the bill's means test provisions.
       Amendment No. 11 Offered by Representatives Conyers, 
     Slaughter, and Jackson-Lee--the amendment gives courts the 
     discretion to disapprove an agreement or the discharge of a 
     debt if it would impair a debtor's ability to pay alimony or 
     child support.
       Open Rule Motion Offered by Representative Frost--on a 
     party-line vote of 3-9, the Committee rejected Mr. Frost's 
     motion that the House consider H.R. 975 under an open rule, 
     which would have allowed the House to debate all of the 
     amendments Members brought before the Committee.

  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we are talking about bankruptcy today again. We have 
done this four times. This rule will pass because it is a fair rule. 
The underlying legislation will pass overwhelmingly because it is great 
legislation that the American people not only asked for but want. It 
will help streamline and make better the bankruptcy procedures that are 
necessary as our courts deal with them, and as people who have gotten 
into financial trouble deal with the old legislation and find out what 
a problem it is.
  I am proud to be here today to talk about good legislation that is 
good for the American public, it is good for consumers, and I am very 
proud of what we are doing.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Georgia (Mr. Linder), a member of the Committee on Rules.
  Mr. LINDER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise in support of this fair rule and the underlying 
legislation, H.R. 975. H. Res. 147 is a fair and responsible rule that 
will allow the House to work its will on the underlying bankruptcy 
reform bill. It makes in order two amendments sponsored by Democrats, 
two bipartisan amendments, and an amendment in the nature of a 
substitute offered by the ranking minority member of the Committee on 
the Judiciary, the gentleman from Michigan (Mr. Conyers). I urge 
Members on both sides of the aisle to join me in approving this rule so 
we can move on to H.R. 975, important bankruptcy reform legislation.
  I support providing this bankruptcy protection. I believe that 
American citizens should be able to gain a fresh start after finding 
themselves incapable of meeting their obligations. In fact, our Nation 
has historically understood the importance of providing this 
protection.
  As one individual put it during the congressional debate in the late 
19th century, ``When an honest man is hopelessly down financially, 
nothing is gained for the public by keeping him down; but on the 
contrary, the public good will be promoted by having his assets 
distributed ratably as far as they will go among his creditors and 
letting him start anew.''
  Today we debate the reform of U.S. bankruptcy law one more time. We 
should focus on how to ensure that bankruptcy laws follow their 
intended design, while working to derail the growing trend of using 
bankruptcy as a means for avoiding the payment of debts, even when 
those debtors are financially capable of paying off those debts. The 
question before us is, How can we prevent individuals abusing these 
protections, while ensuring that bankruptcy relief remains available 
for those who truly need it?
  In 1787, the Founders of this country, some of whom were debtors 
themselves, recognized the necessity for providing leniency to 
individuals who are faced with increasing debts. The Founders 
understood that it was impossible for debtors to work towards paying 
off their debts while sitting in debtors' prison. I do not, however, 
believe the Founders would have approved of a system where bankruptcies 
have increased more than 400 percent in 23 years and represent a cost 
of $400 to every American family who works hard to meet its own 
financial responsibilities.
  H.R. 975 works both to continue the Founders' vision for bankruptcy 
protection while curbing the abuses that have plagued the system over 
the past few decades. Congress should not be in the business of 
protecting those who wish to use bankruptcy as a financial planning 
tool, while penalizing hard-working Americans who fall into financial 
difficulties.
  Last year, almost 1.6 million bankruptcy cases were filed in this 
country. We must ensure that this number is significantly reduced in 
the future. It is not shameful to file for bankruptcy if one falls on 
hard times. It is, however, shameful to use bankruptcy as a means of 
paying one's obligations.
  As such, I urge Members to join me in supporting both this rule and 
the underlying legislation to help restore the legitimacy of this 
protective tool and to bring commonsense reasoning back to American 
bankruptcy law. I urge Members to join me in voting for the rule and 
H.R. 975.
  Ms. SLAUGHTER. Mr. Speaker, I yield 5 minutes to the gentleman from 
Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  Mr. Speaker, two amendments rejected by the Committee on Rules which 
I had hoped to offer illustrate the double standards represented by 
this bill because wealthy debtors with their lawyers and financial 
advisors can continue to game the system, and corporate insiders who 
have managed healthy businesses into bankruptcy can still be awarded 
with golden parachutes. Meanwhile, people of modest means will be 
denied a genuine fresh start, and retirees whose pensions and life 
savings have been wiped out by corporate bankruptcies will get little 
relief.
  My first amendment would have placed reasonable limits on exorbitant 
retention bonuses, obscene severance packages, and other outlandish 
payments to corporate insiders whose companies are bankrupt or 
insolvent; and the amendment would have reserved those assets for the 
benefit of employees, retirees, and other creditors.
  In the State of Massachusetts, Polaroid executives canceled their 
retirees' health coverage days before filing for bankruptcy and then 
terminated workers on long-term disability when the company 
reorganized. At the same time they awarded themselves more than $5 
million in various bonuses and incentive payments shortly before filing 
for bankruptcy and then another $6 million in so-called retention 
bonuses afterwards.
  Of course, this pales in comparison to Enron, where their CEO, 
Kenneth Lay, received gross profits of $247 million, or Global Crossing 
where Gary Winnick, their CEO, grossed $512 million, all the while 
eliminating thousands of jobs and driving their companies into 
bankruptcy.
  My second amendment would have helped eliminate the most notorious 
abuse of all, the financial planning strategy whereby debtors purchase 
expensive homes in States with unlimited homestead exemptions, declare 
bankruptcy, and continue to enjoy a life of luxury while their 
creditors get little or nothing, like the convicted Wall Street 
investment banker who filed bankruptcy while owing some $15 million in 
debt and fines, but still kept his $5 million mansion complete with 11 
bedrooms and 21 bathrooms. Yet while the so-called bankruptcy abuse 
prevention bill obsesses about whether small debtors can manage to pay 
$100 a month in Chapter 13, it continues to tolerate this outrageous 
abuse.
  Mr. Speaker, this is not the only exemption that allows the wealthy 
to shelter their assets. In addition to the million dollar mansion, 
they can receive a substantial pension, have an IRA up to a million 
dollars, and own annuities worth additional millions and not worry 
about it because depending on where they live, these assets are exempt 
and creditors cannot touch them. This bill does nothing about that.

[[Page 6558]]

  What message does it send when Congress subjects middle-class debtors 
to a means test while permitting the wealthy to continue to place their 
millions out of reach of their creditors? We are creating different 
classes of debtors, and every fair-minded person should find this 
unconscionable. This rule should have provided an opportunity to deal 
with these issues, and I urge my colleagues to oppose the rule and vote 
down this unfair and one-sided bill.
  Mr. Speaker, I rise in opposition to the rule.
  The rule fails to allow the House to consider two amendments I had 
intended to offer to illustrate the double standard represented by this 
bill: A bill that denies a fresh start to people of modest means while 
allowing wealthy debtors and corporate insiders to continue to abuse 
the bankruptcy system.
  It was one thing to consider this kind of legislation when our nation 
was enjoying the prosperity of the 1990s. But this debate takes on a 
certain surreal quality when we consider the depths of the economic 
difficulties our country is facing at the moment. With unemployment 
rising. Growing numbers of working Americans who can't buy health 
insurance at reasonable rates. Retirees whose pensions and life savings 
have been wiped out by corporate bankruptcies.
  And what are we doing about it? We're helping the credit card 
companies squeeze a few more pennies out of these same working 
families. And we're ignoring the massive abuses that have turned the 
Bankruptcy Code into a bonanza for a handful of unscrupulous 
executives.
  Some months ago, the Financial Times published an analysis of the 
profits amassed by top officers and directors of the 25 largest 
companies to declare bankruptcy during the previous 18 months. 
According to the report, ``in just three years, they grossed about $3.3 
billion before their companies went bust, having wiped out hundreds of 
billions of dollars of shareholder value and nearly 100,000 jobs.''
  And so, as Global Crossing was losing $9.2 billion and eliminating 
over 5,000 jobs, its chairman, Gary Winnick, grossed $512 million. 
While Enron lost $18.8 billion and eliminated 5,500 jobs, its CEO, 
Kenneth Lay, and the chairman of its energy services subsidiary, Lou 
Pai, made gross profits of $247 million and $270 million, respectively.
  The sources of these windfalls included such now-familiar devices as 
retention bonuses. Severance payments. Forgiven loans. And dividends on 
holdings of company stock.
  In my corner of the world, Polaroid executives cancelled their 
retirees' health and life insurance coverage and terminated workers on 
long-term disability--all while awarding themselves more than $5 
million in various bonuses and ``incentive'' payments before filing for 
bankruptcy and another $6 million in retention bonuses afterwards. 
Officers and directors received severance packages while employee 
severance was terminated. Officers and directors were able to redeem 
their company stock while employees, forced to put 8 percent of their 
salaries into the stock option plan, were prohibited from withdrawing 
the funds and watched their holdings evaporate. No sooner was the sale 
of the company completed than the new CEO terminated the retiree 
pension plan.
  What happens to people who lose their livelihood, their savings, and 
their health coverage? Lots of them wind up unable to pay their debts 
and forced into bankruptcy. So in fact, we have corporate bankruptcies 
causing personal bankruptcies. And the only response from Congress has 
been to push an industry-sponsored bill that would make it harder for 
these people to get a fresh start. A bill that penalizes the very 
working families that have been victimized by corporate misconduct, 
while preserving the loopholes and exemptions that allow corporate 
insiders to shelter their ill-gotten gains when they declare 
bankruptcy.
  I had sought to offer an amendment that would begin to redress the 
balance. It would have placed reasonable limits on exorbitant 
``retention bonuses,'' severance packages, and other payments to 
corporate insiders of companies that are bankrupt or insolvent. The 
amendment would not have prohibited such payments to the extent that 
they are truly necessary to keep key employees in place. But it would 
have permitted them only when the court finds that, first, the employee 
has a bona fide job offer from another business at the same or greater 
rate of compensation; second, the services provided by the person are 
essential to the survival of the business; and third, the amount of the 
payment is not excessive when measured against the amounts paid to 
nonmanagement employees in the ordinary course of business.
  The amendment would have empowered the court to return excessive 
payments to the bankrupt company, so that these funds can be available 
to help the company reorganize, or, in the alternative, can be 
distributed to employees, retirees, and other creditors. It would have 
restored some semblance of fairness to this unbalanced bill.
  The second amendment I had hoped to offer would have helped eliminate 
the biggest loophole in the Bankruptcy Code, by placing a meaningful 
national cap on the homestead exemption.
  I say ``meaningful,'' Mr. Speaker, because the $125,000 cap that is 
currently in the bill is qualified by a series of exemptions that 
assure that those who engage in flagrant abuse of the bankruptcy system 
by sheltering homestead assets can continue to do so.
  My amendment would have left the cap at $125,000 while eliminating 
the exemptions for transactions conducted more than 1,215 days 
preceding the bankruptcy filing and for interests transferred from a 
debtor's previous principal residence acquired within the same state 
prior to that time.
  The rationale we have been given for the so-called ``needs-based'' 
reforms proposed in H.R. 975 is to eliminate abuses of the bankruptcy 
laws--abuses which proponents of the legislation have characterized as 
the use of the Bankruptcy Code as a ``financial planning tool.''
  Yet while the bill obsesses about whether small debtors can manage to 
pay $100 a month in chapter 13, it continues to permit--indeed, it 
endorses--the most notorious abuse of the consumer bankruptcy system of 
all: The ``financial planning'' strategy whereby debtors purchase 
expensive homes in states with unlimited homestead exemptions, declare 
bankruptcy, and continue to enjoy a life of luxury while their 
creditors get little or nothing.
  If we are truly serious about curtailing abuses, it seems to me that 
this is the place to start. With the owner of the failed Ohio S&L who 
paid off only a fraction of $300 million in bankruptcy claims while 
keeping his multi-million-dollar horse ranch in Florida.
  Or the convicted Wall Street financier who filed bankruptcy while 
owing some $50 million in debts and fines, but still kept his $5 
million Florida mansion--complete with 11 bedrooms and 21 baths.
  Or the Miami physician with no malpractice insurance, who was named 
in four separate malpractice actions, filed for bankruptcy protection, 
and kept a $500,000 home--complete with a 100-foot swimming pool.
  Or the movie actor, Burt Reynolds, who declared bankruptcy in 1996, 
claiming more than $10 million in debt. Reynolds kept a $2.5 million 
home--appropriately named ``Valhalla''--while his creditors received 20 
cents on the dollar.
  The situation in Florida has become so notorious that one Miami 
bankruptcy judge told the New York Times, ``You could shelter the Taj 
Mahal in this state and no one could do anything about it.''
  The sponsors of the bill will claim that they have closed the 
loophole by putting a cap on the exemption. But the provision is 
riddled with loopholes that ensure that wealthy debtors who are 
sophisticated enough to plan ahead will still be able to shelter their 
assets without ever being subject to the cap. Under the bill, they can 
purchase a homestead to shelter their non-exempt assets and simply wait 
the 1,215 days before filing their petition. And the bill expressly 
permits them to transfer their assets from a previous principal 
residence into a new one at any time prior to their bankruptcy filing 
without being subject to the cap, provided that the former residence is 
located in the same state.
  What message does it send, Mr. Speaker, when Congress subjects 
middle-class debtors to a means test while permitting the wealthy to 
continue to place their millions out of reach of their creditors? What 
message does it send when we impose tough repayment plans on working 
families that are barely making ends meet, while allowing corporate 
insiders to drive their companies into bankruptcy and pocket millions 
of dollars in bonuses, severance packages, and other ill-gotten gains?
  I urge my colleagues to oppose the rule and vote down this bill.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  The gentleman from Massachusetts has been a very active player in 
this process for a very long time, and he speaks very forcefully about 
all these rich people who utilize the schemes within the bankruptcy 
law, but then the gentleman failed his own test when he spoke about 
millionaires because he moved the test down to a household of $125,000, 
not a house that a millionaire or some rich corporate executive that 
the gentleman speaks about would

[[Page 6559]]

want to protect, but where the average American lives, where the 
average American who would have a chance to lose their own house in the 
event of bankruptcy, and that is the sad part about this, is that this 
clamoring, this beating of the drum about corporate executives and 
corporations and how bad they are for America and all these rich fat 
cats, and then the other party takes it out on the average person, and 
they want more. They want to make sure that literally any person who 
would have a bankruptcy could lose their house.
  The Republican Party disagrees; I disagree. I think that people who 
are Americans who get up and go to work and are hard working would find 
this really despicable, to take a person's home because they got into 
trouble. But now we say oh, no, down to $125,000, not the millionaire. 
So once again we learn the Democratic Party philosophy, and that is 
anybody who has a job or house is not protected. Oh, up to $125,000 is. 
I wonder who has those kinds of houses? The answer is millions of 
Americans, and that is what the other side of the aisle is out after on 
the floor of the House of Representative again today if one engages in 
bankruptcy.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Ohio (Mr. Chabot).
  Mr. CHABOT. Mr. Speaker, I rise in support of the rule and the bill, 
H.R. 975, the Bankruptcy Abuse Prevention and Consumer Protection Act.

                              {time}  1245

  This legislation reflects many years of effort by both the House and 
the Senate to enact bankruptcy reform which protects consumers from 
having to pick up the tab for irresponsible debtors, debtors who are 
capable of paying off a significant portion of their debts. There are 
people who truly have a legitimate need to declare bankruptcy. At times 
hard-working people come up against special circumstances that are 
beyond their control. Family illness, disability or the loss of a 
spouse may necessitate the need to seek relief under our bankruptcy 
laws. This legislation will protect these individuals.
  Too frequently, however, individuals who have the financial ability 
or earning potential to honor their debts are simply seeking an easy 
way out of repaying those debts. While this may prove convenient for 
the debtor, it is not fair to their friends or to their neighbors who 
are ultimately stuck with the bill. Those who can afford to pay their 
debts must honor their commitments.
  The current economic climate necessitates bankruptcy reform now more 
than ever. Some individuals and small businesses in this Nation are 
facing severe financial hardship, hardship that may justify the need to 
file for bankruptcy. As a result, the bankruptcy system must be 
reformed to ensure that those with a legitimate need are not adversely 
affected by those who abuse the system.
  Mr. Speaker, the hard-working families in my district in Cincinnati, 
Ohio, pay far more than they ought to in taxes. They do not need to 
incur an additional burden created by those who seek to hide from their 
debts. This bill holds those irresponsible debtors accountable and 
protects those hard-working families. I urge support of this rule, and 
I urge support of this bill.
  Ms. SLAUGHTER. Mr. Speaker, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  In response to my colleague and dear friend from Texas, it is not the 
cap. It is not the cap that disturbs us. The question is, is it a 
genuine cap, or is it a sham? I suggest that this cap is a sham. There 
are more loopholes in this particular provision than one can even 
comprehend. This is not about the individual, the average, middle-class 
American who earns 25-, 30- or $35,000, but it is about the 
sophisticated investor, it is about the sophisticated individual who 
has access to the very best in terms of legal talent and financial 
advice, who knows how to game the system. We are talking about not 
$125,000, but about the millions, the millions, that are being 
prevented from going to legitimate creditors because of this particular 
exception.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  The gentleman and I have spoken about this often, as a matter of 
fact, including in the Committee on the Judiciary. We will still hold 
on this side of the aisle that if you want to aim at millionaires, then 
make it to a millionaire level instead of to a middle-class issue, and 
that is $125,000. I do not get it, and I do not think they do, either. 
But the American public that loses their home does understand it.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Utah (Mr. Cannon), a member of the Committee on the Judiciary.
  Mr. CANNON. Mr. Speaker, I thank the gentleman from Texas for 
yielding me the time to talk about this issue.
  I would urge support of our Members for this rule and the underlying 
bill. Over the last three Congresses, the House has passed this bill on 
six different occasions. We hope that today we can do it for the 
seventh time. From about the 105th Congress to the present Congress, 
the House Committee on the Judiciary has held hearings at which more 
than 130 witnesses have appeared representing nearly every constituency 
that is affected in the bankruptcy and business community.
  H.R. 975 is virtually identical to the bankruptcy reform legislation 
that the House passed just 4 months ago, which was essentially the 
bankruptcy conference report, without the so-called Schumer amendment, 
so we have eliminated that controversy that we had last year. Last 
year's bankruptcy conference report was the product of nearly a year of 
extensive negotiations and compromises that were bipartisan and 
bicameral.
  Let me just point out some of the things that this bill does. H.R. 
975 consists of a comprehensive package of reform measures pertaining 
to both consumer and business bankruptcy cases. It improves bankruptcy 
law and practice by restoring personal responsibility and integrity in 
the bankruptcy system and by closing loopholes for abuse. It responds 
to many of the factors contributing to the increase in consumer 
bankruptcy filings, such as lack of personal financial accountability 
and ineffective oversight with respect to deterring abuse in the 
system. It ensures that consumer debtors repay creditors to the maximum 
that they can afford. It also includes consumer protection reforms that 
prioritize the payment of spousal and child support, for instance, 
making sure that the deadbeat parents cannot use bankruptcy to avoid 
their support responsibilities. It also protects a debtor's retirement 
pension and educational IRAs for the debtor's children from the claims 
of creditors. And it requires debtors to receive credit counseling 
before they can be eligible for bankruptcy relief so that they will be 
able to make an informed choice about bankruptcy, its alternatives and 
its consequences. We find that many people today are taking out 
bankruptcy and then finding out how brutal it is to have done so after 
the fact.
  We have also touched on many other issues. We help family farmers and 
fishermen who are facing financial distress. This is a program we have 
reauthorized several times independently last year. We authorize the 
creation of 28 additional bankruptcy judgeships. One of the things we 
do that is really quite important is we reduce the systemic risk in the 
financial marketplace in this enactment, which Federal Reserve Chairman 
Greenspan has described as ``extremely important'' for our system 
today.
  In addition to the base bill, we have in the rule a Cannon-Delahunt 
amendment. If I can speak to that for just a moment, this amendment is 
identical to H.R. 5525, a bill that our former colleague George Gekas 
from Pennsylvania introduced in the 107th Congress. This really deals 
with some of the issues that our colleague from Massachusetts has been 
pounding on here recently, where we have had Enron, WorldCom, Global 
Crossing and other corporations that have shown us how

[[Page 6560]]

bad a company can actually be. This bill would provide heightened 
protections for employees by increasing the monetary cap on wage and 
employee benefit claims that are entitled to priority under the 
Bankruptcy Code from $4,650 to $10,000. In addition, it would lengthen 
the reach-back period for wage claims from 90 days to 180 days.
  Secondly, the amendment increases the reach-back period during which 
fraudulent transfers can be rescinded from 1 year to 2 years and 
provides that outrageous compensation payments and bonuses and other 
perks given to a corporation's insiders during the reach-back period 
which we have now doubled can be rescinded and the payments returned to 
the bankruptcy estate for distribution to its employees and creditors.
  Third, it requires the court to reinstate retiree benefits that a 
corporate debtor modified within 180 days preceding the bankruptcy 
filing unless the balance of the equities justifies the modification. 
This amendment reflects sound bankruptcy policy and will effectuate 
meaningful reforms.
  I hope that the Members of this body will support this rule and the 
underlying bill and amendment. I would like to thank the gentleman from 
Massachusetts for working with us on this amendment, which I think is 
going to be very effective in reaching the core problem of companies 
and insiders who do illegal, wrongful things and then walk away scot-
free with a lot of money. Not only should those people be criminalized, 
they should be put in jail and their assets taken back and put back in 
the estate so that employees and creditors can have the benefit of that 
transaction. I thank the gentleman for his work on this issue.
  Ms. SLAUGHTER. Mr. Speaker, I yield 5 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I was very interested in 
listening to a former speaker cite the concepts of the Founding 
Fathers. We have been spending a lot of time today utilizing the 
Constitution, and for this body that is good. Whenever we can attribute 
part of our debate and reasoning to the Constitution, we are on solid 
ground. He reminded us of the concept of the debtors' court and the 
Founding Fathers. Maybe that is all that may be truly accurate in the 
representation of utilizing the Founding Fathers' purposes.
  Yes, they did not want to have a situation where people were 
victimized by those who did not pay their honest debts. We also know 
that this country had several States, maybe one in particular, that was 
founded by exiled or fleeing debtors. Certainly a now prominent member 
of the United States, meaning the United States family, this State is a 
thriving, prosperous State today.
  All debtors should not be condemned. And the consensus, I believe, 
that you could interpret the Founding Fathers' concept does not equate 
to modern times, and that is, the Founding Fathers did not know 
anything about predatory creditors and usurious rates, interest rates; 
they did not know that there would be a proliferation of credit cards 
so that if you were 14 years old, you got a letter; if you were 
incapacitated in a hospital, they would be soliciting you to get a 
credit card; or you could be on a college campus barely making ends 
meet, and they would solicit you for a credit card.
  And now this legislation simply puts in documentation individuals who 
have been preyed upon to get these credit cards now in a situation 
where we go into the bankruptcy court, we, one, out of this legislation 
take more discretion away from the judges so that they can ascertain 
the reasons why you are filing a bankruptcy. You take judicial 
discretion away from the judges, and you put a means test so that if 
you have a catastrophic illness, or you are divorced or you are elderly 
and you lose a loved one, or your spouse and you have fallen upon hard 
times, there is no way to give discretion to helping you as you file in 
the bankruptcy court.
  Let me assure you that neighbors do not put signs out on the front 
yard and say, ``I am bankrupt, I have filed bankruptcy, I'm proud of 
it.'' It is something that we certainly disagree with or are concerned 
with.
  My friends in the credit card industry and the credit union industry 
have many good points, and to my friends particularly in the credit 
union industry of which I support enthusiastically and as well, Mr. 
Speaker, have worked with them and would propose certain aspects to 
correct their problems, but this legislation fails to protect the 
parent who needs alimony and child support. It has them grappling and 
fighting on the ground between high-priced credit card companies, 
because it dumps all of those particular debts into one pot and has 
them fighting with each other.
  Unfortunately, you can burn up a Planned Parenthood center and hide 
behind the Bankruptcy Code. I hope that is fixed in the other body.
  What we call payday loans, the amendment that I had that we would 
protect those who, because they have no money, they go to loan sharks 
on payday, usurious high rates. Their weekly check, they use it, they 
cannot pay it back, they file bankruptcy, and then those usurious rate 
people who take advantage of folks who needed an emergency loan at 
ridiculous rates can go in and press them to pay those ridiculous loans 
back.
  Mr. Speaker, we are not fixing the problem, we are making the problem 
worse. And how in the world can you expect a single parent, whether it 
be a mom or dad, to be able to fight equally with the bigshots with a 
lot of lawyers? When we started this some 4 or 5, 6 years ago, it was 
noted that the credit card companies paid $40 million in lobbying and 
campaign contributions to make sure. They are persistent. And here we 
go again with a big document that does not treat the little guy fairly.
  I support the Cannon-Delahunt legislation, and I hope next time we 
can go even further, because I come from the community where Enron laid 
off 5,000 employees within 72 hours after they filed bankruptcy and 
gave out $120 million in bonuses.
  What we need to do is to do a step further. I will be offering 
legislation that makes employees laid off because of the malfeasance of 
their corporations secured creditors and first in line. And then I will 
make those who have been laid off, losing their benefits, their health 
benefits, like a victim in my community who died, because they were 
getting benefits, they had a catastrophic illness, and because they 
were laid off by this company, they lost their life.
  Mr. Speaker, we can do a better job. Vote down the rule and vote down 
the bill.
  Mr. SESSIONS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Royce).
  Mr. ROYCE. Mr. Speaker, last year my colleagues and I on the 
conference committee for the Sarbanes-Oxley Act sent to the President a 
bill that included tough new criminal penalties for corporate 
malefactors. I think at that time we took a number of steps that were 
important. We drastically increased the sentencing guidelines for 
securities fraud, for document shredding, for mail and wire fraud. I 
think Congress provided a strong deterrent for many white-collar 
criminals that would misrepresent the true financial health of their 
companies.

                              {time}  1300

  By passing this legislation, I think we send a serious message to 
Wall Street and to Main Street that these corporate criminals would be 
dealt with as harshly as other criminals. I think today Congress has 
the opportunity to finish the task of preventing corporate malfeasance 
by agreeing to pass this bill, H.R. 975. This bill may not have 
everything we want in terms of how it is phrased, but included in this 
bill I think is a sensible provision that sharply limits to $125,000 
the homestead exemption that many CEOs and corporate officers have used 
to shield their assets from creditors after they plunder their 
shareholders' wealth. This is in cases where someone has committed 
securities law violations or other bad acts, and I think by

[[Page 6561]]

empowering the government to go after the ill gotten gains that 
corporate officers who break the law and then tie up those assets in 
offshore mansions at the expense of parishioners who have been 
swindled, I think this is an important addition to the law.
  Also, this bill prohibits people convicted of felonies like 
securities fraud from claiming an unlimited exemption when filing for 
bankruptcy, and I think that protects taxpayers from having to bear the 
cost of corporate collapses like Enron and WorldCom; and I think it 
also guards against fraud and abuse by requiring that high-income 
debtors who have the ability to repay a significant portion of their 
debts do so, preventing them from sticking responsible borrowers with 
their tab in the long run.
  It accomplishes all of this while preserving the ability of people 
who truly need to discharge their debts to do so. For far too long, 
Americans who have worked hard and paid their bills have been held 
accountable for their debts but also by debts incurred by those who 
irresponsibly file for bankruptcy; and I think this long-overdue 
legislation will reform the critically flawed bankruptcy process and 
prevent affluent filers from gaming the system and passing on their bad 
debts to hard-working families, while preserving the ability of people 
who truly need to discharge their debt through bankruptcy to do so.
  Bankruptcy should be preserved as a last resort for those who truly 
need the protections that the bankruptcy system has to offer, not a 
tool for those who could pay their debts, but choose to discharge them 
instead. By agreeing to this legislation, Congress will make the 
existing bankruptcy system a needs-based one and correct a flaw in the 
current system that encourages people to file for bankruptcy and walk 
away from debts regardless of whether they are able to repay any 
portion of what they owe, and it does this while protecting those who 
truly need protection.
  So I commend my colleagues for their hard work on this legislation, 
and I strongly urge my colleagues to vote in favor of this report and 
help honest taxpayers by closing the loopholes in the current 
bankruptcy system.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Scott).
  Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentlewoman for 
yielding me this time.
  Mr. Speaker, for centuries American bankruptcy law has had the 
principle that if a person ever gets over their head in debt, they can 
cash in all their assets, pay off all the debts that they can, and get 
a fresh start. For policy reasons, a few assets have been historically 
exempt and a few debts have been historically nondischargeable, 
especially those that have been incurred by fraud or through abuse of 
the bankruptcy system. Yet the principle has always been the same, cash 
in all one has and get a fresh start.
  This bill violates the historic principle. People who incur debts 
because of illness, unemployment, or business failure and have debts 
they cannot pay off will be denied an opportunity to get a fresh start. 
They will be stripped of every penny of income after basic expenses 
such as food and rent without reasonable allowance for unforeseen 
emergencies such as auto repairs and so forth, which will inevitably 
come up. People in these circumstances will be in economic slavery for 
5 years and probably be worse off at the end of 5 years than they were 
before. During this time a person over his head in debt has nothing to 
lose. This bill will deny relief under the traditional bankruptcy laws 
for at least 5 years.
  The bill has no rational measure for determining a person's ability 
to pay off their debts. It says if they can pay off $10,000 on their 
debts over 5 years, that is $167 a month, then they are not entitled to 
a discharge. A person could co-sign a spouse's business loan only to 
have the spouse die or disappear and with a $50,000 salary find him or 
herself owing $1 million, unable to even make interest payments, and 
that person would be denied relief under this bill. This will cause 
many Americans who have had unforeseen business failures, health 
problems, or unemployment to find themselves unable to pay their debts 
and be trapped with no way out.
  If our goal, Mr. Speaker, is to create a situation where people are 
stressed out with nothing to lose and to maximize the chances that a 
person will totally lose control and terrorize the community or their 
co-workers, this is it. Just this week in Washington, D.C. we have seen 
the impact of financial stress. The North Carolina farmer who drove his 
tractor into the pond near the National Mall was quoted as saying: 
``I'm broke, busted, I'm out.'' No one in the community is safer when 
we have increased the number of our neighbors who have nothing to lose.
  Finally, Mr. Speaker, we need to consider the impact this bill will 
have on small business entrepreneurs. How many will be willing to take 
a chance on a new business if any failure will result not just in 
bankruptcy but no relief for the family for 5 years? No bank in the 
future will lend a business any cash, especially one in financial 
distress which actually needs the money, without the personal signature 
of the owner. Long ago we decided that there would be no debtors 
prisons in America. This bill represents an effort to take a giant step 
backwards to this bygone era, and I urge my colleagues to reject this 
bill and the rule.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the Committee on Rules has been the subject of debate 
today; and the Committee on Rules met last night to talk about this 
bankruptcy bill, presented a fair, as they always do, rule to be able 
to discuss and debate this important issue.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from California (Mr. Dreier), the chairman of the Committee on Rules.
  Mr. DREIER. Mr. Speaker, let me begin by thanking the gentleman from 
Dallas, Texas (Mr. Sessions), my friend, for his spectacular job in so 
ably handling the management of this rule.
  The proverbial ``Ground Hog Day'' is what comes back to mind. We have 
been dealing with this issue over and over and over again, and we tried 
desperately in the waning days of the 107th Congress to move ahead with 
a conference report on this because everyone agrees the problem that 
exists out there of abuse of the bankruptcy law needs to be fixed, and 
we know that members of the Committee on the Judiciary have worked long 
and hard on this issue, and we appreciate the fact that we have worked 
in a bipartisan way on the legislation.
  But, Mr. Speaker, I am particularly proud of the fact that when we 
looked at this rule, I know that my friends on the other side of the 
aisle would like to have an open amendment process with every single 
proposal that was put forth to the Committee on Rules consider, but 
quite frankly virtually all of these issues were addressed in the 
Committee on the Judiciary, and they dealt with these questions, and we 
have the responsibility of trying to manage as well as we possibly can 
this floor and at the same time, as I said when I was here last week, 
working hard to ensure the rights of the minority. I do feel very 
strongly about that. I feel strongly about it because, as I said when I 
was here last week, I served for 14 years in the minority and I believe 
that we need to work as hard as we can to allow as many ideas as there 
are out there to address these concerns and have a chance to come 
forward. So that is exactly what we have done.
  Mr. Speaker, there were 14 amendments submitted to the Committee on 
Rules, and I am happy to say that we have two bipartisan amendments 
that we have made in order and three amendments offered by Democrats, 
exclusively by Democrats that have been made in order on this issue; 
and I know yesterday that the gentleman from Texas (Mr. Frost), the 
ranking minority member, referred to the Gutierrez amendment as a 
technical amendment. I happen to be very strongly in support of the 
Gutierrez amendment. I think it is a very important measure. It needs 
to be addressed, but it is a Democratic amendment.

[[Page 6562]]

  So, Mr. Speaker, as we try to focus on issues of individual 
initiative, responsibility for one's actions, while at the same time 
ensuring that those who are in fact really down and out and need to 
have as a recourse the filing of bankruptcy, I believe that as we look 
at those concerns that this legislation, when we pass this rule, will 
allow for an open discussion of the different alternatives and the 
proposals that people have, including the gentleman from Michigan's 
(Mr. Conyers) substitute, which we have made in order; and then at the 
end of the day I hope we can pass this and then move ahead and have 
action taken in the other body and a conference after years and years 
and years with so much hard work put into this. The gentleman from 
Illinois (Mr. Hyde), the gentleman from Wisconsin (Mr. Sensenbrenner), 
and the others on the Committee on the Judiciary who worked on this 
finally have a product that the President will be able to sign.
  So I thank my friend again for yielding me this time, and I thank him 
for his superb service on the Committee on Rules; and since I see two 
other members of the Committee on Rules here, the gentleman from 
Florida (Mr. Hastings) and the gentlewoman from New York (Ms. 
Slaughter), I also thank them for their fine service on the Committee 
on Rules as well.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Illinois (Ms. Schakowsky).
  Ms. SCHAKOWSKY. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  I strongly urge all Members to oppose this rule. Yesterday, 
Republicans on the Committee on Rules refused to make in order my 
amendment that would help three categories of individuals who should be 
given an opportunity to get back on their feet while still being 
obligated to take responsibility for their debts. Without my amendment, 
credit card companies will get more consideration than, one, men and 
women on active duty in uniform; two, victims of terrorism; and, three, 
unemployed Americans.
  As we stand within hours of war, we owe it to our soldiers in uniform 
to think about their financial vulnerability. My amendment would have 
made sure that the brave men and women who serve this country will be 
able to file chapter 7 exempting them from the rigid means test 
required by H.R. 975. There is a great possibility that the families of 
many of the men and women who go to war in Iraq will have economic 
problems. This past Sunday on ``60 Minutes,'' Mrs. Vicky Wessel, whose 
husband is a Reservist who was sent overseas, summed it up by saying: 
``Emotionally it's been tough not having a husband around, not having a 
father for the kids; but financially it's been really difficult because 
a staff sergeant's pay is a 60 percent cut in pay from what my 
husband's regular job pays.''
  There are thousands of families like the Wessels. If we enter war 
with Iraq, we can expect that some of these families will be forced to 
file bankruptcy, and they should not be subjected to the means test.
  Two, victims of international terrorism. I do not believe anyone 
would argue that the victims of terrorism should be subject to the 
means test in the bill. As we all know, many of these families have 
lost loved ones who were their families' primary breadwinners. After 
and during all of their grieving, they may find themselves as victims 
again of economic devastation. Minimally they deserve the protection 
that chapter 7 bankruptcy affords them.
  Third, the unemployed. In today's economy, 10 million unemployed 
workers want jobs but cannot find them. More than 2 million unemployed 
workers have run out of their regular State-provided unemployment 
benefits and the emergency unemployment benefits they received under 
the temporary Federal program. Many of these workers now have no jobs 
and no means of support. Two thirds of those filing for bankruptcy 
report a significant period of unemployment preceding their filing. My 
amendment would make sure that people who exhaust their unemployment 
benefits would not be subject to the H.R. 975 means test. We should 
make sure that people who have lost their jobs through no fault of 
their own are able to file for chapter 7 bankruptcy. We should make 
sure they have an opportunity to regain their economic independence.
  And finally let me say that we should put the interests of American 
families, ordinary American families, people in uniform, people who 
have lost their jobs, people who are victims of terrorism, before the 
interests of profitable credit card companies.
  Oppose this rule. Vote against the underlying bill. It is a bad rule 
and a worse bill that could not come at a worse time.

                              {time}  1315

  Ms. SLAUGHTER. Mr. Speaker, I have no further requests for time, and 
I yield back the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this has been a vigorous debate. We go through this 
often. There are some nice things I would like to say about two nice 
gentlemen also. One of them is the gentleman from Illinois (Chairman 
Hyde), and the other is the gentleman from Wisconsin (Chairman 
Sensenbrenner).
  These gentleman have ably, carefully taken in the views of witnesses, 
of thoughts and ideas not only about bankruptcy, but have included in 
that the thought processes of consumers and normal people and 
bankruptcy judges. These two gentlemen have worked diligently to make 
sure that this body, the United States Congress, has a chance to have 
before it not only good legislation, but legislation that is well 
thought out.
  In particular I would like to thank the gentleman from Wisconsin 
(Chairman Sensenbrenner) for his patience, guidance and leadership to 
the gentleman from Illinois (Mr. Hastert), the Speaker of the House, 
and also the body of the Committee on Rules, because the gentleman from 
Wisconsin (Chairman Sensenbrenner) has done an outstanding job in 
making sure that today we have a great piece of legislation.
  Mr. Speaker, I have no further requests for time, I yield back the 
balance of my time, and I move the previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

                          ____________________