[Congressional Record (Bound Edition), Volume 151 (2005), Part 3]
[Senate]
[Pages 3496-3524]
[From the U.S. Government Publishing Office, www.gpo.gov]




    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
resume consideration of S. 256, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 256) to amend title 11 of the United States 
     Code, and for other purposes.

  Pending:

       Leahy amendment No. 26, to restrict access to certain 
     personal information in bankruptcy documents.
       Feinstein amendment No. 19, to enhance disclosures under an 
     open end credit plan.
       Kennedy amendment No. 44, to amend the Fair Labor Standards 
     Act of 1938 to provide for an increase in the Federal minimum 
     wage.
       Dorgan/Durbin amendment No. 45, to establish a special 
     committee of the Senate to investigate the awarding and 
     carrying out of contracts to conduct activities in 
     Afghanistan and Iraq and to fight the war on terrorism.
       Pryor amendment No. 40, to amend the Fair Credit Reporting 
     Act to prohibit the use of any information in any consumer 
     report by any credit card issuer that is unrelated to the 
     transactions and experience of the card issuer with the 
     consumer to increase the annual percentage rate applicable to 
     credit extended to the consumer.
       Reid (for Baucus) amendment No. 50, to amend section 
     524(g)(1) of title 11, United States Code, to predicate the 
     discharge of debts in bankruptcy by a vermiculite mining 
     company meeting certain criteria on the establishment of a 
     health care trust fund for certain individuals suffering from 
     an asbestos-related disease.


                             Cloture Motion

  Mr. McCONNELL. I send a cloture motion to the desk on the underlying 
bill.
  The PRESIDENT pro tempore. The clerk will report the cloture motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on Calendar Number 
     14, S. 256, a bill to amend title 11 of the United States 
     Code, and for other purposes.
         Bill Frist, Arlen Specter, Chuck Grassley, Judd Gregg, 
           Thad Cochran, R.F. Bennett, Wayne Allard, Lindsey 
           Graham, Jeff Sessions, Trent Lott, Rick Santorum, John 
           Warner, John Thune, Orrin Hatch, Lisa Murkowski, Mel 
           Martinez, Sam Brownback.

  Mr. McCONNELL. I ask unanimous consent that the live quorum under 
rule XXII be waived.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. McCONNELL. For the information of our colleagues, this vote will 
occur on Tuesday. As I just mentioned, we are working on an agreement 
for the precise timing of this vote, and we will announce that later 
this morning.
  I yield the floor.
  Mr. McCONNELL. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Mr. President, I am pleased we have had a good week of 
debate on the bankruptcy bill, which I believe is a very important 
piece of legislation. It is something this Congress has a 
responsibility to deal with since bankruptcy procedures are Federal 
court procedures and bankruptcy judges, although not article III 
judges, are Federal judges.
  The court system, over the last 20, 30 years, has grown incredibly. 
We have gone from a few hundred thousand bankruptcies a year, to 1.6 
million personal bankruptcies in 2003. It has been driven by a lot of 
things. Some say it is economic problems, but our economy compared to 
other times has not been as bad. We have had some tough years, but we 
have also had some good years. We have seen bankruptcies exceeding 
everything that could be based on the economy. I suspect a good part of 
it is because of the advertising of lawyers in the newspapers.
  People who have built up some debt and are having a hard time dealing 
with it, and creditors are calling, they see an ad that says something 
like this: Come on down. We can take care of those debts and help you. 
So people have been filing bankruptcies at a record pace, caused 
somewhat by these ads. Many of the people work their way out of it; 
many of them cannot.
  We absolutely believe and support the classic American view that you 
should be able to have a fresh start; that if debts overpower a family 
or individual, they can go to bankruptcy court and wipe out those debts 
and not

[[Page 3497]]

pay a dime. That is the way the law is, no matter the income of the 
person who files. A person who has a quarter of a million in income 
today can go into bankruptcy court, if they have, say, $150,000 in 
debts, debts they could pay if they put their mind to it, they can just 
wipe out those debts and keep making $250,000 a year and not pay their 
local banker, their local hospital, doctor, car dealer, or whoever they 
bankrupt against. It is an unhealthy practice.
  We thought a lot about how to deal with the problems and how to deal 
with the abuses. Having practiced law a good bit, I have a hard time 
blaming the lawyers who take advantage of the laws that we in Congress 
have provided. They look at the legal system, they see what helps the 
debtor the absolute most, and they file the bankruptcy in that fashion, 
taking full advantage of the law.
  It is appropriate for the Senate, for the first time since 1978, to 
pass a reform of those laws to deal with the problems we know arise, to 
help people who legitimately need relief from their debts to start 
afresh. Those who can pay some of it ought not to get off scot-free. 
That is the fundamental principle of this bill.
  Let me mention one of the best things about bankruptcy. When people 
fall behind in their debts, penalties get assessed against them. They 
have to take out even higher interest rate loans to stay afloat, and 
they begin a downward spiral. They have creditors--in most instances, 
many creditors. These creditors call debtors, they file lawsuits and 
they file liens against the debtor's property. It can be a crushing, 
hard time for them.
  When they file bankruptcy--either in chapter 7 where all the debts 
are wiped out, or in chapter 13 where they pay back a portion of those 
debts--the creditors cannot keep bothering them. They cannot be sued. 
Any lawsuits that have been filed against them are stayed, stopped. The 
court manages their money under chapter 13. They wipe away all their 
debts if they file under chapter 7, and they can start afresh. That is 
a provision of law in America that is worthy of continuing. But we also 
see there are some problems and abuses.
  As we look at the changes in this legislation, I will mention a few 
as we get started this morning.
  One is there was a consensus of those working on the bill that if 
individuals had a higher income and could pay back a portion of their 
debts, at least--perhaps all of them, but most likely not all of them--
they ought to do so. Why should they not pay back something if they are 
able to do so? So we put in the bill a means test.
  This has been in the legislation for the last 8 years. It has come 
before this Congress four separate times. This is the fourth time. And 
it has received a strong majority vote, bipartisan vote every single 
time. But for one reason or other, we have not been able to make the 
bill law. We are going to do that this time, I am confident.
  But on the question of, What about the changes? How does it impact a 
person who would go and file in bankruptcy? We know that 80 percent of 
the people who file for bankruptcy make below median income. That means 
under the provisions of this bill, no fundamental changes will occur. 
They cannot be made to go into chapter 13 unless they choose to do so. 
They can wipe out all their debts, not pay a single one, under the 
provisions of chapter 7, unless it is a debt that is not dischargeable, 
such as a result of an intentional or fraudulent act.
  If they make above median income, and there are no special 
circumstances that apply that might excuse them from that, such as a 
health problem or a problem with an ill child or something that 
requires extra expense, then they could be moved into chapter 13, where 
they pay back a portion of their debts. The judge would decide how much 
they could pay, and they could be made to pay a portion of those debts 
for a period of up to 5 years.
  We think that is a reasonable and fair approach. In fact, this Senate 
certainly did during the 107th Congress when we passed a similar bill 
83 to 15. So I think that is the basic procedure.
  It also provides that before you file in bankruptcy, you should at 
least examine the possibility of credit counseling. There are credit 
counseling agencies all over America. They have proven to be effective 
for a large number of creditors. These agencies are able to negotiate 
reduced payments for the debtors, to reduce interest rates and to help 
the debtor sit down and work out a family budget. They bring in the 
whole family. They sit around the table. They work out a budget. They 
help teach them how to manage their money. They reduce interest rates. 
They reduce debts through negotiation. Many families are finding they 
can work their way out of debt without filing for bankruptcy, without 
walking out on their solemn obligations and actually feeling better 
about themselves, as well as learning a lesson for the whole family.
  So we say they at least ought to know about this option and ask them 
to consider that. It can be to go by and have a brief meeting, a 
discussion, and receive some paperwork on it, and discuss it before 
they file for bankruptcy. We think that can make a big difference for a 
lot of people. How many bankruptcies might be avoided by that? I don't 
know--5 percent, 10 percent--but I think it could be a significant 
improvement in our system.
  We also say that before you can be discharged and finally walk away 
from your debts, you should go through a financial course on how to 
manage money because we want to see people manage money wisely, to 
avoid high interest debts when they can, to keep their interest rates 
low, their borrowing low, to manage their money wisely. This bill would 
also require that.
  These are things that have gained strong bipartisan support. I know I 
offered the amendment on credit counseling. I visited credit counseling 
agencies in Alabama and talked to them. I think they provide a 
tremendous service for a lot of people.
  That is where we are with the fundamentals of the bill. It has, as I 
said, come before Congress four different times. In 1998, during the 
105th Congress, we passed the bill with a 97-to-1 vote. The most recent 
vote, as I noted, was in 2001, and it was 83 to 15. We reported this 
bill out of the Judiciary Committee last week with a vote of 12 to 5, 
with strong bipartisan support again. So we are confident that if we go 
forward and we have an up-or-down vote on the bill, it will pass. I 
believe the House of Representatives will pass it again this time, and 
we can make some progress in that Federal court system that we have the 
responsibility to monitor.
  We have the responsibility to analyze it on a regular basis, and if 
it is not performing up to standards, we ought to fix it. That is what 
we are doing. We have had a surge of bankruptcies. We have had a surge 
of abuses in bankruptcies where people, for example, lawyers, run ads 
in newspapers saying: Are you about to be evicted from your apartment? 
File bankruptcy. Call us. And they have their phone number there.
  People are filing bankruptcies to stay an eviction for not a house 
they own but an apartment. That is not legitimate. So when the case is 
heard in the bankruptcy court, the apartment owner, who oftentimes is a 
small businessperson or retiree, has to go down to bankruptcy court, 
hire a lawyer, and then they win because the debtor does not have any 
property interest in the apartment. The lease has expired. They owe 
money on it. They are due to be evicted. Then it comes back to the 
State court for eviction proceedings, and they have to pick that up 
again. And they extend, for months, their stay in people's houses or 
apartments through the manipulation of the bankruptcy system. That is 
one of the things we tightened.
  We raised the priority for women and children with regard to alimony 
and child support. Those payments are going to be far more high on the 
priority of payments when there is a limited amount of money by the 
debtor. So now, instead of money going strictly to lawyers or to other 
debts, it is going to go straight to children for

[[Page 3498]]

child support and also for alimony. We had testimony in the Judiciary 
Committee, of which I am a member, from professionals in child support 
who say this will be a magnificent advance for women and children. We 
are excited about that potential.
  There is so much more in the bill. I believe it is a sound bill. It 
has been on this floor, as I said, four times. It has been in the 
Judiciary Committee four times. We have had 15 hearings on the bill. I 
believe every possible objection has been considered, and I believe we 
are on the verge of making some positive change in our bankruptcy 
system. It is certainly overdue.
  I yield the floor.
  The PRESIDENT pro tempore. The Senator from Montana.


                            Amendment No. 50

  Mr. BAUCUS. Mr. President, I rise to speak on my pending amendment, 
amendment No. 50, to the bankruptcy reform bill. This is an amendment 
to correct an enormous injustice in my home State. And that is not an 
understatement. That is accurate. It is very accurate. It is not an 
overstatement. It is dead on.
  My amendment is based on a bill I have introduced in past Congresses 
to set up a permanent health care trust fund for current and former 
Libby residents, and former workers at the W.R. Grace vermiculite mine 
in Libby, MT. The trust fund would help pay for the costs of treating 
asbestos-related illness caused by exposure to deadly tremolite 
asbestos and other fibers released by Grace's mining operations.
  This amendment would require a company such as W.R. Grace--which has 
willfully harmed the innocent citizens of Libby, MT--to set up a health 
care trust fund for its victims before it can emerge from bankruptcy. 
As a result of this amendment, W.R. Grace cannot emerge from bankruptcy 
until it has established a trust fund of at least $250 million to cover 
the cost of health care for the people of Libby.
  The people of Libby, the Libby community, and the State of Montana 
face an immediate health care crisis. This crisis was caused by 
alarming rates of asbestos-related exposure, disease, and illness.
  Former Libby residents face their own personal health care crisis 
because they are denied access to private health insurance. Why? 
Because they have been diagnosed with an asbestos-related disease or 
illness, or show signs that they have been exposed to asbestos. They 
have been denied insurance for that reason only. Projected health care 
costs to treat all sick people in Libby, MT, run into the hundreds of 
millions of dollars.
  This dire situation was created because the responsible party in this 
case, the W.R. Grace Company, which had the mine in Libby, MT, 
willfully harmed the people of Libby--willfully harmed the people of 
Libby. There is immense documentation showing that the company knew the 
mine operations were causing illness, asbestos-related diseases, in the 
form of tremolite, which is the worst kind of asbestos disease, and 
caused the death of many people in Libby and the very serious illness 
of very many people in Montana. The company knew that. They willfully 
knew that. The documents prove it.
  After harming Libby, Grace ignored its responsibility for Libby's 
health care needs. Grace ignored the harm it inflicted on Libby. They 
turned their back to it. They showed no accountability. They ignored it 
even though they knew they were the cause of the disease in Libby.
  More than that, the actions of W.R. Grace were criminal. The U.S. 
Attorney General's Office has filed a historic indictment against 
current and former W.R. Grace executives for knowingly concealing 
information about asbestos pollution in Libby. This pollution led to 
the death of more than 200 people in Libby, and made hundreds of others 
sick.
  Mr. President, I wish you could go to Libby, MT. Go see it. Any 
Member of this body who would visit Libby, MT, would know exactly what 
I am talking about and understand why this amendment is needed. Seeing 
is believing. I know we hear lots of stuff around here. We hear lots of 
Senators stand up and talk about problems they see. I tell you, Mr. 
President, I tell my colleagues, if you were to visit Libby, MT--just 
to see it, spend a couple hours--you would know exactly what I am 
talking about and you would support this amendment.
  It is one of the most tragic situations I have ever seen in my life. 
That is not an overstatement. It is one of the most tragic situations I 
have seen in my life. That is why this amendment is so important.
  It is also very unfortunate that my amendment is so necessary, but it 
is. It is vital. It is just. And the people of Libby should not have to 
hope they will be treated fairly in the Grace bankruptcy. They should 
know they will be treated fairly and that at the very least they will 
not have to worry about how to pay for costly medical care. These costs 
should not be borne by Grace's victims, nor should the taxpayers have 
to pick up the tab through Medicare or Medicaid or through other 
publicly funded programs. The responsibility lies squarely with the 
company that caused the sickness in the first place--W.R. Grace.
  Mind you, this is not a company that is struggling. According to 
Grace's recent financial results, issued in January, W.R. Grace 
reported that 2004 fourth quarter sales were up 15 percent over the 
fourth quarter of 2003. And for the full year of 2004--a full year--
Grace reported sales of over $2.2 billion, which is a 14-percent 
increase over the previous year.
  That is right. As Libby's economy struggles, and people are waiting 
for health care, and dying, W.R. Grace's business is booming, with 
operations in nearly 40 countries. And Libby residents are left to die. 
They are left to die because of Grace's actions. A Grace spokesman once 
boasted, as this was happening, ``We are very pleased with our business 
progress and results for 2004.''
  Ask those who died or who fell ill last year because of W.R. Grace 
whether they are pleased with the progress and results of 2004. I 
suspect you will get a different answer.
  The Congress cannot make right what happened to Libby. No amendments, 
no legislation, no resolutions will bring back those who died or 
prevent the afflicted from getting sicker. But we can ensure that those 
afflicted do not have to pay health care costs incurred through no 
fault of their own. And we can ensure that the party responsible--in 
this case W.R. Grace--does.
  I urge my colleagues to support this amendment. It is so important, 
it is a matter of accountability, it is a matter of fairness, and it is 
a matter of time before more folks from Libby, MT, get sick as a result 
of W.R. Grace.
  The PRESIDING OFFICER (Mr. Sessions). The Senator from Alaska, the 
President pro tempore.
  Mr. STEVENS. Mr. President, is it proper to speak on a matter not 
concerning bankruptcy at this time without consent?
  The PRESIDING OFFICER. It would take consent.
  Mr. STEVENS. Mr. President, I ask unanimous consent to be permitted 
to speak for up to 10 minutes on a matter not concerning the bankruptcy 
bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Alaska is recognized.


                           High Energy Prices

  Mr. STEVENS. Mr. President, I hope all Members of Congress saw the 
news yesterday, that oil prices reached $55 a barrel. Now, some of us 
reacted with shock and amazement, but others knew the reality that this 
day would come.
  We have witnessed the impact of these high energy prices every time 
we fill up our gas tanks and pay our heating or electric bills.
  These high prices are unsustainable, jeopardizing jobs and 
threatening the long-term health of our economy. The impact of high 
energy prices can be seen at all levels of our economy. High energy 
prices have produced job losses, trade deficits, and constraints on 
consumer spending and economic growth. Demand for energy in the United 
States is outstripping supply, and Americans are feeling the impact of

[[Page 3499]]

Congress's failure to act to solve the problem. Our people rely on our 
ability to stabilize energy prices and provide them with the energy 
resources all of us need.
  The good news is that this worsening crisis is avoidable. The United 
States has the natural resources to increase our energy supply. But 
inconsistent Government policies discourage the exploration, 
development, and use of our own energy resources. Almost 30 percent of 
all the lands in this country are owned by the Federal Government. That 
is 657 million acres--almost four times the size of Texas. Under those 
lands lies 90 percent of the predicted undiscovered oil and 40 percent 
of our undiscovered natural gas. Those public resources are needed to 
meet our energy needs and secure our future.
  Since 1983, access to our Federal lands has declined by 60 percent. 
Over half of the lands that are designated currently as multiple use--
in other words, ones that oil and gas exploration could take place on--
are subject to highly restrictive land classifications or lease 
stipulations which effectively restrict energy exploration and 
development.
  The effect of these policies is clear. In 1981, 91,533 oil and gas 
wells were drilled in the United States. In 2000, that number declined 
to 29,284, almost down to 25 percent of what we did some 20 years ago. 
As a result, crude oil production in the United States is at a 50-year 
low, and permitting for oil and gas projects on Federal lands that once 
took 18 months--and that was considered a long time then--can now take 
up to 10 years. In some instances, it takes 10 years to clear a permit 
to start exploring for oil on Federal lands. Those delays force 
companies to pursue projects overseas rather than develop U.S. 
resources.
  Some people have commented upon the fact that the U.S. oil industry 
is no longer seeking to support the concept of drilling on Alaska's 
Arctic plain. They have opportunities all over the world where they can 
proceed much more rapidly than in this country, and there is no 
question that they need to find oil to meet our needs. What industry is 
going to put up the money for 10 years to explore for and develop 
energy here at home when it can go abroad and do that in less than 1 
year?
  In a hearing before the House Subcommittee on Energy and Mineral 
Resources, Stephen Entin, a former staff economist for the Joint 
Economic Committee and currently president of the Institute for 
Research On the Economics of Taxation, argued that our current policies 
actually support OPEC, the Organization of the Petroleum Exporting 
Countries, and enhance its power. By locking up our own lands we have 
basically manipulated prices because we have restricted competition 
from American companies, and OPEC reaps the benefits from an 
inequitable playing field. As a matter of fact, we encourage them to 
raise prices because our demand constantly increases and our domestic 
supply constantly decreases. Jobs and energy security have been 
outsourced, as we seek our energy security in places where there are 
unfriendly and unstable regimes. I have had personal talks with some 
members of the oil industry. They know that those are unstable regimes, 
but they have no alternative.
  For every $1 billion we spend to develop petroleum resources 
domestically we would create 12,500 jobs. That would mean that last 
year we lost over 1.3 million jobs by importing oil instead of 
producing it. People wonder why our jobs are going abroad. When we 
withdraw lands from oil and gas exploration, that is not free. Many 
people in this country think it is an easy decision and it doesn't cost 
anything. It is a very expensive policy. We are paying a huge price now 
because we have locked up our lands and made them inaccessible, when 
they purportedly are open, by restrictive policies, restrictive 
stipulations that take so long to comply with that no industry is going 
to put up the money and wait so long for the opportunity to see if 
there is oil and gas in those lands.
  The American taxpayer picks up the tab, and the American consumer is 
severely punished by this policy. Consumers are paying more for food, 
goods, and energy bills. According to Daniel Yergin, an economist from 
Cambridge Energy Associates, high energy and gasoline prices 
essentially act as a consumer tax, leaving Americans with less 
disposable income for travel, home buying, restaurants, and retail 
establishments, all of what we call our quality of life.
  Only yesterday, I received this estimate. It is estimated now that 
for every one-cent increase for gasoline at the pump, there is $1 
billion lost in consumer spending. Just look at the price of gasoline 
now. The price of gasoline is at an alltime high, and it will not come 
down. It is going to continue to go up.
  In China, 5 years ago only 5 percent of their people were using 
energy. Now 15 percent are using it. Even at that low rate of 15 
percent of their people using energy, talking about oil and gas energy, 
they have now passed Japan in consumption annually of oil and gas. They 
are second only to the United States, and only 15 percent of their 
people are using oil and gas so far. People blame a lot of things for 
these high prices, but the fact is the world is starting to use oil and 
gas. We are competing for the world's oil production and ignoring 
completely our capability to produce right here at home.
  Unless Congress acts to ensure greater domestic production of our oil 
and gas resources, our energy security is jeopardized. I am talking 
about security. We had one embargo since I have been in the Senate in 
the 1970s, when we were totally embargoed by OPEC. They would not sell 
us oil. At that time about 33 percent of our oil was coming in from 
OPEC countries. Today it is 60 percent. An embargo today would destroy 
our economy.
  There are many people who advocate quick fixes to use alternative 
sources. I believe there must eventually be alternative sources to oil 
and gas in our economy, but just relying on them and saying we are 
going to do it and never bringing that about has led us to the point 
where we no longer have the capability to produce the oil and gas to 
meet our needs in the event of national security.
  We believe that it is time now that we should review these policies, 
and one of the key policies, of course, is an area that comes from the 
development of an area in my State. In 1980, we passed the Alaska 
National Interest Conservation Lands Act, an act that withdrew over 100 
million acres of Alaska's lands for national purposes. One provision in 
that bill guaranteed the right to explore the Arctic plain, a million 
and a half acres, for oil and gas, probably even then known as the area 
most probable to produce substantial quantities of oil and gas. It is 
estimated to contain 10.4 billion barrels of oil. Just as a comparison, 
when we first drilled at Prudhoe Bay, the estimate was it might contain 
1 billion barrels of oil. We have already produced 16 billion barrels 
of oil from Prudhoe Bay. In other words, this area now considered to be 
capable of producing 10.4 billion barrels of oil is probably the last 
most significant oil and gas area in the country, and we have worked, 
now since 1981, to try to fulfill the promise made to us in the 1980 
bill that that area could be explored.
  It is high time that we take action to reduce our dependence on 
foreign oil. As I said, we rely upon foreign sources for 60 percent of 
our energy needs. The area of the Arctic plain, 1.5 million acres 
guaranteed to be available for oil and gas exploration, is there. 
Allowing exploration and development of this area that is known as 
ANWR, although it is not part of the refuge until oil and gas 
development is over, would improve our U.S. balance of trade, reduce 
the amount of money we spend abroad, and improve our national security 
by having available the capability to produce that amount of oil.
  It is estimated that by 2025, the United States will spend 
approximately $200 billion on foreign oil and petroleum products. By 
opening this area, and when it produces, we could save a considerable 
portion of that by producing our own oil and gas. It means we could 
create tens of thousands of jobs and contribute greatly to the overall 
economy.

[[Page 3500]]

  There is no question that we are now in an energy crisis. Anytime we 
see $55-dollar-a-barrel oil, that is a crisis. I cannot believe that 
Congress wants to wait until the price goes up to somewhere around $80. 
I believe it is going that high unless we start developing our domestic 
resources and look to alternative supplies of energy right here at 
home.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Isakson). The Senator from South Dakota.
  Mr. JOHNSON. Mr. President, I ask unanimous consent to speak for up 
to 10 minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              Steve Metli

  Mr. JOHNSON. Mr. President, it is with great honor and appreciation 
that I recognize the leadership and the many achievements of Mr. Steve 
Metli. Steve will soon retire from his post as city planner for the 
city of Sioux Falls, SD, a position he has held since 1974. He embodies 
the highest qualities of public service and has aptly earned the 
respect and admiration of his colleagues and leaders throughout South 
Dakota. I am proud to claim Steve as a friend.
  Steve Metli consistently addressed challenges with determination and 
foresight which significantly improved the strength of the local 
economy and the quality of life in Sioux Falls and thus expanded 
opportunities for all South Dakotans. His success is rooted in 
enthusiasm, vision, leadership, and progressive South Dakota values 
that will undoubtedly continue to echo in the growth and prosperity of 
the entire region for many years to come.
  In 1974, Mayor Rick Knobe appointed him to head an overburdened four-
person planning and zoning staff. Since that time, the city has swelled 
in population from about 75,000 to over 141,000 people, and Sioux Falls 
has become a major regional center for health, education, culture, 
recreation, and job growth.
  Steve now oversees the city departments of planning, transit, 
building services, media services, and arena, airport, convention 
center, and Washington Pavilion.
  Steve Metli's fortitude and resolve is evident in his private life as 
well as his public service. As an adult, he has survived three bouts 
with cancer, two changes in the form of city government, and the 
administrations of five mayors--Rick Knobe, Joe Cooper, Jack White, 
Gary Hanson, and Dave Munson. He devoted significant attention to the 
Big Sioux River greenway project and on expanding the city's park 
system, which now consists of 76 parks covering 2,600 acres. He has 
sought to reinvigorate and revitalize the downtown community. His 
vision of Sioux Falls downtown centers on the beautiful natural 
resource of the Big Sioux River.
  He led development of the city's growth management plans, which 
include infrastructure direction as well as parks, schools, and fire 
services. His vision of the Phillips to the Falls project was recently 
completed and he stood at the ribbon cutting with the pride of a parent 
whose child achieved a long-time dream and accomplishment. He has 
developed plans for the Big Sioux River Greenway, Falls Park and 
Downtown Development, and served as project manager for the 
construction of the Sioux Falls Convention Center.
  I have greatly appreciated the opportunity to work with Steve. His 
leadership and vision were critical to the successful growth of the 
Sioux Falls region. National publications have consistently recognized 
Sioux Falls as among the best communities of its size in which to live 
and do business. I am proud to recognize Steve Metli's critically 
important contributions to the success of the City of Sioux Falls, SD, 
and to our entire State.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     the history of social security

  Mr. BAUCUS. Mr. President, the ancient text teaches: ``Honor your 
father and your mother so that you may live long and that it may go 
well with you in the land the Lord your God is giving you.'' And Paul 
noted that `` `Honor your father and mother' is the first commandment 
with a promise--`that it may go well with you and that you may enjoy 
long life on the earth.' ''
  That's what Social Security is about. It is about honoring our 
fathers and our mothers. And like the commandment, Social Security also 
carries with it a promise. Social Security benefits not just our 
elders. It also benefits their children, and us all.
  Families throughout history have faced uncertainties, old age, 
disability, and death of the breadwinner. Before Social Security, the 
extended family provided what economic security they had.
  President Franklin Roosevelt described those times:

       In the early days of colonization and through the long 
     years following the worker, the farmer, the merchant, the man 
     of property, the preacher, and the idealist came here to 
     build, each for himself, a stronghold for the things he 
     loved. The stronghold was his home the things he loved and 
     wished to protect were his family, his material and spiritual 
     possessions. His security, then as now, was bound to that of 
     his friends and his neighbors.

  In the 18th and 19th centuries, most Americans lived and worked on 
farms. Before 1840, 9 out of 10 Americans lived in rural areas. And as 
late as 1880, 7 in 10 did.
  This chart on my right shows the degree to which Americans lived in 
rural America and over time moved to cities. Back in 1790, about 95 
percent of Americans lived in rural areas. Right now, the trend line is 
down to 1990, where about 20 percent lived in rural areas. Everybody 
else moved to the cities.
  Back then, in the early days, life was hard and often short. A boy 
born in the year 1850 could expect to live 38 years. That is all. By 
1900, the male life expectancy rose to about 46 years. As this chart 
shows, things changed with the Industrial Revolution. America changed 
from an agricultural to an industrial economy. People moved away from 
the family farm into the city, and by 1920, most Americans lived in 
urban areas. The extended family and family farm failed to provide the 
security they once did.
  At the same time, the people of a more prosperous nation began to 
live longer. As this chart shows, around 1930, a baby boy could expect 
to live 59 years--13 years longer than in 1900. And a 60-year-old man 
could expect to live to age 75. More and more Americans had to address 
the challenges of living into old age.
  This chart shows the male life expectancy at birth has risen 
significantly, from 39 in 1850 to 68 years of age 100 years later, in 
1950. Of course, today the lifespan is longer.
  Senator Robert Wagner of New York described how the burdens of 
supporting those growing numbers of seniors fell heavily through a 
patchy safety net and onto their grown children. He said:

       In truth . . . every civilized community does and must 
     support its old and dependent people in some way. In this 
     country, we have been doing it largely by inefficient relief 
     methods, by shabby pension systems, and by imposing burdens 
     upon millions of younger members of families, with consequent 
     impairment of their industrial efficiency, their morale, and 
     their own opportunities for future independence.

  And President Roosevelt looked back on those times, saying:

       Long before the economic blight of the depression descended 
     on the Nation, millions of our people were living in 
     wastelands of want and fear. Men and women too old and infirm 
     to work either depended on those who had but little to share, 
     or spent their remaining years within the walls of a 
     poorhouse. Fatherless children early learned the meaning of 
     being a burden to relatives or to the community.

  President Roosevelt saw America's social changes as grounds for a 
change in government's role. In his June 1934 message to Congress, he 
said:

       [S]ecurity was attained in the earlier days through the 
     interdependence of members of families upon each other and of 
     the families within a small community upon each other. The 
     complexities of great communities and of organized industry 
     make less real these simple means of security. Therefore, we 
     are compelled to employ the active interest of the Nation as 
     a whole through government

[[Page 3501]]

     in order to encourage a greater security for each individual 
     who composes it.

  The Great Depression triggered government's response.
  As this chart shows, the American economy in 1933 produced barely 
more than half the output that it did in 1929.
  And as the next chart shows, by 1933, a quarter of the American labor 
force was unemployed.
  Look at this next chart. From its 1929 high of 381, the Dow Jones 
Industrial Average fell to a trough of 41 in 1932. That's nearly a 90 
percent drop in the Dow, in just 3 years.
  Lifetimes' worth of private accounts evaporated into thin air. 
Senator Royal Copeland of New York recounted:

       [T]here are thousands of families, I suppose millions, who 
     thought they had prepared for the rainy days, but by reason 
     of the Depression, and the circumstances involved in it, they 
     have come to be almost as bad off as many who were born and 
     have lived all their lives in poverty.

  State governments found themselves under an increasing burden. This 
chart shows unemployed men in line. Senator Daniel Hastings of Delaware 
said,

       [T]he individual States are laboring under a strained 
     financial condition; with many of them believing that they 
     cannot take care of their own.

  As with economic hardship throughout history, the Depression hit 
widows and orphans particularly hard. This chart shows a careworn 32-
year-old woman's face. Congressman William Sirovich of New York painted 
the picture, in 1935:

       Death, through the loss of the breadwinner, has broken many 
     a home. For centuries the widows, orphans, and dependent 
     children have cried aloud for help and assistance in their 
     tragic periods of economic insecurity. In the past the only 
     recourse for orphaned children was the poorhouse, alsmhouse, 
     and the orphan asylum. The twentieth century of civilization 
     has awakened our citizens to the duty and obligations they 
     owe to these unfortunate orphans.

  And Congressman Fred Crawford of Michigan spoke of children with 
disabilities:

       One only needs to come in contact with a home which is 
     unable to provide any means of relief for a little child who 
     has been stricken with paralysis to appreciate what this will 
     mean to those homes so darkened with the suffering that 
     follows such a catastrophe.

  Remember what happened back then. I am not saying we are going to 
again suffer the same cataclysmic and dire consequences of the 
Depression. I don't think we will. But we could suffer bad times in the 
future. The stock market could fall precipitously. Two speakers ago on 
the floor, the Senator from Alaska was talking about the economy, 
saying it would be devastated if there was an oil embargo; that would 
be the end of the American economy. The stock market would clearly 
fall. We don't know. We live in times that are a little more 
precarious, uncertain, and it is harder to predict the future. We just 
don't know. I am presenting these charts and this information to remind 
us that we don't know. Again, I doubt we will have another depression 
that severe--we may, but I doubt it. But things can go south sometimes. 
Things don't always go well all the time.
  President Roosevelt sought a comprehensive solution. To that end, in 
June of 1934, he issued an Executive Order creating the cabinet-level 
Committee on Economic Security. He charged them to, ``study problems 
relating to the economic security of individuals.''
  Labor Secretary Frances Perkins chaired the committee, which also 
included the Treasury Secretary, the Attorney General, the Agriculture 
Secretary, and the Federal Emergency Relief Administrator. Secretary 
Perkins relied heavily on her assistant secretary, Arthur Altmeyer, who 
would become the first Social Security Commissioner.
  And to address the need, President Roosevelt and other leading 
thinkers turned to the idea of ``social insurance.'' President 
Roosevelt said of social insurance: ``This is not an untried 
experiment. Lessons of experience are available from States, from 
industries and from many nations of the civilized world. The various 
types of social insurance are interrelated; and I think it is difficult 
to attempt to solve them piecemeal. Hence, I am looking for a sound 
means which I can recommend to provide at once security against several 
of the great disturbing factors in life--especially those which relate 
to unemployment and old age.''
  Social insurance programs began in Europe in the 19th century. By the 
time America adopted Social Security as a national social insurance 
program in 1935, 34 European nations and several States in the Union 
already operated some form of social insurance program--34 nations 
before 1935.
  I am very proud to say my home State of Montana played a leading role 
when, in March of 1923, it enacted its old age pension law. Montana's 
was the first State law to stand the test of constitutionality for an 
old age pension law. Its sponsor was Lester Loble of Helena, MT.
  I would like to show a picture of Lester Loble, who later became a 
State judge, Judge Loble. I knew him. He was a wonderful, wise man. 
Frankly, I did not know of his history until I did a little research 
into Social Security and was delighted to find Judge Loble played a 
prominent role in developing Social Security.
  He had been a delegate to the 1921 national convention of the 
Fraternal Order of Eagles, which had devoted a special focus to pension 
laws for seniors. Mr. Loble's old age pension law provided each 
county's fund would pay a modest monthly income--up to $25 a month--to 
the poorest of Montana's seniors, those earning less than $300 a year.
  In a legislative session torn by struggle over taxes on mining 
property, the bill passed, and Governor Joseph Dixon, a Republican, 
signed it into law, saying:

       You Eagles have planted this seed and you can no more stop 
     the progress of old age pensions than you can stem the tide 
     of the Pacific Ocean.

  In November of 1934, on behalf of President Roosevelt's Committee on 
Economic Security, Secretary Perkins invited Mr. Loble to Washington, 
saying:

       We are extending this invitation to you because you have 
     the honor of having been the author of the first old age 
     pension law in this Country.

  The committee set to work on the idea of social insurance. Like all 
insurance, social insurance protects against a defined risk. The 
insurance pays beneficiaries when they need to bear a large expense, 
often at times when they would otherwise not be able to provide for 
themselves. Like all insurance, social insurance spreads the burdens of 
the risk broadly across a large pool of those who may encounter the 
risk. When the risk does occur to one beneficiary, the sharing of the 
risk makes it easier to bear.
  Social insurance spreads these risks over the largest possible pool 
of potential beneficiaries--society as a whole. And social insurance is 
shaped by broader social objectives, helping to promote the Nation's 
overall economic security.
  President Roosevelt's Committee on Economic Security made its 
recommendation to Congress in January 1935. The committee reported:

       At least one-third of all our people, upon reaching old 
     age, are dependent upon others for support. . . . There is an 
     insecurity in every stage of life.

  They went on:

       Children, friends, and relatives have borne and still carry 
     the major cost of supporting the aged. . . . [T]his burden 
     has become unbearable for many of the children. . . .

  They responded to that challenge with a proposal for Social Security, 
and they concluded:

       The measures we suggest should result in the long run in 
     material reduction in the cost to society of destitution and 
     dependency and we believe will immediately be helpful in 
     allaying those fears which open the door to unsound 
     proposals.

  The Finance Committee held hearings on the proposal. At one hearing, 
Senators watched as several elderly gentlemen who were totally blind 
were led into the committee room by their guide dogs and told of their 
life of need. This is before Social Security. Finance Committee 
Chairman Pat Harrison of Mississippi said:

       I do not know of any committee that was ever moved more 
     than was the Finance Committee.


[[Page 3502]]


  During the Senate's floor debate on the bill, Senator Wagner from New 
York said:

       The social security bill embraces objectives that have 
     driven their appeal to the conscience and intelligence of the 
     entire Nation. We must take the old people who have been 
     disinherited by our economic system and make them free men in 
     fact as well as in name. We must not let misfortune twist the 
     lives of the young. We must tear down the house of misery in 
     which dwell the unemployed. We must remain aware that 
     business stability and prosperity are the foundation of all 
     of our efforts. In all of these things we are united, and in 
     this unity, we shall move forward to an era of greater 
     security and happiness.

  This chart shows the signing of the Social Security Act. In signing 
the Social Security Act in August 1935, President Roosevelt said:

       Today a hope of many years' standing is in large part 
     fulfilled. The civilization of the past hundred years, with 
     its startling industrial changes, has tended more and more to 
     make life insecure.
  That was in 1935. Think how insecure now.

       Young people have come to wonder what will be their lot 
     when they came to old age. The man with a job has wondered 
     how long that job would last.
       This Social Security measure gives at least some protection 
     to . . . millions of our citizens who will reap direct 
     benefits through unemployment compensation, through old-age 
     pensions and through increased services for the protection of 
     children and the prevention of ill health.

  President Roosevelt continued:

       We can never insure 100 percent of the population against 
     100 percent of the hazards and vicissitudes of life, but we 
     have tried to frame a law which will give some measure of 
     protection to the average citizen and to his family against 
     the loss of a job and against poverty-ridden old age.

       The law established two social insurance programs on a 
     national scale to help meet the risks of old age and 
     unemployment: a Federal system of old age benefits for 
     retired workers and a Federal-State system of unemployment 
     insurance.
  President Roosevelt saw the 1935 Social Security law as an economic 
foundation. He said:

       This law . . . represents a cornerstone in a structure 
     which is being built but is by no means complete. It is a 
     structure intended to lessen the force of possible future 
     depressions. It will act as a protection to future 
     administrations against the necessity of going deeply into 
     debt to furnish relief to the needy. The law will flatten out 
     the peaks and valleys of deflation and inflation. It is, in 
     short, a law that will take care of human needs and at the 
     same time provide the United States an economic structure of 
     vastly greater soundness.

  President Roosevelt justly concluded:

       If the Senate and House of Representatives in this long and 
     arduous session had done nothing more than pass this bill, 
     the session would be regarded as historic for all time.

  President Roosevelt's prophecy that Congress would build on Social 
Security was soon proved true. The Old-Age Insurance Program had not 
yet come fully into operation when Congress enacted significant 
changes. In 1939, Congress added benefits for dependents of retired 
workers and surviving dependents of deceased workers, and Congress made 
the first benefits payable in 1940 instead of 1942, as originally 
planned.
  In the 1950s, Congress broadened Social Security to cover many jobs 
that previously had been excluded.
  In 1956, Congress added disability insurance. Benefits were provided 
for severely disabled workers aged 50 or older and for adult disabled 
children of deceased or retired workers.
  Two years later, in 1958, Congress provided benefits for dependents 
of disabled workers similar to those already provided for dependents of 
retired workers.
  In 1960, Congress removed the age-50 requirement for disabled worker 
benefits.
  And in 1967, Congress provided disability benefits for widows and 
widowers aged 50 or older.
  There used to be a yearly annual ritual in Congress to provide cost-
of-living increases to Social Security beneficiaries. This sometimes 
happened right before an election. In 1972, Congress did away with this 
uncertainty and provided for automatic cost-of-living increases in 
benefits tied to increases in the consumer price index. The 1972 
amendments also increased benefits for workers who retired after full 
retirement age.
  In 1977, Congress changed the method of benefit computation to ensure 
stable replacement rates over time. Earnings included in the 
computation were to be indexed to account for changes in the economy 
from the time they were earned.
  In 1983, as a consequence of the Greenspan Commission, to strengthen 
and extend the life of Social Security, Congress made coverage 
compulsory for employees of the Federal Government and nonprofit 
organizations. State and local governments were prohibited from opting 
out of the system once they had joined. The amendments also gradually 
increased the age of eligibility for full retirement benefits from 65 
to 67, beginning with persons who reach the age of 62 in the year 2000.
  For certain higher income beneficiaries, benefits became subject to 
income tax.
  In 1996, Congress relaxed earnings limits for seniors who reached the 
full retirement age.
  In 1999, Congress reformed certain provisions under the disability 
program to create stronger incentives and better supports for 
individuals to work.
  And in 2000, Congress eliminated the earnings for seniors who have 
reached the full retirement age.
  What we now know is Social Security touches almost every American. 
Social Security covers 96 percent of American workers and their 
families. In 2003, Social Security provided $471 billion in benefits to 
47 million people. One in six Americans collects Social Security 
benefits today.
  In my home State of Montana, 164,000 of our 927,000 residents, or 
about 18 percent of all Montanans, receive Social Security benefits. 
Nearly 7 percent of all Montana personal income comes from Social 
Security payments. Montana ranks fifth among the 50 States in terms of 
the share of our State's income that comes from Social Security.
  Social Security is, in effect, three programs: an earned retirement 
benefit, a disability insurance policy, and a life insurance policy.
  Most people think of Social Security as a retirement program, but 3 
in 10 beneficiaries collect survivors' or disability insurance 
benefits.
  Of today's 20-year-olds, 28 percent will become disabled. That is 
quite startling when one stops to think about it. Of today's 20-year-
olds, 28 percent will become disabled, and 17 percent will die before 
reaching retirement. Look around the room in any college classroom: 3 
in 10 students will become disabled, and 2 in 10 will die before 
retirement. But if a young worker should experience a period of 
disability, Social Security will provide for the worker and the 
worker's family. In the same vein, Social Security will provide for the 
worker's family if the worker experiences an untimely death. For a 
young married worker with two children, Social Security provides the 
equivalent of a $400,000 life insurance policy and a $350,000 
disability policy. Think of that. For a young married worker today with 
two children, Social Security provides the equivalent of a $400,000 
life insurance policy and a $350,000 disability policy. Only about 3 in 
10 workers have access to long-term disability benefits, aside from 
Social Security.
  Social Security provides retirement benefits for retirees who worked 
at least 10 years. President Roosevelt said:

       There are other matters with which we must deal before we 
     shall give adequate protection to the individual against the 
     many economic hazards. Old age is at once the most certain, 
     and, for many people, the most tragic of all hazards. There 
     is no tragedy in growing old, but there is tragedy in growing 
     old without means of support.

  Social Security provides the primary source of income for two-thirds 
of America's seniors. Stop and think about that a moment. Social 
Security provides the primary source of income for two-thirds of 
America's seniors. For one-fifth of our seniors, it provides the only 
source of income. For one-fifth of our seniors in our country, Social 
Security is the only source of income. The average retiree benefit is 
$822 a month, or about $10,500 a year in my State of Montana, and about 
$900 per month, or about $11,000, nationally.

[[Page 3503]]

  This is hardly a king's ransom, but as President Roosevelt said on 
the third anniversary of the law's enactment:

       The act does not offer anyone, either individually or 
     collectively, an easy life--nor was it ever intended to do 
     so. None of the sums of money paid out to individuals in . . 
     . insurance will spell anything approaching abundance. But 
     they will furnish that minimum necessity to keep a foothold; 
     and that is the kind of protection Americans want.

  Before Social Security, poverty and dependency threatened all who 
could no longer work, but with its guarantee of benefits to seniors for 
life, progressive benefit structure, spousal and survivor benefits, and 
annual cost-of-living adjustments, Social Security provides a solid 
foundation of economic security for all workers and retirees.
  Look at the effects of this chart. Because of Social Security, 
poverty among American seniors has fallen from roughly half of seniors 
in 1935 to roughly a third of seniors in 1959 to 1 out of 10 seniors 
now. Just think of that. Before Social Security, half of America's 
seniors were in poverty. That is this bar off to the left. Gradually, 
fewer of America's seniors were living in poverty. Social Security 
brought them out of poverty, and so today only 1 in 10 is living in 
poverty. Just think what would happen if they did not have those 
current Social Security benefits. Think what would happen to future 
retirees who had benefits reduced by 50 percent, as would be 
contemplated under the President's proposal.
  Social Security provides a guarantee of economic security for 
America's workers, for current workers and for retired workers. Social 
Security protects all Americans, whether they are fortunate and living 
a long and healthy life or unfortunate and facing early disability or 
death.
  Social Security benefits are adjusted for inflation, so the buying 
power of beneficiaries does not erode over time. Social Security 
benefits increase with family size, and they are progressive to ensure 
that even low wage earners have sufficient income. Beneficiaries cannot 
outlive their benefits. This is an insurance policy. It is a life 
insurance policy. Seniors cannot outlive their benefits. Seniors keep 
getting those monthly benefits as long as they live.
  Social Security uses a common system to administer all three 
programs--retirement, survivors, and disability--resulting in 
administrative costs of less than 1 percent. Administrative costs of 
all three, since they are combined with the same administration, are 
just 1 percent. Think of the administrative and other costs associated 
with other forms of retirement payments, particularly in the private 
sector, which we must have, which are important and critical. It is 
important also to note the factual difference of the administrative 
costs of some systems compared with some others.
  These unequaled benefits make Social Security invaluable for 
individual workers, retirees, and all Americans.
  In future statements I hope to go further into other aspects of 
Social Security. It is somewhat complicated, but it is somewhat 
simple--very important. I hope to address how the President's plan 
would cut benefits, not increase benefits, not stabilize benefits but 
cut them, and what benefit cuts would mean for Americans. I hope to 
address the concerns caused by the mounting debt and how the 
President's plan would make that mounting debt problem worse, not 
better but worse, much worse--much, much, much worse. I hope to address 
why we should be concerned about the savings and what changes we should 
be considering to increase savings in America, both public and private 
savings.
  Yes, Social Security faces long-term challenges. We all know that. We 
should work hard to address those. We should work together to 
strengthen Social Security for the long term. We all know we must do 
that. We want to do that, but we need to do it right. We should no 
longer endanger the valuable legacy we have built over so many years. 
It is important, to say the least.
  Privatization plans would cut Social Security's funding, weaken the 
program, and make its problems worse, not better. Plans like option 2 
of the President's Social Security Commission would cut benefits by 
one-third or more for future retirees, even for those who choose not to 
have a private account. That is important to note. Under the 
President's plan as we know it so far, Americans who do not choose to 
have a private account would find their benefits out in the future cut 
by one-third or more, even if they do not want to participate in the 
private or personal accounts--whatever one wants to call them.
  Those investing in those accounts--personal accounts or private 
accounts--will be hit twice. Those who do invest, who choose to opt to 
invest, would be hit twice, as their benefits would be subject to a 
substantial privatization tax. I am not going to go into great detail, 
but if one chooses to participate in the President's plan, their total 
benefits when they retire are going to be less than they would be if 
there is no change in Social Security, just as long as we find ways to 
keep it going.
  Cuts of this magnitude would leave many seniors in poverty, requiring 
more taxpayer assistance, not less, and the President's privatization 
plan would cause the Government to borrow $5 trillion in additional 
debt in the next 20 years. Five trillion dollars additional of publicly 
held debt in the next 20 years. Today the publicly held debt is about 
$4 trillion or $5 trillion. It will practically double over the next 20 
years. We cannot do that. That does not make sense. This is not the 
legacy we should be giving to our kids and grandkids.
  Yes, clearly, we should address Social Security. We should stop using 
Social Security surpluses for other Government purposes. We should save 
more as a nation. We should address the Government's record budget 
deficits by restoring fiscal discipline and avoiding massive new debt. 
We should reinstate enforceable budget restrictions such as the pay-as-
you-go rules, and we should work to develop new and innovative ways to 
help Americans save separate and apart from Social Security.
  We should honor the words of Congressman Joseph Monaghan of Montana, 
who said in April of 1935:

       When the sun of life begins to set upon the aged of our 
     country, the . . . Government should extend to them a relief 
     from the weary toils of the day and to bring relief, comfort, 
     and security to them when the burdens of life are hardest to 
     bear and when the darkening shadows of approaching night 
     begin to fall upon his path to make further toil impossible, 
     to make further travel insecure, a just reward which their 
     toil has merited; an adequate old-age pension and not a 
     pauper's dole.

  We should also honor the words of President Roosevelt, who said to 
Congress in 1934:

       We must dedicate ourselves anew to a recovery of the old 
     and sacred possessive rights for which mankind has constantly 
     struggled: homes, livelihood, and individual security. The 
     road to these values is the way of progress. Neither you nor 
     I will rest content until we have done our utmost to move 
     further on that road.

  We should honor our fathers and our mothers. We should honor this 
important social insurance, honor this protection that keeps our 
fathers and mothers from these darkening shadows of approaching night. 
We should do so not just for them, we should do so also because it will 
help their children. It will help the economy to go well for us. It 
will help us to live better lives, all the days we are on this good 
land that the Lord has given us.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that I be 
permitted to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BINGAMAN. Mr. President, I first commend my colleague from 
Montana for his statement about Social Security and his leadership on 
that issue. He has been the leader in the Senate in trying to keep us 
focused on the real importance of maintaining Social Security and 
avoiding a privatized proposal, and I commend him for it. It is an 
honor for me to serve with him on the Finance Committee and follow his 
leadership on this issue.
  As we all know, Social Security and proposals to change Social 
Security are

[[Page 3504]]

very much the priority today in Washington, and particularly this 
President. The President just yesterday, I believe, announced that he 
will take the next 2 months to do a 60-city tour or to at least have 
events in 60 cities to try to promote his suggestion or his proposal 
for privatizing Social Security. Of course, this is a decision he has 
made about how to use the political capital that he saw himself coming 
out of the last election with.
  Social Security is clearly an issue that deserves attention. There 
will be serious difficulties with Social Security. I believe 38 years 
from now, with current projections, the system will not be able to pay 
full benefits. I favor trying to find something that can be done to 
head that off. I do not believe the President's proposal is the right 
solution, and I have spoken out on that before.


                           First Things First

  What I want to do today is speak very briefly on a couple of other 
issues that I believe are more urgent and more priority issues that we 
in the Congress should be addressing and that the President should be 
addressing. If we are looking to how to spend the next 60 days, let us 
focus on first things first. I remember reading a book Peter Drucker 
wrote many years ago called ``The Effective Executive.'' According to 
Peter Drucker, one of the attributes of an effective executive was that 
he or she would work on first things first.
  In my view, first things first today in our circumstance is not 
changing Social Security. First things first is dealing with our budget 
deficits and dealing with our trade deficits. Unfortunately, I believe 
we are failing to deal with either of those issues in a responsible 
way.
  First I will talk about the budget deficit. In 2004, we had a record 
deficit of $412 billion. That was a turnaround from the $128 billion 
surplus we had 4 years ago. In 2005, this year, the deficit is 
projected to grow to $427 billion, and clearly this is an unsustainable 
course. We need to look carefully at the decisions we are making in 
Washington and what those decisions will do with regard to this very 
large budget deficit.
  The first step in addressing the budget deficit is to make some tough 
choices in this year's budget. The process starts with the President's 
recently released proposal, and it will conclude with Congress's 
actions when we actually appropriate funds.
  I support the President's stated intention to cut the deficit in half 
by 2009, although it is also clear to me that we cannot do so if we 
adopt his proposed budget. The budget claims to get us to that goal, 
but, in fact, it falls short because it excludes so many large-ticket 
items.
  The budget does not include the real costs of going forward with the 
conflicts in Iraq and Afghanistan. The Congressional Budget Office has 
estimated that cost will be roughly $383 billion over the next 10 
years. The President has put in his budget an estimate for $81 billion. 
We are going to be passing a supplemental appropriation for $81 billion 
just for current operations in Iraq, to say nothing of the next 5 or 10 
years of cost.
  The second item the President's budget does not include is anything 
for these so-called private accounts that the President wants to have 
us establish in Social Security. Again, the estimate in the President's 
budget is zero. The phased-in cost of the administration's Social 
Security plan during the first 10 years is projected at $754 billion, 
and over 20 years it is projected at $4.5 trillion. The Senator from 
Montana spoke about that issue.
  The third item the budget does not include is anything to deal with 
the alternative minimum tax. Taxpayers must pay the alternative minimum 
tax if they have too many deductions and credits and, therefore, 
otherwise are not paying a sufficient percent of their income in taxes. 
If we made the President's tax cuts permanent, we would go from roughly 
3 million alternative minimum tax payers, which we had last year, to 
roughly 40 million alternative minimum tax payers at the end of the 
decade. That is a very expensive proposition. If the tax cuts are to be 
made permanent, reform of the alternative minimum tax is going to cost 
a very substantial amount of money: $774 billion is the 10-year cost of 
reforming the alternative minimum tax during the years 2006 to 2015.
  The failure to deal with the short-term cost of our defense budget 
and the proposal to make recent tax relief permanent is going to leave 
future generations with no options except to drastically raise taxes or 
to drastically cut services and benefits. Most of this should be 
avoidable, but first we need a realistic plan about how to move 
forward. It is clear that simply cutting discretionary spending 
accounts, as the President's budget proposes, is not the answer.
  To put this in context, the administration estimates that the deficit 
of 2005 is $425 billion. That is about the same as our entire 
nondefense discretionary spending for 2005. So you can eliminate all of 
these departments whose spending levels we are going to be arguing 
about here over the next several months: the Energy Department, 
Education Department, Transportation Department, Department of 
Commerce, Department of Homeland Security. You can eliminate the 
Department of Homeland Security and you still do not solve the problem 
of the deficit. No one is proposing to eliminate all of that, but I 
think it gives you a sense of the magnitude of the problem when you 
look at the fact that we cannot solve this problem strictly by cutting 
domestic discretionary spending. That is the point.
  As we all know, debt matters. There are three obvious reasons why 
debt matters. First, debt prevents us from dealing with the costs 
involved with the aging of our population. Second, we need to find 
other countries to lend us money as long as we are going to keep 
running this kind of enormous debt.
  We have a chart here that shows where we are getting the money we are 
borrowing every day, every week, every month. These are the top 10 
countries that hold our national debt. Over 60 percent of our debt is 
purchased by foreign government banks. The top 10 countries are Japan, 
and we owe them $715 billion; China, $191 billion; United Kingdom, $152 
billion; ``Caribbean banking centers,'' we owe $76 billion; South 
Korea, we owe $69 billion. This was as of November 2004, so all of 
those figures are now larger than this chart reflects.
  A third reason why debt matters is that high deficit levels will 
eventually result in higher interest rates. All of us know that higher 
interest rates depress economic activity, hurt consumers, and clearly 
it does not make sense for us to take action here to adopt budgets that 
have the ultimate effect of driving up interest rates.
  What we need is a real plan, one that can be supported by a majority 
of the Members of the Congress, one that can become law. We need a 
budget that is honest. We need to provide voters with clear choices, 
letting them know what the real impact of different options is.
  One of the areas we need to deal with honestly and not just to 
demagog is the issue of taxes. I believe there is sufficient bipartisan 
support to make permanent many of the tax provisions that are now 
scheduled to expire in 2010. For example, the marriage penalty relief, 
child tax credit, 10-percent income tax bracket--those are provisions 
that were adopted at the urging of President Bush which enjoy broad 
support here in the Congress and around the country. We should find a 
way to make that a permanent part of the tax package that we have 
earlier adopted.
  Even though the administration requested that we make all of the 2001 
and 2003 tax cuts permanent, I do not believe there are sufficient 
votes in the Senate to do that. There are not enough votes because 
there are enough Senators who realize we do not have the resources to 
do that. Overall, making all of the tax cuts permanent will put us an 
additional half trillion dollars in debt over the next 10 years.
  Here is the chart that shows what happens after 2010, if you go ahead 
and do what the President is urging and make all these tax cuts 
permanent. You can see essentially that 10-year cost, from 2006 to 
2015, is $1.6 trillion. This is unsustainable. We need something 
responsible we can negotiate and

[[Page 3505]]

 on which we can arrive at a consensus. We need a real plan for dealing 
with our budget deficit.
  Let me say a few words also about the trade deficit. As we know, the 
trade deficit is the difference between what we sell to the rest of the 
world in goods and services and what they sell to us. On February 10, 
the Department of Commerce released the trade data for 2004. The trade 
deficit in 2004 was $617.7 billion. That is a new record for trade 
deficits for the United States. It is a new record for any country. 
There is no other country in the world that has ever had such a trade 
deficit. It was $121 billion more than the previous record of $496 
billion we set in 2003.
  To emphasize the point a little more, it was a 24-percent increase in 
1 year, in spite of 3 straight years of declines in the value of the 
dollar.
  Let me show a couple of charts here. This first one shows what has 
happened to trade deficits starting in 1992. It went up a little, then 
sort of leveled off during the mid-1990s, and then it started up again 
in 1998 and it has been going up ever since and there is no end in 
sight. I believe this is a major problem. Let me give you the reasons 
why.
  If you look at historical context, in the mid-1980s the Reagan 
administration found itself in a similar circumstance. This is a more 
complicated chart, but what it tries to do is show the trade deficit, 
which is this red line, and also show the value of the dollar compared 
to other currencies. The trade deficit started up in the mid-1980s, in 
the Reagan administration. It was a concern then. The Reagan 
administration was not known for its policies of Government 
intervention, but the Secretary of the Treasury then understood that 
something had to be done to deal with this growing trade deficit. The 
result was the 1985 Plaza Accord, which bound the governments of the 
then G-7 countries to pursue specific actions related to currency 
valuations, market access, deregulation, deficit spending, and 
workforce investment. And the deficit, the trade deficit, came down. 
The value of the dollar came down relative to other currencies and the 
trade deficit came down.
  What we have now, and this chart makes the point very emphatically, 
is the value of the dollar went up and in the last 3 years it has been 
coming down, but the trade deficit continues to go up. This is an 
unsustainable situation, just as the budget deficit is an unsustainable 
situation. This affects people throughout the country in very obvious 
ways.
  This chart shows the trade deficit. Again, the red line is going up 
as compared to manufacturing exports, which have been going down in the 
last 4 or 5 years. So you have people losing their jobs. You have U.S. 
companies finding it impossible to export. Accordingly, we have a very 
serious issue with decline in manufacturing jobs in the United States. 
It is a long-term decline. It seems to continue unabated. While the 
trade deficit continues to grow, manufacturing jobs continue to drop.
  These charts speak to a very significant problem I believe needs 
attention. Let me suggest four concrete actions we could take to 
address the trade deficit.
  First, we need to recognize the importance of research and technology 
development in our own country. Across the board, we need to have 
targeted investments in critical emerging technologies. We need to see 
to it that we remain on the cutting edge of new technologies. 
Unfortunately the administration's budget actually decreases support 
for science and technology and engineering research and development. In 
my view, that is moving us in the exact wrong direction.
  This chart shows the budgets, proposed budgets the administration has 
given us for all of these agencies that are very involved in science 
and technology. You can see, with the exception of one agency, NASA, 
everyone else is slated for a cut. That is moving us in the wrong 
direction.
  A second step we can take is to actually step up and begin enforcing 
our trade agreements in a meaningful way. I think we have assumed that 
other countries will play by the rules, and the more trade agreements 
we could enter into, the better off we will be. That has not proven to 
be the case. The administration has done little to make many of these 
countries abide by their agreements. China is the most salient example. 
We have a $162 billion trade deficit with that country today. It is up 
31 percent from 2004 over 2003. We have lost well over a million jobs 
to China in the last decade or 15 years. China continues to manipulate 
the value of its currency, continues to subsidize its exports. I 
believe it is time the administration insists on better treatment. It 
needs to start by pressing the Chinese to revalue their currency. We 
have a circumstance now where everything the Chinese send to us is 
artificially undervalued and everything we send to them is artificially 
overvalued, and that hurts us badly.
  The third suggestion I have is we need to improve our education and 
workforce training systems. There is no question we need to have people 
who can fill these jobs if we are going to hope to attract and retain 
these jobs. Again, I point to the President's budget and say that it is 
wrongheaded in the extreme in this regard. The administration proposes 
elimination of these 48 educational programs. I am not suggesting all 
of those are meritorious, but many of them are, and many of them are 
helping local school districts and States to improve their education 
system.
  I think there are many things that can be done. I have various 
recommendations of bills to try to help. I hope we can seriously push 
back against the administration on these proposed cuts in education and 
training, job training funds.
  The final point I would suggest is the final concrete action we can 
take to deal with the trade deficit is to encourage foreign firms to 
contribute to the U.S. economy, to come here and establish here and 
create jobs here to a much greater extent than we have in the past. 
What we need is a national strategy to do the very same thing our 
States are doing and our local communities are doing, and that is they 
are working hard to attract business and to create jobs. We need an 
aggressive effort on the national level to do the same. We need a 
concerted effort to market the United States to other countries as a 
place to do business, a good place to do business.
  I am working on legislation that I will introduce soon that would 
increase the U.S. Government's efforts in this regard to establish a 
very visible, assertive entity where the primary mission would be to 
promote increased foreign investment in the United States.
  Once we take these steps, the four I have outlined, then we at least 
would have some strategy in place to increase domestic investment and 
to draw foreign investment to our country to a greater extent. Maybe 
those actions could help shrink the trade deficit.
  We should be working on our highest priority problems, our most 
urgent problems. It is my firm belief that the budget deficit and the 
trade deficit are those problems.
  Let me finish by saying we should not allow politics as usual to 
prevail in this 109th Congress. The decline in the value of the dollar 
and the decisions that we have seen in recent weeks by foreign banks to 
begin shifting their reserves from dollars to other currencies, those 
are our signals that financial markets want responsible action by this 
Government to deal with these two problems, the budget deficit and the 
trade deficit.
  I ask unanimous consent an editorial from earlier this week in the 
Washington Post be printed in the Record following my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. BINGAMAN. Mr. President, that editorial makes the point that 
these issues deserve attention, and we cannot postpone action on these 
issues indefinitely. We in Congress and the administration need to get 
the message that foreign governments and foreign banks are sending to 
us. We need to face up to the challenge. We need to begin addressing 
the budget deficit and the trade deficit as first priority issues, and 
not push them off while we continue to deal with other matters.

[[Page 3506]]

  I yield the floor.

                               Exhibit 1

                [From the Washington Post, Mar. 1, 2005]

                             Dollar Jitters

       Last week brought a warning to economic policymakers on 
     both ends of Pennsylvania Avenue. A rumor that South Korea's 
     central bank had decided to shift its reserves away from 
     dollars triggered a sharp fall in the greenback and a retreat 
     on Wall Street. The fact that the South Koreans later denied 
     this rumor is only half-comforting. Economic logic is pushing 
     Asia's central banks to quit propping up the dollar. If a 
     hollow rumor can rattle the currency, what would a real 
     policy change do?
       The dollar's vulnerability reflects the nation's trade 
     deficit. To sustain their appetite for foreign goods, 
     Americans need to convert their dollars into other 
     currencies, depressing the greenback's value. This didn't 
     stop the dollar from being strong in the 1990s, because the 
     trade deficit was smaller then and because foreign investors 
     were hungry for American stocks, bonds and other assets, 
     reflecting the U.S. economy's eviable performance. But now 
     foreign investors' appetite for dollars lags behind 
     Americans' demand for foreign goods and services. The gap is 
     being filled by Asian governments, whose central banks have 
     accumulated vast piles of U.S. bonds in an attempt to slow 
     the dollar's slide.
       A year or so ago, a fashionable theory held that this Asian 
     government support could continue indefinitely. Asian 
     policymakers, according to this theory, would prop up the 
     dollar to keep their own currencies competitive. It's true 
     that export-led growth is a quasi-religion in East Asia and 
     that China's dictators fear their grip on power might falter 
     if they can't keep growth and job creation humming. But China 
     and its neighbors have proved themselves capable of fast 
     growth even in periods when they haven't been artificially 
     depressing their own currencies. So it seems dangerous to bet 
     that Asian central banks will think it worth the risk of 
     holding ever-expanding dollar portfolios that can falter on a 
     rumor.
       The other optimistic theory is that while Asians may not 
     want to prop up the dollar, they are prisoners of their own 
     policy. By now they've bought so many dollars that if they 
     quit buying, the value of their existing reserves would tank. 
     But what if one central bank worries that others will stop 
     buying dollars first? Such fears could trigger a stampede for 
     the exit.
       None of this is to say that a dollar crash is inevitable. 
     The dollar may fall gently, as it has over the past year or 
     so, or a renewed appetite for U.S. assets among private 
     investors could even stabilize its value. But the risk of a 
     currency crash grows every day. In 2003, the United States 
     had to attract $530 billion of foreign capital to finance its 
     purchases of foreign stuff; in 2004 it had to attract $650 
     billion; this year, it may have to pull in as much as $800 
     billion. Every year of vast borrowing increases borrowing in 
     later years; as Brad Setser of Oxford University notes, just 
     paying interest on the $800 billion borrowed in 2005 might 
     add $40 billion to the overall 2006 deficit.
       To stabilize this house of cards, Congress and the 
     administration should pull the one lever they have: They 
     should reduce the nation's reliance on foreign capital by 
     cutting government borrowing. This isn't going to be possible 
     through spending cuts alone. It's going to take higher taxes.

  The PRESIDING OFFICER. The Senator from Tennessee.


                  Federal Consent Decree Fairness Act

  Mr. ALEXANDER. Mr. President, I thank my colleague, the Senator from 
Connecticut, for giving me an opportunity to speak, and also my 
colleague, the Senator from Alabama.
  The Senator from Connecticut and I, Senator Dodd, on behalf of 
ourselves, and Senators Enzi, Kennedy, Roberts, and Hatch, yesterday 
introduced the Caring for Children Act of 2005 which reauthorizes the 
Child Care Development Block Grant Program. This is a program that is 
very important to families across this country. I am pleased that our 
committee is progressing in a bipartisan way on the very important 
piece of legislation.
  Today I want to talk about a piece of legislation I introduced 
earlier this week. It is called the Federal Consent Decree Fairness 
Act. It has to do with federalism, with democracy, with 
responsibilities of State and local government. It has to do with our 
effort to try to restrain the growth of the cost of Medicaid so that we 
can properly fund other programs such as higher education, elementary 
and secondary education, and research. I introduced that legislation, 
along with Senator Pryor of Arkansas, who is the lead Democratic 
sponsor. Senator Cornyn and Senator Kyl joined us at that time.
  Since that time, 12 other Senators have asked to join us. I ask 
unanimous consent that the following Senators be added as cosponsors to 
S. 489, the Federal Consent Decree Fairness Act: Senators McConnell, 
Bennett, Cochran, Craig, Domenici, Hutchison, Inhofe, Lott, Roberts, 
Santorum, Smith, and Warner.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALEXANDER. I failed to mention an early sponsor and a principal 
sponsor, Senator Ben Nelson of Nebraska.
  Senator Nelson of Nebraska is a former Governor. Senator Pryor is a 
former attorney general. Senator Cornyn is a former attorney general. I 
am a former Governor. That explains part of our interest in this. 
Congressman Jim Cooper, by the way, a Democrat from Nashville, will be 
the principal Democratic sponsor of this legislation in the House. It 
has strong bipartisan support.
  As I will show in a few minutes, it strongly supports the idea of 
limiting what we call democracy by court decree. Limiting the idea of 
Federal courts running the Government has strong bipartisan appeal. It 
has strong support from the left and the right, because democracy by 
court decree interferes with democracy. It interferes with the ability 
of voters to elect officials who are accountable, and then throw them 
out if they don't like what they are doing.
  Consent decrees, which are judicial orders based on the consent of 
the parties engaged in civil court action, can be an effective judicial 
tool when drawn narrowly, and with respect to State and local policy 
choices. Congress passes legislation and sets conditions on grants that 
must be followed by State and local governments. When they are not 
followed, it is important for citizens to be able to turn to the court 
to see that their rights and the rule of law are upheld. That is the 
heart of the idea of federalism.
  Unfortunately, in many cases, rather than preserving the separation 
of powers between the Federal Government and the State government, 
consent decrees have the opposite effect. What we are seeing in State 
after State is government policy controlled by courts and judges 
instead of by Governors, mayors, and legislators.
  For example, in Maine in 2003, the Governor had to propose deep cuts 
to mental health services for children because consent decrees made it 
almost impossible to restrain other parts of the budget.
  In New York City, Latino parents are upset because schools are 
forcing their children into bilingual education programs when they want 
them in a different kind of program to learn English. And why is that 
happening? Because for the last 30 years, bilingual education in New 
York has been mandated by a consent decree that the schools have no 
choice but to obey.
  In Los Angeles, a consent decree has forced the Metropolitan Transit 
Authority to spend $110 million per year on improving city buses. That 
sounds like a good idea. But that is 47 percent of the Metropolitan 
Transit Author-
ity's budget spent on just buses, leaving the remaining 53 percent to 
pay for street and freeway improvements, rail systems, transportation 
planning programs, and the reduction of debt. Meanwhile, ridership on 
MTA buses increased only marginally in the first 6 years of judicial 
management, and residents of Los Angeles complain that other MTA 
services are suffering, and their elected officials are not able to do 
anything about it because the courts are running the transit authority.
  The State of Tennessee has also become a victim of democracy by court 
decree. Tennessee, like every State, has to balance its budget. I can 
speak from experience. I did it for 8 years. I know it involves some 
difficult choices. Our Democratic Governor Bredesen of Tennessee is 
making some of those choices. But he can't do it because the Federal 
Government has refused to let him to do what he feels he needs to do to 
balance the budget.
  Late last year, it became apparent that the costs of the Medicaid 
program in Tennessee are rising at an unsustainable rate. The Medicaid 
caseload has gone up 40 percent across this country in the last 5 
years. When you combine that with sharp increase in

[[Page 3507]]

the rate of inflation for health care costs over the regular inflation 
rate, we get a staggering impact, not only on the Federal Government 
but especially on State Governors who are balancing their budgets. The 
inevitable result of that is the Governors reach to find somewhere else 
to get the money to balance their budget. Where does it come from? It 
comes from education. It comes from especially higher education. In the 
last 4 years, Federal spending for K-12 education has gone up about 40 
percent. In Tennessee, spending for K-12 education over those same 4 
years has gone up about 11 percent.
  In other words, Federal spending is going up three times the rate of 
State spending. The reason is Medicaid is eating up the money, and the 
Governor is unable to control the growth of Medicaid because the 
Federal court says it can decide better than the Governor can where 
those dollars ought to be spent. For example, pre-K education is 
something on which Governor Bredesen wants to spend the money. He can't 
charter a preschool program, an important program such as I suppose the 
distinguished Senator from Connecticut is advocating nationally. His 
hands are tied. Governor Bredesen has tackled TennCare. He ran for 
office and said, ``I wanted to be elected to fix the TennCare 
Program.'' He has come up with a plan that would result in Medicaid 
spending in Tennessee rising only $75 million this year instead of the 
$650 million it will rise without those changes. But he is constrained 
by a series of four Federal court consent decrees entered into by his 
predecessors going back 25 years.
  These consent decrees dictate policies on medical screening for 
children, requiring the States to provide patients with high-cost, 
brand name prescription drugs, and affecting the ability of States to 
verify the eligibility of the patients they serve. But most 
importantly, they deny the voters the opportunity to have a new 
Governor and a new legislature look at all of their programs and make 
choices about how and where to spend the money.
  In the face of enormous pressures, the Federal courts are going to 
force Tennessee to maintain programs that the Governor says he would 
rather not maintain because he would rather spend the money for 
education.
  Governor Bredesen is making painful, difficult decisions. He has 
proposed cutting 323,000 adults from TennCare and limiting the benefits 
for the remaining 396,000 adults because he wants to strengthen 
Tennessee's pre-K and K-12 programs, and have a first-rate system for 
colleges and universities.
  I might emphasize that the services the Governor hopes to limit are 
not required by the Federal Government. They are optional services that 
States may or may not offer, according to the Federal law, except they 
are not as optional as we might think. On January 29, Judge William 
Haynes, U.S. District Judge, declared he must approve any of those 
changes. So we have a Federal court judge, not the Governor and 
legislature, making those decisions.
  The Federal Consent Decree Fairness Act contains three main 
provisions that address many of these concerns. First, it lays out a 
series of guidelines that will guide Federal courts in approving future 
consent decrees. Basically, these guidelines follow suggestions which 
the U.S. Supreme Court made in the year 2004 in a decision in which it 
expressed concern about the fact that old consent decrees were limiting 
the actions of newly elected officials and interfering with democracy.
  The bottom line of these guidelines is to narrow the consent decrees 
and encourage the courts to get the decision-making back in the hands 
of the elected officials as soon as possible.
  Second, our legislation creates term limits for consent decrees. 
Fundamentally, it says any new Governor may go into the court and ask 
the judge to vacate or modify that consent decree; or a Governor or 
mayor may do that 4 years after the original date of the consent 
decree.
  Seventy-five of the 100 Senators in this body have served in State or 
local government before. I am sure they can understand the frustration 
of being elected to fix the schools, or improve the roads, or repair 
the prisons, or restrain growth of Medicaid, or improve colleges, and 
discover they don't have the authority to do it because the Governor or 
mayor 15 years ago entered into a consent decree and the court approved 
it, and the newly elected official can't change it.
  Finally, the bill shifts the burden of proof from the State and local 
governments to the plaintiffs in the case.
  Under current law, State and local governments must prove that a 
decree is no longer necessary to protect the plaintiffs' rights. In 
other words, they must prove a negative. Now the plaintiff will have to 
prove that the court interference with the decisions of elected 
officials is still needed.
  The court still retains full control of the case. The court still 
retains the ability to protect the rights of Americans. But the court 
would have instructions to say that if the parties come to you and say, 
``Mr. Court, Ms. Court, we can't solve this problem, will you approve 
this consent decree?'' The court will say, ``I will temporarily get 
involved in what is your responsibility, but I will do it under a 
narrowly defined set of terms and very shortly I will make sure that it 
gets back in the hands of elected officials.''
  I have in my remarks, which I will submit in complete form for the 
Record, some of the comments of the Supreme Court in Frew v. Hawkins in 
2004. The Court took an extraordinary step in inviting the Congress to 
pass legislation such as this and in suggesting to the Federal courts 
that they might narrow their consent decrees and as soon as possible 
get these decisions back in the hands of elected officials.
  In other words, the principle here is democracy and whether unelected 
people or elected people will make the decisions.
  This is an especially important piece of legislation at a time when 
we are considering Medicaid. We are asking States to restrain the 
growth of Medicaid. We are still spending a lot of money. Over the next 
10 years, we propose to spend $1.2 trillion--new dollars. We are not 
restraining spending much. But if the caseload is growing by 40 
percent, and if the cost of health care is rising faster than the 
normal cost of living, and if we still require Georgia, or Connecticut, 
or Alabama, or Tennessee, to pay for 43 percent of Medicaid, and we 
haven't changed the eligibility requirements, and we don't give the 
States much flexibility, and the Federal court tells the Governors they 
can't do it, we are giving the States an impossible assignment. The 
only result will be the gradual destruction of our system of higher 
education, which is principally funded by State governments.
  I strongly urge my colleagues to seriously consider this legislation. 
I am glad to see 17 Senators of both parties have already signed on. I 
am glad a leading Democrat in the House, Congressman Jim Cooper, will 
be sponsoring a version of this bill as well.
  I will have printed in the Record a series of comments about a book, 
``Democracy By Decree,'' which is the scholarship on which this 
legislation is based. This book is by Ross Sandler and David 
Schoenbrod, professors at the New York Law School. The book is 
published by Yale University Press. It has been widely praised by 
columnists as evenhanded. Among those who praise the scholarship are 
former Senator Bill Bradley, Ed Koch, Diane Ravitch, John Sexton, 
president of the New York University and Dean of the NYU Law School, 
and Chris DeMuth, president of the American Enterprise Policy Institute 
for Public Policy Research. Not many pieces of scholarship have support 
from such a broad spectrum.
  I ask unanimous consent to have printed after my remarks the complete 
comments of those individuals I just mentioned, as well as a column by 
George F. Will in Newsweek on November 28th, saying that ``Democracy By 
Decree'' is one of the most important books on governing in the last 10 
years. I ask unanimous consent also to have printed an article from the 
Wall Street Journal on December 31, 2002, by

[[Page 3508]]

Thomas J. Main, assistant professor at the School of Public Affairs of 
Baruch College. I ask unanimous consent that a review of the book by 
Ross Weiner in the Legal Times also be printed.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit A.)
  Mr. SESSIONS. Will the Senator yield for a question?
  Mr. ALEXANDER. Of course.
  Mr. SESSIONS. Senator Alexander, I appreciate your remarks, having 
been a U.S. attorney involved in urging certain consent decrees and 
having been an attorney general and seeing it from the side of the 
State.
  My question is this: What your legislation would do is provide a 
mechanism to guarantee a periodic review of a consent decree so it 
would not continue indefinitely. There are many in this country that 
are well over 20 years in which judges are intimately involved in 
details of governing and the local people have to seek approval for any 
of the most minute changes.
  This would not eliminate consent decrees. It would not eliminate 
their enforcement, but it creates a mechanism by which they are 
periodically reviewed so as to determine whether they should be 
extended.
  Mr. ALEXANDER. The Senator is absolutely right. Perhaps Congressman 
Cooper had the best phrase. He said the purpose of this legislation is 
to keep democracy fresh.
  The people are entitled to two things. One is to have their 
constitutional and Federal rights enforced in the Federal courts. This 
will continue under this legislation. But they are also entitled to 
have democratically elected leaders that can make the policy decisions 
and do the governing, which is what we say to the rest of the world.
  We are fighting in Iraq and Afghanistan, sacrificing lives and 
hundreds of billions of dollars to promote the idea that people have a 
right to elect their own officials, yet we have drifted into the 
situation somewhere, as in the Tennessee case, where we have four prior 
consent decrees that will leave in the Federal courts these decisions 
and the Governor cannot change them. Even though a previous Governor 
entered into them, the standards are such he cannot change them.
  He has a right to go in there and say, Judge, I hope you will review 
it. The plaintiff, not the Governor, has to persuade the judge that it 
needs to be continued. And if it does, the court may continue the 
consent decree if he considers it to be useful.
  Mr. SESSIONS. I say to the Senator, I think that is a very thoughtful 
and important change he is proposing. We need to give it the most 
serious consideration. It would strike me that it does go to the heart 
of what democracy is. We created a legislative and executive branch 
elected by the people and empowered to deal with certain of these 
issues. It should be only for extraordinary things that a court would 
maintain extended jurisdiction over the elected representatives.
  Mr. ALEXANDER. I thank the Senator from Alabama.
  When the word ``judges'' is mentioned in this Chamber, we 
automatically divide, especially during this season. That is why I am 
so glad Senator Pryor of Arkansas, Senator Nelson of Nebraska, and 
Congressman Cooper have joined in this. Former Senator Bill Bradley has 
praised the ideas found in ``Democracy by Decree.''
  This is not a Democratic or Republican idea. Democracy is everyone's 
idea in this country. One reason it has such broad support is that it 
is not just the court's fault that this is happening; sometimes 
Governors and mayors do not want to deal with the prison problem. They 
do not want to deal with the Medicaid problem, so they unload it on the 
courts. That hurts the people who should be helped. It deprives the 
voters of their right to choose elected officials.
  The bill has broad bipartisan support. I hope it continues to have. I 
am grateful to the Senator from Connecticut for giving me an 
opportunity to make my remarks today before he made his remarks.

                               Exhibit A

                     Praise for Democracy by Decree

                 (By Ross Sandler and David Schoenbrod)

       ``The first book that shows how courts can do their proper 
     job of protecting rights without allowing elected officials 
     off the hook for their proper job of making policy.''--Former 
     Senator Bill Bradley
       ``A fascinating book for someone like me who regretted 
     agreeing to a court-approved consent decree limiting the 
     city's authority in programs involving prisons, welfare, 
     education, homeless shelters, etc.''--Ed Koch, former mayor, 
     New York City
       ``A brilliant, well-written, and brave account of how 
     federal courts have distorted our political system by taking 
     control of complex institutions like schools and prisons--
     sometimes for decades--instead of enforcing rights, which is 
     their proper domain.''--Diane Ravitch, New York University
       ``With fascinating blow-by-blow accounts, Sandler and 
     Schoenbrod expose how advocates for one interest group 
     inevitably undermine the interests of others and thwart the 
     ability of those in responsibility to balance interests for 
     the common good.''--Philip K. Howard, author of The Death of 
     Common Sense
       ``Democracy by Decree is an impressive and thoughtful 
     analysis of the current court-centered rights culture in 
     which it is too easy for elected officials to `pass the buck' 
     to courts while taking actions that are blatantly 
     unconstitutional.''--Nadine Strossen, president, American 
     Civil Liberties Union, and professor, New York Law School
       ``Democracy by Decree shows how courts can protect rights 
     and still let mayors and governors do their job.''--John 
     Sexton, president of New York University and dean of New York 
     University School of Law
       ``Sandler and Schoenbrod's account--really a discovery--of 
     the existence of a second government in our midst is 
     meticulous, nuanced, and alarming. By showing how unilateral 
     judicial government undermines both democracy and individual 
     rights, they have done a significant service to both.'' 
     Christopher DeMuth, president, American Enterprise Institute 
     for Public Policy Research
                                  ____


                     [From Newsweek, Feb. 28, 2005]

                       Judges and ``Soft Rights''

                          (By George F. Will)

       On Feb. 15 the New York Times carried this headline: Judge 
     Orders Billions in Aid to City Schools. The derangement of 
     American government, and the decay of democratic 
     sensibilities under rule by the judiciary, are apparent in 
     the fact that such headlines do not enrage, or even startle.
       In a case that began 12 years ago, and will surely run at 
     least 12 more, Leland DeGrasse of the New York Supreme Court 
     has decreed that an extra $5.6 billion, a 43 percent increase 
     in the school budget, must be spent on the schools every 
     year--presumably until he decides that the schools are 
     delivering a ``sound basic'' education. And over the next 
     five years another $9.2 billion must be spent to improve 
     class sizes and facilities.
       Why? Because the state constitution says, ``The legislature 
     shall provide for the maintenance and support of a system of 
     free common schools, wherein all the children of the state 
     maybe educated'' and this has been interpreted to guarantee a 
     ``sound basic'' education. Those two adjectives are the 
     slender reeds supporting this latest excess by the imperial 
     judiciary.
       In 1993 the Campaign for Fiscal Equity, a self-generated 
     group, unelected and accountable to nobody, sued, charging 
     that the constitution's adjectives were not being fulfilled. 
     Between 1997 and 2003 spending on the city's schools rose 
     $4.8 billion--54.5 percent. But DeGrasse, who apparently 
     thinks he learned in law school how to fix urban education, 
     believes the canard that in primary and secondary education 
     there is a clear causal connection between financial inputs 
     and cognitive outputs--that the best schools are the ones on 
     which the most money is spent. Actually, New York ranks third 
     among the states in per-pupil spending ($11,218; the national 
     average is $7,734). The highest per-pupil spending is in 
     Washington, D.C., which probably has the nation's worst 
     schools.
       DeGrasse's ruling is just the latest of thousands of such 
     instances of judicial overreaching involving schools, 
     prisons, hospitals, transportation, environmental policies 
     and other matters. Constitutional or, more often, statutory 
     language stipulates praiseworthy but vague goals to be 
     enforced by courts. Then ``public interest'' groups, eager to 
     wield the power of elected officials without the tiresome 
     matter of running for office, go to courts.
       The courts, with an arrogance often tacitly encouraged by 
     elected officials eager to avoid difficult choices, wander 
     beyond their competence. They do not merely enforce 
     compliance with the law, they dictate in minute detail what 
     shall constitute compliance--e.g., the water temperature in 
     prison showers, the soap used to wash prison floors, the 
     frequency with which prison windows are washed. Really.
       In 2003 two professors at the New York Law School, Ross 
     Sandler and David Soenbrod, published ``Democracy by Decree: 
     What Happens When Courts Run Government'' (Yale), perhaps one 
     of this decade's most important books on governance. They 
     explain how federal standards are attached to federal money

[[Page 3509]]

     by Congress's heroically transmuting aspirations into rights-
     enforceable claims. Congress has become a bestower of mass-
     produced rights--to ``healthy'' air, to ``appropriate'' 
     education for the handicapped, etc.
       These are what Sandler and Schoenbrad call ``soft rights'': 
     ``Traditional common law rights, such as the right against 
     trespass, are typically negative. They tell government what 
     it cannot do. Soft rights, such as the right to healthy air, 
     are typically positive. They tell government what it must 
     do.'' In practice, judges--unelected, unaccountable and 
     inexpert--often dictate what it must do.
       Some political activists have decided that, the dismantling 
     of segregation proved that the primary means of social 
     improvement should be through judicially enforceable rights. 
     And many liberals, frustrated by the public's increasing 
     conservatism, are unwilling to have the patience required by 
     democracy--the politics of persuasion. They know that rights 
     claims can truncate debate and trump policy considerations 
     about the community's conflicting imperatives and priorities. 
     And ``public interest'' groups have become skilled at getting 
     themselves entitled to control a sphere of public policy. 
     They negotiate consent decrees, many of which have empowered 
     courts-as-legislatures to formulate public policies for 20 or 
     30 years. All of which confirms Sandler and Schoenbrod's 
     central point: Not all that lawyers do in their various 
     venues amounts to the rule of law, as a democracy ought to 
     understand that.
       In responding to DeGrasse's hubris, New York might consider 
     Andrew Jackson's strategy. In 1832 the Supreme Court rendered 
     a decision favoring two imprisoned missionaries in Georgia, a 
     decision Jackson disagreed with, vehemently. He reportedly 
     said: ``[Chief Justice] John Marshall has made his decision, 
     now let him enforce it.'' Marshall could not; the 
     missionaries remained in prison.
       New York's Supreme Court can neither tax nor spend. The 
     state legislature is not a party to the suit, so it cannot be 
     held in contempt. Perhaps it should just ignore the court's 
     ruling as noise not relevant to the rule of law. Which 
     happens to be the case.
                                  ____


             [From the Wall Street Journal, Dec. 31, 2002]

                       Closed Doors, Open Season

                          (By Thomas J. Main)

       Ten prisoners in a Philadelphia prison sued Mayor Wilson 
     Goode in the early 1980s claiming that conditions there 
     violated their rights. The result was a consent decree, in 
     1986, that limited the number of prisoners who could be held 
     in the city's jails.
       And the result of the decree itself? ``A blood-chilling 
     crime wave,'' write Ross Sandler and David Schoenbrod. In 18 
     months, ``police rearrested 9,732 defendants released because 
     of the consent decree.'' They were charged with ``79 murders, 
     959 robberies, 2,215 drug dealing crimes, 701 burglaries, 
     2,748 thefts, 90 rapes 14 kidnappings, 1,113 assaults, 264 
     gun-law violations and 127 drunk-driving incidents.'' This is 
     only one of the hair-raising stories in ``Democracy by 
     Decree,'' (Yale, 280 pages, $30) a critique of astonishing 
     efforts to govern society through the miracle of what the 
     authors call ``institutional reform litigation.''
       The tactic is simple: A crusading lawyer notices that some 
     public entity--a prison, a hospital, an environmental or 
     child-welfare agency--is performing below expectations, as 
     the lawyer sees it. He then finds ``parties'' willing to say 
     they have been injured and searches for a legal hook--a 
     statute, regulation or right whose violation offers the basis 
     for a lawsuit.
       And legal hooks abound. Congress regularly passes laws with 
     sweeping guarantees vaguely phrased. Did the Americans with 
     Disabilities Act (1990) really require curb ramps at every 
     intersection within just five years? Did the Clean Air Act of 
     1970 really promise that the air will be entirely clean by 
     the end of the decade? (And when, precisely, is air 
     ``clean''?) Can schools immediately offer a free and 
     appropriate education to all children with learning 
     disabilities, as the Education for All Handicapped Children 
     Act (1975) seemed to require?
       These may be worthy goals, if they are indeed required by 
     statute. But they are not easily achieved. Indeed, state and 
     local governments are likely to act on them as they act on 
     everything else: incrementally, tentatively and piecemeal. 
     Thus it is often possible for public-interest lawyers to make 
     a prima facie case for one violation or another. Not that 
     they need do much more than that. Many public officials--
     rather than submit to trial and the risk, however slim, of 
     draconian punishment--settle such cases by entering into 
     consent decrees with plaintiffs.
       Consent of the sued? Public officials would rather settle 
     than fight.
       From this point on, as Messrs. Sandler and Schoenbrod show, 
     the powers of elected officials ``are eroded in favor of a 
     negotiating process between plaintiffs' attorneys, various 
     court-appointed functionaries, and lower echelon officials.'' 
     This controlling group, as the authors call it, ``works 
     behind closed doors'' to draft complicated decrees. Its 
     members bargain, log-roll and cut deals, and the judges 
     before whom the original suit was brought rarely intervene.
       Under such circumstanes, the concerns of ordinary public 
     managers get short shrift. In Jose P. v. Ambach, for 
     instance, a consent decree dictated the terms of ``every 
     aspect of [New York's] special education; from staffing to 
     teaching and collecting data.'' With appendices, it filled 
     515 pages.
       And once a consent decree is agreed on, it is very 
     difficult to change, even in the face of dramatic 
     developments. In 1971, for instance, the New York City 
     Housing Authority was accused of failing to give rent-
     delinquent tenants due process. The city signed a consent 
     decree that imposed elaborate, court-supervised procedures 
     for eviction. Twenty years later, the crack-cocaine epidemic 
     hit public housing, and everyone--city officials and law-
     abiding tenants alike--wanted to speed along the eviction of 
     drug-dealers.
       The decree's controlling group, however, objected to 
     quicker procedures. Its members even disputed ``whether 
     living next door to a drug dealer actually increased the risk 
     of criminal violence.'' It took two years of legal wrangling 
     before the Housing Authority could make its changes, and by 
     then the tenants had hired new lawyers to fight ``against the 
     lawyers who theoretically were representing them.''
       It should be said that Messrs. Sandler and Schoenbrod do 
     not oppose all public-interest litigation. They note that 
     lawsuits have helped put an end to racial segregation and to 
     the abominable conditions in various prisons and mental 
     institutions. They accept court intervention in even less 
     dramatic cases, as long as some common-sensical reforms are 
     put in place, like opening controlling-group meetings to the 
     public and making it easier to change outdated provisions. 
     They note as well that the rights asserted by Congress are 
     too often ``aspirations rather than practical 
     possibilities.'' In any case, making minute policy 
     adjustments is best left to the political branches of 
     government, not the courts.
       One of the book's most striking anecdotes illustrates this. 
     In the early 1990s, New York tried to install sidewalk 
     toilets, only to run into the problem of making them large 
     enough for wheelchairs--as required by regulators 
     interpreting federal law--without making them inadvertent 
     criminal dens. At a public meeting, the spokesmen for the 
     toilets' maker, whose designs were apparently not generous 
     enough, found themselves confronted by angry citizens in 
     wheelchairs. Then in walked another advocate, whose 
     disability, the authors write, ``was that he grew to be only 
     about three feet high.''
       ``I don't care about wheelchair accessibility,'' this man 
     declared belligerently. ``I can't reach the higher toilet 
     seat in the wheelchair-accessible toilets. What about that?''
       To this question, the law has no good answer.
                                  ____


                  [From the Legal Times, May 5, 2003]

                     The Corrosive Consent Decrees 

                            (By Ross Weiner)

       Democracy by Decree: What Happens When Courts Run 
     Government is a thought-provoking book about the fundamental 
     issues of democracy, federalism, and separation of powers. 
     Authors Ross Sandler and David Schoenbrod put forward a 
     forceful critique of the consent decrees that often result 
     from institutional reform litigation and have, over time, 
     reduced the power of democratically elected state and local 
     institutions to make public policy choices.
       Yet Democracy by Decree is not a wholesale attack on class 
     actions or the consent decrees that often settle these cases. 
     The authors, who both teach at New York Law School, are 
     content to offer reform proposals, but do not advocate 
     removing the judiciary from its important place in protecting 
     the rights of aggrieved plaintiffs. But they do forcefully 
     attack the habit of using courts, and class actions in 
     particular, to make public policy decisions that are better 
     left to the democratically elected.
       The authors argue that the courts are the proper forum for 
     remedial action or for limited prospective action to ensure 
     that constitutional rights are not violated, but that 
     institutional reform litigation creates many negative 
     unforeseen consequences when it encroaches upon the elected 
     branches of government by instituting widespread oversight of 
     public institutions.
       Sandler and Schoenbrod trace the historical development of 
     institutional reform litigation to the civil rights movement. 
     They argue that the heroic achievements of civil rights era 
     attorneys in dismantling segregation inspired a generation of 
     attorneys to become ``public interest'' lawyers to fight for 
     social change. Many elected Southern officeholders at the 
     time actively worked to subvert the constitutional rights of 
     their African-American constituents, and this massive 
     resistance forced the judiciary to take over the management 
     of several public institutions to ensure that African-
     Americans could freely exercise their constitutional rights. 
     They note that the difference between the attitudes of local 
     and state officeholders during the civil rights era and the 
     attitudes of later elected officials is often lost on these 
     public interest attorneys.
       The authors argue that, in much of the recent institutional 
     reform litigation, the rights at issue and the behavior of 
     elected officials is less stark than that during the civil

[[Page 3510]]

     rights era. While their policies may in fact violate 
     statutory rights, their intentions are far less nefarious. 
     Rather, this litigation often concerns statutory rights or 
     federal aspirations, while local elected officials attempt to 
     balance public policy choices with their constituencies' own 
     limited financial wherewithal. These officeholders often 
     support the underlying rights being enforced, but are simply 
     unable to muster the public resources to attain those 
     unfunded federal mandates. Such new rights often call for 
     government to provide something to its citizens, unlike a 
     more traditional right, which called for government to 
     refrain from taking something away from the citizenry.
       The authors postulate that most of these officeholders are 
     a far cry from the Southern segregationists, but that the 
     public interest lawyers and the judiciary have devised 
     standard remedial actions that do not differentiate between 
     the attitudes of officeholders and the rights being enforced.
       Democracy by Decree provides many examples of cases that 
     illustrate the perils and unforeseen consequences of 
     institutional reform litigation. Jose P. v. Ambach, which 
     began in 1979, shows how the judicial process usurped special 
     education policy in New York City.
       This case has its roots in the congressional passage of the 
     Education for All Handicapped Children Act. The legislation 
     contained vague goals, but with no clear mechanism outlining 
     for states and localities the means to achieve the nebulous 
     ends outlined in the statute. The federal right to special 
     education created by this statute begat class action 
     litigation to enforce such a right when New York City could 
     not comply with all the goals outlined in the statute.
       The litigation ultimately resulted in a court finding New 
     York City in violation of the statute, and affirming a very 
     broad consent decree among plaintiffs and city officials, 
     which mandated many changes to special education policy in 
     New York City. Over the decades in which this decree has been 
     in place, the court and the plaintiffs' attorneys have had 
     the authority to reject or approve all changes to the city's 
     special education program. This has shifted policy-making 
     power from open forums among the elected City Council and 
     city agencies to closed-door negotiations between attorneys.
       The authors show how this has led to many unintended 
     consequences, including the locking into place of special 
     education policy designed more than two decades ago, which 
     now may be outdated; the reduction of money available for 
     students in nonspecial education classes; and the awarding to 
     plaintiffs' attorneys of a significant degree of control over 
     a large portion of the city's budget.
       An intended consequence of these types of consent decrees 
     is to limit the variety of policy choices available to 
     elected officials. The authors contend that when public 
     interest attorneys were confronting massive resistance, this 
     was the correct choice for the judiciary. But when 
     confronting public officials who attempt to deal with such 
     issues by balancing the proper amount of funding for special 
     and nonspecial education programs, more flexibility is 
     required.
       The authors argue that it is sometimes appropriate to 
     restrain the future actions of private citizens indefinitely 
     in private litigation, but in institutional reform 
     litigation--in the absence of an intent to impede the 
     constitutional rights of individuals--present day 
     officeholders should not be allowed to sign away the rights 
     of the people and their future representatives to make public 
     policy choices.
       Sandler and Schoenbrod emphasize sympathetically that they, 
     too, were once public interest attorneys. And they avow their 
     admiration for the efforts of civil-rights lawyers to fight 
     segregation. Thus, the tone of the book feels similar to that 
     of a journalist paying homage to Bob Woodward and Carl 
     Bernstein, while attacking the type of journalism that may 
     have developed in the wake of Watergate. Such rhetorical 
     shields appear to be attempts to protect their work from 
     political criticism by public interest attorneys and the 
     lobbying groups they populate. Their homage to the roots of 
     public interest litigation does bolster the credibility of 
     Democracy by Decree, and it is to their merit that they do 
     not resort to the tired clichs often heard in the political 
     arena about judicial activism.
       At its heart, Democracy by Decree is an ode to 
     representative government. The authors demonstrate that the 
     judiciary has an important role in protecting the rights of 
     citizens, but argue convincingly that when it comes to making 
     basic public policy choices, representative democracy may not 
     be perfect, but it is often better than any viable 
     alternative.

  Mr. ALEXANDER. Mr. President, I am pleased to say that the Senator 
from Arizona, Mr. Kyl, the Senator from Texas, Mr. Cornyn, and the 
Senator from Nebraska, Mr. Nelson, have joined Senator Pryor and me in 
introducing this bill. Congressman Jim Cooper from Tennessee will be 
introducing similar legislation in the House of Representatives.
  This is bipartisan legislation that will help slow down the practice 
of democracy by decree--Federal courts running State and local 
governments.
  Consent decrees--judicial orders based on the consent of parties 
engaged in a civil court action--can be an effective judicial tool when 
drawn narrowly and with respect for State and local policy choices. 
Congress passes laws and sets conditions on grants that must be 
followed by State and local governments, and when they are not followed 
it is important for citizens to be able to turn to the courts to see 
that the rule of law is upheld. That is at the heart of the idea of 
federalism.
  Unfortunately, in many cases, rather than preserve the separation of 
powers between the Federal Government and State governments, consent 
decrees have done just the opposite. What we are seeing in State after 
State is government policy controlled by courts and judges instead of 
by Governors, mayors, and legislatures.
  In Maine, in 2003, the Governor had to propose deep cuts to mental 
health services for children because consent decrees made it almost 
impossible to cut other parts of the budget.
  In New York City, Latino parents are outraged because schools are 
forcing their children into bilingual education programs when the 
parents want them in all-English classes. Why? Because for the last 30 
years, bilingual education in New York has been mandated by a consent 
decree that the schools have no choice but to obey.
  In Los Angeles, a consent decree has forced the Metropolitan Transit 
Authority to send $110 million per year on improving city buses. That 
is 47 percent of its budget just on buses, leaving the remaining 53 
percent pay for street and freeway improvements, rail systems, 
transportation planning programs, and the reduction of its debt. 
Meanwhile, ridership on MTA buses increased only marginally in the 
first 6 years of judicial management and residents of Los Angeles 
complain that other MTA services are suffering.
  The State of Tennessee has also become a victim of democracy by 
decree.
  In Tennessee, like in every State, governments do not have the luxury 
we have up here of being able to deficit spend. State governments need 
to balance the budget, and I can speak from experience when I say that 
is a process that involves making excruciating choices. In Tennessee, 
however, Governor Bredesen has had fewer choices to make because the 
Federal court has refused to let him do what he needs to do to balance 
the budget.
  Late last year, it became apparent that the rising cost of providing 
Medicaid--and in the case of Tennessee, we have a program called 
TennCare on a waiver from CMS would result in an additional $650 
million in costs to the State of Tennessee in the upcoming 2006 budget. 
Now, Governor Bredesen has a plan that he says would result in costs 
only rising $75 million in the next year, but he can not implement it 
because he is constrained by a series of consent decrees. These consent 
decrees prescribe policies on medical screenings for children, require 
the State to provide patients with high-cost, brand-name prescription 
drugs, and affects the ability of the State to verify the eligibility 
of the patients it serves.
  On the face of it, it sounds like these are all good things. Of 
course we want children to get screenings that will help prevent 
serious illness and of course we want to make sure patients have 
prescription drugs. The problem is that whereas the Federal Medicaid 
laws say one thing, Federal judges are turning that into a whole series 
of requirements that States are then bound by for as long as a Federal 
judge decides it is necessary.
  For example, regarding medical screenings for children: Medicaid 
law--section 1905(r)(5) of the Social Security Act requires that 
children receive ``such other necessary health care, diagnostic 
services, treatment and other measures . . . to correct or ameliorate 
defects and physical and mental illnesses under the State plan.'' Now, 
from that one line of Federal code, the court entered a consent decree 
that established a deadline for Tennessee to improve its performance to 
ensure that 80 percent of eligible beneficiaries were receiving this 
screening.

[[Page 3511]]

  Nonetheless, even in the face of enormous budget pressures, the 
Federal courts are going to force Tennessee to maintain the programs 
that will keep it on track to meet that 80 percent goal. So Governor 
Bredesen had to make a painful decision; he had to cut 323,000 adults 
from TennCare and limit benefits for the remaining 396,000 adults. 
Let's be clear here--these beneficiaries are people that the State of 
Tennessee has decided to provide health care services to even though 
the Federal Medicaid laws do not require the State to do so. These are 
optional populations and services, and Governor Bredesen was exercising 
his option not to provide these services.
  But hang on a minute. Maybe they are not as optional as we all 
thought. On January 29, 2005, Judge William J. Haynes, Jr., a U.S. 
District Court Judge, declared that he must approve any changes to 
TennCare. So now, the Tennessee State Legislature is waiting for Judge 
Haynes to make a decision and give the State legislature permission to 
change the State health insurance program and balance the budget.
  In all of these cases, and in many more; we see courts and lawyers 
making decisions like this. Not just protecting rights, but running the 
government. Courts are making policy choices that are supposed to be 
made by elected Governors, mayors, legislators, city councilmen and 
women, school board members, and any number of other officials.
  When courts run the government, that is no democracy. Federal courts 
are not accountable. They do not have to answer to an electorate for 
the choices they make. This is not good government.
  The Federal Consent Decree Fairness Act contains three main 
provisions that address many of these concerns.
  First, this bill lays out a series of findings that will guide 
Federal courts in approving future consent decrees. The findings give 
congressional endorsement to the Supreme Court's call for limiting 
decrees to make sure they are not unreasonably broad. The findings also 
advocate the entry of consent decrees that take into account the 
interests of State and local governments and give due deference to 
their policy choices. Finally, the findings also make it clear that 
consent decrees should contain explicit and realistic strategies for 
ending court supervision.
  Second, the bill creates ``term limits'' for consent decrees. It 
provides State and local governments with an opportunity to revisit the 
consent decree after either 4 years or 6 months after the end of the 
term of the State or local official who consents to the agreement. Four 
years is a reasonable amount of time to evaluate the success of 
judicial management and to determine whether or not it is still 
warranted. Alternatively, a provision allowing a decree to be revisited 
following the election of new State and local officials will give these 
officials the opportunity to bring fresh ideas to the table. I am sure 
that many of my colleagues who served as State and local officials can 
attest to the frustration of coming into office and having your hands 
tied by an agreement that the last mayor, attorney general, or Governor 
made.
  Finally, this bill shifts the burden of proof from the State and 
local governments to the plaintiffs in the case. Under the current law, 
State and local governments must prove that a decree is no longer 
necessary to protect plaintiffs' rights; that is, they must prove a 
negative. They must also show that they have complied substantially 
with all the terms of the existing decree. However, as I have already 
mentioned, the terms of these decrees often go far beyond simply 
upholding the plaintiffs' rights. By shifting the burden of proof, this 
bill requires the plaintiffs to show that judicial management is still 
necessary. It allows parents like those concerned about the New York 
bilingual education programs to make the point that they do not think 
they still need judicial management of this program.
  Passage of my bill will not immediately end the consent decree 
problem. We have separation of powers in our government, and there is 
only so much Congress can do. However, what Congress can do, and what I 
hope to do with this legislation, is level the playing field so that 
State and local governments can have a fair shot at getting back the 
authority that is rightfully theirs.
  Judicial management has become a national concern. Federal courts are 
running police departments, school districts, foster care programs, 
State health insurance programs, and numerous other programs that are 
rightfully left to the responsibility of State and local elected 
officials.
  No less an authority than the Supreme Court has recognized the 
overreaching of the Federal courts. In 2004, the court handed down a 
decision in the Frew v. Hawkins case. Although the court upheld the 
consent decree in this case, its opinion recognized the dangers of 
consent decrees and contained some guidance as to how to address these 
concerns.
  I think the Supreme Court's own words say it most effectively:

       The state officials warn that enforcement of consent 
     decrees can undermine the sovereign interests and 
     accountability of state governments. . . . The concerns they 
     express are legitimate ones. If not limited to reasonable and 
     necessary implementations of federal law, remedies outlined 
     in consent decrees involving state officeholders may 
     improperly deprive future officials of their designated 
     legislative and executive powers. They may also lead to 
     federal court oversight of state programs for long periods of 
     time even absent an ongoing violation of federal law.

  Referencing a previous Supreme Court decision involving consent 
decrees, the Court went on to say:

     `principles of federalism and simple common sense require the 
     [district] court to give significant weight' to the views of 
     government officials. . . . principles of federalism require 
     that state officials with front line responsibility for 
     administering the program be given latitude and substantial 
     discretion.
       The federal court must exercise its equitable powers to 
     ensure that when the objects of the decree have been 
     attained, responsibility for discharging the State's 
     obligations is returned promptly to the State and its 
     officials. As public servants, the officials of the State 
     must be presumed to have a high degree of competence in 
     deciding how best to discharge their governmental 
     responsibilities. A State, in the ordinary course, depends 
     upon successor officials, both appointed and elected, to 
     bring new insights and solutions to problems of allocating 
     revenues and resources. The basic obligations of federal law 
     may remain the same, but the precise manner of their 
     discharge may not.

  The Federal Consent Decree Fairness Act comes at a time when 
President Bush has called on Congress to offer more flexibility to 
State governments to manage Medicaid. That flexibility has to in part 
address the Federal courts' assumption of judicial control of these 
programs. This bill is one way of doing that. In a broader sense too, 
this bill is one small piece of the effort to promote federalism in the 
United States.
  In recent years, it has become the trend to treat States as the 
wayward little brother of the Federal Government. That was never the 
intent of the Founding Fathers. State governments provide the basic 
necessities of life that citizens demand. They are the laboratories 
that can serve as models of good government that the rest of the 
country can follow. They are our partners, not our wards. It is time we 
begin to treat them that way.
  This bill is the first of what I hope will be many steps toward 
restoring the relationship between the Federal Government and the State 
and local governments that do so much.
  Mr. KYL. Mr. President, I join Senators Alexander and Pryor in 
introducing the Federal Consent Decree Fairness Act. This important 
legislation, by placing reasonable limits on the duration of judicial 
consent decrees, will help restore democratic control over State and 
local institutions.
  Lawsuits against public schools, welfare agencies, and other State 
and local government agencies and programs often end in judicial 
consent decrees. Consent decrees are binding, legal agreements between 
plaintiffs and institutions specifying how a particular problem will be 
remedied.
  Two years ago, two professors at the New York Law School, Ross 
Sandler and David Schoenbrod, published an important book about the 
effect of consent decrees on our society: Democracy

[[Page 3512]]

by Decree: What Happens When Courts Run Government.'' The professors' 
book describes how unelected and unaccountable judges and attorneys 
control many State and local institutions by imposing rigid plans 
through consent decrees and how these decrees prevent newly elected 
officials from altering policies in response to the changing wishes of 
voters. These decrees allow plaintiffs' lawyers and judges to assume 
the power to make policy and dictate in detail what shall constitute 
compliance with the decree. They reflect a multitude of motives and 
often are based on considerations of the moment, yet they can bind 
public institutions for decades.
  While plaintiffs must allege violations of rights when filing their 
cases, the consent decrees that are produced by the litigation often 
have little connection with the enforcement of those rights. Instead, 
the decrees in some cases simply reflect the policy preferences of the 
controlling group behind the litigation, including the plaintiffs' 
attorneys and special interest groups.
  One example from ``Democracy by Decree'' illustrates the nature of 
this phenomenon. When Congress enacted the Education for All 
Handicapped Children Act, it created a Federal right to special 
education. This new right required that all handicapped children 
receive ``free appropriate public education.'' After the law's 
enactment, local school boards had difficulty complying with the new 
Federal standards. As a result, parents and children's advocates 
brought many lawsuits in Federal courts, including a New York case that 
was titled Jose P. v. Ambach.
  The Jose P. case ended with a consent decree that dramatically 
shifted control over public education in New York. It transferred power 
over special education from the board of education and elected 
officials to the Federal court. Judge Nickerson, the U.S. District 
Court Judge assigned to Jose P., selected a ``special master'' and 
extended to him the enormous power to decide what was ``appropriate to 
provide the requisite public education to handicapped children in New 
York City.''
  In an affidavit to Judge Nickerson, New York City School Chancellor 
Macchiarola described how the litigation forced attention to a vast 
succession of special education and administrative issues, and diverted 
teachers' attention from the education of children. The special 
master's orders elevated speed of child placement above all other 
educational priorities. The mass processing of children with 
disabilities forced by the order, in turn, directly conflicted with 
efforts to educate these children. Chancellor Macchiarola wrote:

       I believe that however closely the judgment may have 
     approximated the best professional judgment at a particular 
     time, it is a mistake to elevate any set of practices and 
     procedures to the level of an inflexible mandate. Such an 
     approach robs the school system of the flexibility it needs 
     to adapt to changing circumstances, increasing practical 
     experience with alternative approaches to implementation, and 
     a constantly growing understanding of the nature and 
     dimensions of the educational issues we face.

  In April 1984, New York City Mayor Ed Koch created the Beattie 
Commission to review the city's special education programs. Five years 
after Judge Nickerson issued the Jose P. consent decree, the city's 
programs had grown to serve 116,000 children at a cost of $850 million, 
yet it still did not meet the mandates of Jose P. The Beattie 
Commission found that special education had been transformed into a 
program for handling any child who for one reason or another performed 
at less than expected levels or who caused trouble in the classroom. 
Eighty-nine percent of all referrals for evaluations were either for 
poor academic performance, bad behavior, or both. The program had begun 
to function as a quickly expanding and increasingly expensive general 
education program.
  The New York City Board of Education officials who worked under the 
decree conceded that Jose P. caused a restructuring of special 
education, but they emphasized that the scope of the judgment and the 
detailed procedures that it required shifted attention from what was 
truly best for the children to a focus on numerical compliance with 
rigid timelines.
  In ``Democracy by Decree,'' Sandler and Schoenbrod explain:

       The most notable fact after more than twenty years of court 
     supervision is the size of the special education program. For 
     the 1999-2000 school year, out of a school system of 1.1 
     million children, 168,000 received special education--three 
     times the number when Jose P. was filed. Public school costs 
     for these services reached $2.7 billion, 25% of the entire 
     school budget. The board spends in excess of $26,000 per 
     student in special education, nearly three times more than 
     the resources devoted to students in regular education.
       Jose P. failed to produce sound special education because 
     it was premised on a basic misunderstanding of institutional 
     change. The court set about to reform a single program in a 
     vast educational structure--a fool's errand because special 
     education could not be reformed without reforming the entire 
     system. What was needed was to overhaul the system, only part 
     of which was special education. The New York City board of 
     education could not stop the gaming of special education 
     unless it also stopped gaming in other areas such as 
     seniority, union perks, principal rights, custodial 
     authority, and inadequate programs of all kinds, from 
     athletics to grammar. What the court order did was cause the 
     board to focus effort on one area of institutional 
     performance without altering the culture of which it was a 
     part. That, and the very rigidity of the Jose P. decree and 
     the process it required, made it more difficult for new 
     mayors, new chancellors, or new boards of education to 
     improve the entire system.

  In their handling of cases such as Jose P., the courts have moved 
away from enforcing rights and toward a managerial process of 
overseeing the pursuit of general goals.
  The Jose P. order and its process could conceivably continue without 
end. The court never described what the board must do to terminate 
supervision. Sandler and Schoenbrod plead that our conclusion

     should not be to fix blame on the individuals in charge of 
     the case. They are superbly trained, well intentioned, and 
     widely recognized as outstandingly successful judges and 
     lawyers. Nor should that attention be fixed on questioning 
     the worthy objective of special education. Rather, the 
     failure of such competent people in pursuit of such a needed 
     objective should compel attention on whether we should 
     continue to rely so readily on courts to manage the complex 
     institutions of state and local governments.

  Senator Alexander's bill is an important step in addressing the 
structural failures behind cases like Jose P. I look forward to the 
bill's consideration in the Senate.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, before the Senator departs the floor, I 
commend my colleague from Tennessee for his comments. I will take a 
close look at them myself.
  As usual, the Senator from Tennessee makes an awful lot of sense. The 
question raised by our colleague from Alabama is an appropriate 
question. I underscore the last point he made, as well, this idea of 
dumping on the courts a lot of time to resolve matters which are thorny 
and difficult. It is a lot easier to do that.
  We have learned painfully in the area of education, the area of 
equalization formulas, 47 States have enacted or required through the 
courts to provide equalization of funding for elementary and secondary 
education. I don't know of a single State that has done it yet because 
the political community has passed the ball on, in a sense, to the 
courts without addressing the issue in a fundamental way themselves. It 
is another example of Congress not coming to terms with some of the 
difficult issues.
  My colleague has pointed out the one dealing with Medicaid. I applaud 
him for his comments. I intend to take a close look at his bill and may 
join him. I thank him for his comments this morning.
  Mr. President, I have been present for most of the votes the past 4 
or 5 days but not engaged in the debate on the bankruptcy bill. The 
reason for my absence is because my wife and I were very blessed on 
Tuesday morning, in the wee hours, to become parents again. So for the 
past 4 or 5 days if I looked a little sleepy to my colleagues it is 
because we have been up with a wonderful new infant. This child arrived 
a little earlier than expected. I intended to be much more involved in 
this debate than I have had the ability

[[Page 3513]]

to. I apologize to my colleagues and to others who have had a strong 
interest in this legislation.
  This morning I would like to take a few minutes and talk generally 
about the bankruptcy bill, and also to propose a couple of amendments 
which I will describe briefly. I realize any votes on these amendments 
may occur on Monday or Tuesday, depending on conversation with the 
majority in terms of how they will handle these matters.
  The fundamental premise behind the bankruptcy bill, as I understand 
it and in listening to my colleagues over the last 7 or 8 years who 
have talked about this legislation, is that more and more consumers 
across this great country of ours are living rather lavish lifestyles 
and then filing for bankruptcy to avoid paying the debts which they 
have incurred as a result of their irresponsibility. This is one of the 
major arguments for this legislation--that bad actors are depriving 
credit card issuers of money owed to them as a result of people 
lavishly using these credit cards to acquire whatever products or 
services they want. This premise, I argue, is categorically and 
demonstrably false.
  Let me, first, begin with the first chart, if I may, which lays out 
the statistics of what happens to an individual in America in the two 
years before they file for bankruptcy. I hope it will give my 
colleagues some sense of what actually is going on with these families. 
Who are these families? Are these people living lavish lifestyles, 
accumulating debts that they should have been more responsible about, 
and then trying to avoid their obligations by declaring bankruptcy?
  Health Affairs, a respected organization in this field, did an 
analysis of what happened in the 2 years prior for people who file for 
bankruptcy. The study revealed that sixty-one percent of those who 
filed for bankruptcy during the previous 2 years had gone without 
needed medical care, 50 percent did not fill doctors' prescriptions 
they had been given, 30 percent had their utilities shut off, 22 
percent went without adequate nutrition and food, and 7 percent moved 
elderly parents to cheaper care facilities across the country. These 
are hardly people who are leading what you would call a lavish 
lifestyle.
  In fact, these are people who are desperately trying to hold their 
families together, who cannot meet the kind of responsibilities despite 
their best efforts.
  Credit card issuers, I point out, are earning enormous amounts of 
money in income from fees, penalties, and interest charges. As one 
expert said:

       The idea that companies are losing their shirts on 
     bankruptcies is [just not true at all].

  Mr. President, I ask unanimous consent that an article that appeared 
this morning in the Los Angeles Times be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Los Angeles Times, Mar. 4, 2005]

                  Credit Card Firms Won as Users Lost

                         (By Peter G. Gosselin)

       Washington.--In the eight years since they began pressing 
     for the tough bankruptcy bill being debated in the Senate, 
     America's big credit card companies have effectively 
     inoculated themselves from many of the problems that sparked 
     their call for the measure.
       By charging customers different interest rates depending on 
     how likely they are to repay their debts and by adding 
     substantial fees for an array of items such as late payments 
     and foreign currency transactions, the major card companies 
     have managed to keep their profits rising steadily even as 
     personal bankruptcies have soared, industry figures show.
       As a result, while they continue to press for legislation 
     that would make it harder for individuals to declare 
     bankruptcy, the companies have found ways to make money even 
     on cardholders who eventually go broke.
       At the same time, under the companies' new systems, many 
     cardholders--especially low-income users--have ended up on a 
     financial treadmill, required to make ever-larger monthly 
     payments to keep their credit card balances from rising and 
     to avoid insolvency.
       ``Most of the credit cards that end up in bankruptcy 
     proceedings have already made a profit for the companies that 
     issued them,'' said Robert R. Weed, a Virginia bankruptcy 
     lawyer and onetime aide to former Republican House Speaker 
     Newt Gingrich.
       ``That's because people are paying so many fees that 
     they've already paid more than was originally borrowed,'' he 
     said.
       In addition, some experts say, the changes proposed in the 
     Senate bill would fundamentally alter long-standing American 
     legal policy on debt. Under bankruptcy laws as they have 
     existed for more than a century, creditors can seize almost 
     all of a bankrupt debtor's assets, but they cannot lay claim 
     to future earnings.
       The proposed law, by preventing many debtors from seeking 
     bankruptcy protection, would compel financially insolvent 
     borrowers to continue trying to pay off the old debts almost 
     indefinitely.
       ``Until now, the principle in this country has been that 
     people's future human capital is their own,'' said David A. 
     Moss, an economic historian at Harvard University. ``If a 
     person gets on a financial treadmill, they can declare 
     bankruptcy and have what can't be paid discharged. But that 
     would change with this bill.''
       Debate about the bill continued Thursday, with the 
     Republican-controlled Senate refusing to limit consumer 
     interest rates to 30%. The vote was a bipartisan 74 to 24 to 
     kill a proposed amendment by Sen. Mark Dayton (D-Minn.). 
     Senate passage of the bill is expected next week.
       The House has not taken up the issue this year, although it 
     passed a version of the bill last year, as did the Senate. 
     Attempts to reconcile the two bills failed.
       Industry officials have sought to minimize the role of 
     credit card companies in pushing for bankruptcy legislation 
     since 1998. They have argued that the bill introduced last 
     month by Republican Senate Finance Committee Chairman Charles 
     E. Grassley of Iowa and supported by President Bush would 
     affect about 5% of the roughly 1.6 million Americans who file 
     for bankruptcy each year.
       They have portrayed the measure's principal target as high-
     income individuals who are abusing the law to escape their 
     debts.
       ``The bottom line is that there are people out there who 
     are able to pay their bills who are not paying,'' said Tracey 
     Mills, a spokeswoman for the American Bankers Assn., which 
     represents most of the major credit card companies.
       But consumer advocates, many academics and some judges and 
     court officials argue that the bill would sharply reduce the 
     number of Americans able to file for bankruptcy, even in 
     instances where doing so would buy them time to repay their 
     debts.
       The critics argue that people unable to file would be at 
     the mercy of increasingly aggressive efforts by lenders--
     especially credit card companies--to raise fees and boost 
     collections.
       People like Josephine McCarthy, for instance, a 71-year-old 
     secretary at the Salem Baptist Church, less than a mile from 
     where the Senate bill is being debating.
       According to papers in her recent bankruptcy, McCarthy 
     discovered at about the time of her husband's death in 2003 
     that the couple had a $4,888 balance on a Providian Financial 
     Corp. Visa card and another $2,020 balance on a Providian 
     Mastercard.
       Over the two years from 2002 until early 2004, when she 
     filed for bankruptcy, McCarthy charged an additional $218 on 
     the first card and made more than $3,000 in payments, the 
     court papers show. But instead of her balance going down, 
     finance charges--at what the bankruptcy judge termed a 
     ``whopping'' 29.99% rate, together with late fees, over-limit 
     fees and phone payments fees--pushed what she owed up to more 
     than $5,350.
       In the case of the second card, the papers show that 
     McCarthy charged an extra $203 and made more than $2,000 in 
     payments, but again fees and finance charges pushed the 
     balance up.
       McCarthy refused to comment on the case. A spokesman for 
     Providian could not be reached last night.
       But court papers show that McCarthy eventually paid all the 
     bills in the case, including back taxes. The way she did it, 
     using provisions of bankruptcy law, illustrates one of the 
     problems with the proposed new law, critics say.
       McCarthy had been making mortgage payments on two houses. 
     She wanted to sell one of the houses to pay off her debts, 
     but the house was entangled in legal difficulties. By 
     declaring bankruptcy, she was able to stop the clock on her 
     escalating credit card debts and give her lawyer time to 
     clear up the legal problem, enabling her to sell the house 
     and pay off the bills.
       Under the proposed new law, McCarthy, who makes about 
     $55,000 a year, would have had a much harder time qualifying 
     for the bankruptcy protection that allowed her to pay 
     creditors.
       ``The McCarthy case shows how hard-working people making 
     good incomes can end up in situations that they can't dig 
     themselves out of unless they file for bankruptcy,'' said 
     Weed, her lawyer.
       Credit card companies have come in for harsh criticism in 
     recent years for their penalty fees and the ``risk-based 
     pricing'' under which they charge customers different 
     interest rates depending on their credit histories and their 
     likelihood of paying.
       Consumer advocates have accused firms of not adequately 
     disclosing such controversial practices as universal default, 
     when a company can jack up a cardholder's annual percentage 
     rate, often to ``more than 30%, based

[[Page 3514]]

     on the cardholder's performance with another creditor, not 
     the card company.
       Regulators and law enforcement officials have accused 
     companies of deceptive practices. In 2000, the U.S. Office of 
     the Comptroller of the Currency and the San Francisco 
     district attorney's office ordered Providian to pay $300 
     million in restitution after customers complained that the 
     company didn't credit their payments on time and then imposed 
     late fees.
       A stream of court cases involving credit card companies has 
     produced public outrage in various parts of the country.
       In Cleveland, a municipal court judge tossed out a case 
     that Discover Bank brought against one of its cardholders 
     after examining the woman's credit card bill.
       According to court papers, Ruth M. Owens, a 53-year-old 
     disabled woman, paid the company $3,492 over six years on a 
     $1,963 debt only to find that late fees and finance charges 
     had more than doubled the size of her remaining balance to 
     $5,564.
       When the firm took her to court to collect, she wrote the 
     judge a note saying, ``I would like to inform you that I have 
     no money to make payments. I am on Social Security 
     Disability. . . . If my situation was different I would pay. 
     I just don't have it. I'm sorry.''
       Judge Robert Triozzi ruled that Owens didn't have to pay, 
     saying she had ``clearly been the victim of [Discover's] 
     unreasonable, unconscionable and unjust business practices.''
       Efforts to reach Owens were unsuccessful A spokeswoman for 
     Discover said she could not comment on the case.
       Analysts said that lost in the uproar over particular 
     practices and cases is the fact that the credit card industry 
     has almost completely remade itself in the years since it 
     began pushing for passage of the bankruptcy bill--a makeover 
     that has left some analysts wondering why the industry needs 
     the changes in bankruptcy law.
       ``The idea that companies are losing their shirts on 
     bankruptcies is a lot of bull,'' said Robert B. McKinley, 
     chief executive of CardWeb.com, a Frederick, Md., consulting 
     group that tracks the credit card industry. ``With these 
     rates and fees, the card industry is a gravy train right 
     now.''
       Mills, the bankers association spokeswoman, said 
     bankruptcies affected all American households in the form of 
     higher costs and lower returns on investments.
       As recently as the late 1980s, credit card companies 
     offered a one-size-fits-all card with a fixed interest rate 
     and an annual fee. Virtually all cards went to middle-class 
     borrowers with good credit histories; issuing cards to poor 
     or high-risk borrowers was almost unheard of.
       But in the early 1990s, companies such as AT&T and General 
     Motors began issuing cards with variable rates and no fees, 
     increasing competition. And by the middle of the decade, card 
     companies were finding their traditional middle-class markets 
     saturated.
       Their response: lend to riskier customers and make up for 
     the danger of more defaults by charging higher rates and then 
     new fees.
       McKinley, the industry analyst, said the firms were helped 
     by a 1996 Supreme Court case that gave card companies new 
     protections against state regulation of fees.
       ``That really opened the flood gates. It set off a fee 
     frenzy,'' he said.

  Mr. DODD. Taking the Bankruptcy Act goes back to the earliest days of 
our Republic. Article I, section 8 of the U.S. Constitution mandates 
that Congress pass laws dealing with bankruptcy. I believe our Founders 
did so because they realized there was inherent, fundamental value to 
allowing people who find themselves under difficult circumstances to be 
able to get out from underneath those circumstances, to discharge their 
responsibilities to the best extent possible, and then to get back on 
their feet again. That is a social value from which all Americans 
benefit.
  Now, will there be people who should have been far more responsible? 
Absolutely. But I happen to believe that the overwhelming majority of 
people who are forced to file for bankruptcy do so most reluctantly, 
only because there are no other avenues available to them which they 
can deal with their problems. We have with a responsibility, to 
remember what our Founders envisioned in article I, section 8, which 
calls upon Congress to pass bankruptcy legislation.
  I would like to add at the outset of these remarks, if I can, some 
general understanding of what is happening to American consumers and 
their indebtedness.
  First of all, in terms of household savings, in 1993, the savings 
rate was 4.3 percent of the gross domestic product nationally. In 2003, 
it was at 1 percent of gross domestic product. In the third quarter of 
2004, savings rates were less than one-half of 1 percent of the gross 
domestic product. The national savings rate is declining rapidly in 
this country. At a time when we ought to be doing everything we can to 
encourage consumers to begin to save more, to participate in their own 
long-term financial needs, we are going in the exact opposite direction 
of where we ought to be heading in this country.
  Let me add, simultaneously, that according to the Federal Reserve 
Board, the United States has over $2.1 trillion in consumer debt. 
Consumer debt is truly skyrocketing. Almost one-half of that $2.1 
trillion in consumer debt is revolving credit--to credit cards and home 
equity loans--nearly $800 billion of the $2.1 trillion.
  Our nation's savings rates are less than one-half of 1 percent of our 
gross domestic product--down from over 4 percent just a few years ago. 
Our nation's consumer debt has skyrocketed to $2.1 trillion, $800 
billion of which is due to credit cards and home equity loans.
  We are going in the absolute wrong direction. The questions we ought 
to be asking as we debate and discuss this bankruptcy bill is: Does 
this legislation contribute in the 21st century to encouraging more 
savings? Does it do anything at all to try to reduce consumer debt? 
Does this bankruptcy bill do anything to reduce the number of 
bankruptcies and effect the underlying causes of bankruptcy.
  Certainly, consumers bear responsibility in terms of how they handle 
their money and the obligations they incur to those who extend them 
credit. However, there is a commensurate responsibility, I believe, on 
the part of those who extend credit. Creditors must make sure they are 
extending credit in a responsible way, with prudent underwriting 
standards. If they extend credit to those who can least afford it, 
charging them incredibly high rates and packed with hidden fees and 
costs, and with little or no expectation that they will have the 
ability to repay the debts incurred, then it seems to me that their 
charges of personal responsibility is wholly inappropriate.
  If we are going to try to increase savings rates and reduce consumer 
debt in this country, then we ought to ask ourselves whether or not 
this bill before us contributes to those important goals.
  Now, again, proponents of this legislation have wrapped themselves, 
if you will, in the flag of personal responsibility. The real purpose 
of the legislation, they argue, is to punish those who abuse our 
bankruptcy system, who raise costs to all consumers. The creditors are 
being forced, they argue, to raise prices on a variety of goods and 
services because of so-called bad actors who abuse the Bankruptcy Code. 
They would like us to believe that those bad actors are the real 
culprits behind why creditors, such as credit card issuers, are 
charging these incredibly high rates, using hidden, undisclosed fees 
and engaging in deceptive predatory practices.
  I would like to dispel, if I can, these myths. Nothing in this bill, 
in my view, is going to help consumers. Let me repeat that. Nothing in 
this legislation will help consumers. The legislation, I would argue, 
will only help creditors recover more money from debtors, most of whom 
have been forced to declare bankruptcy because of emergency medical 
expenses or due to the loss of a job or as a result of a divorce.
  Let me put up the second chart, if I can, to make that point for my 
colleagues and others who may be interested in this debate. We are 
told, again, that 46 percent--almost half--of the 1.5 million 
bankruptcies taken annually are as a result of illness. Mr. President, 
46 percent as a result of illness, alone.
  I mentioned briefly at the outset the reason I have not been as 
engaged in this debate over the last 4 days is because of the arrival 
of my new daughter in the wee hours of Tuesday morning. As I went to 
the nursery to see my new daughter I looked across the hall of the 
hospital, located in Northern Virginia. I saw where the premature 
infants were being cared for in incubators, and I saw the families with 
their premature infants. Many of the families did not strike me as 
people living lavish lifestyles at all, struggling with a new infant 
who is in a very fragile condition inside an incubator.

[[Page 3515]]

  I do not need to tell anyone the costs associated with those type of 
medical challenges. I suspect, unfortunately, that a lot of these 
people do not have health insurance. As I watched them come in and out 
of that nursery to be with their newborn child in an incubator, I 
suspected that many of them are going to have costs far beyond anything 
they ever imagined. The idea, that somehow, we ought to penalize people 
because of a newborn in their life, who are going to have incredible 
increased costs, seems to me to be terribly wrongheaded.
  As I stated earlier, 46 percent, of the 1.5 million bankruptcies 
annually occur because of medical causes. Of the remaining 54 percent, 
we know the majority of that 54 percent is due to job loss and divorce 
in the country--not the lavish lifestyles of bad actors that the credit 
card companies would suggest.
  This legislation will injure honest, hard-working Americans, in my 
view, who fall on hard times through no fault of their own.
  Let's just take a few steps back, if we can. What is the reason we 
have bankruptcy laws? The reason we have a Bankruptcy Code is because 
life, sometimes, just deals people all across our country, regardless 
of who they are or where they come from, a bad hand. People get dealt a 
bad hand every now and then. And we happen to believe, as a society, it 
is important to give people a fresh start in our Nation, an opportunity 
to overcome the financial misfortunes that have struck them, such as 
those families I have just described that I watched with premature 
infants.
  This principle is so fundamental to our Nation that our Constitution 
expressly lists the establishment of uniform bankruptcy laws as a 
congressional responsibility. It seems that the Framers understood that 
society is better off if we can find an orderly way to allow people to 
pay off their debts to the best degree possible. It is critical to 
helping people to get back on their feet as productive citizens. 
Regrettably, that principle seems to suffer, in my view, at the hands 
of this legislation.
  Recent evidence supports the idea the vast majority of people who 
file for bankruptcy do so because of some financial crisis beyond their 
control that has plunged them into debt they cannot avoid.
  A recent study, conducted in early 2005 by a team of researchers at 
Harvard University, confirmed that nearly half of all people who file 
for bankruptcy protection do so because of medical or health reasons.
  The evidence shows that abusive filings are the exception, not the 
rule. The median income of the average American family filing for 
chapter 7 bankruptcy--what do my colleagues think it might be? What is 
the median income of the average family filing for bankruptcy, these 
lavish-lifestyle people out there? It is $20,000 a year. That is the 
average annual income of a person filing for bankruptcy--hardly people 
living lavish lifestyles. That is according to the General Accounting 
Office.
  The majority of the people who file for bankruptcy are single women 
who are heads of households, elderly people trying to cope with medical 
costs, and people who have lost their jobs or families whose finances 
have been complicated by divorce. For the most part we are talking 
about working people or elderly Americans on fixed incomes who have 
fallen on hard times and who need the protection of the Bankruptcy Act 
to help put them and their lives back together.
  It is also worth noting that based on the first three quarters of 
2004, the personal bankruptcy rate actually decreased by 2.6 percent. 
According to the American Bankruptcy Institute, there were actually 
50,000 fewer cases from September 2003 to September 2004 than there 
were in the previous 12-month period, which, of course, begs the 
question: If bankruptcy rates are falling, why is this legislation 
necessary?
  There is no smoke and there is certainly no fire except for maybe the 
millions of consumers who are being burned by abusive creditor 
practices.
  The impact this legislation would have on single-parent households is 
of particular concern to me. Single parents have one of the hardest 
jobs in America. Most work all day, prepare meals, keep house, help 
children with their homework, schedule doctor appointments, parent-
teacher meetings, and extracurricular activities. Life is very hard for 
working single parents, and often financial assistance they receive in 
the form of alimony or child support is critical to keeping their 
families from falling into poverty. I believe sincerely that this 
legislation, if enacted, is going to frustrate the efforts of single-
parent families to collect child support payments.
  I understand that the proponents of this bill believe they have 
treated single-parent families fairly. But what I worry about is the 
unintended but perfectly foreseeable consequence of allowing more debts 
to survive bankruptcy. Let me explain why and what is in this bill 
today.
  For more than 100 years, the Bankruptcy Code has given women and 
children an absolute preference over all others who have claims on a 
debtor's estate. Under the well-established rule, if a divorced person 
files for bankruptcy, the court doesn't require the person's ex-spouse 
or children to compete with creditors for the funds needed to pay child 
support and alimony. Instead, for 100 years, alimony and child support 
have been taken out of the debtor's monthly income first, and if there 
is anything left over, it is made available to commercial creditors. If 
there is nothing left over, the commercial or consumer debts are 
discharged, and the debtor's only remaining obligation is to the ex-
spouse and his or her children.
  This legislation changes those rules for the first time in 100 years. 
For the first time we are going to make credit card and other consumer 
debts essentially nondischargeable so that while a divorced spouse 
would still be obligated to pay alimony and child support, his or her 
other unsecured debts remain intact. The proponents of the bill will 
say this does no harm to the divorced spouses or children because the 
ex-spouses are still at the front of the collection process. But there 
is, in my view, a huge practical difference between being first in line 
and being the only one in line.
  Under current law, nonsupport debts are often discharged and debtors 
can focus entirely on meeting their obligations to their children and 
current spouses. If this legislation becomes law, that will change for 
the first time in 100 years. Debtors will not be able to focus on their 
children; they will, as a matter of law, have to divert limited 
financial resources to pay back consumer creditors. I believe this 
change will inevitably lead to conflicts between commercial creditors 
and single parents who are owed support and alimony payments. Sure, 
they are going to be first in line, but single parents will be 
competing with large creditors, creditors who have teams of lawyers who 
are hired to use every imaginable tactic to see to it that they get 
their money first. That is what they are going to do. I promise, it is 
going to happen.
  I believe it is a mistake to make single parents compete with teams 
of lawyers from very well-heeled creditors for the money they need to 
clothe and feed and educate their children. That is a mistake, and we 
will regret it.
  I understand the perspective that says that all debts incurred should 
be paid. I don't fundamentally disagree with that. But when debtors 
simply cannot pay all of their debts, I believe that our laws should 
protect the interests of children and families first. Under this 
legislation, child support payments could very well be reduced in order 
to satisfy an unsecured commercial creditor. In my view, that change 
will place the well-being of children at a disadvantage and elevate the 
status of the unsecured creditor. Low-income children and families will 
be put at a practical disadvantage by this bill and will ultimately 
suffer greater economic deprivation because they cannot afford to 
compete with sophisticated creditors.
  I have talked a bit about who will be hurt by this legislation. Let 
me take a

[[Page 3516]]

few minutes to focus on the big winners, if the legislation passes. The 
big winner, of course, is the credit card industry. Let me describe the 
current state of the credit card industry. In a time when access to 
credit is the easiest and cheapest, credit card companies are making 
more money than ever, bilking millions of American families by charging 
what would have been only a few years ago usurious rates and fees, 
engaging in a series of abusive and deceptive practices which will have 
drastic long-term consequences. At the same time they are getting more 
and more Americans deeper and deeper into debt.
  I have cited these statistics previously: $2.1 trillion, almost half 
of that coming from credit cards and home equity loans--the same 
creditors pushing bankruptcy legislation in Congress to make their 
debts nondischargeable in the event of a bankruptcy. In effect, we are 
becoming the collection agency for these companies. The old expression 
never had a more apt example: the credit card industry wants to have 
its cake and eat it, too.
  Credit card companies are charging consumers higher fees than ever 
before.
  In 1980, credit card fees alone raised $2.6 billion. In the year 
2004, credit card fees alone raised over $24.4 billion--$2.6 billion 24 
years ago to $24.4 billion. Fees alone. Proponents of this legislation 
argue that because of increasing default rates, the supposed work of 
those bad actors, the ones making $20,000 a year on average, credit 
card companies are being forced to charge more fees.
  In fact, the exact opposite is the truth. Consumer bankruptcies 
actually went down last year by nearly 3 percent, and default rates 
actually decreased.
  A recent American Banker article cites industry expert Robert Hammer, 
chairman of R.K. Hammer Investment Bankers, who said that the biggest 
factor in industrywide credit card industry improvement was the 20-
basis-point drop in chargeoffs from the year 2003. So I ask again: If 
default rates are decreasing, why is this legislation necessary?
  The truth is, this is the best time in history to be in the credit 
card business. Last year over 5 billion solicitations were offered to 
consumers, which is nearly twice as many as only 8 years ago. Despite 
the assertions that the credit card industry is struggling because of 
bad consumer behavior, credit card companies have more money than they 
know what to do with. They are pumping out solicitations in search of 
new people who will only acquire more and more debt.
  Credit card companies are making record profits. Credit Card 
Management reported in May 2003 that it was the most profitable year 
ever for credit cards. At a time when interests rates are at historic 
lows, credit card rates have not followed suit. The industry is engaged 
in a series of deceptive and abusive practices to take advantage of 
consumers.
  Let me take a few moment to describe a few of these practices. I am 
not making this up. Credit card companies are finding more ways to 
effectively increase their income from rates and fees. Abusive 
practices such as misleading teaser rates which employ bait-and-switch 
tactics, hidden fees and penalties, and the universal default 
provisions buried in the fine print are standard operating procedures 
in the credit card industry today.
  One of these abuses, the so-called ``universal default'', which could 
more accurately be described as a predatory retroactive interest rate 
hike. This practice forces a credit card consumer in good standing--one 
who is paying his or her credit card bills on time--to have his 
interest rates retroactively jacked up 25 to 30 percent because of an 
unknown, irrelevant change in his or her spending patterns.
  The idea that credit card companies can charge an initial interest 
rate that would have in the past been outlawed as usurious, and then 
double or triple that rate for any reason it so chooses is plain wrong, 
in my view. If a phone bill is inadvertently mailed to the wrong 
address or you are disputing an amount of a bill and it is not paid on 
time, does the mortgage rate on your house go up? Of course not. But it 
does with the credit card industry.
  We should stop this practice. At a minimum--and I will offer an 
amendment shortly--we should make any increase in the rates 
prospective, not retroactive.
  Let me explain why. If you enter into a agreement with a credit card 
company, and the established rate is set at 15 percent. Despite the 
fact that you continue to make your monthly payments on time, without 
exception, you can have your interest rate unexplainably raised. This 
inexplicable rate hike can occur for whatever reason the creditor sees 
fit. You have an argument with your automobile company and you decide 
to withhold a car payment, or you are having a debate with the utility 
company, so you hold back on your utility bill--under the law today, 
the credit card company can automatically increase your rates. And to 
add insult to injury, this new rate retroactively applies for the goods 
you have already purchased.
  I think this practice is completely uncalled for. But if you are 
going to allow for rates to go up, at a minimum they ought to be 
prospective, on future purchases,
  I would, frankly, like to eliminate it altogether, but I don't think 
enough people here would support that. At the very least, if you 
entered into a contract at 15 percent and if you are suddenly forced to 
pay a higher interest rate, it ought to be on prospective purchases, 
not to things that you may have bought 1 or 2 years ago. That is 
patently wrong, and I will offer an amendment to implement this policy.
  There is a second practice: credit card companies are focusing on 
customers who pay their bills on time. Credit card issuers are now 
providing incentives or rewards to customers for not paying their 
bills. They get a reward for not paying their bills. They offer up to 3 
percent cash back on all credit card purchases, but only during the 
month when the credit card holder doesn't pay off his or her monthly 
balance. We have this consumer debt mounting by the hour, and we have 
credit card companies offering rewards to those who don't pay on time 
and they are cutting off the card for those who do. It is absolutely 
incredible.
  That underscores how important it is to the credit card industry that 
consumers get in debt and stay in debt. There are 51 million households 
that carry balances on the credit cards at an average balance of 
$11,944. That is the average amount of debt families carry on their 
credit cards. The current average interest rate is running at about 13 
percent. This is at a time when we have the lowest interest rates at 3, 
4 percent and we have 13 percent credit card charges. Each of those 
families is paying credit card interest, on average, of 15 percent a 
year. Some are having their credit cards cancelled because they simply 
pay all of their outstanding debt every month. Imagine that. You are 
paying your bills on time and the credit card company triples your 
interest rate or cancels your card.
  In fact, the credit card industry calls you a ``deadbeat'' if you pay 
off your entire balance every month. Why do they call you a deadbeat? 
The credit card industry has a vested interest to keep you in debt. 
Failure to do so affects their bottom line. They don't like people to 
pay off their monthly balances. You could lose your credit card for 
doing that.
  As I have said earlier, the real purpose of this legislation is to 
help credit card companies make more money. I am not opposed to them 
making their money, but I think we have a higher obligation here to see 
that these companies are prevented from engaging in abusive and 
predatory practices that run contrary directly to stated national goals 
of increasing savings rates and reducing consumer debt.
  I have given you some brief insight into some of the abusive 
practices of the credit card industry. I would now like to focus on 
what I believe to be the most egregious trend in the industry, which is 
targeting our Nation's most vulnerable customers. One of the most 
troubling developments is the hotly contested battle between credit 
card issuers to sign up new customers, and

[[Page 3517]]

the aggressive way they have targeted people under the age of 21, 
particularly college students. Solicitations going to this age group 
have become incredibly intense. First, it is one of the few market 
segments in which every year 25 to 30 percent of the undergraduates are 
fresh faces entering their first year of college. Second, it is an age 
group in which brand loyalty can be readily established. Most people 
hold on to their first credit card for up to 15 years, which, by the 
way, is probably the amount of time it takes to dig out of the amount 
of debt they have incurred while in their teens.
  Let me share this with my colleagues. It is somewhat amusing, but it 
is also rather sad. This is a letter that was sent to a 7-year-old 
child of one of the people in my office. I have crossed out the family 
name. He has a 7-year-old son. He was amazed to find a brand new 
American Express card being issued to his son. The card came as a 
result--according to the offer--of this young elementary schooler's 
``excellent credit history.'' It says: You should know about this 
milestone that you have achieved. With your excellent financial record, 
our decision was very simple. We want you as a card member. Imagine, a 
7-year-old. It reads: ``You have the flexibility of a no preset 
spending limit''--a 7-year-old. There are no limits on how much you can 
spend on this credit card. He has amply demonstrated his financial 
responsibility, according to this letter. He has earned this 
recognition to receive an American Express card at age 7. This type of 
solicitation happens more and more every single day and yet we need to 
focus on personal responsibility and not corporate responsibility.
  There are 5 million solicitations that go out every year, many going 
to young children in our society. Obviously, we are talking not just 
about 7-year-olds here but also to college-age persons. They are 
vulnerable, these younger people in our society. To extend them large 
amounts of credit, with no limits, is an act of incredible 
irresponsibility. Again, I agree that consumers have a duty to be 
responsible. I will take a back seat to no one in arguing that ought to 
be the case. However, there needs to be a sense of balance about this. 
If you are expecting the consumer to be responsible, the issuer of the 
credit card also has to be responsible. They lack total responsibility 
when it comes to these solicitations.
  I have an amendment that I will offer shortly that places new 
requirements on credit card companies who solicit to persons under the 
age of 21. It requires if you are under the age of 21, either 
demonstrate that you can pay--a lot of people under 21 can pay because 
they hold jobs, they have made money, and they have saved. Or have 
somebody cosign--a parent, guardian or other responsible party--the 
application to get the credit card, Or lastly, the completion of 
certified credit counseling course. Any one of those three, not all 
three. It is a very simple and prudent requirement to ask for before 
issuing credit cards. This ought to be plain common sense, in my view.
  We have an obligation to protect and educate our young people. The 
next generation of American leaders deserves no less than reining in 
the irresponsible practices of the credit card industry that just 
pushes these cards out. In fact--and I will touch on this later--
universities actually get money into their coffers if they will promote 
students signing up for credit cards. There are actually fees that come 
to the universities as a result of the indebtedness of their students. 
It seems to me we ought to be thinking twice and thinking hard about 
those practices. Credit card companies are running roughshod over 
millions of Americans and their families. We should be passing 
legislation that prevents these types of practices, not padding the 
credit card industry's pockets, in my view.
  The credit card issuers seem to have forgotten the correlation 
between high interest rates and unsecured debt. Traditionally, 
unsecured credit issued without collateral and relying only on the 
integrity of the borrower has a higher default rate. As a result, 
credit issuers are allowed to charge a higher interest rate in order to 
make up for expected losses from those higher default rates.
  However, this legislation begins to change this deal, changing the 
Bankruptcy Code to make unsecured debt nondischargeable in the event of 
a bankruptcy. Record fees, record abuses, record profits, and a record 
number of Americans are being taken advantage of. I urge my colleagues 
to reject this legislation.


                            Amendment No. 52

  Mr. DODD. Mr. President, I wish to call up two amendments. I believe 
the first, amendment No. 52, is at the desk. I ask that it be called 
up.
  The PRESIDING OFFICER. Without objection, the pending amendment is 
laid aside. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Connecticut [Mr. Dodd] proposes an 
     amendment numbered 52.

  The amendment is as follows:

   (Purpose: To prohibit extensions of credit to underage consumers)

        At the appropriate place, insert the following:

     SEC. __. EXTENSIONS OF CREDIT TO UNDERAGE CONSUMERS.

       Section 127(c) of the Truth in Lending Act (15 U.S.C. 
     1637(c)) is amended by inserting after paragraph (5), the 
     following:
       ``(6) Applications from underage consumers.--
       ``(A) Prohibition on issuance.--No credit card may be 
     issued to, or open end credit plan established on behalf of, 
     a consumer who has not attained the age of 21, unless the 
     consumer has submitted a written application to the card 
     issuer that meets the requirements of subparagraph (B).
       ``(B) Application requirements.--An application to open a 
     credit card account by an individual who has not attained the 
     age of 21 as of the date of submission of the application 
     shall require--
       ``(i) the signature of the parent, legal guardian, or 
     spouse of the consumer, or any other individual having a 
     means to repay debts incurred by the consumer in connection 
     with the account, indicating joint liability for debts 
     incurred by the consumer in connection with the account 
     before the consumer has attained the age of 21;
       ``(ii) submission by the consumer of financial information 
     indicating an independent means of repaying any obligation 
     arising from the proposed extension of credit in connection 
     with the account; or
       ``(iii) proof by the consumer that the consumer has 
     completed a credit counseling course of instruction by a 
     nonprofit budget and credit counseling agency approved by the 
     Board for such purpose.
       ``(C) Minimum requirements for counseling agencies.--To be 
     approved by the Board under subparagraph (B)(iii), a credit 
     counseling agency shall, at a minimum--
       ``(i) be a nonprofit budget and credit counseling agency, 
     the majority of the board of directors of which--

       ``(I) is not employed by the agency; and
       ``(II) will not directly or indirectly benefit financially 
     from the outcome of a credit counseling session;

       ``(ii) if a fee is charged for counseling services, charge 
     a reasonable fee, and provide services without regard to 
     ability to pay the fee; and
       ``(iii) provide trained counselors who receive no 
     commissions or bonuses based on referrals, and demonstrate 
     adequate experience and background in providing credit 
     counseling.''.


                            Amendment No. 53

  Mr. DODD. Mr. President, I ask that amendment No. 52 be laid aside, 
and I call up amendment No. 53.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the amendment.
  The legislative clerk read as follows:

       The Senator from Connecticut [Mr. Dodd] proposes an 
     amendment numbered 53.

  Mr. DODD. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

          (Purpose: To require prior notice of rate increases)

        At the appropriate place, insert the following:

     SEC. __. PRIOR NOTICE OF RATE INCREASES REQUIRED.

       Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is 
     amended by adding at the end the following:
       ``(h) Advance Notice of Increase in Interest Rate 
     Required.--
       ``(1) In general.--In the case of any credit card account 
     under an open end consumer credit plan, no increase in any 
     annual percentage rate of interest (other than an increase 
     due to the expiration of any introductory percentage rate of 
     interest, or due solely to a change in another rate of 
     interest to which such rate is indexed)--

[[Page 3518]]

       ``(A) may take effect before the beginning of the billing 
     cycle which begins not less than 15 days after the obligor 
     receives notice of such increase; or
       ``(B) may apply to any outstanding balance of credit under 
     such plan as of the date of the notice of the increase 
     required under paragraph (1).
       ``(2) Notice of right to cancel.--The notice referred to in 
     paragraph (1) with respect to an increase in any annual 
     percentage rate of interest shall be made in a clear and 
     conspicuous manner and shall contain a brief statement of the 
     right of the obligor to cancel the account before the 
     effective date of the increase.''.

     SEC. __. FREEZE ON INTEREST RATE TERMS AND FEES ON CANCELED 
                   CARDS.

       Section 127 of the Truth in Lending Act (15 U.S.C. 1637), 
     is amended by adding at the end the following:
       ``(i) Freeze on Interest Rate Terms and Fees on Canceled 
     Cards.--If an obligor referred to in subsection (h) closes or 
     cancels a credit card account before the beginning of the 
     billing cycle referred to in subsection (h)(1)--
       ``(1) an annual percentage rate of interest applicable 
     after the cancellation with respect to the outstanding 
     balance on the account as of the date of cancellation may not 
     exceed any annual percentage rate of interest applicable with 
     respect to such balance under the terms and conditions in 
     effect before the date of the notice of any increase referred 
     to in subsection (h)(1); and
       ``(2) the repayment of the outstanding balance after the 
     cancellation shall be subject to all other terms and 
     conditions applicable with respect to such account before the 
     date of the notice of the increase referred to in subsection 
     (h).''.

  Mr. DODD. Mr. President, I briefly mentioned this amendment before. 
This amendment focuses on a abusive practice that I have to believe all 
of my colleagues would want to see done away with, this universal 
default practice. Let me explain what this means.
  Under a universal default, which almost all these companies now 
engage in, it says that credit card companies have the right to raise 
fees and rates, whenever they want, for any reason I choose. That 
language actually is included in some of the small print. Again, I 
believe that consumers have an important responsibility for the debts 
they incur. However, I think it is patently unfair, that if you are 
paying your minimum monthly balance to the credit card company, and for 
whatever reason you are not meeting your obligation to the car payment, 
the house payment, or the utility bill that you be subject to a 
universal default clause. And while I think the practice should be 
banned, if it is part of the credit card agreement, credit card 
companies are allowed to raise your rates even though you are meeting 
your obligation to them.
  This amendment simply restores some basic fairness in this 
arrangement. You can raise interest rates--but only prospectively on 
new purchases. However, it prohibits retroactively rate hikes, that is, 
raising the interest rate on purchases you may have made a week, a 
month, a year, or 2 years earlier.
  Let me make the point again. I understand why the credit card 
companies would like to do this. Obviously, they make more money doing 
it. But I think we have an obligation to see to it that there is a 
sense of fairness about all of this.
  That is what I am trying to do with this amendment. That is all this 
amendment does. It just says here you cannot apply these rates 
retroactively. On future purchases, fine. Again, I think the practice 
of universal default is unfair. If I have a contract with my friend 
from Alabama at a certain rate and I am meeting my responsibilities to 
him, he is lending money at 15 percent, and for whatever reason I have 
a contract with my friend from Georgia, and we have a dispute about my 
payment obligations to you, my friend from Alabama then can 
automatically raise my rate to 20 percent, 25 percent, or 30 percent 
because of my dispute with the Senator from Georgia.
  The idea that a credit card company can charge an initial interest 
rate that would have in the past been outlawed as usurious and then 
double or triple that rate for any reason it chooses is just plain 
wrong, in my view.
  If a phone bill is inadvertently mailed to the wrong address, you are 
disputing the bill that is not paid on time, does the mortgage rate on 
your home go up? No, but apparently your credit card interest rate can.
  Record number credit card companies have built-in universal default 
clauses in their agreements. ``Universal default complaints are 
definitely on the increase at a disturbing rate,'' says Paul Richard, 
director of the nonprofit Institute of Consumer Financial Education. 
More than one-third of all major credit card issuers now say they act 
on these clauses regularly. A recent survey found that a staggering 39 
percent of credit card issuers apply this universal default rate to 
consumers even if they have no late payment on their credit cards.
  A recent New York Times article entitled ``Plastic Trap, Soaring 
Interest Rate Compounds Credit Card Payments for Millions'' illustrates 
the point.

       Ed Sweibel was whittling down his mound of credit card debt 
     at an interest rate of 9.2 percent. The MBNA company had a 
     happy and profitable customer. But this past summer when MBNA 
     suddenly doubled the rate on his account, Mr. Sweibel joined 
     the growing number of irate card holders stunned by lenders' 
     harsh tactics. Mr. Sweibel, 58 years old, a semiretired 
     software engineer in Gilbert, AZ, was not pleased his minimum 
     monthly payment jumped from $502 in June to $895 in July. But 
     what really made him angry, he said, was the sense he was 
     being punished despite having held up his end of the bargain 
     with MBNA. ``I paid the bills the minute the envelope hit the 
     desk. All of a sudden in July they swapped it to 18 percent, 
     no warning, no reason. It was like I was blindsided.''
       Mr. Sweibel had stumbled into the new era of consumer 
     credit in which thousands of Americans are paying millions of 
     dollars each month in fees that they did not expect and that 
     strike them as unreasonable. Invoking clauses tucked into the 
     fine print, lenders are doubling or tripling interest rates 
     with little warning or explanation.

  What truly astounds me is the fact that credit card companies view 
the practice as completely legitimate. In fact, when in fine print they 
disclose they engage in this practice, the language they use is 
incredibly brazen. One credit card issuer states in its standard 
disclosure:

       We may change the rates, fees, and terms of your account at 
     any time for any reason.

  Rates, fees, and terms--is there anything left in the credit card 
contract that a consumer can count on staying the same? I understand 
why they would want to do this, but, again, I do not understand why the 
Congress should continue to allow them to continue this practice.
  As I pointed out at the outset of these remarks, I carry a copy of 
the U.S. Constitution with me. In Article I, section 8 of the Federal 
Constitution--the Framers decided--that it is our job to write the 
Bankruptcy Code. In the initial draft of the Constitution, the Framers 
thought this was a significant enough issue. It is hard to find any 
more complicated or difficult issue than bankruptcy, and yet the 
Framers said do it.
  Why did they do it? Again, the point I tried to make at the outset: 
The Framers wanted to give people a chance to get back on their feet. 
If we allow these credit card companies to constantly raise the bar--we 
will force future generations into never ending indebtedness. In the 
article I just read, Mr. Sweibel was trying to get rid of his debt and 
meet his obligations. No matter how diligent he was in paying his 
bills, his credit card company jacks up his interest rate--almost 
doubling it in one month because of a disagreement he had with some 
other obligation.
  That is wrong. Again, I understand why the credit card companies may 
want to get away with it, but we should not let them get away with it. 
We have an obligation to people, to make sure that people play fair, 
play by the rules, and act responsibly. It is irresponsible for a 
credit card company to be able to double and triple the interest rates 
on someone when they are meeting their obligations of that creditor. I 
think it is wrong and unfair. If we do not put our foot down and say it 
is wrong and unfair, they are going to continue to get away with it, 
and we are never going to see consumers get beyond the mountain of debt 
they are accumulating.
  Almost one-half of the $2.1 trillion in debt is consumer credit-card-
related debt. The savings rate is down to less than 1 percent in the 
country. Consumer debt is skyrocketing, and we are

[[Page 3519]]

handing these credit card companies a gift they could never have 
imagined when the Framers of the Constitution were around.
  We should not be allowing credit card companies to use farcical 
excuses to penalize unaware consumers who pay their bills on time.
  If a credit card company wants to change the rules of the game, they 
should not be allowed to reach back and set new terms and conditions to 
purchases made under previous agreements. This is just plain, basic 
fairness.
  If for some reason a credit card issuer views a customer as an 
increased credit risk, which is the purported justification for the 
universal default practice, then it can decide to only lend future 
credit at a higher rate or with different terms. Also, consumers must 
be given ample notice of this new credit decision so they can fully 
understand the changes in the new contract.
  This amendment is a necessary addition to the bill. It will not solve 
all the problems, but it will solve a major one, the universal default 
clauses.


                            Amendment No. 52

  I call up amendment No. 52 at this point, the one that was set aside.
  The PRESIDING OFFICER. The amendment is already pending.
  Mr. DODD. As I touched on briefly before, this amendment seeks to 
protect the most vulnerable of our nation's consumers--persons under 
the age of 21. According to Dr. Robert Manning, a professor at 
Rochester Institute of Technology, one of the fastest growing groups of 
bankruptcy filers are people under the age of 25.
  In fact, the number of bankruptcies among those under the age of 25 
is more than 6 times that of only 5 years ago, according to the 
American Bankruptcy Institute. One of the most troubling developments 
in the hotly contested battle of credit card issuers to sign up new 
customers has been the aggressive way in which they target people under 
the age of 21. Solicitations to this group have become more intense for 
a variety of reasons which I have mentioned already.
  Obviously, we know about consumer loyalties. It is also an age group 
in which brand loyalty can be established. However, some credit card 
issuers have gone too far. Again, I am not opposed to people under the 
age of 21 having credit cards.
  Credit cards, are a great asset to a lot of people. I am not opposed 
to them, but they must be issued and used responsibly.
  I mentioned the letter earlier of the 7-year-old, which is just plain 
ridiculous. What also worries me is what is happening with these 
younger people on college campuses around the country.
  Credit card issuers are deeply involved in the business of enticing 
colleges and universities to help promote their products. Many colleges 
receive as much as 1 percent of all student charges from credit card 
issuers in return for marketing or affinity agreements. Even those 
colleges that do not enter into such agreements are making money.
  Robert Bugai, the President of the College Marketing Intelligence, 
told the American Banker that colleges charge up to $400 per day for 
each credit card company that sets up a table on campus. That can run 
into tens of thousands of dollars by the end of just one semester.
  A ``60 Minutes II'' piece a number of years ago vividly illustrated 
the impact that credit card debt is having on college students. A crew 
from the show was on a major public university, and with the use of 
hidden cameras filmed vendors pushing free T-shirts, hats, and other 
enticements for credit applications. The ``60 Minutes'' program 
revealed that the university was being paid $13 million over 10 years 
by a credit card company for the right to have a presence on campus and 
to use the university logo on its cards.
  This public university was making money off its students who used 
credit cards, the report said. As part of the agreement, the university 
receives four-tenths of a percent of each purchase made with the cards. 
Unbelievably, this university has a vested interest in getting their 
students into as much debt as possible.
  Again, we have kids who are going--the anecdotal stories of the debt 
they are incurring is just staggering. We have watched it actually 
almost double. Debt among this group has gone from around $1,800 a year 
to over $3,000 a year.
  Again, this amendment requires one of three things. Firstly, it 
requires that one can prove that they have the financial resources to 
repay debts incurred. That is simple enough. Or have someone cosign the 
application, or just agree to take a short course in credit counseling. 
Any one of those three things and a person gets their card.
  To push these cards out with no spending limits on them at all, 
knowing what is inevitably going to happen--bankruptcy--is 
irresponsible. Again, I understand why the credit card companies want 
to do it. I do not understand why we want to allow them to do it in 
such an unfettered way, knowing what we know now. If they were doing 
this for the first time and we did not know the implications or the 
effects of their actions, I could understand maybe why some people 
would be willing to go along with it. But we now know what is 
happening. We are watching consumer debt among young people double over 
the last several years.
  Why would we not just say, look, prove you can pay your debts, prove 
you have some financial means, have someone cosign with you, or be 
willing to take a credit counseling course? These are not heavy burdens 
to make. It seems to me the very least we could do, again, acting 
responsibly. If this bill says consumers must act more responsibly, 
should we not commensurately ask the industry to act responsibly as 
well?
  When universities are collecting $13 million over 10 years in fees to 
allow a credit card company to be on their campus, and they are getting 
four-tenths of 1 percent on every purchase made by a student on campus, 
that is a university encouraging debt among its kids. That is just 
wrong, in my view.
  So we are requiring a cosigner, proving a person has a source of 
income, or take some counseling so the kids have some idea of what they 
are getting into.
  Again, just some basic statistics, and I will wrap up. Our personal 
savings rate is at an all-time low. The last quarter in the year 2004, 
less than one-half of 1 percent was the national annual savings rate. 
That is down from
4\1/2\ percent 10 years ago. It was at 1 percent last year. We are 
going in the wrong direction in terms of encouraging people to save. 
Consumer debt is now at $2.1 trillion, and almost half of that, $800 
billion, is credit card debt--$2 billion alone in the month of 
December. The consumer debt is mounting, and there needs to be a 
commensurate sense of responsibility by these credit card companies. 
They are making incredible profits with interest rates at 18, 25, 30 
percent, when one can borrow money to buy a home for 4\1/2\ or 5 
percent. Yet credit card companies are charging these incredibly high 
rates, making staggering profits.
  The average income of a person taking the bankruptcy act is $20,000 a 
year. The reason they are taking the bankruptcy act is because of 
medical expenses, job loss, or divorce. These are not people living 
lavishly. Default rates are actually dropping. What is the 
justification and rationale for a bill that makes it easier for these 
credit card companies to collect and prevents consumers from getting 
back on their feet again?
  Particularly disturbing to me is this change, after 100 years of law, 
where we sought to protect single women raising children with child 
support and alimony payments by allowing the discharge of these other 
obligations and seeing to it that they would focus on meeting their 
family obligations. We are now going to have the credit card companies 
competing with these children and these families, and I do not even 
have to say who is going to win that battle.
  A team of lawyers representing very rich credit card companies are 
always going to beat that family out there. They are going to get that 
father, that

[[Page 3520]]

husband, or that woman, to pay their unsecured debts to that credit 
card company, and that child and that family will lose. Why, after 100 
years, are we changing the law protecting families and children? I 
think that is a huge mistake. I think it is going to come back to cause 
us a great deal of pain. This bill needs fundamental change.
  I wish people would take time and look at these things. I understand 
there is a sentiment to reject all amendments, but we ought to ask 
these companies to act more responsibly. We are not going to do it, but 
I think, in time, we are going to pay an awful price. When we ought to 
be encouraging more personal savings, and when we ought to be reducing 
consumer debt, we are getting more consumer debt and less and less 
personal savings. We are allowing credit card companies to gouge 
consumers and never let average people who get into trouble--and, 
again, a lot of them, through no fault of their own--to get back on 
their feet again. That is what we ought to be trying to do.
  When it is the appropriate time I will ask for votes on these 
amendments. I realize it will not be until next week. I have taken a 
lot of time, and I express my appreciation to my friend from Alabama 
who has been very patient, listening to me going on about this bill, 
and I thank the Presiding Officer for his patience as well in listening 
to this, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I want to express my congratulations to 
Papa Dodd on his new daughter, born this week to join her sister Grace. 
We wish Jackie and the family well. I know how excited he has been over 
young Grace. I know how excited he is over this one. He said he lost a 
lot of sleep this week, he is a little tired, but he looked pretty 
vigorous to me in debate. I wish my sincerest best to you, and my wife 
Mary sends her regards, too.
  I am disappointed Senator Dodd is not supportive, as I understand it, 
of this bill. It is essentially the same bill we passed during the 
107th Congress, 83 to 15. It came out of committee with a strong 
bipartisan vote again this year. This is the fourth time it has come 
up. It passed one time 97 to 1 in the Senate. This is the fourth time 
it is up. I believe it will become law this year.
  I want to say there are some things here that my good friend has 
stated that are just not correct. I hope really he will think about and 
reevaluate some of his conclusions on the legislation. I have to say, 
there is a small group of leftists who are determined to block this 
bill. They seem to believe there is something wrong if a corporation, 
even a credit card company, gives money to an American citizen for them 
to want to be paid back, and if they don't pay it back, it is the 
credit card company's fault. They lose their money and they are an evil 
force here. This is really an odd argument, I suggest.
  I also argue, flatly state, that I disagree with the statement that 
the only purpose of this bill is to help the credit card companies make 
money. That is absolutely not correct. It is really offensive to 
suggest that to the 83 Members of this Senate who have been working on 
this bill for quite a number of years.
  Let me say a couple of things that I believe are indisputable. Philip 
Strauss, attorney for San Francisco Child Support Services, for 28 
years enforcing child support obligations, testified before our 
Judiciary Committee, of which I am a member. I want to deal with some 
allegations that have been floated by--I think primarily it is the 
Elizabeth Warren view of this bankruptcy bill. In an effort to smear 
the bill and defeat the bill, they have conjured up this idea, somehow, 
that children and spouses are going to be harmed by this bankruptcy 
bill. It is absolutely incorrect. It is abysmally wrong. Let me tell 
you what this expert said.

       It is my opinion and the opinion of every professional 
     support collector with whom I have discussed the issue that 
     the support amendments contained as part of the bill, 
     contained in section 211-219 of S. 256, the bankruptcy bill, 
     will revolutionize enforcement of support organizations 
     against debtors in bankruptcy.

  Child support obligations will be revolutionized.
  This legislation has been endorsed by the National Child Support 
Enforcement Association. Maybe some of those who have been saying this 
hurts children ought to interview the professionals--the National 
Association of Attorneys General, the National District Attorneys 
Association, both of which have important roles to play in collecting 
enforcement obligations for children--child support.
  Mr. Philip Strauss, the attorney who spent 28 years in bankruptcy 
court collecting these debts for women and children against spouses and 
deadbeat dads who bankrupt against their debts, had this to say. The 
provisions in the bill are ``a wish list for child support attorneys.'' 
That is what he has been looking for.
  Under the current law, if we don't change it by passing this bill, 
the law that will remain in effect has alimony and child support 
payments No. 7 on the list of priorities for paying nonsecurity debt--
No. 7 in the list. We moved it up to the top. Everybody who knows 
anything about this bill knows that women and children and their 
alimony and child support is going to be secured in a way it never has 
been before. It is offensive what Professor Warren is saying about this 
bill. This college professor keeps writing things that are not so. I 
don't know how--I guess she has tenure.
  She also is the one who has gone around this country and promoted the 
idea, and had a press conference a few weeks ago, to announce that 
medical bills are the cause of everything. She says that all the people 
filing, half the people plus, 54 percent of the people who file 
bankruptcy are in bankruptcy court because of medical bills.
  What do we know about that as a fact? She had a survey that indicated 
that. Do you know what we discovered, when you read the fine print of 
her survey? It includes gambling debts. It includes alcoholism and drug 
problems.
  This is what the United States Trustee Program found in a much more 
extensive survey. Hers I believe had 1,700 people. This one has 5,203 
cases. U.S. trustees are involved in bankruptcy courts in 48 States. 
They deal with these cases. They were asked to survey the filings in 
their districts to find out what you list on your filing as your debts, 
who you owe. You actually list who it is. So, if it is a doctor bill, 
it is on there. If you don't put it on there you don't wipe out that 
debt and you remain obligated to pay it, so everybody puts every debt 
they have on the list so it can be wiped out when they file bankruptcy. 
What they found was, this professional study of 5,000 cases, not 
interviewing debtors but looking at what they put on their form, they 
found that only slightly more than 5 percent of the total unsecured 
debt reported in those cases was medically related. Only 5 percent was 
medically related. This is not 50 percent of the cases in bankruptcy 
being caused by medical--only 5 percent of them, of the total debt, was 
medical.
  It also revealed that 54 percent of the debtors, when they list all 
their debts, and they have a long list of them, listed no medical debts 
whatsoever. And of the people who listed some medical debts, 90 percent 
of those who listed a medical debt listed a medical debt of less than 
$5,000.
  For some people there is no doubt that medical debts are a cause for 
bankruptcy. I do not doubt that. But this idea that we ought not reform 
bankruptcy, that we ought to assume that there is no fraud and abuse in 
bankruptcy and the idea that everybody is in bankruptcy because of 
medical debts is just not so.
  It is just not; it is a fiction. We need to get it out of our heads.
  There is another suggestion that poor people are going to have to pay 
back some of their debt. This is ``pressure on poor people,'' they say; 
``this is class warfare.'' Poor people now are going to have to pay 
back their debt, and they are going to be harmed. We discussed the 
problem in bankruptcy.
  The most offensive, clearly wrong thing about the current bankruptcy 
problem in America is that people making $200,000 a year, if they run 
up a couple hundred thousand dollars in

[[Page 3521]]

debt, those people do not have to pay a dime. They can wipe out the 
entire debt. Shouldn't they pay some of it back? The average American 
citizen works hard to pay his or her debts back. They save; they do not 
take vacations; they do not buy a new car, they buy an older car so 
they can pay their debt. Some doctors, lawyers--we have examples of 
them--know how the bankruptcy works. They do not want to pay their 
debt. They wipe them out when they could easily have paid them back.
  We reached a bipartisan consensus to have a means test which received 
83 votes on the floor of the Senate the last time. If you make below 
median income your State, then you don't have to pay anything back. 
Eighty percent of the people make below median income. Some people who 
make above median income have special expenses, and we allowed them to 
take an exception. It really looks as though maybe only 10 to 13 
percent of the people who file bankruptcy would be impacted by the 
means test.
  The wealthy, why shouldn't they pay? I ask you, why should somebody 
not pay the local hospital when they have plenty of money with which to 
pay their debts?
  What happens if you make median income and you don't have special 
circumstances? What should happen? I think you ought to pay some of it 
back. That is what the American people think, and that is what this 
Congress thinks.
  What would happen is this: They would move into chapter 13, the 
bankruptcy chapter, which allows for repayment of a portion of the 
debt. The judge would look at the person's income, how much he believes 
they can pay back over a period of no more than 5 years, and order them 
to pay back some portion of those debts. What is wrong with that?
  I hear my colleagues complain about the bill saying: I don't mind 
rich people paying back. That is what the bill does. It creates a safe 
harbor, an absolute wall for lower income people, people making below 
median income in America. Eighty percent of the filers of bankruptcy 
don't have to go into chapter 13. They don't have to pay a dime back.
  Let's just say this: Chapter 13 is not so bad. It has a lot of 
sanctions. You can keep your car and ``cram down'' the value of that 
car, hold on to your house better, and other things that sometimes are 
an advantage. A lot of States use chapter 13 a lot. In Alabama, almost 
half of the filers are chapter 13 filers.
  Just because somebody is going into chapter 13 and pays some back 
does not mean they are being oppressed.
  ``Oh, you know.'' Well, we are going to complain about credit cards 
today. A couple of days ago, it was about health insurance, we need to 
reform health insurance. If we reform health insurance, they argue, we 
wouldn't have bankruptcy.
  If we don't fix credit cards and interest rates and truth in lending 
and banking issues--they are not part of the Judiciary Committee but 
part of the Banking Committee's financial lending portfolio of issues--
we have to deal with them. We can't deal with bankruptcy. This is a 
bankruptcy bill.
  This bill would create a workable process for filing bankruptcy in 
Federal court, so fairness occurs based on the debt that people have 
incurred. If you want to deal with the debts being incurred and giving 
more money, or have a welfare increase, whatever you want to do, let us 
propose that somewhere else to give people more money. But once they 
choose to file bankruptcy, let us create a system that is fair.

       Let us say that people who have higher incomes and can pay 
     back some of it, why don't they pay it back?

  That is what I think we ought to do.
  It has been suggested. We have a lot of complaints. Members of this 
body like to talk about some minor child getting a credit card.
  Let me say that any minor in America who gets a credit card and goes 
down and runs up $5,000 worth of bills on that credit card does not 
have to pay a dime. The company that wrongly sent them that credit card 
eats the $5,000 loss because you can't sue a minor on such a debt. They 
can't be made to pay it. Who is the loser, if they sent a credit card 
to some young person and they used it, but the credit card company 
itself? That is not the issue before us.
  Let us fix this bankruptcy bill that allows too much abuse, too much 
legal cost for people who go to court. Let us keep the legal fees down. 
Let us make the system fairer. Let us make sure the great protections 
of a fresh start for Americans is still alive and well. And for those 
median income and below, there is no change fundamentally in this bill 
whatsoever except they have to have some financial counseling, some 
credit counseling, and they can start all over again and wipe out all 
of their debt. But if they make above that and can pay some of it back, 
let us have them pay some back.
  I don't think that is unfair or unusual or upsetting to most people 
who considered the bill, and that is why we have had such good support 
for it.
  There was some suggestion that we have seen some reduction in 
filings. I hear 50,000--50,000 off a number of 1.6 million. About a 
little over 20 years ago, in 1980, there were 287,000 bankruptcy 
filings a year. Now they hit 1.6 million, and there is the suggestion 
that because it has dropped to 1.5, that somehow we ought not to fix 
this system that we know from experience--and we have been watching it 
for some time as a problem. Let us fix this problem. Whether it is 1.2 
million in bankruptcy, 2 million in bankruptcy, we have a problem with 
the system. Let us fix it.
  Let us treat people fairly. If you can pay some of it back, you 
shouldn't get off scot-free. If you make below median income, you get 
to wipe out all of your debts and not pay a dime to the people you owe 
unless you intentionally and deliberately inflict harm on that.
  It is the same law we have always had. Those debts are not 
dischargeable in bankruptcy.
  Mr. President, I ask unanimous consent to have printed in the Record 
a letter from the Department of Justice on the data they have obtained 
from the U.S. Trustees on the issue of medical debts, and I commend to 
my colleagues the February 10, 2005, testimony of Philip Strauss before 
the Senate Judiciary Committee on the benefits of the bill to women and 
children which he states is indisputable and represents a wish list of 
items of those who collect child support for women and children.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                       U.S. Department of Justice,


                                Office of Legislative Affairs,

                                                   Washington, DC.
     Hon. Charles E. Grassley,
     U.S. Senate,
     Washington, DC.
       Dear Senator Grassley: This responds to your letter, dated 
     February 5, 2005, requesting information from the Executive 
     Office for United States Trustees (EOUST) concerning medical 
     debts of those who file for bankruptcy protection and the 
     recently published study in the Health Affairs journal 
     (``Market Watch: Illness and Injury As Contributors to 
     Bankruptcy'').
       It is the practice of the U.S. Trustee Program (USTP) not 
     to comment on data collected and analyses performed by 
     outside researchers for reasons that include difficulties in 
     verifying their data and research methodologies. It is noted 
     in the cited study of 1,771 filers that very broad 
     definitions of ``medical bankruptcies'' are used. The authors 
     considered a ``Major Medical Bankruptcy'' to include cases in 
     which debtor reported any of the following: illness or injury 
     as a reason for filing bankruptcy, uncovered medical bills 
     exceeding $1,000 in the past two years, loss of two weeks of 
     work-related income due to illness or injury, or mortgage of 
     home to pay medical bills. The authors considered ``Any 
     Medical Bankruptcy'' to include cases containing any of the 
     factors above or birth or death in the debtor's family or 
     birth or death in the debtor's family or addiction or 
     uncontrolled gambling.
       Enclosed in a description of related USTP data and a 
     summary of findings from analysis of a similar but larger 
     sample of bankruptcy cases (5,203) utilizing data from 
     official records during approximately the same time period as 
     the study cited above. It should be noted that reported 
     credit card debt also may reflect medical-related debts, but 
     are not shown in these findings.
       In general, the data describing medical-related expenses 
     contained in official documents filed by chapter 7 debtors 
     reveal that

[[Page 3522]]

     slightly more than 5 percent of their general unsecured debt 
     is medical-related. The conclusion that almost 50 percent of 
     consumer bankruptcies are ``medical related'' requires a 
     broad definition and generally is not substantiated by the 
     official documents filed by debtors.
       We hope this information is responsive to your inquiry. If 
     we can be of further assistance, please do not hesitate to 
     contact this office.
           Sincerely,
                                             William E. Moschella,
                                       Assistant Attorney General.
       Enclosure.
                                  ____


           Summary of USTP Data and Findings on Medical Debt


                               USTP Data

       The USTP database contains 5,203 no asset chapter 7 cases 
     that were closed between 2000 and 2002. The database includes 
     cases filed in 48 States, Washington, DC and Puerto Rico 
     proportionate to chapter 7 filings in each location. The 
     database contains no cases from North Carolina and Alabama, 
     because those States are served by Bankruptcy Administrators. 
     Nearly all of these cases had been filed about 4 months prior 
     to closing.
       On each petition we reviewed Schedule F of the petition to 
     see if any medical debts were listed. This would include 
     where the creditor was a doctor, hospital or other treatment 
     facility, medical collection agency, or if the debt was in 
     any way identifiable as being medical in origin.
       This accounting would not have identified medical debts 
     charged on credit cards, placed with certain collection 
     agencies, or paid prior to the bankruptcy filings.


                                findings

     All Debtors (N = 5,203):
       54 percent listed no medical debt.
       Medical debt accounted for 5.5 percent of the total general 
     unsecured debt.
       90.1 percent reported medical debts less than $5,000.
       1 percent of cases accounted for 36.5 percent of medical 
     debt.
       Less than 10 percent of all cases represent 80 percent of 
     all reported medical debt.
     Cases Reporting Medical Debts (N = 2,391):
       Among the debtors reporting medical debt, the average 
     medical debt was $4,978 per case.
       78.4 percent reported medical debts below $5,000 (average 
     of $1,212 for this group).
       21.6 percent reported 80.9 percent of the total medical 
     debt.
       Medical debts accounted for 13.0 percent of the total 
     general unsecured debt for those reporting medical debt.

  Mr. SESSIONS. Mr. President, I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Thank you, Mr. President.
  First, let me say to my friend, the Senator from Alabama, how much I 
appreciate his eloquence on this bill and his very successful attempt 
to explain to the American people, as well as to us, what is at stake 
here, and to knock down some myths that are being used to try to worry 
people when, in fact, there is no reason for people to be worried about 
this legislation.
  Indeed, as has been reflected before, this bill will pass as it has 
previously, and will pass by a large bipartisan majority, and for good 
reason.


                              Free Speech

  Mr. CORNYN. Mr. President, I want to turn to another subject briefly.
  The reason I changed the subject from bankruptcy to this is provoked 
by an op-ed piece that I read today, and that others in this body may 
have read, published in the Washington Post. This article is called `` 
`Nuking' Free Speech,'' certainly an attention-grabbing headline.
  As it turns out, reading the op-ed, it is what I can only describe as 
a breathless statement made in writing by one of our distinguished 
colleagues, claiming there are efforts to reinstate majority rule when 
it comes to the procedures that govern our advice and consent function; 
that is, the procedures by which we evaluate Federal judges sent to the 
Senate for our consideration under our advice and consent function.
  Somehow, the opponents of reinstating the 200-and-more year tradition 
of majority rule when it comes to confirming Federal judges have been 
able to convince the press and others that this represents a nuclear 
option. Hence, the title and, hence, the first sentence in this op-ed.
  It says:

       A ``nuclear option'' is targeting the Senate.

  That is unfortunate because it suggests people who want to reinstate 
majority rule when it comes to advice and consent on the President's 
judicial nominees are somehow doing something radical, something 
dangerous, something potentially catastrophic when, in fact, that is 
not the case.
  As many know, we have seen use of a tactic which has been labeled 
obstructionist, it is fair to call it; that is, the use of the 
filibuster, to block the President's judicial nominees from getting an 
up-or-down vote. Indeed, it is that obstructionist procedure that has 
never been used in the history of this country before the last 
Congress. If there is a nuclear tactic being used here, I submit it is 
the use of that obstruction where a willful minority blocks a 
bipartisan majority from voting on the President's judicial nominees. 
That radical change from Senate tradition over the 200-plus years this 
body has existed is the radical change. For those who believe we ought 
to restore that tradition which has been taken down a very dangerous 
road these last 2 years with obstruction, I submit we are doing nothing 
more than trying to restore that Senate tradition and majority rule; 
and those who oppose reestablishing majority rule are the ones who are 
taking a radical, a dangerous position.
  The senior Senator from West Virginia, the author of this op-ed, 
claims that 20 men and women have been renominated by the President to 
the Federal bench where 7 of those were rejected last year. Plainly, 
that is false. How can it be said the Senate has rejected a nominee 
when we were prevented from having an up-or-down vote? Clearly, that is 
not true.
  This op-ed piece goes on to suggest that as a result of those who 
believe we ought to reestablish this 200-year-long tradition of 
majority rule when it comes to confirming judicial nominees, this op-ed 
goes on to say it starts with shutting off debate on judges, but it 
will not end there. Ultimately, he says, if Senators are denied their 
right to free speech on judicial nominations, an attack on extended 
debate on all other matters cannot be far behind.
  The distinguished senior Senator from West Virginia has been in the 
Senate a long time. Much of his service he is justly proud of. But one 
of the dangers of being in the Senate for a long time is that you go on 
record making statements which have the potential of contradicting 
one's current statements. Indeed, that has been the case when it comes 
to the senior Senator from West Virginia.
  For example, the very procedure which he now decries as nuking free 
speech, he himself championed in 1977, in 1979, in 1980, in 1987. 
Hardly can it be true that today trying to reinstate majority rule as 
he himself did on those four occasions on the dates of the years 
mentioned, hardly can that be nuking free speech. In fairness, he ought 
to concede what we are doing is nothing radical. Indeed, it is doing 
the same thing he himself did four times earlier.
  The other thing that is unfortunate about this claim made in this op-
ed is that it represents the latest in a continuing series of arguments 
being made in the Judiciary Committee. I am thinking now of the senior 
Senator from New York, Mr. Schumer, who asked the Attorney General, 
then nominee, Alberto Gonzales, of his opinion on this ``nuclear 
option.'' Later we heard speeches in the Senate from the distinguished 
senior Senator from Massachusetts, Mr. Kennedy, and together the three 
Senators making speeches, raising fears of alarm about the so-called 
nuclear option have raised the concern, at least on my part, that if 
left unresponded to, if the record is left uncorrected, people might 
indeed begin to believe what we are suggesting by restoring this 200-
year tradition of majority rule is radical when it is not.
  One of the dangers of being here a while is you may have been on 
record directly and diametrically opposed to what one is saying today. 
That is the case with the senior Senator from West Virginia.
  In 1979 on this same issue, he said:

       This Congress is not obliged to be bound by the dead hand 
     of the past . . .

  He said:

       Any Member of this body knows that the next Congress would 
     not heed that law . . .

  He is talking about a hypothetical law where a Congress would pass a 
bill

[[Page 3523]]

that says to change this you need a two-thirds majority requirement.
  He said:

       Any Member of this body knows that the next Congress would 
     not heed that law and would proceed to change it and would 
     proceed to change it and would vote repeal of it by a 
     majority vote.

  The senior Senator from West Virginia was correct in 1979. He is 
plainly incorrect today in claiming now that a 60-vote threshold is 
required in order to get an up-or-down vote on the President's judicial 
nominees.
  The senior Senator from Massachusetts, Mr. Kennedy, spoke on this 
same matter in 1975--quite a time ago--when he served in this body as a 
much younger man. He said on this same subject:

       The simple fact is the two-thirds majority required . . .

under the filibuster, under the cloture rules

     is too difficult to obtain. Too much Senate business is too 
     often obstructed. The will of the majority is too easily 
     thwarted. And it is not the Senate, but the Nation's people 
     who suffer the consequences.

  I agree with the senior Senator from Massachusetts, speaking in 1975. 
I disagree with the senior Senator speaking in 2005 on the same 
subject. He made the case very clearly back then. It is the same case 
that applies today. He said that the immediate issue is whether a 
simple majority of the Senate is entitled to change the Senate rules. 
Although the procedural issues are complex, it is clear this question 
should be settled by majority vote.
  So it is clear from the record that what Senator Kennedy, Senator 
Byrd, and Senator Schumer himself back in the year 2000 suggested, 
which was the majority should govern, should be the rule today. It 
should be the rule when Republicans control the White House and control 
the Senate. It should be the case were there a Democrat in the White 
House or the Democrats controlled the Senate. In other words, what we 
are talking about today is an important principle. And principles 
should not change with political convenience, which apparently is the 
case today.
  For those who took the same position back then as I and others 
believe should be applied today, then somehow it is suggested that this 
majority rule option--which is what I would prefer to call what they 
refer to as the nuclear option or the constitutional option--that is 
all we are asking for, a return to that majority rule, which they 
championed years ago and which they, unfortunately, are obstructing 
today in suggesting that somehow it is a violation of our rules and of 
our precedents.
  Unfortunately, we learn, those of us who run for office, those of us 
who are engaged in the rough and tumble of debate in the political 
arena, we know that an unresponded to allegation or attack is often an 
attack or an allegation believed. That is why it is so important, to 
set the record straight.
  One of the concerns Senator Byrd expressed in this op-ed, if I can 
sort of get down to the bottom of it, is he thinks what we are 
suggesting, the return to majority rule, is somehow going to stifle 
debate. Well, the fact is, we have had more than 2 years, going on 3 
years, to debate the President's judicial nominees who have been 
filibustered. Surely, any reasonable person would agree that 2 or 3 
years is enough debate on any nominee, when all we are asking for is 
simply an up-or-down vote.
  One other distinction I think is noteworthy. What we are talking 
about is not restricting debate in any way on legislative business, 
which, of course, is exclusively within the purview of the Congress. 
And if we want to pass a rule that says we are not going to have an up-
or-down vote on legislation unless 60 Senators agree that we should 
close off debate, I think that is exclusively within our purview 
because it does not speak to the constitutional authority of power of 
any other branch of Government.
  But when we say--and the President is given the constitutional 
responsibility to nominate people to the Federal bench--that our advice 
and consent function cannot occur unless 60 Senators agree to close off 
debate so we can have an up-or-down vote, that does not merely infringe 
on our authority as the Senate, it infringes on the constitutional 
power of this President to nominate good and qualified people to the 
Federal bench, and then to have a debate, to have a searching inquiry 
into their qualifications and background, but ultimately then to have a 
vote, if a majority stand ready to confirm these nominees.
  Surely, everyone would agree that it would be wrong to say it takes a 
51-percent vote to elect a Democrat to office but it somehow should 
take a 60-percent vote to elect a Republican to office. In a very odd 
sort of way, that is an analogy to what Senator Byrd, Senator Kennedy, 
Senator Schumer, and others on their side of the aisle have suggested.
  Why in the world, after more than 200 years, when the practice has 
been not to filibuster judges but to allow an up-or-down vote when a 
bipartisan majority stand ready to vote on them, should the rules 
change when this President is elected to the White House and when 
Republicans have a majority in the Senate?
  Well, of course, that is an unprincipled approach. It is merely a way 
of saying we have an argument for why we ought to be able to obstruct 
this President from getting the nominees he wants voted on to the 
Federal bench. No one is suggesting, of course, that any Senator do 
anything other than vote their conscience. If any Senator feels there 
is just cause for them to vote against a nominee, then they should do 
so. And I trust they will. But no Senator and no group of Senators has 
the authority to block a bipartisan majority of this Senate from doing 
its solemn duty under the Constitution. Yet that is precisely what has 
happened time and time and time again by an obstinate minority who last 
Congress filibustered 10 different judges, preventing that up-or-down 
vote from occurring.
  We have tried to work with our colleagues on the other side. I 
remember the Democratic leader, when asked whether his approach to 
leadership on this and other issues would change with the change of 
Congress and with his ascension to Democratic leader, said: I would 
rather dance than fight. What it suggested to me was he was going to be 
amenable to working together. I know he is a tough advocate for his 
side of any argument, and as leader has a responsibility to his caucus 
to represent the views of his caucus. But it suggested to me perhaps we 
would have a fresh start and a new attitude when it came to judicial 
filibusters.
  But, indeed, time and time again we have seen that is not apparently 
the case. And while we have not yet had to go to a vote on the floor on 
these judges who have been filibustered in the past, we will very soon. 
We know also that in addition to these circuit court nominees, we are 
likely to have a vacancy to the U.S. Supreme Court before very long, 
where, believe me, all this will have been merely a prelude to what 
will be a vigorous debate, which will consume virtually everything else 
we do, because people understand that those who are unsuccessful in 
getting their views enacted into law through the political process know 
that having judges who are confirmed who believe that a judge should be 
an umpire and enforce political decisions rather than make political 
decisions from the bench represents a threat to their agenda.
  But none of us have the right to use unconstitutional means, which 
these filibusters are, to prevent the people of this body, to prevent 
this President, from doing our constitutional duty. For them to suggest 
trying to restore 200 years of tradition, trying to restore majority 
rule, doing the very things they themselves have advocated and done in 
the past, is somehow a nuclear option is blatantly false.
  So, unfortunately, it is necessary, for me and others to lay the 
record straight. I trust that fairminded people, looking at the record, 
looking at the facts, will realize what we are suggesting is not a 
nuclear option. What we are suggesting is perhaps a constitutional 
option. What we are suggesting is a restoration of the majority

[[Page 3524]]

rule option, but it is nothing radical, and it is, indeed, in keeping 
not only with the traditions of the Senate but also in keeping with the 
Constitution and laws of the United States.
  The Constitution is abundantly clear when supermajorities are 
required in order to perform a certain function. For example, to amend 
the Constitution, it talks explicitly about the requirement of a two-
thirds majority and ratification by three-quarters of the States. It is 
also very clear that a supermajority is required to ratify treaties. 
But nowhere within that document, that foundation of our laws, the 
Constitution, is it suggested that more than a majority rule is 
required in order to provide advice and consent when it comes to the 
President's judicial nominees.
  I appreciate the opportunity and the patience of my friend, the 
Senator from Georgia, who I know is going to speak next, allowing me to 
correct the record and I hope better inform the American people and our 
colleagues about exactly what is going on. What is going on is that we 
are required to do what the people of our respective States have sent 
us here to do, and that is to vote. We have a tradition of lengthy 
debate and opportunity for any Senator to speak their mind on any 
subject that they care to speak on, but ultimately we are obligated by 
our oath and by the Constitution that governs all Americans to have an 
up-or-down vote, especially when a bipartisan majority stands ready to 
confirm, which is the case here. No Senator, no person, no collection 
of persons has any right to demand anything more.
  Unfortunately, this has gone on for too long. Good and distinguished 
nominees of this President have not only been denied the opportunity to 
have an up-or-down vote but unfortunately have been smeared as part of 
the process far too often. I believe what we need is a fresh start. We 
need a fair process, one that will apply to Democrats as well as 
Republicans, and one that will reflect the kind of honor that should be 
reflected on this institution. Unfortunately, that has not been the 
case. We have somehow allowed ourselves to veer off the path that the 
Constitution lays out for us. But we do have a chance, if necessary, if 
the Democratic leadership is going to persist in this unconstitutional 
blockade and obstruction of the President's nominees, for us to correct 
what has gone on for too long. Indeed, I hope that will not be 
necessary. Ultimately the decision is going to be theirs.
  We have been patient. We have explained our position. We have 
listened carefully to their arguments. We have listened to their 
objections. Frankly, we find them to be firmly planted on both sides of 
this issue.
  I hope those listening and colleagues in the Chamber will now 
understand a little bit better about why it is so important for us to 
reinstate this more than 200-year tradition, indeed this constitutional 
mandate that binds all of us as Americans to majority rule restoration.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. ISAKSON. Mr. President, I ask unanimous consent to address the 
Senate as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Tillie Fowler

  Mr. ISAKSON. Mr. President, at this precise minute and this precise 
hour in Jacksonville, FL, countless friends and admirers are gathering 
to pay tribute to Tillie Fowler. It is only fitting and proper that in 
this Chamber this Congress do the same.
  For me personally, it is more than just the loss of a colleague. I 
served with Tillie's dad, Culver Kidd, a State senator in Georgia for 
years when I served in the legislature--colorful and distinguished, a 
leading citizen. Her brother Rusty is a warm and trusted friend. Her 
daughter Tillie worked for me the first 4 years I served in the House 
of Representatives. I honor, admire, and respect her loving husband 
Buck who, together with Tillie, has meant so much to me personally in 
my career.
  I know the bible teaches us in the book and chapter of Ecclesiastes 
that there is a time for everything, a time to live and a time to die. 
But there are some times that it is so difficult to accept, the loss of 
one so vibrant and so important, not only to their community but to 
their country. Such is the case with Tillie Fowler.
  I know that her family, gathered today at this moment in 
Jacksonville, FL, would want us in the Senate and in this Congress, in 
this building today, to pay tribute to the legacy of Tillie Fowler: an 
accomplished attorney, a loving wife, a devoted mother, a committed 
servant of the people she represented, an honored Member of the United 
States House of representatives, a lady who became the highest elected 
woman in leadership in the Congress of the United States at the time 
she ascended to the position of vice chairman of the Republican 
conference in the majority of the House, respected by both sides of the 
aisle as the most formidable and knowledgeable member of the Armed 
Services Committee in the House, one who had the temperament and the 
ability to calm the waves of partisanship and point to the direction 
that we all knew we should go, and one that would also stop to help, 
regardless of the need of an individual.
  In fact, on Tuesday of this week, just one day after she was 
stricken, I was to have had an appointment in my office in the Russell 
office building with Tillie Fowler. Obviously, because of her illness, 
she could not come. But the person she was going to introduce me to 
could. Only a Tillie Fowler would have sent to me the new director of 
the largest public and charitable hospital in Georgia and the largest 
trauma center in our State because she was spending part of her time 
trying to see to it that those that help others got help themselves.
  It was an honor for me to serve in the House with Tillie Fowler. It 
is a privilege for me to stand here today in the Senate and pay tribute 
to our colleague. On behalf of all the Members of this Senate, we 
extend our deepest sympathy and condolences to her husband Buck, her 
daughter Elizabeth, her daughter Tillie, and all of her extended 
family.
  Mr. NELSON of Florida. Mr. President, it was with great sadness that 
I learned of the passing of Tillie Fowler, a great friend, dedicated 
public servant, and remarkable woman.
  It is difficult to think about Florida politics without thinking 
about Tillie Fowler. She was a woman with strong values, political 
acumen and honor. I was lucky to have known her and, more importantly, 
Florida was lucky to have had her represent us in the U.S. House of 
Representatives.
  She is an inspiration to Floridians and all Americans, and she will 
be greatly missed.

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