[Congressional Record (Bound Edition), Volume 151 (2005), Part 3]
[Senate]
[Pages 3653-3654]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           BANKRUPTCY REFORM

  Mr. FRIST. Madam President, we have made tremendous progress on the 
bankruptcy bill over the last 2 weeks. Republicans and Democrats have 
stood together to support a bankruptcy reform package that the House 
will pass and the President will sign into law. The Senate has resisted 
attempts to renegotiate hard-fought compromises and legislate on 
unrelated issues. I do thank my colleagues, our colleagues, for staying 
focused on the bankruptcy bill.
  There have been many attempts to sidetrack the Senate on this bill. 
But let me just take a moment to reiterate why we need bankruptcy 
reform and what this bill really does.
  The bill before us establishes a means test based on a simple, fair 
principle: those who have the means should repay their debts. Personal 
bankruptcies are skyrocketing, and wealthy debtors are walking away 
from debts that they had the ability to repay. Opportunistic debtors 
who have the means to repay use the law to evade personal 
responsibility.
  This abuse does not hurt the creditor only, it hurts all who pay 
higher fees and prices as a result. Every bill that you and I pay, that 
our families pay, includes a ``bankruptcy tax'' of about $400 a year 
per household. That tax is figured into every bill, every phone bill, 
every electric bill, every mortgage payment, every furniture purchase 
or car loan we pay. Interest rates are higher, downpayment requirements 
are larger, grace periods become shorter, late payment penalties become 
astronomical--all because some people are shirking their debt 
obligations.
  This legislation is targeted to ensure that wealthy debtors who can 
pay their debts do so. It specifically exempts anyone who earns less 
than the median income in their State, and it also allows every 
consumer to show special circumstances if they cannot handle a 
repayment plan.
  We know that one reason people file for bankruptcy is because of 
unexpected medical emergencies. Consequently, this legislation allows 
every filer to deduct 100 percent of their medical costs. We also know 
that education is a big outlay for many families. Under bankruptcy 
reform, parents can deduct private school tuition to protect their 
children's educational opportunities.
  In addition, the bankruptcy bill strengthens protections for child 
support and alimony payments. It protects patient privacy and care 
during bankruptcy proceedings that involve health care facilities. It 
protects consumers from deceptive credit practice that can lead to 
financial distress, and it protects the system that allows America to 
be one of the most generous countries when it comes to bankruptcy.
  There remain, however, some misconceptions about this bill that 
should be dispelled. The first regards our protections for Active-Duty 
military personnel and veterans. Some opponents of the bill charge that 
we do not adequately address the needs of our combat men and women who 
suffer financially.
  Madam President, it should go without saying that the Senate and the 
American people deeply honor our men and women in uniform. Every day, 
these young soldiers sacrifice to protect us and to defend the freedom 
we enjoy. We are indebted to them for the dangers they face on the 
field, and we are indebted to their families they leave in order to 
fight for that freedom.
  That is why last Tuesday we passed the Sessions amendment to help 
clarify protections for our military and others under a safe harbor in 
the bill. This provision, which passed with 63 votes, makes explicitly 
clear that Active-Duty military and low-income veterans are protected 
by the safe harbor. In addition, it also protects debtors with serious 
medical conditions.
  On this issue, the other side has created a red herring designed to 
score political points and shift the debate away from bankruptcy abuse. 
Another red herring is the charge that the bankruptcy bill sacrifices 
consumers to benefit credit card companies. The truth is that the bill 
before us includes several carefully negotiated amendments that 
expressly protect credit card holders.

[[Page 3654]]

  Among its beefed-up consumer protections are increased disclosure 
requirements for credit card statements and mandates that credit card 
companies assist borrowers in determining how long it will take to pay 
off their credit card balances, additional disclosures to borrowers 
buying and refinancing their homes, and additional disclosures 
regarding credit card introductory rates and new disclosures related to 
credit card late fees.
  These protections are the result of lengthy and careful negotiation. 
Additional measures should be properly addressed in the Banking 
Committee. As Senator Sessions has pointed out, we are debating a 
bankruptcy bill designed to create a fair and commonsense process in 
the Federal courts.
  Moreover, the bill before us has passed this body three times, with 
overwhelming bipartisan support. In the 105th Congress, it passed by a 
vote of 97 to 1. In the 106th Congress, it passed 83 to 14. And again 
in the 107th Congress, it passed by a vote of 82 to 16.
  It is time to take action on this much needed reform that is 
supported by both sides of the aisle.
  I am confident that by working together we can get this done in this 
Congress, this week, and see bankruptcy reform signed into law. I 
encourage our Members, this afternoon, to vote for cloture so we can 
bring this bill to fruition, to make it the reality we know the 
American people deserve.
  It is long past time to stop the abuses of the Bankruptcy Code. The 
legislation before us is thoughtful. It is built on common sense. It 
offers the opportunity to give the system, and the people it is 
designed to help, a fresh start. In short, it promises to deliver 
meaningful solutions that will keep America moving forward.
  Madam President, I yield the floor.

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