[Congressional Record (Bound Edition), Volume 151 (2005), Part 5]
[House]
[Pages 6381-6394]
[From the U.S. Government Publishing Office, www.gpo.gov]




PROVIDING FOR CONSIDERATION OF S. 256, BANKRUPTCY ABUSE PREVENTION AND 
                    CONSUMER PROTECTION ACT OF 2005

  Mr. GINGREY. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 211 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 211

       Resolved, That upon the adoption of this resolution it 
     shall be in order to consider in the House the bill (S. 256) 
     to amend title 11 of the United States Code, and for other 
     purposes. All points of order against the bill and against 
     its consideration are waived. The bill shall be considered as 
     read. The previous question shall be considered as ordered on 
     the bill to final passage without intervening motion except: 
     (1) one hour of debate on the bill equally divided and 
     controlled by the chairman and ranking minority member of the 
     Committee on the Judiciary; and (2) one motion to recommit.

  The SPEAKER pro tempore (Mr. Duncan). The gentleman from Georgia (Mr. 
Gingrey) is recognized for 1 hour.
  Mr. GINGREY. Mr. Speaker, for the purpose of debate only, I yield the 
customary 30 minutes to the gentleman from Florida (Mr. Hastings), 
pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.
  Mr. Speaker, this is a closed rule providing for consideration of S. 
256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 
2005.

                              {time}  1030

  The rule provides for 1 hour debate in the House, equally divided and 
controlled by the chairman and ranking minority member of the Committee 
on the Judiciary. It waives all points of order against the bill and 
its consideration, and it provides for one motion to recommit with or 
without instructions.


                             General Leave

  Mr. GINGREY. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on H. Res. 211.
  The SPEAKER pro tempore (Mr. Duncan). Is there objection to the 
request of the gentleman from Georgia?
  There was no objection.
  Mr. GINGREY. Mr. Speaker, bankruptcy reform is overdue for passage. 
Despite its critics, S. 256, the Bankruptcy Abuse Prevention and 
Consumer Protection Act of 2005, does not exclude anyone from filing 
for bankruptcy. Instead, it implements a simple means test to shield 
debtors who make below their State's median income and to determine if 
a higher income debtor has the ability to partially pay back his or her 
creditors.
  To phrase it simply, bankruptcy reform is financial accountability. 
It protects our system against fraud and abuse. And it asks those who 
have the means to repay as much of their debts as they can.
  For at least four previous Congresses, members have been trying to 
reform our ``when in doubt, bail out society'' in favor of personal 
responsibility. Bankruptcy should not be a financial planning tool, and 
it should be available for legitimate emergency situations only. Our 
bankruptcy system should fit the needs of the individual, no more, no 
less. With this rule, and passage of the underlying legislation, S. 256 
we will finally see some movement in the right direction.
  Bankruptcy reform is important to help speed up court hearings, 
because it only takes a few fraudulent or misdirected cases to stall a 
court for hundreds of other legitimate bankruptcy filings. Federal 
bankruptcy filings per judgeship have increased by 71 percent from 
2,998 in 1992 to 5,130 in 2003; and it represents the largest case load 
in our Federal court system. This creates a backlog that slows down the 
process for those really in need of bankruptcy protection.
  Bankruptcy reform provisions found in S. 256 include, but are not 
limited

[[Page 6382]]

to: abuse prevention so debtors who have committed crimes of violence 
or engaged in drug trafficking are no longer able to use bankruptcy to 
hide their finances;
  Needs-based credentials, where if a debtor has the ability to 
partially repay debts, he or she must either be channeled into a form 
of bankruptcy relief that requires repayment or risk having the 
bankruptcy case dismissed as an abusive filing;
  Spousal and child support protections to help single parents and 
their children by closing a loophole used by some spouses currently 
avoiding their child support responsibilities. This would put child 
support and alimony payments as a first priority, ahead of credit card 
debt and attorney's fees. Child support and alimony payments are 
currently seventh in the priority list of payments;
  Closing the mansion loophole require a debtor to live in a State for 
at least 2 years before he or she can claim that State's homestead 
exemption. The current requirement is 91 days, allowing some debtors to 
shield themselves from creditors by putting all of their equity into 
their homes;
  Debtor protections requiring potential debtors to receive credit 
counseling before they can be eligible for bankruptcy relief, allowing 
them to make an informed choice about bankruptcy considering all 
alternatives and consequences;
  Further, small business protections to defend against needless 
bankruptcy lawsuits. Under current law, a business can be sued by a 
bankruptcy trustee and forced to pay back monies previously paid by a 
firm that later files for bankruptcy protection;
  Additionally, family farm relief by doubling debt eligibility for 
chapter 12 filing, allowing periodic inflation adjustment of this debt, 
and lowering the required percentage of a farmer's income that must be 
derived from farming operations.
  There are business privacy protections to prohibit the disclosure of 
names of a debtor's minor children with privileged information kept in 
a nonpublic record. Current law allows nearly every item of information 
supplied by a debtor in connection with his or her bankruptcy case to 
be made available to the public.
  S. 256 passed the Senate with a clear 74 to 25 majority. The House 
judiciary markup on March 16 included rollcall votes on 11 amendments. 
The reforms included in this legislation will be very beneficial to our 
society without ignoring the need of those suffering financial 
uncertainty. This legislation deserves a clean up-or-down vote. Mr. 
Speaker, I ask my colleagues to support this rule and pass S. 256 
bankruptcy reform.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I thank the gentleman from 
Georgia (Mr. Gingrey) for yielding me the time.
  Before yielding myself such time as I may consume, I yield to the 
distinguished gentleman from California (Mr. Stark) for a unanimous 
consent request.
  Mr. STARK. Mr. Speaker, I rise in strenuous opposition to this unfair 
bill.
  Mr. Speaker, I rise in strong opposition to S. 256. This bankruptcy 
bill is touted as reform, but it is actually a wolf in sheep's clothing 
intended to allow credit card companies and other lenders to gouge 
consumers when they are most vulnerable.
  Republicans are giving this gift to big credit card companies at a 
time when many Americans are faced with uncertain job stability, 
retirement security, and health coverage. In fact, 90% of all 
bankruptcies are filed due to the common financial emergency of a lost 
job or lack of medical coverage. This bill makes it harder for working 
families to seek shelter from these devastating and unavoidable 
expenses.
  The Wall Street Journal recently featured the case of a constituent 
in my district. Crystal Herndon, a single mom in Haywood, California, 
earns $15 an hour. Ms. Herndon got sick with pneumonia, causing her to 
miss six weeks of work and rack up over $5,000 in medical bills. These 
unforeseen expenses caused her to fall behind on other financial 
obligations, and before she knew it she was simply unable to make ends 
meet. Bankruptcy protection was the only way out for Ms. Herndon and 
her family. It's hard to see the abuse in real instances of need such 
as these, especially when many Americans live paycheck to paycheck.
  Sadly Crystal Herndon is not the only worker to be forced into 
bankruptcy due to unavoidable medical expenses. According to a recent 
Harvard University research study 2 million Americans, including filers 
and their dependents, face the double jeopardy of illness and 
bankruptcy each year. Most of these medically bankrupt are middle-class 
homeowners with responsible jobs and health insurance coverage. Once 
illness strikes, high co-payments, deductibles, exclusions from 
coverage, and other loopholes quickly overwhelm these families' 
budgets. Loss of income and health insurance often deepen this 
financial crisis when a breadwinner becomes too sick to work.
  To add insult to injury, consumers like Crystal Herndon will 
potentially face an avalanche of litigation that they can't afford as a 
result of this bill. The bill requires the debtor in some cases to have 
to challenge big corporate lenders in court to prove they are eligible 
to seek relief under Chapter 7 of the bankruptcy code. In addition, 
this bill also allows creditors to threaten debtors with costly 
ligitation that will force many families to needlessly give up their 
legal rights.
  In their continuing compassion, the Republicans have crafted this so-
called reform so that a parent seeking child support from a bankrupt 
spouse will have to fight it out with creditors in order to receive 
payment. Meanwhile, this bill makes it easier for those seeking 
bankruptcy protection to lose their homes or be evicted by the 
landlords. Yet, those with million dollar mansions will be able to keep 
their homes even while seeking the same protection under the law. 
Nothing like a fair shake for America's working families.
  Finally, Mr. Speaker, with all of the perks they've awarded to the 
big credit card companies, Republicans have done nothing to ensure that 
they are held accountable for their role in this consumer crisis. There 
is nothing is this bill that stops the abusive, predatory lending that 
lands too many Americans in bankruptcy in the first place.
  Bankruptcy has always been about giving a fresh start to those who 
have fallen on hard times. The link between illness, job loss, and 
health insurance is a harsh reality in our country today. It is morally 
reprehensible to suggest that we exploit medical tragedies befalling 
honest, hardworking Americans in order to grant the wishes of the 
credit card companies.
  I urge my colleagues to vote down this merciless legislation. Now is 
not the time to turn the tables on America's working families. Vote no 
on S. 256.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise today to oppose this closed rule and S. 256. Once 
again, the majority has squelched debate on a controversial piece of 
legislation for no legitimate reason.
  More than 35 Democratic amendments were offered in the Rules 
Committee yesterday. Yet none have been made in order. Why? There is no 
reason for limiting the debate in this manner.
  The House came into session on Tuesday and Members will leave town 
later this afternoon after just 2 days of work. Even more, there was 
only one other bill of substance before the House this week. The time 
to debate this bill and its offered amendments is available. The 
willingness to conduct meaningful business, however, is the missing 
ingredient. A 1-hour debate on legislation containing such sweeping 
reforms is not the way to conduct the people's business.
  The argument will be made that this has been 9 years in the making. 
But a lot of this measure has been overcome by time, and that will be 
discussed by others later.
  I am particularly disappointed that an amendment I offered is not 
being allowed to come before this body for consideration. My amendment 
seeks to prevent the very bankruptcies that are causing this Congress 
so much consternation and is germane to the discussion. It requires 
credit card companies to preserve a customer's interest rate prior to 
incurring medical expenses if the customer is unable to pay off the 
full medical expenses on time. It also prohibits hospitals from 
reporting delinquent patients for 5 years, provided that the patient is 
paying 20 percent of his or her monthly mandated medical expenses.
  All the information we have available suggests that medical bills are 
the

[[Page 6383]]

second leading cause of personal bankruptcy in the United States. It 
is, in my opinion, hypocritical to prevent debate on an amendment that 
could ameliorate some of the issues facing this bankruptcy reform 
legislation. Is not the whole point of this bill to make bankruptcy 
less frequent? If Members of Congress have ideas about how to 
accomplish that, should they not be heard?
  Many other Members sought to introduce amendments, but have also been 
denied their opportunity to be heard. These amendments could have 
improved this legislation.
  For example, the gentleman from Virginia (Mr. Scott) offered an 
amendment to exempt from the means test provision of debtors who have 
business losses incurred by a spouse who has died or deserted the 
debtor.
  The gentleman from California (Mr. Filner) offered an amendment that 
would exempt victims of identity theft. And the ranking member of the 
Rules Committee, the gentlewoman from New York (Ms. Slaughter), offered 
an amendment that imposes restrictions on issuing credit cards to 
college students. But none of those amendments, or the 31 others, will 
be debated today because the rule on this bill is closed.
  At this point, Mr. Speaker, I will insert a list of all 35 amendments 
which the Republican majority has blocked from being considered in the 
Congressional Record.

   Amendments Submitted to the Rules Committee for S. 256 and Denied 
                Consideration by the Rule (H. Res. 211)

       1) Emanuel/Delahunt/Dingell--prevents debtors from 
     shielding their funds from bankruptcy liquidation through so-
     called ``asset protection trusts;''
       2) Filner--exempts disabled veterans from the bill's means 
     test;
       3) Filner--exempts from the bill's means test consumers who 
     are victimized by identity theft;
       4) Inslee--exempts from the bill's means test consumers 
     whose debts are the result of serious medical problems;
       5) Delahunt--requires debtor corporations to file for 
     bankruptcy where their principal place of business is 
     located;
       6) Sanders--establishes a ``usury rate'' for credit card 
     companies, above which credit card companies cannot charge 
     consumers;
       7) Sanders--caps fees credit card companies can impose on 
     consumers at $15;
       8) Sanders--prohibits credit card companies from changing 
     interest rates based on changes in consumers' credit 
     information;
       9) Sanders--prohibits credit card companies from raising 
     interest rates based on consumer credit reports;
       10) Ruppersberger--requires credit card solicitations to be 
     accompanied by a brochure explaining the consequences of the 
     irresponsible use of credit;
       11) Schiff--exempts from the bill's means test consumers 
     who are victimized by identity theft, if at least 51% of the 
     creditor claims against them are due to identity theft;
       12) Lofgren--exempts from the bill's means test 1) families 
     facing bankruptcy due to a serious medical hardship that 
     drains at least 50% of their yearly income, and 2) families 
     who lose at least one month of needed pay or alimony due to 
     illness;
       13) Lofgren--exempt from the bill's means test a single 
     parent who failed to receive child or spousal support 
     totaling more than 50% of her or his household income;
       14) Scott (VA)--exempts from the bill's means test 
     provisions: 1) debtors who have business losses incurred by a 
     spouse who has died or deserted the debtor 2) debtors who 
     have had serious illness in their family and 3) debtors who 
     have been laid off;
       15) Scott (VA)--exempts from the bill's means test 
     provisions debtors who have business losses incurred by a 
     spouse who has died or deserted the debtor;
       16) Scott (VA)--exempts from the bill's means test 
     provisions debtors who have had serious illness in their 
     family;
       17) Scott (VA)--exempts from the bill's means test 
     provisions debtors who have been laid off from their jobs 
     through no fault of their own;
       18) Nadler--sunsets the bill after 2 years;
       19) Watt--prohibits annual credit card rates higher than 
     75%;
       20) Watt--includes the costs of college in the calculation 
     of debtor's monthly expense;
       21) Ruppersberger--exempts from the bill's means test 
     debtors who have declared bankruptcy due to high medical 
     expenses;
       22) Hastings (FL)--prevents credit card companies from 
     increasing rates on consumers who use their credit cards to 
     pay for extraordinary medical expenses; also prevents 
     hospitals from generating negative credit information on 
     consumers who are paying their bills in good faith;
       23) Meehan--Exempts from the means test disabled veterans 
     whose indebtedness occurred primarily as a result of an 
     injury or disability resulting from active duty or homeland 
     defense activities; closes a loophole in S. 256, which 
     exempts only disabled veterans whose indebtedness occurs 
     primarily while on active duty while failing to exempt 
     disabled veterans whose indebtedness occurs after they have 
     left active duty;
       24) Jackson Lee--makes debts arising out of state sex 
     offenses non-dischargeable in bankruptcy proceedings;
       25) Jackson Lee--clarifies Congress' intent that nuclear 
     liabilities be covered by the Price-Anderson Act, and not by 
     bankruptcy laws;
       26) Jackson Lee--makes debts arising out of penalties 
     imposed on businesses for false tobacco claims non-
     dischargeable;
       27) Jackson Lee--strikes the bill's means test provision;
       28) Woolsey--requires credit counseling agencies to provide 
     free services to recent veterans of the military who served 
     in combat zones;
       29) Slaughter--requires credit card companies to determine, 
     before they approve a credit card, whether a student 
     applicant has the financial means to pay off a credit card 
     balance; it restricts the credit limit to minimum balances if 
     the student has no independent income; and it requires 
     parental approval for credit limit increases in the event 
     that a parent cosigns the account;
       30) Slaughter--applies the highest median income of any 
     county or Metropolitan Statistical Area in the state to all 
     residents of the state petitioning for bankruptcy protection;
       31) Millender-McDonald--provides the bankruptcy courts a 
     higher percentage of the fees collected when a debtor files 
     for bankruptcy;
       32) Maloney--ensures that debtors emerging from bankruptcy 
     make child credit payments first, before payments on credit 
     card debt. The current version of the bill does not ensure 
     that child support payments will have priority over the other 
     types of unsecured debts, such as credit card debt;
       33) Meehan and Berman--provides a modest homestead 
     exemption for people who have suffered a major illness or 
     injury;
       34) Jackson Lee--provides additional protections to debtors 
     who are the victims of identity theft;
       35) Jackson Lee--increases the means test limit on 
     parochial school tuition expenses from $1,500 to $3,000, so 
     that families Chapter 13 bankruptcy can keep their children 
     in schools that conform to their deeply held religious 
     beliefs.

  Mr. Speaker, the House has adopted a new modus operandi. We saw it 
earlier this year with the class action bill, and we are seeing it 
again today.
  It seems that if the Republican leadership deems legislation 
important, and that is their prerogative, it is willing to push through 
the other body's version without the opportunity for debate here in the 
people's House on any amendments. This new method does a great 
disservice to the people of this Nation. Even more, it stops Members, 
Democrats and Republican, from serving as thoughtful, effective 
legislators.
  The House of Representatives is the people's House. The Founding 
Fathers envisioned a forum for lively debate on the issues of the day, 
not the controlled steering of selected legislation with no opportunity 
for meaningful change.
  What also concerns me is the unworkable means test contained in this 
legislation. I am greatly disturbed, as I know all the residents of 
south Florida will be, that this means test includes disaster 
assistance as a source of revenue.
  People forced into dire financial circumstances through natural 
disasters should find bankruptcy a source of relief. Considering 
disaster assistance as a source of revenue adds insult to injury and 
contradicts the government's efforts to help people get back on their 
feet.
  This legislation, masquerading as protection against bankruptcy 
abuse, is really a protection for credit card companies and their 
predatory lending practices. This legislation does not protect the 
American people. This legislation protects the credit industry at the 
expense of the American people.
  Increasingly, credit card companies market their product to riskier 
consumers, and now they want the Congress to protect them from the 
losses that are the foreseeable result of this ill-sighted business 
strategy. Why are we not debating legislation that would address those 
practices, instead of eviscerating a crucial safety net that Americans 
rely on when all else fails?
  Mr. Speaker, should it pass, this bill will severely curtail the 
ability of

[[Page 6384]]

Americans to obtain relief from bankruptcy without solving any of its 
underlying causes. Medical bills, unemployment, and predatory lending 
practices are at the root of this problem. In the long run, the net 
effect of this legislation will drive more Americans deeper into 
financial crisis and weaken our social structure and the Nation's 
economy.
  I will not, and cannot, support such an attack on American consumers. 
I urge my colleagues to vote ``no'' on this closed rule and ``no'' on 
S. 256.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  I want to point out, Mr. Speaker, to the gentleman from Florida that 
medical expenses are specifically covered in the bill, and all other 
extenuating circumstances are covered in section 102 of the bill 
allowing judicial latitude.
  At this point, I would like to yield 4 minutes to the gentleman from 
Wisconsin (Mr. Sensenbrenner), the distinguished chairman of the 
Judiciary Committee.

                              {time}  1045

  Mr. SENSENBRENNER. Mr. Speaker, I thank the gentleman from Georgia 
for yielding me time.
  I rise in support of the rule for consideration of S. 256, the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This 
bill consists of a comprehensive package of reform measures that will 
improve bankruptcy law and practice by restoring personal 
responsibility and integrity to the bankruptcy system. It will also 
ensure that the system is fair for both debtors and creditors.
  As we now consider this rule, and the legislation later today, I 
believe it is particularly important to keep in mind bankruptcy 
reform's extensive deliberative history before the Committee on Rules, 
the Committee on the Judiciary, and both bodies of Congress, which I 
would like to briefly summarize.
  First, the bill represents the culmination of nearly 8 years of 
intense and detailed congressional consideration. The House, for 
example, has passed prior iterations of this legislation on eight 
separate occasions. Likewise, the other body has repeatedly registered 
its strong support for bankruptcy reform. Just last month, the bill 
passed there 74 to 25, marking the fifth time that body has 
overwhelmingly adopted bankruptcy reform legislation since 1998.
  Second, S. 256 has benefited immensely from an extensive hearing and 
amendment process, as well as meaningful bipartisan and bicameral 
negotiations. Over the past four Congresses, the Committee on the 
Judiciary has held 18 hearings on the need for bankruptcy reform, 11 of 
which focused on S. 256's predecessors. The Senate Judiciary Committee 
likewise has held 11 hearings on bankruptcy reform, including a hearing 
held earlier this year.
  In the 105th Congress, 4 days were devoted to the Committee on the 
Judiciary's markup of bankruptcy reform legislation.
  In the 106th Congress alone, the Committee on the Judiciary 
entertained 59 amendments over the course of a 5-day markup on 
bankruptcy reform legislation, which included 29 recorded votes. On the 
floor, 11 more amendments were considered.
  In the 107th Congress, the Committee on the Judiciary considered 18 
amendments during the course of its markup of bankruptcy reform 
legislation, and the House, thereafter, considered five amendments.
  In the last Congress, the Committee on the Judiciary entertained nine 
amendments to the bill, and five amendments were considered on the 
House floor. Also in the last Congress, the Committee on Rules made two 
amendments in order in connection with a similar bill, addressing 
bankruptcy reform, which was considered on the floor.
  Last month, the Committee on the Judiciary entertained 23 more 
amendments, each of which has been soundly defeated.
  Mr. Speaker, I have over here the paper record of the House 
consideration of bankruptcy reform legislation over the last four 
Congresses. Here's the committee report on this bill, over 500 pages 
long. We have a copy of the House version of the bill, which is over 
500 pages long. We have the committee report from 2003. We have a 
conference report from the 107th Congress. We have a committee report 
from the 107th Congress. We have a committee report from the 106th 
Congress. We have a committee report earlier in the 106th Congress, one 
from the 105th Congress, and then we have a committee report from the 
105th Congress on the House side. All of these are debates in the 
Congressional Record when this bill has come up, and we have had 
conference reports filed, amendments filed, original bills filed.
  There has been plenty of process on this legislation. The time to 
pass it is now, and that is why this rule is coming up in the way it is 
structured the way it is.
  Mr. Speaker, I thank the gentleman for yielding again for the time.
  Mr. Speaker, I rise in support of this rule for consideration of S. 
256, the ``Bankruptcy Abuse Prevention and Consumer Protection Act of 
2005.'' S. 256 consists of a comprehensive package of reform measures 
that will improve bankruptcy law and practice by restoring personal 
responsibility and integrity to the bankruptcy system. It will also 
ensure that the system is fair for both debtors and creditors.
  As we now consider this rule, and the legislation later today, I 
believe it is particularly important to keep in mind bankruptcy 
reform's extensive deliberative history before the Rules Committee, the 
Judiciary Committee, and both bodies of Congress, which I would like to 
briefly summarize for you.
  First, S. 256 represents the culmination of nearly 8 years of intense 
and detailed congressional consideration. The House, for example, has 
passed prior iterations of this legislation on eight separate 
occasions. Likewise, the other body has repeatedly registered its 
strong support for bankruptcy reform. Just last month, they passed S. 
256 by a vote of 74 to 25, making the fifth time that body has 
overwhelmingly adopted bankruptcy reform legislation since 1998.
  Second, S. 256 has benefitted immensely from an exhaustive hearing 
and amendment process as well as meaningful bipartisan, bicameral 
negotiations. Over the past four Congresses, the Judiciary Committee 
held 18 hearings on the need for bankruptcy reform, 11 of which focused 
on S. 256's predecessors. The Senate Judiciary Committee, likewise, has 
held 11 hearings on bankruptcy reform, including a hearing held earlier 
this year.
  In the 105th Congress, 4 days were devoted to the Judiciary 
Committee's mark up of bankruptcy reform legislation. In the 106th 
Congress alone, the Judiciary Committee entertained 59 amendments over 
the course of a 5-day markup of bankruptcy reform legislation, which 
included 29 recorded votes. On the floor, 11 more amendments were 
considered.
  In the 107th Congress, the Judiciary Committee considered 18 
amendments during the course of its markup of bankruptcy reform 
legislation, and the House, thereafter, considered five amendments. In 
the last Congress, the Judiciary Committee entertained nine amendments 
to the bankruptcy legislation and 5 amendments were considered on the 
House floor. Also in the last Congress, the Rules Committee made two 
amendments in order in connection with a similar bill, addressing 
bankruptcy reform, which was considered on the floor. Last month, the 
Judiciary Committee entertained 23 more amendments, each of which was 
soundly defeated.
  Third, it must be remembered that S. 256 is a result of extensive 
bipartisan and bicameral negotiation and compromise. For example, 
conferees during the 106th Congress spent nearly 7 months engaged in an 
informal conference to reconcile differences between the House and 
Senate passed versions of bankruptcy reform legislation. In the 107th 
Congress, conferees formally met on three occasions and ultimately 
agreed--after an 11-month period of negotiations--to a bipartisan 
conference report. The legislation before us today represents a 
delicate balance and various compromises that have been struck over the 
past 7 years.
  Fourth, and perhaps most importantly, the need for bankruptcy reform 
is long-overdue and should not be further delayed. Every day that 
passes by without these reforms, more abuse and fraud goes undetected.
  Mr. Speaker, there simply is no reason to further amend this 
legislation given its uniquely extensive deliberative record. Those who 
come to the floor today and complain about lack of process or the need 
to further refine

[[Page 6385]]

this legislation--simply oppose bankruptcy reform. Accordingly, I 
believe this rule is appropriate, and urge Members to support it.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I 
may consume.
  My respect for the chairman of the Committee on the Judiciary is 
immense, and he has thrust all of these hearings and all that were in 
committee where 40 Members of the Committee on the Judiciary had an 
opportunity to participate.
  What we are talking about is today, 35 Members of the House of 
Representatives, 35 amendments are not being permitted today. So I 
guess the 40-plus people are the ones who are representing the near 
395, 40-plus none for the American people. That would be what I would 
put on the table from the minority side.
  Mr. Speaker, I am delighted to yield 3 minutes to the gentlewoman 
from California (Ms. Matsui), our newcomer, who is making her first 
statement as a Committee on Rules member.
  Ms. MATSUI. Mr. Speaker, I thank the gentleman from Florida for 
yielding me this time.
  I rise in opposition to this rule. We have before us a misguided 
attempt to reform our bankruptcy system. We have heard cries that this 
system is being abused and is corrupted; and while there is need for 
reform, the proposal before us today contains a number of unintended 
consequences, consequences that would deprive consumers of the 
protection they deserve, hurt children, hurt families and neglect our 
veterans.
  During the Committee on the Judiciary markup, numerous amendments 
were offered to correct these provisions, yet amendment after amendment 
was voted down, not on the merits of the amendments but because there 
was a backroom deal to move this legislation through the House without 
any changes. The committee held a sham markup.
  Again, in the Committee on Rules, a number of amendments were offered 
to allow a debate on these issues, but not a single one was made in 
order today. In certain cases, my Republican colleagues acknowledged 
the merits of the amendments, but maintained it was simply not the time 
to address the issue. I have to disagree.
  I am particularly disappointed that the very reasonable amendment 
offered by the gentleman from California (Mr. Schiff) was not made in 
order. The amendment is narrowly tailored to exempt from the means test 
consumers with 51 percent of their debt caused by someone who stole 
their identity.
  This amendment makes sense. I am sure that most everyone at some time 
in their life has experienced the frustration of losing their wallet. 
First, you have to call all the credit card companies to cancel 
service. Then you may have to close and later reopen your checking 
account. Then you may have to take a trip down to DMV to get a new 
driver's license. It is an ordeal.
  But these days, losing your wallet can even lead to greater problems. 
To then realize someone racked up thousands of dollars of debt after 
stealing your identity is just awful. No one should ever have to pay 
for a crime someone else committed.
  Those on the other side of the aisle say they sympathize with the 
issue and would like to address this matter at some point in the 
future; but I ask, why do we not do this now? What are we waiting for? 
What better place to talk about the rights of bankrupted identity theft 
victims than in the bankruptcy reform bill?
  Just yesterday, an article ran in the New York Times about another 
security breach potentially leaking Social Security numbers, driver's 
licenses, and addresses of over 300,000 people.
  We all see the headlines. Identity theft poses an enormous financial 
risk to the average American. No one deserves a bill for someone else's 
crime, but the Republican majority seems to think so. Their legislation 
would punish the victims of identity theft, and the refusal to adopt 
this very simple fix raises real questions about who they are fighting 
for. I believe this amendment is very timely and appreciate the 
attention the gentleman from California (Mr. Schiff) has brought to 
this issue.
  I know this legislation has been around since 1998, but that does not 
excuse us from being unresponsive to real issues affecting Americans 
today.
  Mr. GINGREY. Mr. Speaker, I yield to myself such time as I may 
consume.
  I want to thank the gentleman from Wisconsin, distinguished chairman 
of the Committee on the Judiciary, for bringing forth those statistics 
and that stack of documents that he just went over; and I want to add 
one more statistic to that, and this is that since the 105th Congress, 
the House and the Senate have passed bankruptcy reform legislation a 
dozen times, with a vote tally of 2,455 for and 871 against.
  To my distinguished colleague from Florida, in regard to the 
amendment process in the Committee on Rules, my colleague knows that 
the other side was offered an amendment in the nature of a substitute. 
That substitute amendment could have included all 35 Democrats, who my 
colleagues allege were shut out. Every one of those 35 amendments could 
have been included in an amendment in the nature of a substitute; but 
apparently they just could not get their act together, did not have an 
amendment and passed on that opportunity.
  In regard to the gentlewoman from California and the concerns about 
identity theft, opponents of the means test of the bankruptcy 
legislation have attempted to claim that a debtor should be except from 
the means test if the debt is related to identity theft. This is a red 
herring, Mr. Speaker, because consumers who are victims of identity 
theft do not owe the debts that result from identity theft; and, 
therefore, it is not an issue addressed by the bankruptcy court.
  We all understand the sentiment of trying to help identity theft 
victims. Amendments related to identity theft, though, are not 
necessary. They would inadvertently do serious harm to consumers and 
create a significant potential for fraud and abuse. A consumer who is 
victimized when an identity thief establishes credit in the consumer's 
name is not liable for any of the debts incurred by the identity thief. 
The maximum amount I think is $50, and that is even waived by the 
credit card companies if it is proved to be fraudulent. Bankruptcy 
relief is, therefore, not necessary in regard to identity theft.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I 
may consume before yielding to the distinguished ranking member to 
respond to my colleague from Georgia by indicating, the last time I 
looked at the rules, it allowed that individual Members have a right to 
make amendments, and we are not required to offer a substitute.
  Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Ms. 
Slaughter), my good friend.
  Ms. SLAUGHTER. Mr. Speaker, I thank the gentleman for the time.
  The rule we are debating, that we have made today is a closed rule 
which means that the Members of Congress who brought 35 amendments to 
the Committee on Rules will not have a chance to bring them up.
  This closed rule means that the elected representatives of the people 
will never have the opportunity to consider the amendments and decide 
for themselves whether or not they would make the bankruptcy bill a 
better piece of legislation.
  I personally think that amendments protecting our men and women 
returning from military service in Iraq and Afghanistan would be a good 
idea, and I feel very strongly that the amendment protecting the 
victims of identity theft from bankruptcy is an important measure that 
should be debated on the House floor. After all, Americans are and 
should be very concerned about identity theft. AARP said it is one of 
the top five issues concerning seniors today.
  Just to give my colleagues an idea of how concerned our fellow 
Americans should be about this, Lexis-Nexis and GM MasterCard are both 
recovering from wide-scale security breaches which may have placed 
millions of

[[Page 6386]]

 Americans at risk for having their identity stolen. In fact, just 2 
days ago, Lexis-Nexis identified more than 300,000 Americans that their 
personal information may have been stolen. In some cases, it will take 
those people 6 years to get back their identity. It is a very real 
problem for our country.
  But if my colleagues in the majority do not agree that protecting 
Americans from identity theft is an important issue, why will they not 
let the body debate it? If they want to, they can always vote against 
it. That is the way things are supposed to happen here in a democracy. 
Instead, they have instituted another closed rule and will not allow us 
to debate the issues.
  This is the fifth Congress that we have debated bankruptcy reform, 
and we have heard that this morning. To be fair, we have not debated 
this bill under open rules in the past, but we have certainly debated 
them under rules that allowed amendments.
  This chart shows the number of amendments that the Committee on Rules 
made in order on this bill in every Congress since the 105th, and I 
insert in the Record at this point a list of the rules.

  Number of Amendments Made in Order on Bankruptcy Bills--105th-109th 
                                Congress

       105th Congress (H. Res. 452)--12 amendments made in order.
       106th Congress (H. Res. 158)--11 amendments made in order.
       107th Congress (H. Res. 71)--6 amendments made in order.
       108th Congress (H. Res. 147)--5 amendments made in order.
       109th Congress (H. Res. 211)--Closed Rule, 0 amendments 
     made in order.

  This chart shows a disturbing pattern, Mr. Speaker, a pattern that 
has become common practice here in the House.

                              {time}  1100

  In every Congress, Republican leaders have allowed fewer and fewer 
amendments to be debated. We started at 12 amendments in the 105th 
Congress; and in the 109th Congress, we have a completely closed rule. 
Zero amendments are in order. There is less and less democracy in this 
House, and every Congress fewer voices are being heard on the floor.
  The Democrats on the Committee on Rules last month issued a report 
studying the disturbing trend toward less democracy and deliberation in 
this House. During this last Congress and this closed rule today 
convinces me we are only getting worse.
  So, Mr. Speaker, I say again we have disallowed the amendments that 
would have let us make this a better bill, a bill that would protect 
more vulnerable people in this country, including our soldiers who have 
returned from Iraq, most of those in the National Guard and Reserves, 
many of whom are losing their houses because they were called back time 
and again and were to able to maintain their houses. It is a disgrace 
we were not allowed to bring that amendment to the floor.
  Mr. GINGREY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Sensenbrenner).
  Mr. SENSENBRENNER. Mr. Speaker, I would like to lay to rest the fact 
that we have not had a full and complete debate on this.
  This year, on March 16, the Committee on the Judiciary had a full 
markup on this bill. Anybody who wished to offer amendments was allowed 
to do so. Our committee publishes the complete transcript of markups as 
a part of the committee report. This transcript goes on for 160 pages 
in the committee report, which shows that everybody had an opportunity 
to speak their peace. There were 23 amendments that were offered, and 
all of them were voted down by overwhelming margins.
  Now, amending this bill is what the people who wish no bankruptcy 
reform have in mind because they know the other body has had difficulty 
in finding time to debate this bill and vote cloture. The gentlewoman 
from New York (Ms. Slaughter), whom I greatly respect, has voted 
against this bill every time it has come up when she has cast a vote in 
a rollcall. Much of the complaints we are going to be hearing are 
coming from Members who wish to sink this bill through amendments. They 
have never supported it in the past. They are against it even if it 
were amended, and that is why the rule is the way it is.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 2 minutes to the 
gentleman from Virginia (Mr. Scott).
  Mr. SCOTT of Virginia. Mr. Speaker, while some who file bankruptcy 
have been financially irresponsible, the overwhelming majority of those 
who file do so as a result of divorce, major illness, or job loss. Half 
of those who go into bankruptcy do so because of illness, and most of 
them had health insurance but still could not pay their bills.
  If the purpose of the legislation is to try to deal with those who 
abuse credit, we ought to be able to distinguish them from the hard-
working Americans who unfortunately become ill, those who have an 
unforeseen loss of a job, or whose spouses desert them after a business 
failure.
  Mr. Speaker, in addition to those who get sick or lose their job, 
this bill will also hurt small business entrepreneurs. They go into 
business and consider a risk-benefit ratio that includes the 
possibility of making a lot of money, but also includes the possibility 
of losing everything and ending up in bankruptcy. With the passage of 
this legislation, those entrepreneurs and their families will risk not 
only losing everything but also being denied a fresh start if the 
business goes under. They will be stripped down to essentials like food 
and rent for 5 years, and that is average rent for the area, not what 
they may have been living in.
  Finally, we ought to consider the impact on society of increasing the 
number of people who conclude that they have nothing to lose. It is 
ironic that the last time we debated bankruptcy reform on the floor of 
the House, a farmer had driven his tractor into the pond near the 
Washington Monument, tying up traffic for a long time. He was quoted as 
saying, ``I am broke. I am busted. I have the rest of my life to stay 
here.''
  People who feel they have nothing to lose can become dangerous to 
society. Denying bankruptcy protection to people who need a fresh start 
will only increase the number of people in our community who feel they 
have nothing to lose.
  This legislation does not differentiate between those who abuse the 
system and those who deserve a fresh start. This rule does not allow 
amendments to fix the bill; and, therefore, the rule should be 
defeated.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  In the 105th Congress, H.R. 3150, bankruptcy reform, passed 306-118.
  In the 106th Congress, H.R. 8333 passed the House, 313-108.
  In the 107th Congress, H.R. 333 passed the House 306-108.
  In the 108th Congress, H.R. 975 passed the House 315-113.
  The gentleman from Virginia (Mr. Scott) was not one of those voting 
in the affirmative on any of those occasions, but I want to point out 
to the gentleman in regard to his concern over medical and health-
related expenses for a debtor, spouse, and dependents, on line 23, page 
8, continuing through line 10 page 9, this covers the treatment of 
medical expenses for the debtor, spouse of the debtor, and dependents 
of the debtor. It expressly includes not just actual medical expenses 
but expenses for health insurances, disability insurance, and health 
savings accounts.
  Mr. Speaker, put another way, contrary to misrepresentations by 
opponents, the needs-based test not only takes into account the full 
range of medical expenses by the debtors, but it also covers the spouse 
and dependents. This is just one of three provisions for a member of 
the household or immediate family. The provision includes for the 
monthly expense of the debtor, expenses incurred for the care and 
support of an elderly, chronically ill or disabled member of the 
debtor's immediate family. This includes parents, grandparents, 
siblings, children and grandchildren of the debtor, among others.
  So medical in any situation, Mr. Speaker, medical or otherwise, no 
debtor is denied access to bankruptcy

[[Page 6387]]

relief. All S. 256 says is that, in a limited range of cases, a debtor 
with meaningful capacity to repay may have to file in chapter 13 as 
opposed to chapter 7. In no case is a debtor denied access to the 
bankruptcy system.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 2 minutes to the 
gentleman from Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Speaker, the chairman of the Committee on the 
Judiciary is correct when he says 8 years. I dare say we could spend 
another 8 years, but given the quality of this bill, given the reality 
that it imposes no responsibility whatsoever on the credit card 
industry, naturally we will be opposed. Responsibility. We hear 
personal responsibility. What about corporate responsibility? 
Responsibility is a two-way street.
  To get a fair and balanced bill, we need amendments. We need 
amendments like the one that the gentleman from North Carolina and 
myself filed which would have limited the interest on credit cards to 
75 percent.
  Sure, that might have shifted, if you will, some of us to support the 
bill. But, no, the credit card industry bought and paid for this 
legislation. Somewhere north of $40 million was part of that effort. 
Let us not kid ourselves. This bill was written for and by the credit 
card industry. It has nothing to do with the consumer. But that is why 
we needed amendments, to make it fair and to make it balanced. Let us 
not just use those words.
  Mr. GINGREY. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Dreier).
  Mr. DREIER. Mr. Speaker, this is a great day. Not only are we going 
to be able to see the Nationals play the first home game in 34 years, 
but we are going to finally pass bankruptcy reform legislation that can 
get to the President's desk and be signed.
  Also, tomorrow many of us are going to be paying our taxes. We have 
constituents who are complaining justifiably about the high cost of 
gasoline.
  On average, passage of this legislation will save a family of four 
$400 a year, and $400 a year is a very important amount of money for an 
awful lot of people in this country, and that is the price that they 
are paying because of the abuse that we have seen of our bankruptcy law 
that has been going on for years and years and years.
  I happen to believe that it is essential that we provide that $400 in 
relief to the American people just as quickly as we can. We know, as 
the gentleman from Wisconsin (Mr. Sensenbrenner) has said, and I 
congratulate the gentleman for all of the effort that he has put into 
this, that we for years and years and years have been going through the 
amendment process. We have had a wide range of concerns brought to the 
forefront, and we have been able to address them. I believe that we are 
doing the right thing by moving ahead with this measure.
  Mr. Speaker, any Member who votes no on this rule is voting against 
bankruptcy reform. They are voting against bankruptcy reform. Why? 
Because it is true 35 amendments were submitted to us in the Committee 
on Rules. We made it very clear that one of the things that we offered 
when we came to majority status was the chance to give the minority an 
opportunity to offer a substitute. The gentleman from Wisconsin 
(Chairman Sensenbrenner) came before the Committee on Rules and made it 
very clear to us. He requested a closed or a modified closed rule.
  Let me say, a modified closed rule means that the minority is offered 
a chance at providing a substitute, cobbling together a package that in 
fact is an alternative to the measure that we have brought forward.
  The minority had an opportunity to do that. What did they choose to 
do? Members of the minority did not come forward with a substitute. 
They chose to offer what I describe as cut-and-bite amendments, going 
through these issues and amending and amending and amending.
  Mr. Speaker, we would have made in order a substitute had they given 
it to us.
  Mr. SENSENBRENNER. Mr. Speaker, will the gentleman yield?
  Mr. DREIER. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Speaker, I recall yesterday when the death tax 
repeal was on the floor. It was a similar rule, and the minority was 
offered a chance to offer a substitute. They offered a substitute which 
was voted on and debated in the House of Representatives. But that rule 
passed by voice vote. So the rule under which we considered the death 
tax repeal yesterday is the same type of rule that we are considering 
today, except that the minority on this bill decided not to offer a 
constructive alternative substitute.
  Mr. DREIER. Mr. Speaker, reclaiming my time, the chairman of the 
Committee on the Judiciary is absolutely right. We reported out a 
modified closed rule that provided the gentleman from North Dakota (Mr. 
Pomeroy) an opportunity to not only offer his substitute, but he could 
have offered a motion to recommit. So two bites at the apple. The exact 
same opportunity existed on this bill which has gone through Congress 
after Congress with an excess of 300 votes in the past.
  We said a substitute would have been made in order if it had been 
submitted to us in the Committee on Rules.
  Mr. DELAHUNT. Mr. Speaker, will the gentleman yield?
  Mr. DREIER. I yield to the gentleman from Massachusetts.
  Mr. DELAHUNT. Mr. Speaker, the gentleman made a statement, if I 
understand correctly, that passage of this proposal before us today 
would translate into a savings of $400 for each family in America.
  Mr. DREIER. Mr. Speaker, that is absolutely right. If you look at the 
cost that exists today because of abuse of bankruptcy law, the abusive 
filings of bankruptcy, there is, on average, for a family of four of 
$400 per year.

                              {time}  1115

  Mr. DELAHUNT. If the gentleman will yield further, the $400 would 
actually go back to the American family? Is that what the chairman is 
suggesting?
  Mr. DREIER. If I could reclaim my time, what I am suggesting is that 
because of abuse of bankruptcy filings that take place today, that is a 
cost that is imposed on American consumers to the average family of 
four of in excess of $400.
  That is the reason it is absolutely essential, Mr. Speaker, that we 
pass this legislation.
  Mr. DELAHUNT. Will the gentleman yield further?
  Mr. DREIER. I have yielded three times. If I could finish my 
statement, I would like to. We have other people who would like to 
participate. I know that my dear friend from Florida (Mr. Hastings) 
will be more than happy to yield further time to the gentleman from 
Massachusetts.
  Mr. Speaker, we have been waiting for years and years and years to 
get to the point where we could get a measure to the desk of the 
President of the United States so that he can sign it, so that we can 
deal with this issue and finally bring about responsible reform of our 
bankruptcy law.
  We happen to believe very passionately that people should be 
accountable for their actions. We do not want anyone to be deprived of 
access to file for bankruptcy, but we know full well that this has been 
abused for such a long period of time. That is why we are here today 
and that is why I am convinced, Mr. Speaker, that even though we will 
see opposition to this rule, at the end of the day, we will see very 
strong bipartisan support to reform our bankruptcy law.
  Mr. HASTINGS of Florida. Mr. Speaker, I am pleased to yield 2 minutes 
to my good friend, the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, with that generous yielding, I 
would like to yield to the distinguished gentleman from Virginia (Mr. 
Scott).
  Mr. SCOTT of Virginia. I would like to respond very quickly. If 
medical expenses wipe you out and you cannot pay them, under this bill 
you cannot get into chapter 7 if you can pay $166 a

[[Page 6388]]

month on your bills, however much they are. There could be hundreds of 
thousands of dollars that you could never pay.
  Ms. JACKSON-LEE of Texas. I thank the distinguished gentleman.
  Mr. Speaker, I rise today to answer my good friend, the chairman of 
the Committee on Rules, to simply say the reason why a substitute was 
not offered is because the bankruptcy code as it now stands addresses 
the needs of the American people. It is interesting that the 
Republicans want to tell us what kind of amendment to offer when we had 
35 amendments that would have protected the American people.
  Mr. Speaker, I am outraged because the bankruptcy bill stabs the 
American people in the back. The reason why I say that is because we 
have a bankruptcy code that allows for the discretion of the judiciary 
in the bankruptcy courts to be able to determine whether your case is 
frivolous.
  But now we have put in place what we call a means test which 
indicates that hardworking American families, middle-class families who 
have faced catastrophic illnesses, divorce, loss of job in this 
horrible economy, these individuals will be barred from entering the 
bankruptcy court because they do not meet the IRS guidelines. Who wants 
to meet the IRS guidelines? We already know what the Internal Revenue 
Service will do to you. All we wanted to do is to give more leeway.
  If you listen to Professor Elizabeth Warren of Harvard University, 
she will tell you that the time for the bankruptcy bill has long 
passed. It is an 8-year-old bill that was written more than 8 years 
ago. Now we find that more consumer bankruptcies have declined. There 
are less consumer bankruptcies. But if you look at what the President 
is going to do with Social Security and take so much money out of our 
economy and break the American people, you are going to see an upsurge. 
But what you are going to see is the American people, because of this 
bankruptcy bill, losing their house, pulling their children out of 
school, not being able to make ends meet. It is an outrage. This rule 
should be defeated because the American people are being stabbed in the 
back. It is a disgrace.
  I ask for a ``no'' vote on the rule.
  Mr. GINGREY. Mr. Speaker, I yield myself such time as I may consume.
  In response to the gentlewoman from Texas, Mr. Speaker, a substitute 
amendment was offered in every other Congress that bankruptcy reform 
was considered. Every other Congress in which bankruptcy reform was 
considered, the minority submitted a substitute amendment. Why not now? 
I have asked that question several times, and I still have no answer.
  In regard to health care expenses, and I am reading from a March 29, 
2005, CRS report for Congress titled ``Treatment of Health Care 
Expenses under the Bankruptcy Abuse Prevention and Consumer Protection 
Act'':
  ``Conclusion. Health care expenses will generally be considered in 
one of two contexts in a bankruptcy filing. Significant expenses 
incurred prior to the bankruptcy filing may be calculated as unsecured 
claims; if the debtor cannot afford to pay 25 percent of unsecured 
claims or $100 a month, the debtor may be eligible to file under 
chapter 7.
  ``Ongoing health care expenses and health insurance premiums may be 
deducted from the debtor's monthly income. Factoring in these expenses 
may also reduce the debtor's disposable income under the means test.''
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 2 minutes to my good 
friend, the gentlewoman from California (Ms. Waters).
  Ms. WATERS. Mr. Speaker, I rise in strong opposition to this unfair, 
undemocratic closed rule and to the underlying bankruptcy bill. This 
lopsided bill will make it harder for families and seniors with debt 
problems arising from high medical expenses, job loss, divorce, or 
other financial hardships to address their problems while doing nothing 
to rein in the credit card companies whose practices have led to much 
of the rise in bankruptcies.
  S. 256 presumes that bankruptcy filers are simply bankruptcy abusers 
looking to game the system and avoid paying their bills, ignoring the 
clear evidence that the overwhelming majority of people in bankruptcy 
are in financial distress because of job loss, medical expense, 
divorce, or a combination of these causes.
  Mr. Speaker, an important and controversial bill like the bankruptcy 
bill deserves a real debate. Members deserve the opportunity to 
consider a wide range of amendments. For the Republican leadership and 
the Republican members of the Committee on Rules to propose that we 
consider a bill that is tilted toward the credit card companies and as 
complex as this bill is without giving Members any opportunity to amend 
it on the floor with only 30 minutes per side for general debate is a 
travesty and a gross abuse of power.
  When this bill was in the Committee on the Judiciary, we had a 
pseudo-markup that lasted all day and was a complete embarrassment and 
a waste of time for all of the members, for the Republicans would not 
even consider one amendment, no matter how meritorious or beneficial to 
the American people, even if the amendment addressed issues not 
previously considered because of the Republican leadership's insistence 
on reporting out a clean bill in order to avoid a conference committee.
  As a result, important, thoughtful amendments on such subjects as 
protection on domestic violence victims from eviction, disabled 
veterans, alimony and child support, exemptions for medical emergencies 
and job loss, underage credit card lending, and a homestead exemption 
for seniors, predatory lending and payday loans all were rejected by 
the Committee on the Judiciary.
  Shame on you Republicans.
  Mr. GINGREY. Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I am pleased to yield 1 minute 
to my friend, the gentlewoman from California (Ms. Lee).
  Ms. LEE. I thank the gentleman for yielding me this time and for his 
leadership.
  Mr. Speaker, I rise in opposition to this rule and to this morally 
bankrupt bill that puts corporate greed over fairness for ordinary 
folks. This bill takes the phrase ``kick them when they are down'' to a 
whole new level. What about the fact that half of the people who file 
for bankruptcy protection are forced to do so because of high medical 
costs, loss of a job, or scam loan sharks? This bill would say to these 
people, the answer is, of course, too bad.
  Make no mistake, Mr. Speaker, this bill is a big-time corporate 
payoff that was drafted with one overriding goal in mind, that is, 
profits, profits, profits.
  I am all for curbing abuses in bankruptcy and would suggest that we 
start by closing bankruptcy loopholes for millionaires and taking steps 
to address predatory lending and payday loans rather than a one-sided, 
harsh industry payoff. This bill should include real solutions to 
address the really hard problems fueling the financial difficulties so 
many in this Nation are facing. We should focus on the true abusers and 
not the working families that have played by the rules.
  Mr. Speaker, we need to have a bankruptcy bill that addresses the 
real abusers. This is a morally bankrupt bill.
  Mr. GINGREY. Mr. Speaker, I yield myself 1 minute.
  The gentlewoman from California brought up the issue about bankruptcy 
reform harming veterans. In speaking to that, Senate 256 needs-based 
test includes several safeguards and exceptions for special 
circumstances, including those of veterans: a specific reference to a 
debtor who is subject to a call or ordered to active duty in the Armed 
Forces to the extent that such occurrences substantiate special 
circumstances.
  S. 256 means test has a special exception just for debtors who are 
disabled veterans if the indebtedness occurred primarily during a 
period when the debtor was on active duty or performing a homeland 
security activity. The bill excuses a debtor if he or she is on active 
military duty in a military

[[Page 6389]]

combat zone from the mandatory credit counseling and financial 
management training requirements.
  I could go on and on, Mr. Speaker; but we are addressing, as we 
always have on this side of the aisle, the special needs of our great 
veterans of this country.
  Mr. HASTINGS of Florida. Mr. Speaker, I am pleased to yield 2 minutes 
to my good friend, the gentlewoman from New York (Mrs. Maloney).
  Mrs. MALONEY. Mr. Speaker, I rise in opposition to this rule. There 
is much that should be law in this bill; but as written, it should not 
pass. If this bill becomes law, children will have to compete for the 
first time with credit card companies in State court for the limited 
assets of debtors emerging from the bankruptcy process.
  I believe that there are many good parts of this bill; but as a 
mother I came to Congress to protect the rights of children, not to 
make their interests second to those of credit card companies. Congress 
has always insisted that debtors should take care of their children 
before their credit cards, and we should not undermine this important 
family value.
  I am a strong supporter of the netting provisions of the bill. These 
provisions provide for the orderly unwinding of complex financial 
transactions when one participant becomes insolvent. Alan Greenspan has 
said these provisions reduce uncertainty for market participants and 
reduce risk by making it less likely that the default of one financial 
institution would have a domino effect on others. I support this; and 
as a New Yorker, I am really concerned that these provisions go into 
effect to protect the financial sector in the event of another 
terrorist attack. And I agree we need to build savings.
  But these positive aspects of the bill are outweighed by an 
unacceptable feature that the majority has refused to address, the fact 
that the bill pits child support claimants against credit card 
companies in State court for the assets that the debtor has when she or 
he goes into bankruptcy. In other words, kids will lose.
  I offered an amendment to address this, but the Committee on Rules 
did not make it in order. They did not make other important amendments 
that would protect victims of medical catastrophes, of identity theft 
and many others. This is very, very important. The sponsors say that 
they take care of this, but none of their steps address the new threat 
created by the bill to protect children from having to fight credit 
card companies in State court. We have never done this before. We 
should not leave this as a legacy of this Congress. We can get this 
right. We should have put children first. We must vote against this 
rule and the bill.
  Mr. GINGREY. Mr. Speaker, I yield myself 1 minute.
  In response to the gentlewoman, I have got a letter from the National 
Child Support Enforcement Association, February 8, 2005, that I will 
insert for printing in the Record.
  Let me just read one paragraph, the first and most important:
  ``The National Child Support Enforcement Association is a membership 
organization representing the child support community--a workforce of 
over 63,000 child support professionals. For the past 5 years, it has 
strongly supported the enactment of bankruptcy reform because the 
treatment of child support and alimony under present bankruptcy law so 
desperately needs reform. We applaud your continuing efforts since the 
mid-1990s to reform the bankruptcy system and welcome your introduction 
of S. 256. The bankruptcy bill, S. 256, like the reform bills of the 
last three Congresses and the signed conference report of 2002, 
includes provisions crucial to the collection of child support during 
bankruptcy.''
                                            National Child Support


                                      Enforcement Association,

                                     Washington, DC, Feb. 8, 2005.
     Re Child Support Provisions in S. 256.

     Hon. Chuck Grassley,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Grassley: The National Child Support 
     Enforcement Association is the membership organization 
     representing the child support community--a workforce of over 
     63,000 child support professionals. For the past 5 years it 
     has strongly supported the enactment of bankruptcy reform 
     because the treatment of child support and alimony under 
     present bankruptcy law so desperately needs reform. We 
     applaud your continuing efforts since the mid 1990s to reform 
     the bankruptcy system and welcome your introduction of S. 
     256. The Bankruptcy Bill, S. 256, like the reform bills of 
     the last three Congresses and the signed conference report of 
     2002, includes provisions crucial to the collection of child 
     support during bankruptcy.
       With each day that passes under current law, countless 
     numbers of children of bankruptcy debtors are subject to 
     immediate interruption of their on-going support payments. In 
     addition, during the lengthy 3 to 5 years duration of 
     consumer bankruptcies as they happen every day under present 
     law, debtors often succeed in significantly delaying or even 
     avoiding repayment of child support and alimony arrearages 
     altogether. Hardest hit by these effects of current 
     bankruptcy law are former recipients of welfare who are owed 
     support arrears but are stuck waiting until the bankruptcy is 
     completed before such debts can be collected. Families who 
     are dependent on obtaining their share of marital property 
     for survival may now find under present bankruptcy law that 
     such debts are discharged. And, worst of all, under present 
     law significant collection tools used to require the payment 
     of current child support needed by the custodial parent to 
     feed and clothe children may be rendered ineffective after a 
     bankruptcy petition is filed. Today, a bankruptcy filing may 
     delay or halt the collection of support debts through the 
     federally mandated earnings withholding and tax refund 
     intercept programs, the license and passport revocation 
     procedures, and the credit reporting mandates.
       S. 256 would provide these children with first priority in 
     the collection of support debts, allow the enforcement of 
     medical support obligations, prevent any interruption in the 
     otherwise efficient process of withholding earnings for 
     payment of child support, and insure that during the course 
     of a consumer bankruptcy all support owed to the family would 
     be paid, and paid timely. It will allow state court actions 
     involving custody and visitation, dissolution of marriage, 
     and domestic violence to proceed without interference from 
     bankruptcy court litigation.
       We, therefore, urge the members of the Conference Committee 
     and the leadership of Congress to enact this important piece 
     of legislation with its long overdue bankruptcy reforms.
           Sincerely,

                                                  Margot Bean,

                                         President, National Child
                                  Support Enforcement Association.

                              {time}  1130

  Mr. GINGREY. Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 5 seconds to the 
gentlewoman from New York (Mrs. Maloney) for the purpose of making a 
unanimous consent request.
  Mrs. MALONEY. Mr. Speaker, I request permission to place in the 
Record, in response to this statement, statements by Bar Associations 
across this country, women's organizations, women's legal defense, 
asserting what I have said that children are put second to credit card 
companies.
  The material referred to is as follows:

                                  National Women's Law Center,

                                   Washington, DC, March 14, 2005.
     Re: Oppose H.R. 685, The Bankruptcy Act of 2005
     Hon. John Conyers, Jr.,
     House of Representatives,
     Washington, DC.
       Dear Congressman Conyers: The National Women's Law Center 
     is writing to urge you to oppose H.R. 685, a bankruptcy bill 
     that is harsh on economically vulnerable women and their 
     families, but that fails to address serious abuses of the 
     bankruptcy system by perpetrators of violence against 
     patients and health care professionals at women's health care 
     clinics.
       This bill would inflict additional hardship on over one 
     million economically vulnerable women and families who are 
     affected by the bankruptcy system each year: those forced 
     into bankruptcy because of job loss, medical emergency, or 
     family breakup--factors which account for nine out of ten 
     filings--and women who are owed child or spousal support by 
     men who file for bankruptcy. Contrary to the claims of some 
     proponents of the bill, low- and moderate-income filers--who 
     are disproportionately women--are not protected from most of 
     its harsh provisions, and mothers owed child or spousal 
     support are not protected from increased competition from 
     credit card companies and other commercial creditors during 
     and after bankruptcy that will make it harder for them to 
     collect support.
       The bill would make it more difficult for women facing 
     financial crises to regain their economic stability through 
     the bankruptcy process. H.R. 685 would make it harder for 
     women to access the bankruptcy system, because the means test 
     requires additional paperwork of even the poorest filers; 
     harder for

[[Page 6390]]

     women to save their homes, cars, and essential household 
     items through the bankruptcy process; and harder for women to 
     meet their children's needs after bankruptcy because many 
     more debts would survive.
       The bill also would put women owed child or spousal support 
     who are bankruptcy creditors at a disadvantage. By increasing 
     the rights of many other creditors, including credit card 
     companies, finance companies, auto lenders and others, the 
     bill would set up an intensified competition for scarce 
     resources between mothers and children owed support and these 
     commercial creditors during and after bankruptcy. The 
     domestic support provisions in the bill may have been 
     intended to protect the interests of mothers and children; 
     unfortunately, they fail to do so.
       Moving child support to first priority among unsecured 
     creditors in Chapter 7 sounds good, but is virtually 
     meaningless; even today, with no means test limiting access 
     to Chapter 7, fewer than four percent of Chapter 7 debtors 
     have anything to distribute to unsecured creditors. In 
     Chapter 13, the bill would require that larger payments be 
     made to many commercial creditors; as a result, payments of 
     past-due child support would have to be made in smaller 
     amounts and over a longer period of time, increasing the risk 
     that child support debts will not be paid in full. And, when 
     the bankruptcy process is over, women and children owed 
     support would face increased competition from commercial 
     creditors. Under current law, child and spousal support are 
     among the few debts that survive bankruptcy; under this bill, 
     many additional debts would survive. But once the bankruptcy 
     process is over, the priorities that apply during bankruptcy 
     have no meaning or effect. Women and children owed support 
     would be in direct competition with the sophisticated 
     collection departments of commercial creditors whose 
     surviving claims would be increased.
       At the same time, the bill fails to address real abuses of 
     the bankruptcy system. Perpetrators of violence against 
     patients and health care professionals at women's health 
     clinics have engaged in concerted efforts to use the 
     bankruptcy system to evade responsibility for their illegal 
     actions. This bill does nothing to curb this abuse.
       The bill is profoundly unfair and unbalanced. Unless there 
     are major changes to H.R. 685, we urge you to oppose it.
           Very truly yours,
     Nancy Duff Campbell,
       Co-President.
     Marcia Greenberger,
       Co-President.
     Joan Entmacher,
       Vice President and Director, Family Economic Security.
                                  ____



                                               Legal Momentum,

                                Washington, DC, February 28, 2005.
       Dear Senator: Legal Momentum is writing to you today to 
     urge you to oppose S. 256, the Bankruptcy Abuse Prevention 
     and Consumer Protection Act of 2005. Legal Momentum is a 
     leading national not-for-profit civil rights organization 
     with a long history of advocating for women's rights and 
     promoting gender equality. Among our major goals is securing 
     economic justice for all. In this regard we have worked to 
     end poverty; improve welfare reform; create affordable, 
     quality childcare and guarantee workplace protections for 
     survivors of domestic violence. The bankruptcy system is 
     another crucial safety net for women, and Legal Momentum is 
     concerned that the changes to the bankruptcy system proposed 
     in S. 256 would be harmful to the economic security of women 
     and families. In addition, the legislation fails to hold 
     perpetrators of violence against workers and patients of 
     women's health care clinics accountable for their actions.
       The large majority of women who file for bankruptcy do so 
     because of unemployment, medical bills, divorce, or because 
     they are owed child support by men who file for bankruptcy. 
     And because women are more likely to be caring for dependent 
     children or parents and have lower incomes and fewer assets 
     than men, they are more likely to seek bankruptcy as a result 
     of a divorce or a medical problem. In 2001, women represented 
     39% of households filing for bankruptcy, while men filing 
     independently represented only 29%. Married couples 
     represented 32%. Single mothers are the group most at risk 
     for bankruptcy--in the last 20 years, bankruptcy filings for 
     female-headed households have increased at more than double 
     the rate of bankruptcies in other households. This 
     legislation will make it more difficult for women already 
     struggling to achieve economic independence to access the 
     bankruptcy system. The proposed means test will make filing 
     for bankruptcy more complex, it will be more difficult to 
     keep homes and cars from being repossessed, and even if a 
     bankruptcy is successfully filed, more debts will main.
       Even the child support provisions in the legislation will 
     not help women and children. If the parent who owes child 
     support is the debtor, the bill will divert more money to 
     other creditors and allow more non-child support debts to 
     survive bankruptcy. As a result, the custodial parent, 
     usually the mother, will have to compete with other 
     creditors, including credit card companies, for the debtor's 
     limited income.
       Legal Momentum is concerned that, unlike in the conference 
     report of last year's bankruptcy legislation, S. 256 does not 
     include a provision to prevent perpetrators of clinic 
     violence from declaring bankruptcy to avoid responsibility 
     for their actions against patients and health care providers. 
     Please include language that would insure that these 
     perpetrators of violence cannot use the bankruptcy system to 
     protect themselves. The pocketbooks of violent offenders are 
     protected, while hardworking women struggling to make ends 
     meet and feed their families are denied access to a system 
     that could help and provide them with hope for the future.
       Legal Momentum believes that if S. 256 is enacted, the 
     economic effects on more than 1.2 million women each year 
     will be devastating, and we strongly urge you to oppose the 
     legislation. If you have any questions, please contact Legal 
     Momentum's Policy Office at 202/326-0044.
           Sincerely
                                                Lisalyn R. Jacobs,
     Vice President for Government Relations.
                                  ____

                                             Leadership Conference


                                              on Civil Rights,

                                   Washington, DC, March 14, 2005.

                  Oppose Unfair Bankruptcy ``Reform''

       Dear Representative: On behalf of the Leadership Conference 
     on Civil Rights (LCCR), the nation's oldest, largest, and 
     most diverse civil rights coalition, we write to express our 
     strong opposition to the ``Bankruptcy Abuse Prevention and 
     Consumer Protection Act of 2005'' (H.R. 685). We urge you to 
     oppose H.R. 685 because it poses significant concerns for the 
     economic self-sufficiency of all working people in the United 
     States and will cause substantial financial inequities in the 
     process.
       The issue of bankruptcy reform is of profound concern to 
     LCCR because, as a general matter, disadvantaged groups in 
     our society disproportionately find themselves in bankruptcy 
     courts as a result of economic discrimination in its many 
     forms. For example:
       Divorced women are 300 percent more likely than single or 
     married women to find themselves in bankruptcy court 
     following the cumulative effects of lower wages, reduced 
     access to health insurance, the devastating consequences of 
     divorce, and the disproportionate financial strain of rearing 
     children alone;
       Since 1991, the number of older Americans filing for 
     bankruptcy has grown by more than 120 percent. This age group 
     tends to file after being pushed out of jobs and encountering 
     discrimination in hiring, which could result in loss of 
     health insurance, or victimization by credit scams or home 
     improvement frauds that put their homes and security at risk, 
     and;
       African American and Hispanic American homeowners are 500 
     percent more likely than white homeowners to find themselves 
     in bankruptcy court largely due to discrimination in home 
     mortgage lending and housing purchases, and to inequalities 
     in hiring opportunities, wages, and health insurance 
     coverage.
       H.R. 685 proposes a number of changes in current bankruptcy 
     law, and supporters claim that enactment is thereby necessary 
     to stop abuse of bankruptcy laws. Yet a majority of those who 
     file are working families who are not abusing the system; 
     instead, they have experienced financial catastrophe. H.R. 
     685 would make starting over virtually impossible.
       In addition, hundreds of thousands of women and children 
     who are owed child support or alimony would be harmed under 
     H.R. 685, as it forces them to compete with credit card 
     issuers and therefore would make it less likely that support 
     payments will be made to those in need. H.R. 685 will also 
     make it much more difficult for businesses to reorganize, 
     thereby forcing them into bankruptcy and eliminating much 
     needed jobs.
       H.R. 685 also fails to address one of the key reasons that 
     bankruptcy filings have increased in recent years--a reason 
     that is the willful doing of many of the financial 
     institutions that are lobbying in support of the bill--the 
     aggressive marketing of credit cards to our most financially 
     vulnerable citizens, such as women, students, seniors, and 
     the working poor. According to a recent article in the 
     Washington Post, credit card companies continue to offer 
     credit in record amounts, in an aggressive campaign to saddle 
     more Americans with debts. (Kathleen Day, Tighter Bankruptcy 
     Law Favored, Washington Post, February 11, 2005 at A-05). Yet 
     these same companies have steadfastly resisted even the most 
     modest reforms to help consumers avoid placing themselves in 
     financial jeopardy in the first place, such as requiring 
     clearer disclosure about late payment fees, interest rates, 
     and minimum payments.
       LCCR has opposed bankruptcy reform proposals similar to 
     H.R. 685 every year since 1998. Sadly, bankruptcy reform 
     proponents are now pushing legislation that is every bit as 
     flawed as previous legislation and, given today's slow 
     economy, would lead to even more inequitable results. We 
     strongly urge you to reject H.R. 685 because it would 
     radically alter the bankruptcy system in a way that imposes 
     hardships particularly on the most vulnerable among us.

[[Page 6391]]

       Thank you for your consideration. If you have any 
     questions, please feel free to contact Rob Randhava, LCCR 
     Counsel, at (202) 466-6058.
           Sincerely,
     Wade Henderson,
       Executive Director.
     Nancy Zirkin,
       Deputy Director.
                                  ____


  Written Statement of Marshall Wolf, May 13, 1998, on Behalf of the 
    Governing Council of the Family Law Section of the American Bar 
                              Association

       * * * earlier version of this legislation concluded that 
     ``child support and credit card obligations could be `pitted 
     against' one another. . . . Both the domestic creditor and 
     the commercial credit card creditor could pursue the debtor 
     and attempt to collect from post-petition assets, but not in 
     the bankruptcy court.''
       Outside of the bankruptcy court is precisely the arena 
     where sophisticated credit card companies have the greatest 
     advantages. While federal bankruptcy court enforces a strict 
     set of priority and payment rules generally seeking to 
     provide equal treatment of creditors with similar legal 
     rights, state law collection is far more akin to ``survival 
     of the fittest.'' Whichever creditor engages in the most 
     aggressive tactic--be it through repeated collection demands 
     and letters, cutting off access to future credit, garnishment 
     of wages or foreclose on assets--is most likely to be repaid. 
     As Marshall Wolf has written on behalf of the Governing 
     Counsel of the Family Law Section of the American Bar 
     Association, ``if credit card debt is added to the current 
     list of items that are now not dischargeable after a 
     bankruptcy of a support payer, the alimony and child support 
     recipient will be forced to compete with the well organized, 
     well financed, and obscenely profitable credit card companies 
     to receive payments from the limited income of the poor guy 
     who just went through a bankruptcy. It is not a fair fight 
     and it is one that women and children who rely on support 
     will lose.''
       It is for these reasons that groups concerned with the 
     payment of alimony and child support have expressed their 
     strong opposition to the bill and its predecessors. Professor 
     Karen Gross of New York Law School stated succinctly that 
     ``the proposed legislation does not live up to its billing; 
     it fails to protect women and children adequately.'' Joan 
     Entmacher, on behalf of the National Women's Law Center, 
     testified that ``the child support provisions of the bill 
     fail to ensure that the increased rights the bill would give 
     to commercial creditors do not come at the expense of 
     families owed support.''
       Assertions by the legislation's supporters that any 
     disadvantages to women and children under S. 256 are offset 
     by supposedly pro-child support provisions are not 
     persuasive. It is useful to recall the context in which these 
     provisions were added. In the 105th Congress, the bill's 
     proponents adamantly denied that the bill created any 
     problems with regard to alimony and child support. Although 
     the proponents have now changed course, the child support and 
     alimony provisions included do not respond to the provisions 
     in the bill causing the problem--namely the provisions 
     limiting the ability of struggling, single mothers to file 
     for bankruptcy; enhancing the bankruptcy and post-bankruptcy 
     status of credit card debt; and making it more difficult for 
     debtors * * *

     
                                  ____
                                                   March 11, 2005.
     Re The Bankruptcy Abuse Prevention and Consumer Protection 
         Act of 2005 (H.R. 685/S. 256).

     Hon. F. James Sensenbrenner,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Rayburn House Office Building, 
         Washington, DC.
     Hon. John Conyers, Jr.,
     Ranking Democratic Member, Committee on the Judiciary, House 
         of Representatives, Rayburn House Office Building, 
         Washington, DC.
       We are professors of bankruptcy and commercial law. We are 
     writing with regard to The Bankruptcy Abuse Prevention and 
     Consumer Protection Act of 2005 (H.R. 685/S. 256)(the 
     ``bill''). We have been following the bankruptcy reform 
     process for the last eight years with keen interest. The 110 
     undersigned professors come from every region of the country 
     and from all major political parties. We are not members of a 
     partisan, organized group. Our exclusive interest is to seek 
     the enactment of a fair, just and efficient bankruptcy law. 
     Many of us have written before to express our concerns about 
     earlier versions of this legislation, and we write again as 
     yet another version of the bill comes before you. The bill is 
     deeply flawed, and will harm small businesses, the elderly, 
     and families with children. We hope the House of 
     Representatives will not act on it.
       It is a stark fact that the bankruptcy filing rate has 
     slightly more than doubled during the last decade, and that 
     last year approximately 1.6 million households filed for 
     bankruptcy. The bill's sponsors view this increase as a 
     product of abuse of bankruptcy by people who would otherwise 
     be in a position to pay their debts. Bankruptcy, the bill's 
     sponsor says, has become a system ``where deadbeats can get 
     out of paying their debt scott-free while honest Americans 
     who play by the rules have to foot the bill.''
       We disagree. The bankruptcy filing rate is a symptom. It is 
     not the disease. Some people do abuse the bankruptcy system, 
     but the overwhelming majority of people in bankruptcy are in 
     financial distress as a result of job loss, medical expense, 
     divorce, or a combination of those causes. In our view, the 
     fundamental change over the last ten years has been the way 
     that credit is marketed to consumers. Credit card lenders 
     have become more aggressive in marketing their products, and 
     a large, very profitable, market has emerged in subprime 
     lending. Increased risk is part of the business model. 
     Therefore, it should not come as a surprise that as credit is 
     extended to riskier and riskier borrowers, a greater number 
     default when faced with a financial reversal. Nonetheless, 
     consumer lending remains highly profitable, even under 
     current law.
       The ability to file for bankruptcy and to receive a fresh 
     start provides crucial aid to families overwhelmed by 
     financial problems. Through the use of a cumbersome, and 
     procrustean means-test, along with dozens of other measures 
     aimed at ``abuse prevention,'' this bill seeks to shoot a 
     mosquito with a shotgun. By focusing on the opportunistic use 
     of the bankruptcy system by relatively few ``deadbeats'' 
     rather than fashioning a tailored remedy, this bill would 
     cripple an already overburdened system.
       1. The Means-test: The principal mechanism aimed at the 
     bankruptcy filing rate is the so called ``meanstest,'' which 
     denies access to Chapter 7 (liquidation) bankruptcy to those 
     debtors who are deemed ``able'' to repay their debts. The 
     bill's sponsor describes the test as a ``flexible . . . test 
     to assess an individual's ability to repay his debts,'' and 
     as a remedy to ``irresponsible consumerism and lax bankruptcy 
     law.'' While the stated concept is fine--people who can repay 
     their debts should do so--the particular mechanism proposed 
     is unnecessary, over-inclusive, painfully inflexible, and 
     costly in both financial terms and judicial resources.
       First, the new law is unnecessary. Existing section 707(b) 
     already allows a bankruptcy judge, upon her own motion or the 
     motion of the United States Trustee, to deny a debtor a 
     discharge in Chapter 7 to prevent a ``substantial abuse.'' 
     Courts have not hesitated to deny discharges where Chapter 7 
     was being used to preserve a well-to-do lifestyle, and the 
     United States Trustee's office has already taken it upon 
     itself to object to discharge when, in its view, the debtor 
     has the ability to repay a substantial portion of his or her 
     debts.
       Second, the new means-test is over-inclusive. Because it is 
     based on income and expense standards devised by the Internal 
     Revenue Service to deal with tax cheats, the principal effect 
     of the ``means-test'' would be to replace a judicially 
     supervised, flexible process for ferreting out abusive 
     filings with a cumbersome, inflexible standard that can be 
     used by creditors to impose costs on overburdened families, 
     and deprive them of access to a bankruptcy discharge. Any 
     time middle-income debtors have $100/month more income than 
     the IRS would allow a delinquent taxpayer to keep, they must 
     submit themselves to a 60 month repayment plan. Such a plan 
     would yield a mere $6000 for creditors over five years, less 
     costs of government-sponsored administration.
       Third, to give just one example of its inflexibility, the 
     means-test limits private or parochial school tuition 
     expenses to $1500 per year. According to a study by the 
     National Center for Educational Statistics, even in 1993, 
     $1500 would not have covered the average tuition for any 
     category of parochial school (except Seventh Day Adventists 
     and Wisconsin Synod Lutherans). Today it would not come close 
     for any denomination. In order to yield a few dollars for 
     credit card issuers, this bill would force many struggling 
     families to take their children from private or parochial 
     school (often in violation of deeply held religious beliefs) 
     for three to five years in order to confirm a Chapter 13 
     plan.
       Fourth, the power of creditors to raise the ``abuse'' issue 
     will significantly increase the number of means-test 
     hearings. Again, the expense of the hearings will be passed 
     along to the already strapped debtor. This will add to the 
     cost of filing for bankruptcy, whether the filing is abusive 
     or not. It will also swamp bankruptcy courts with lengthy and 
     unnecessary hearings, driving up costs for the taxpayers.
       Finally, the bill takes direct aim at attorneys who handle 
     consumer bankruptcy cases by making them liable for errors in 
     the debtor's schedules.
       Our problem is not with means-testing per se. Our problem 
     is with the collateral costs that this particular means-test 
     would impose. This is not a typical means test, which acts as 
     a gatekeeper to the system. It would instead burden the 
     system with needless hearings, deprive debtors of access to 
     counsel, and arbitrarily deprive families of needed relief. 
     The human cost of this delay, expense, and exclusion from 
     bankruptcy relief is considerable. As a recent study of 
     medical bankruptcies shows, during the two years before 
     bankruptcy, 45% of the debtors studied had to skip a needed 
     doctor visit. Over 25%

[[Page 6392]]

     had utilities shut off, and nearly 20% went without food. If 
     the costs of bankruptcy are higher, the privations will 
     increase. The vast majority of individuals and families that 
     file for bankruptcy are honest but unfortunate. The main 
     effect of the means-test, along with the other provisions 
     discussed below, will be to deny them access to a bankruptcy 
     discharge.
       2. Other Provisions That Will Deny Access to Bankruptcy 
     Court: The means-test is not the only provision in the bill 
     which is designed to limit access to the bankruptcy 
     discharge. There are many others. For example:
       Sections 306 and 309 of the bill (working together) would 
     eliminate the ability of Chapter 13 debtors to ``strip down'' 
     liens on personal property, in particular their car, to the 
     value of the collateral. As it is, many Chapter 13 debtors 
     are unable to complete the schedule of payments provided for 
     under their plan. These provisions significantly raise the 
     cash payments that must be made to secured creditors under a 
     Chapter 13 plan. This will have a whipsaw effect on many 
     debtors, who, forced into Chapter 13 by the means-test, will 
     not have the income necessary to confirm a plan under that 
     Chapter. This group of debtors would be deprived of any 
     discharge whatsoever, either in Chapter 7 or Chapter 13. In 
     all cases this will reduce payments to unsecured creditors (a 
     group which, ironically, includes many of the sponsors of 
     this legislation).
       Section 106 of the bill would require any individual debtor 
     to receive credit counseling from a credit counseling agency 
     within 180 days prior to filing for bankruptcy. While credit 
     counseling sounds benign, recent Senate hearings with regard 
     to the industry have led Senator Norm Coleman to describe the 
     credit counseling industry as a network of not for profit 
     companies linked to for-profit conglomerates. The industry is 
     plagued with ``consumer complaints about excessive fees, 
     pressure tactics, nonexistent counseling and education, 
     promised results that never come about, ruined credit 
     ratings, poor service, in many cases being left in worse debt 
     than before they initiated their debt management plan.'' 
     Mandatory credit counseling would place vulnerable debtors at 
     the mercy of an industry where, according to a recent Senate 
     investigation, many of the ``counselors'' are seeking to 
     profit from the misfortune of their customers.
       Sections 310 and 314 would significantly reduce the ability 
     of debtors to discharge credit card debt and would reduce the 
     scope of the fresh start, for even those debtors who are able 
     to gain access to bankruptcy.
       The cumulative effect of these provisions, and many others 
     contained in the bill (along with the means-test) will be to 
     deprive the victims of disease, job loss, and divorce of much 
     needed relief.
       3. The Elusive Bankruptcy Tax?: The bill's proponents argue 
     that it is good for consumers because it will reduce the so-
     called ``bankruptcy tax.'' In their view, the cost of credit 
     card defaults is passed along to the rest of those who use 
     credit cards, in the form of higher interest rates. As the 
     bill's sponsor dramatically puts it: ``honest Americans who 
     play by the rules have to foot the bill.'' This argument 
     seems logical. However, it is not supported by facts. The 
     average interest rate charged on consumer credit cards has 
     declined considerably over the last dozen years. More 
     importantly, between 1992 and 1995, the spread between the 
     credit card interest rate and the risk free six-month t-bill 
     rate declined significantly, and remained basically constant 
     through 2001. At the same time, the profitability of credit 
     card issuing banks remains at near record levels.
       Thus, it would appear that hard evidence of the so-called 
     ``bankruptcy tax'' is difficult to discern. That the 
     unsupported assertion of that phenomenon should drive 
     Congress to restrict access to the bankruptcy system, which 
     effectuates Congress's policies about the balance of rights 
     of both creditors and debtors, is simply wrong.
       4. Who Will Bear the Burden of the Means-test? The 
     bankruptcy filing rate is not uniform throughout the country. 
     In Alaska, one in 171.2 households files for bankruptcy. In 
     Utah the filing rate is one in 36.5. The states with the ten 
     highest bankruptcy filing rates are (in descending order): 
     Utah, Tennessee, Georgia, Nevada, Indiana, Alabama, Arkansas, 
     Ohio, Mississippi, and Idaho. The deepest hardship will be 
     felt in the heartland, where the filing rates are highest. 
     The pain will not only be felt by the debtors themselves, but 
     also by the local merchants, whose customers will not have 
     the benefit of the fresh start.
       The fastest growing group of bankruptcy filers is older 
     Americans. While individuals over 55 make up only about 15% 
     of the people filing for bankruptcy, they are the fastest 
     growing age group in bankruptcy. More than 50% of those 65 
     and older are driven to bankruptcy by medical debts they 
     cannot pay. Eighty-five percent of those over 60 cite either 
     medical or job problems as the reason for bankruptcy. Here 
     again, abuse is not the issue. The bankruptcy filing rate 
     reveals holes in the Medicare and Social Security systems, as 
     seniors and aging members of the baby-boom generation declare 
     bankruptcy to deal with prescription drug bills, co-pays, 
     medical supplies, long-term care, and job loss.
       Finally, it is crucial to recognize that the filers 
     themselves are not the only ones to suffer from financial 
     distress. They often have dependents. As it turns out, 
     families with children single mothers and fathers, as well as 
     intact families--are more likely to file for bankruptcy than 
     families without them. In 2001, approximately 1 in 123 adults 
     filed for bankruptcy. That same year, 1 in 51 children was a 
     dependent in a family that had filed for bankruptcy. The 
     presence of children in a household increases the likelihood 
     that the head of household will file for bankruptcy by 302%. 
     Limiting access to Chapter 7 will deprive these children (as 
     well as their parents) of a fresh start.
       Conclusion: The bill contains a number of salutary 
     provisions, such as the proposed provisions that protect 
     consumers from predatory lending. Our concern is with the 
     provisions addressing ``bankruptcy abuse.'' These provisions 
     are so wrongheaded and flawed that they make the bill as a 
     whole unsupportable. We urge you to either remove these 
     provisions or vote against the bill.
           Sincerely,
       Richard I. Aaron, S.J. Quinney College of Law, University 
     of Utah.
       Peter Alexander, Dean and Professor of Law, Southern 
     Illinois University--Carbondale School of Law.
       Thomas B. Allington, Professor of Law, Indiana University 
     School of Law--Indianapolis.
       Ralph C. Anzivino, Professor of Law, Marquette University 
     School of Law,
       Allan Axelrod, Brennan Professor of Law (emeritus), 
     Rutgers-Newark Law School.
       Douglas G. Baird, Professor of Law, University of Chicago 
     Law School.
       Patrick B. Bauer, Professor of Law, University of Iowa.
       Robert J. Bein, Adjunct Professor of Law, The Dickinson 
     School of Law of the Pennsylvania State University.
       Carl S. Bjerre, Associate Professor of Law, University of 
     Oregon School of Law.
       Susan Block-Lieb, Professor of Law, Fordham Law School.
       Amelia H. Boss, Professor of Law, Temple University School 
     of Law.
       Kristin Kalsem Brandser, Associate Professor of Law, 
     University of Cincinnati College of Law.
       Jean Braucher, Roger Henderson Professor of Law, University 
     of Arizona.
       Ralph Brubaker, Professor of Law and Mildred Van Voorhis 
     Jones, Faculty Scholar, University of Illinois College of 
     Law.
       Mark E. Budnitz, Professor of Law, Georgia State University 
     College of Law.
       Daniel Bussel, Professor of Law, UCLA School of Law.
       Bryan Camp, Professor of Law, Texas Tech University School 
     of Law.
       Dennis Cichon, Professor of Law, Thomas Cooley Law School.
       Donald F. Clifford, Jr., Aubrey Brooks Professor Emeritus, 
     University of North Carolina School of Law.
       Neil B. Cohen, Professor of Law, Brooklyn Law School.
       Andrea Coles-Bjerre, Assistant Professor, University of 
     Oregon School of Law.
       Corinne Cooper, Professor Emerita of Law, University of 
     Missouri, Kansas City.
       Marianne B. Culhane, Professor of Law, Creighton Univ. 
     School of Law.
       Susan L. DeJarnatt, Associate Professor of Law, Beasley 
     School of Law of Temple University.
       Paulette J. Delk, Associate Professor, Cecil C. Humphreys 
     School of Law, The University of Memphis.
       A. Mechele Dickerson, 2004-2005 Cabell Research Professor 
     of Law, William and Mary Law School.
       W. David East, Professor of Law, South Texas College of 
     Law.
       Thomas L. Eovaldi, Professor of Law Emeritus, Northwestern 
     University School of Law.
       Mary Jo Eyster, Associate Professor of Clinical Law, 
     Brooklyn Law School.
       Adam Feibelman, Associate Professor, University of North 
     Carolina.
       Paul Ferber, Professor of Law, Vermont Law School.
       Jeffrey Ferriell, Professor of Law, Capital University 
     School of Law.
       Larry Garvin, Associate Professor of Law, Michael E. Moritz 
     College of Law, Ohio State University.
       Michael Gerber, Professor of Law, Brooklyn Law School.
       S. Elizabeth Gibson, Burton Craige Professor of Law, 
     University of North Carolina at Chapel Hill.
       Marjorie L. Girth, Professor of Law, Georgia State 
     University College of Law.
       Michael M. Greenfield, Walter D. Coles, Professor of Law, 
     Washington University in St. Louis School of Law.
       Karen Gross, Professor of Law, New York Law School.
       Steven L. Harris, Professor of Law, Chicago-Kent College of 
     Law.
       John Hennigan, Professor of Law, St. John's University 
     School of Law.
       Henry E. Hildebrand III, Adjunct Professor, Nashville 
     School of Law.
       Margaret Howard, Professor of Law, Washington and Lee 
     University School of Law.
       Sarah Jane Hughes, Professor of Law, Indiana University-
     Bloomington School of Law.
       Melissa B. Jacoby, Associate Professor of Law, University 
     of North Carolina at Chapel Hill.

[[Page 6393]]

       Edward J. Janger, Visiting Professor of Law, University of 
     Pennsylvania Law School and Professor of Law, Brooklyn Law 
     School.
       Creola Johnson, Associate Professor of Law, Ohio State 
     Univeristy, Moritz College of Law.
       Daniel Keating, Tyrell Williams, Professor of Law, 
     Washington University in Saint Louis School of Law.
       Kenneth C. Kettering, Associate Professor, New York Law 
     School.
       Jason Kilborn, Assistant Professor, Louisiana State 
     University Law Center.
       Don Korobkin, Professor of Law, Rutgers-Camden School of 
     Law.
       Robert M. Lawless, Gordon & Silver, Ltd., Professor of Law, 
     University of Nevada, Las Vegas, William S. Boyd School of 
     Law.
       Paul Lewis, Professor of Law, The John Marshall Law School.
       Jonathan C. Lipson, Visiting Professor of Law, Temple 
     University and Professor of Law, University of Baltimore.
       Lynn M. LoPucki, Security Pacific Bank Professor of Law, 
     UCLA Law School.
       Ann Lousin, Professor of Law, John Marshall Law School.
       Stephen J. Lubben, Associate Professor of Law, Seton Hall 
     University School of Law.
       Lois R. Lupica, Professor of Law, University of Maine 
     School of Law.
       Ronald J. Mann, Ben H. & Kitty King Powell Chair in 
     Business and Commercial Law, University of Texas School of 
     Law.
       Nathalie Martin, Dickason Professor of Law, UNM Mexico 
     School of Law.
       James McGrath, Associate Professor of Law, Appalachian 
     School of Law.
       Stephen McJohn, Professor of Law, Suffolk University Law 
     School.
       Juliet M. Moringiello, Professor of Law, Widener University 
     School of Law.
       Jeffrey W. Morris, Samuel A. McCray Chair in Law, 
     University of Dayton School of Law.
       James P. Nehf, Professor and Cleon H. Foust Fellow, Indiana 
     University School of Law-Indianapolis, and Visiting 
     Professor, University of Georgia School of Law.
       Spencer Neth, Professor of Law, Case Western Reserve 
     University.
       Gary Neustadter, Professor of Law, Santa Clara University 
     School of Law.
       Scott F. Norberg, Associate Dean for Academic Affairs and 
     Professor of Law, Florida International University College of 
     Law.
       Richard Nowka, Professor of Law, Louis D. Brandeis School 
     of Law, University of Louisville.
       Rafael I. Pardo, Associate Professor of Law, Tulane Law 
     School.
       Dean Pawlowic, Professor of Law, Texas Tech University 
     School of Law.
       Christopher Peterson, Assistant Professor of Law, 
     University of Florida Fredric G. Levin College of Law.
       Lydie Pierre-Louis, Assistant Professor of Law, Director, 
     Securities Arbitration Clinic, St. John's University School 
     of Law.
       John A. E. Pottow, Assistant Professor of Law, University 
     of Michigan Law School.
       Lydie Nadia Pierre-Louis, Assistant Professor of Law, St. 
     John's University School of Law.
       Thomas E. Plank, Joel A. Katz Distinguished Professor of 
     Law, University of Tennessee College of Law.
       Katherine Porter, Visiting Associate Professor of Law, 
     University of Nevada, Las Vegas William S. Boyd School of 
     Law.
       Theresa J. Pulley Radwan, Associate Dean of Academics, 
     Stetson University College of Law.
       Nancy B. Rapoport, Professor of Law, University of Houston 
     Law Center.
       Robert K. Rasmussen, Milton Underwood Chair in Law, FedEx 
     Research Professor of Law, Director, Joe C. Davis Law and 
     Economics Program, Vanderbilt University School of Law.
       David Reiss, Assistant Professor, Brooklyn Law School.
       Alan N. Resnick, Interim Dean and Benjamin Weintraub, 
     Professor of Law, Hofstra University School of Law.
       R. J. Robertson, Jr., Professor of Law, Southern Illinois 
     University School of Law.
       Arnold S. Rosenberg, Assistant Professor of Law, Thomas 
     Jefferson School of Law.
       Keith A. Rowley, Associate Professor of Law, William S. 
     Boyd School of Law, University of Nevada Las Vegas.
       David Wm. Ruskin, Adjunct Professor of Law, Wayne State 
     University Law School.
       Michael L. Rustad, Thomas F. Lambert Jr., Professor of Law 
     & Co-Director of Intellectual Property Law Program, Suffolk 
     University Law School.
       Milton R. Schroeder, Professor of Law, Arizona State 
     University College of Law.
       Steven L. Schwarcz, Stanley A. Star, Professor of Law & 
     Business, Duke University School of Law, Founding Director, 
     Global Capital Markets Center.
       Stephen L. Sepinuck, Professor of Law, Gonzaga University 
     School of Law.
       Charles Shafer, Professor of Law, University of Baltimore.
       Paul Shupack, Professor of Law, Benjamin Cardozo School of 
     Law, Yeshiva University.
       Norman I. Silber, Professor of Law, Hofstra University 
     School of Law.
       David Skeel, S. Samuel Arsht, Professor of Corporate Law, 
     University of Pennsylvania Law School.
       Judy Beckner Sloan, Professor of Law, Southwestern 
     University School of Law.
       James C. Smith, Professor of Law, University of Georgia.
       Charles Tabb, Associate Dean for Academic Affairs and Alice 
     Curtis Campbell Professor of Law, University of Illinois 
     College of Law.
       Walter Taggart, Prof. of Law, Villanova University School 
     of Law.
       Bernard Trujillo, Assistant Professor, U. Wisconsin Law 
     School.
       Joan Vogel, Professor of Law, Vermont Law School.
       Thomas M. Ward, Professor, University of Maine School of 
     Law.
       G. Ray Warner, Professor of Law & Director, LL.M. in 
     Bankruptcy, St. John's University School of Law.
       Elizabeth Warren, Leo Gottlieb, Professor of Law, Harvard 
     Law School.
       Elaine A. Welle, Professor of Law, University of Wyoming 
     College of Law.
       Jay Lawrence Westbrook, Benno C. Schmidt, Chair of Business 
     Law, University of Texas School of Law.
       Douglas Whaley, Professor Emeritus, Moritz College of Law, 
     Ohio State University.
       Michaela M. White, Professor of Law, Creighton University 
     School of Law.
       Mary Jo Wiggins, Professor of Law, University of San Diego 
     School of Law.
       Lauren E. Willis, Associate Professor of Law, Loyola Law 
     School--Los Angeles.
       William J. Woodward, Jr., Professor of Law, Temple 
     University School of Law.
       John J. Worley, Professor of Law, South Texas College of 
     Law.
       Mary Wynne, Associate Clinical Professor and Director 
     Indian Legal Clinic, Arizona State University.

  The SPEAKER pro tempore (Mr. Sweeney). Is there objection to the 
request of the gentlewoman from New York?
  Mrs. MALONEY. And this is wrong. Where are the family values in this 
Congress?
  The SPEAKER pro tempore. The gentlewoman is not under recognition.
  Mrs. MALONEY. Is it just rhetoric or do you really care about 
children?
  Mr. SAM JOHNSON of Texas. I object, Mr. Speaker.
  The SPEAKER pro tempore. Objection is heard.
  Mr. GINGREY. Mr. Speaker, I reserve the balance of my time.


                        Parliamentary Inquiries

  Mr. HASTINGS of Florida. Parliamentary inquiry, Mr. Speaker. What was 
the objection about?
  The SPEAKER pro tempore. The objection was regarding the placement of 
extraneous material in the Record.
  Mr. HASTINGS of Florida. Mr. Speaker, further parliamentary inquiry, 
what is the ruling of the Chair?
  The SPEAKER pro tempore. The Chair heard objection.
  Mr. HASTINGS of Florida. Further parliamentary inquiry, so the 
gentlewoman from New York's request to put in the Record the material?
  The SPEAKER pro tempore. The material will not be placed in the 
Record. Objection was heard.
  Mr. HASTINGS of Florida. Mr. Speaker, there is objection to a 
Member's placing in the Record, a Member who had made a statement 
supporting the things that she asked to be submitted, that is being 
denied?
  The SPEAKER pro tempore. That is correct.
  Mr. NADLER. Parliamentary inquiry, Mr. Speaker. What is the basis for 
the objection to a request for insertion into the Record of material?
  The SPEAKER pro tempore. It takes unanimous consent to place 
extraneous material in the Record. An objection was heard to such a 
request; therefore, unanimous consent was not obtained.
  Mr. NADLER. Mr. Speaker, is it not customary as a normal matter of 
comity in this House to allow all material requested to be placed in 
the Record?
  The SPEAKER pro tempore. Unanimous consent was sought. It was not 
obtained because the gentleman from Texas was on his feet and objected; 
therefore, the material does not get inserted in the Record.
  Mr. SENSENBRENNER. Parliamentary inquiry, Mr. Speaker. Is the 
material asked to be inserted covered under the General Leave that was 
requested at the beginning of the debate by the gentleman from Georgia 
(Mr. Gingrey)?
  The SPEAKER pro tempore. The general leave was for extension of 
remarks and not for insertion of extraneous material.
  Mr. NADLER. Mr. Speaker, I appeal the ruling of the Chair.
  The SPEAKER pro tempore. There has been no ruling. The Chair merely 
heard objection.

[[Page 6394]]


  Ms. WATERS. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The gentlewoman from California is 
recognized.
  Ms. WATERS. Mr. Speaker, does the rule not state that the objection 
must be asked for prior to the speaking of the Member? This Member 
spoke, and the objection was asked for after the party spoke. My 
understanding is it should have been done ahead of time.
  What is the correct rule?
  The SPEAKER pro tempore. The gentlewoman from New York made a 
unanimous consent request, which was heard in total. At the conclusion 
of that request, the Chair queried for objection, and the gentleman 
from Texas rose and objected. Therefore, unanimous consent was not 
obtained.
  Ms. WATERS. I am sorry, Mr. Speaker. I think what I observed was she 
asked unanimous consent. There was no objection. She proceeded to 
speak. She spoke, and the objection was not timely. It was asked for 
after she had completed speaking. That is what I saw.
  The SPEAKER pro tempore. The gentlewoman from New York was yielded 
for the purpose of a unanimous consent request. At the conclusion of 
that consent request, objection was made by the gentleman from Texas.
  Ms. WATERS. Mr. Speaker, I submit that that was not a timely 
objection. It was not timely.
  The SPEAKER pro tempore. It was a contemporaneous objection; when the 
Chair queried for objection, the gentleman was on his feet. Therefore, 
it was timely.
  Ms. WATERS. Mr. Speaker, I do not think so. And I would oppose that, 
and I would support my colleague, who again would ask that we have a 
vote on the ruling by the Chair.
  The SPEAKER pro tempore. Does the gentlewoman from California appeal 
the ruling of the Chair that the objection was timely?
  Ms. WATERS. Yes, Mr. Speaker. Based on my statement, he is now again 
appealing the ruling of the Chair based on that it was untimely.
  I ask the gentleman from New York (Mr. Nadler) if that is right.
  Mr. NADLER. Yes, it is.
  The SPEAKER pro tempore. The question is, shall the decision of the 
Chair stand as the judgment of the House?


              Motion to Table Offered by Mr. Sensenbrenner

  Mr. SENSENBRENNER. Mr. Speaker, I move to table the appeal.
  The SPEAKER pro tempore. Would the gentleman kindly withhold that 
motion.
  Mr. SENSENBRENNER. Mr. Speaker, I withdraw for now the motion to 
table.
  Mr. NADLER. Mr. Speaker, in light of new information, I withdraw the 
appeal.
  The SPEAKER pro tempore. Does the gentlewoman from California 
withdraw her appeal?
  Ms. WATERS. Yes, Mr. Speaker, I withdraw; and I thank the gentleman 
on the opposite side of the aisle.
  Mr. HASTINGS of Florida. Mr. Speaker, with the Speaker's permission, 
I ask unanimous consent that the extraneous material offered by the 
gentlewoman from New York (Mrs. Maloney) be made a part of the Record 
following her remarks.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 1 minute to the 
gentleman from Illinois (Mr. Emanuel).
  Mr. EMANUEL. Mr. Speaker, I rise to oppose this legislation.
  After 4 years of record deficits and $2 trillion in new debt, one 
would think that the Republican majority would have a better 
understanding of what bankruptcy is. They are lucky this law does not 
apply to their actions in the last 4 years.
  Instead, we have a bill that promotes one bankruptcy code for the 
wealthy and another for the middle class.
  Case in point: The bill preserves the ``Millionaires Loophole,'' used 
by the wealthy to hide up to $1 million from creditors and courts into 
offshore accounts known as asset protection. Everyone should be subject 
to the same law and the same standards, not one set of rules for the 
wealthy and one for middle-class families. If one can afford a high-
priced lawyer to set up an asset protection trust, they are a lot 
better off in bankruptcy than a middle-class family struggling to pay 
off large hospital bills. More than half of all bankruptcies result 
from catastrophic medical bills.
  Mr. Speaker, rather than deal with the health care crisis or making 
college affordable, this legislation protects wealthy deadbeats from 
the same standard imposed upon every middle-class American. We should 
have one rule, one standard in the law of bankruptcy law that applies 
to every American regardless of income and regardless of wealth or 
position.
  Mr. GINGREY. Mr. Speaker, I yield myself 1 minute.
  In response to the gentleman from Illinois, the reform bill 
significantly limits two practices that some wealthy filers use to hide 
assets from bankrupt creditors. Under the current system, in States 
with unlimited homestead exemptions, debtors can shield the full value 
of their residencies from creditors. To discourage debtors from 
relocating to the State to hide assets prior to a bankruptcy filing, 
the legislation requires a 3-year residency before a debtor can take 
advantage of the State's full homestead exemption. Currently, that is 
91 days.
  In addition, the bill adds a specific provision that prevents filers 
from shielding funds in an asset protection trust when fraud is 
involved. In fact, these practices will continue unabated unless this 
legislation is passed.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield for the purposes of 
making a privileged motion to the gentlewoman from California (Ms. 
Woolsey).

                          ____________________