[Pages H2063-H2077]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

{time} 1445

Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, one does not need to get a good grade in Economics 101
to realize that those who pay their bills as agreed end up having to
pay for the cost of debts that are ripped off in bankruptcy. The number
of bankruptcy filings has exploded. The number of proven instances of
people gaming the system and using bankruptcy as a financial planning
tool has gone up, and this bill stops those types of abuses.
I would like to quote from page 4 of the committee report from
testimony that was given by Professor Todd Zywicki, and he said, ``Like
all other business expenses, when creditors are unable to collect debts
because of bankruptcy, some of those losses are inevitably passed on to
responsible Americans who live up to their financial obligations. Every
phone bill, electric bill, mortgage, furniture purchase, medical bill
and car loan contains an implicit bankruptcy tax that the rest of us
pay to subsidize those who do not pay their bills. Exactly how much of
these bankruptcy losses is passed on from lenders to consumer borrowers
is unclear, but economics tell us that at least some of it is. We all
pay for bankruptcy abuse in higher down payments, higher interest rates
and higher costs for goods and services.''
The Credit Union National Association, which is a national
organization of nonprofit credit unions that are owned by their
members, said that, as of 2002, they lost over $3 billion from
bankruptcies since Congress started its consideration of bankruptcy
reform legislation in 1998; and CUNA estimates that over 40 percent of
all credit union losses in 2004 will be bankruptcy related, and those
losses will total approximately $900 million.
Now the credit unions are not the big issuers of credit cards. They
are owned by their members, and those members have to pay additional
costs of the services of their own credit unions because of the huge
write-offs that have been described in this report.
Now if my friends on the other side of the aisle were so concerned
about bankruptcy abuse and the fact that this bill does not deal with
the problem, they could have spent the time drafting an amendment in
the nature of a substitute. They were offered by the Committee on Rules
and I requested the Committee on Rules to make such a substitute in
order, but, no, all they want to do is criticize, attack and come up
with no positive alternatives.
If that is their position, then the bankruptcy tax that everybody
realizes is passed on to people who pay their bills as agreed to is on
their shoulders, because we are trying to stop the abuse.
I have heard an awful lot about the homestead exemption. If this bill
goes down, eight States and the District of Columbia will continue to
have an unlimited homestead exemption where corporate crooks can hide
their assets from bankruptcy in a homestead and, once they get their
discharge, sell that mansion and go off on their merry way. They want
to keep that. Our bill closes it.
We have heard an awful lot about asset protection trusts that become
the law in a number of States. Page 506 of the bill contains a new
section on fraudulent transfers and obligations that says that anybody
who creates one of these trusts within 10 years of the date of filing
can have that transfer voided if such a transfer was made to a self-
settled trust or similar device, such transfer was made by the debtor,
the debtor is the beneficiary of the trust or similar device, and the
debtor made the transfer with actual intent to hinder, delay, or
defraud any entity to which the debtor was or became, on or after the
date such transfer was made, indebted. Our bill closes those asset
protection trusts. If the other side votes this bill down, they
continue on and the blame for that is on their shoulders.
We have heard an awful lot about medical bills. Well, the people who
are complaining about medical bills put a tin ear on to the testimony
that has been submitted in this extensive hearing record.
The United States trustees program, independent people who administer
the

[[Page H2064]]

Bankruptcy Code, collected data and made findings on medical debt. They
drew a random sample and, of 5,203 debtors, 54 percent listed no
medical debt. Those that did, medical debt accounted for 5.5 percent of
the total general unsecured debt; 90.1 percent reported medical debts
of less than $5,000; 1 percent of the cases accounted for 36.5 percent
of the medical debt; and less than 10 percent of all cases represented
80 percent of all reported medical debt. This is not the big problem
that the people on the minority side have said it is. The data from the
United States trustees proves this.
Finally, we have heard about debt that has been run up by service
people who are on active duty, whether it is the permanent active duty
military service or Guard and Reserve members who have been called up
to active duty.
In the last Congress, the Congress enacted the Servicemembers Civil
Relief Act, Public Law 108-189, which gives protection to people on
active duty from collection of these debts by those that they have
become indebted to, and this law puts a cap on interest at an annual
rate of 6 percent on debts incurred prior to a person's entry into
active military duty service.
Mr. Speaker, this is a good bill. It is not a perfect bill. It is a
good bill, but it plugs a lot of loopholes that abuse has been
generated under, and it does provide protection for medical debts and
to our service people.
Let us not listen to the inaccurate statements that have been made by
people who have been opposed to bankruptcy reform beginning 8 years
ago, long before the military actions in Iraq and Afghanistan. Let us
give some protection to the people who pay their bills that they have
agreed to from the hidden bankruptcy tax, and the way we do that is by
passing this legislation.
Ms. DeLAURO. Mr. Speaker, to listen to this majority, we have a
crisis in this country--one brought on by spendthrifts defrauding the
public via our bankruptcy system. Indeed, to look at the statistics, we
are facing a crisis--but it has nothing to do with ordinary Americans
acting irresponsibly or even our bankruptcy system.
Last year, more than a million-and-a-half families resorted to
declaring bankruptcy--a full half of which occurred not because of any
irresponsible behavior but because of unexpected medical expenses
brought on by an illness or death in the family. These families--widows
and widowers, mothers and fathers, many in the middle-class--are hardly
``gaming the system''--they are doing the best they can under
unbelievable circumstances that have left them with no choice but to
resort to the only recourse they have: filing bankruptcy, wiping their
debt and trying their best to start anew.
If there is any ``crisis,'' it is the skyrocketing cost of health
care, which has left more than 14 million Americans spending more than
a quarter of their every paycheck on medical costs--that Mr. Speaker,
is what I call a crisis. A moral crisis.
We can all agree that individuals should be accountable for living
beyond their means, but if anyone is ``gaming'' our bankruptcy system,
it is the credit card companies, who have long been advocating for this
bill at the same time they prey on unsuspecting customers. And as with
previous incarnations of this legislation, there is virtually nothing
in the bill that would require creditors to curb their outrageous
predatory lending practices that mislead even the most educated
consumers into debt.
This bill is especially bad for women, who are the single largest
group currently in bankruptcy. By making it harder for them to file for
bankruptcy, we will make it more difficult for them to maintain
essential items such as the car that gets them to and from their job.
Women who are owed child support will be forced to compete with credit
card companies and other lenders for dollars to spend feeding and
clothing their children. The bill also allows perpetrators of violence
against women at health centers to escape liability for their actions
through the bankruptcy courts.
Mr. Speaker, this bill is yet another product of an Administration
and majority that taxes work and rewards wealth. It appeals to the
worst in all of us, painting honest middle-class families who are
working hard and taking personal responsibility for their actions as
liars, cheaters and spendthrifts. At the same time it lets off the hook
those who do act irresponsibly by preserving loopholes which allow
wealthy bankruptcy filers to hide their true wealth in mansions and
trust funds. I can hardly imagine a more unfair piece of legislation
less concerned with promoting the common good, and I urge my colleagues
to oppose it.
Ms. JACKSON-LEE of Texas. Mr. Speaker, as I stated with respect to
the consideration of the rule, today is a sad day for America, its
elderly, its veterans, its bereaved, and its aspirants for a second
chance.
This 512-page legislation before the Committee of the Whole simply
falls far short of its purported goal of ensuring that every debtor
repay as much of her debt as she can reasonably afford. Instead, this
bill appeals to special interest groups--mainly credit card companies.
The bill's sponsor has said that bankruptcy 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.'' Given the
economic gap as evidenced by the predominance of African American and
Hispanic bankruptcy filers, it is clear that these minorities are
viewed as the ``deadbeats'' of society. Given the harmful provisions
that are contained within the legislation, it is clear that the
Republican Majority wishes to perpetuate this condition.
According to the Democratic Platform: ``The heart of the American
promise has always been the middle class, the greatest engine of
economic growth the world has ever known. When the middle class grows
in size and security, our country gets stronger. And when more American
families save and invest in their children's future, America grows
stronger still . . . Today, the average American family is earning
$1,500 less than in 2000. At the same time, health care costs are up by
nearly one-half, college tuition has increased by more than one-third,
gas and oil prices have gone through the roof, and housing costs have
soared. Life literally costs more than ever before--and our families
have less money to pay for it. Three million more Americans have fallen
into poverty since 2000''.
The bankruptcy bill, as it stands, has the potential to crush the
dreams and futures of the vast majority of Americans. It will shut the
door to the one avenue that is available to those who are eventually
overwhelmed by debt.
The proposed bankruptcy bill will lead to a new feudal system. Let me
share a few facts with you. Do you know that currently, more that 1 of
every 100 adults in America files bankruptcy each year? Families with
children are twice as likely to file. Research shows that approximately
50 percent of all families are forced to file bankruptcy due to medical
expenses; and other 40 percent of families file bankruptcy due to
divorce, job loss or death in the family.
Hispanic homeowners are nearly three times more likely than White
homeowners to file, and African American homeowners are nearly six
times more likely than White homeowners. African Americans are also
twice as likely to lose their homes due to foreclosures, often falling
victim to the unscrupulous practices of predatory lenders. Furthermore,
African Americans consistently have higher levels of debt. In a study
of African American families, the typical family had debt of 30 percent
of its assets, while the debt of the typical White family was 11
percent of its assets.
The process by which this bankruptcy bill has made its way to the
Floor of the House frustrates both the notion of democracy and of
representative government.
I offered amendments to the bill that included: (1) closing a new
loophole that threatens to undermine the comprehensive scheme to
compensate victims of nuclear accidents, which Congress enacted long
ago in the Price-Anderson Act (PAA); (2) increasing the amount of
tuition expenses allowed under the Chapter 7 means test; and (3)
precluding the discharge of debt arising out of suits against sex
offenses; (4) striking the means test; and (5) supporting an amendment
by my colleague Mr. Schiff to offer relief to those who are victims of
identity theft.
Chairman Mel Watt offered substantive amendments including one that
would protect consumers from predatory lending tactics, and another
that would seek to protect the credit of college students. Similarly,
Representative Bobby Scott offered amendments that included proposals
to allow debt to be discharged when bankruptcy is caused by unforeseen
medical expenses or by the death of a spouse.
However, the Republican Majority did not accept the amendments, and
therefore ignored the issues advocated by my constituents and those of
my seventeen Democratic colleagues.
The Republican leadership of the Judiciary Committee passed this
measure without consideration of a single amendment that was offered by
my Democratic colleagues and me. They effectively shut Democrats out of
the markup process and thereby ignored the voices of the people's
representatives on this very serious policy matter. When the bill was
considered in the Senate, the Majority rejected over 25 Democratic
amendments, including one that would have helped debtors to keep their
homes if they have been driven into bankruptcy by medical expenses.
Clearly, the Majority has priorities that do not protect Americans who
are victims of circumstances that have nothing to do with
creditworthiness.

[[Page H2065]]

Of the amendments that my Democratic colleagues and I plan to offer
(for our upcoming consideration) before the House is one that would
remove the Chapter 7 `means test'. This would sift out debtors who can
afford to repay at least a portion of their debts from those who
cannot. Debtors who have income above a ``state median'' would have to
plead before a bankruptcy judge.
The egregious provisions of this bankruptcy bill and its name are not
unlike many recent bills that have sifted through committee and onto
the House Floor. Banks, credit card companies, and retailers have
accounted for more than $24.8 million of campaign and partisan
contributions since 1999. Commercial banks have given some $76.2
million, according to a study of campaign finance and lobbying
disclosure reports and the Center for Responsive Politics. The banking
industry has spent $22 million on federal lobbying in the past five
years. In fact, according to the New York Times, ``The main lobbying
forces for the bill--a coalition that included Visa, MasterCard, the
American Bankers Association, MBNA America, Capital One, Citicorp, the
Ford Motor Credit Company and the General Motors Acceptance
Corporation--spent more than $40 million in political fund-raising
efforts and many millions more on lobbying efforts since 1989.''
Clearly, the Republican Majority has shut Democrats out of the
process in order to appease these special interest groups--to the
detriment of middle-class and elderly Americans.
As an African American, I am troubled by the fact that both African
American and Hispanic families, both of whom are over-represented in
bankruptcy, would suffer disproportionately if this bill becomes law.
Proponents of this bankruptcy bill suggest that it will put pressure
only on the families that have the ability to repay. In fact, the
weight of the evidence demonstrates that this legislation will increase
the cost of bankruptcy for every family, and decrease the protection of
bankruptcy for every family, regardless of income or the cause of
financial crisis. The bill contains provisions that will force many
honest debtors unnecessarily out of Chapter 7, make Chapter 13
impossible for many of the debtors who file today, protect significant
loopholes for wealthy and well-advised debtors, as well as raise the
cost of the system for all parties. It will turn the government into a
private collection agency for large creditors, and force women trying
to collect child support or alimony to compete with credit card
companies that will have more of their debts declared non-
dischargeable.
The ability to file for bankruptcy relief and to receive a fresh
start is a source of hope for a number of American families that suffer
the burden of financial problems. What this Administration proposes
with this bankruptcy reform bill is an attack upon minorities. It will
make it virtually impossible for many families to extricate themselves
from a web of high interest debt--and kill the dream of these families
to become homeowners.
Mr. Speaker, I reject this legislation not only because it is flawed
in and of itself but also because the process by which it is being
considered is severely flawed. Americans deserve and have a right to a
better process.
Mr. BLUMENAUER. Mr. Speaker, for as long as I've been in Congress I
have supported bankruptcy reform on two simple principles; I believe
people should pay their debts, if they are able, and that we should end
abuses in the system, whether by people who deliberately run up their
bills or by businesses who exploit the gullible and the unfortunate.
My first vote in favor of bankruptcy reform was cast with
reservations because some of the provisions of the bill seemed unduly
harsh, but I had hoped that the legislative process would ultimately
improve the product. Unfortunately, for 8 years we have been unable to
see the bill move through the legislative process and improve; it
appears as though the bill, if anything, is actually less adequate due
to increasing predatory lending by credit card companies and
skyrocketing medical costs.
One of my deep concerns has been credit card mills, which send out
millions of credit cards to people who are not creditworthy. In 2001
there were 5 billion solicitations by credit card companies. Meanwhile,
skyrocketing fees have been coupled with reduced minimum payments.
Bait-and-switch techniques have been employed that change the terms and
raise the interest rates of cardholders who have never missed a
payment.
While S. 256 contains overly harsh punishments for middle class
Americans that have been preyed upon by the credit card industry, it
preserves loopholes for the very rich. S. 256 maintains a homestead
exemption that allows people with lots of money to shield their assets
by purchasing multimillion dollar homes in certain states. O.J. Simpson
was able to shield many of his assets by doing this in Florida. There
are even sophisticated trust arrangements that enable people with
substantial sums of money to be protected from the provisions of this
bankruptcy bill.
There are some simple, common sense changes that could be made to
this bill that would make it more fair to all parties involved. The
Senate, however, was unwilling to compromise and approve any of these
provisions and the House leadership has prevented any of these
proposals from even being debated on the floor. Perhaps the most
glaring example of the majority's unwillingness to compromise is the
rejection of an amendment that would protect soldiers injured in Iraq
and Afghanistan from the unfair ``means test'' within this bill.
I have had meetings over the years with individuals who represent all
sides of this issue: the bankruptcy trustees, judges, and lawyers who
represent the debtors, and the people who extend credit to businesses
large and small and to individuals rich and poor. As a result of these
meetings, it is clear that the loopholes do remain and that the abuses
of lending practices are not being reigned in. The bill provides a
mandate for unnecessary and burdensome paperwork and the most extreme
requirements, including personal certification of the facts by the
attorneys assisting the debtor that are not found anyplace else under
any other legal provisions. This is going to shut down programs like
the legal clinic at Lewis and Clark law school in Portland and will
make it harder for legitimate creditors to be able to get their money
back in a timely fashion.
The sad fact is that most bankruptcies are due to large medical
bills, family breakup, and job loss. This legislation is going to put
an unnecessary burden on the vast majority of unfortunate people and
still allow too many of the unscrupulous to avoid their
responsibilities. It does not have to be this way. I continue to hope
that the political process will respond to these problems with sympathy
and concern for the unfortunate. Until that point, I cannot support S.
256 in good conscience.
Mr. KIRK. Mr. Speaker, I am proud to vote in favor of S. 256, The
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This
important bill brings needed reforms to our nation's bankruptcy system.
The legislation reduces the unfair disparity of treatment in the
bankruptcy system by establishing more uniform and predictable
standards.
I am particularly pleased to note the compromise reached on
healthcare and employee benefits. This legislation takes great strides
to protect patients' rights, and it encourages debtors and trustees to
consider patients' interests when administering healthcare bankruptcy
cases. Patients are given a voice through the appointment of an
ombudsman, who advocates for the confidentiality of patients' records
and ensures patients are transferred to appropriate facilities. These
are critical provisions that protect the rights of those with failing
health.
I would like to commend a constituent from my district for his
contributions to this legislation, Keith J. Shapiro, Esq., of
Northbrook, Illinois, and his colleague Nancy A. Peterman, Esq. Mr.
Shapiro testified in support of these patient health provisions before
the U.S. Senate Committee on the Judiciary Subcommittee on
Administrative Oversight and the Courts on June 1, 1998. The passing of
this legislation marks the culmination of Mr. Shapiro and Ms.
Peterman's tireless efforts to protect patients' interests in
bankruptcy cases. On behalf of my colleagues in Congress, I offer my
sincere gratitude for their dedication to fair bankruptcy policy.
Mr. HOLT. Mr. Speaker, thank you for allowing me the opportunity to
offer my remarks today regarding S. 256, the so-called ``Bankruptcy
Abuse Prevention and Consumer Protection Act.'' The issue of bankruptcy
reform is extremely important and it is critical that we pass a measure
that will both ensure greater personal responsibility of debtors, as
well as ensure that credit card companies and other creditors take
responsibility for their reckless lending. Unfortunately, this bill
does neither. In fact, the bill before us today overly penalizes
working families. In fact, the bill before us today takes no action
against reckless and predatory lending. This bill will do nothing to
reduce the number of bankruptcy filings or address the problem of
record-high consumer debt, which now stands at $2 trillion.
As to the substance of the legislation, it is no secret that the
number of bankruptcies has risen dramatically over the past few years.
In 2001, 1,398,864 people filed for bankruptcy in the United States.
According to the Center for American Progress, in 2003 there were a
record number of 5.5 personal bankruptcy filings for every 1,000 people
living in the United States. In 2003, my own state of New Jersey ranked
slightly below the national average at 4.8 filings per every 1,000
residents. This past year, the number of personal bankruptcies had
risen to 1,584,170, an increase of over 13 percent. In my own state of
New Jersey, citizens have seen a similar increase in bankruptcy filing
over the past three years. With those facts in mind, I strongly support
the principle of increased personal responsibility of debt.

[[Page H2066]]

While there are many problems with S. 256, I'll name just a few of
the more egregious provisions to which I strongly object. While the
bill purports to elevate the priority of child support payments, in
reality credit card companies would receive repayment of debt at the
same rate as child support obligations. Children and families will now
compete with credit card companies for payment. The bill's homestead-
exemption cap does little to address the problem of wealthy debtors
shielding their assets from creditors by purchasing million-dollar
homes. Sophisticated, wealthy debtors can easily plan ahead and evade
the cap. The provision in the bill dealing with ``asset protection
trusts'' also does not adequately address the problem of wealthy
individuals stashing millions away in trusts that are protected in
bankruptcy proceedings. The bill puts the onus on creditors and the
court to prove that the debtor was actively trying to avoid creditors
by transferring money into the trust. The bill does nothing to protect
people who have medical liabilities.
The bill also imposes artificial deadlines and cumbersome new
paperwork requirements on small businesses trying to reorganize, and it
unnecessarily limits the discretion of bankruptcy judges in crafting
the best possible result for small-business debtors and creditors. The
rigid and unrealistic requirements will force many viable small
businesses to permanently close their doors.
Mr. Speaker, I recognize that there have been, and likely continue to
be, abuses of the bankruptcy law, which was designed to be a safety
net. As I've said before, I strongly support increased personal
responsibility for debt accrued. However, this should coincide with
greater responsibility on the part of the creditors. It is the
creditors who often shamelessly target college students and low-income
individuals with their credit card applications. It is the creditors
who subsequently grant these individuals higher levels of credit at
high interest rates. It is the creditors who saddle these individuals
with insurmountable levels of debt. In fact, it is estimated that the
credit card industry mails out five billion unsolicited credit card
offers a year.
I believe we would be better served if we could fully debate the
merits of this legislation, as well as substantive amendments that were
disallowed from consideration by the full House. Sadly, once again, we
cannot, and I urge my colleagues to oppose this legislation.
Mr. MORAN of Virginia. Mr. Speaker, the ``Bankruptcy Abuse Prevention
and Consumer Act'' is long overdue and with House passage later today,
it stands a very real prospect of becoming law. It's been an extremely
long road to reform.
I originally supported bankruptcy reform in 1998 with former
Representative George Gekas. Ironically, the legislation was drawn from
the recommendations of the bipartisan National Bankruptcy Review
Commission that was established through legislation passed in 1994 by a
Democratic-controlled Congress. It enjoyed the same level of bipartisan
support as when it passed the Senate last month.
The main component of the commission's recommendations and the
legislation we have here today is to establish a means-based test to
determine who should work with creditors on a plan to repay their debts
and those who cannot afford to do so. Sometimes a market-based
capitalist economy can be unforgiving, but Americans are fair and
decent people. We want a system that allows a fresh start to those in
financial trouble, but also one that promotes personal responsibility
and is not susceptible to fraud and abuse.
The means test in this bill carves out a series of exemptions to
steer those who can afford to repay at least part of their debt toward
a Chapter 13 repayment plan. This test takes into account exemptions
for living expenses, health and disability insurance, expenses to care
for an elderly or disabled family member, secured debts, and home
energy costs among others. It also recognizes situations where
individuals face overwhelming medical costs or other debilitating
situations. Under the bill, if an individual can demonstrate ``special
circumstances'' that create an overwhelming financial burden, those
individuals would not be required to file for Chapter 13. As a final
safeguard, those people earning less than their state's median income
would automatically be ineligible for Chapter 13.
It is estimated that only a small minority of those already filing
for bankruptcy would be affected, perhaps as little as 7 percent.
Contrary to some reports, families and individuals facing difficult
economic circumstances, people who may have lost their job or family
breadwinner or have been devastated by a severe medical condition, will
be given a chance to clear their debts and receive a fresh start under
this bankruptcy reform legislation.
Back in 1998, I encouraged supporters of the bill to improve its
consumer protection provisions. They responded by making child support
a priority in a repayment plan, requiring credit counseling prior to
filing for bankruptcy, and limiting abuses caused by a few unscrupulous
individuals who hide their wealth behind a state's homestead
provisions.
At the onset of the 107th Session, I sought and won the House's
approval of my pro-consumer amendments that remain a part of today' s
bill. These provisions:
Require credit card companies to include a disclosure statement
highlighting the number of months necessary to repay a balance if the
card holder were to pay only the minimum amount due;
Require credit card companies to inform cardholders on when their low
introductory rates expire and new higher rates take effect; and
Prevent deceptive and fraudulent advertising practices by debt relief
agencies by making certain that creditors are informed of their rights
as debtors.
Could these provisions be perfected? I suspect so. There were several
other consumer protections we were unsuccessful in getting included.
But perfection should not be an enemy of the good.
Increasingly, bankruptcy has become a tool of first impulse rather
than a last option after all other avenues have been exhausted. Last
year, 1.6 million consumers filed for bankruptcy, a figure just short
of the number of filings in 2003, which represented the most in our
nation's history. How is it that during periods of sustained economic
growth and prosperity, such as during the Clinton presidency, when all
incomes rose, bankruptcies also continued to climb?
S. 256 has been criticized for advancing the interests of the credit
card industry on the backs of the poor and the middle class, many of
whom are in debt because of circumstances beyond their control. I am
sympathetic to this argument, but the flaw is not with this
legislation. Those deserving of a fresh start will still be able to do
so under this legislation.
The real flaw is with an agenda that the majority continues to
advance.
Most families in dire financial straits and filing for bankruptcy
will be able to discharge their debts under this legislation. But why
are they facing bankruptcy?
One reason is that 41 million Americans are uninsured because the
majority party refuses to address this growing crisis.
Another is because 7.3 million Americans live on the minimum wage,
more than one-third of whom rely on the $5.15 cents per hour to support
their family. They last saw a minimum wage increase in 1997.
It is because during the height of the last recession, the majority
party refused to allow any extension of unemployment benefits, because
they were too busy falling all over themselves to cut taxes for the
wealthiest Americans.
We just passed this week a permanent elimination of the estate tax,
helping the wealthiest among us avoid paying any tax on their untaxed
earnings, and passed a budget resolution that will cut health care to
the indigent.
Mr. Speaker, bankruptcy reform has merit and should become law. It is
the majority's overall agenda that is bankrupt and in need of reform.
Mr. CUMMINGS. Mr. Speaker, after eight years of consideration, we are
now poised to enact bankruptcy legislation that is deeply flawed. Like
so many of the policy priorities pursued by this Congress and the
Administration, this bill hurts the most vulnerable among our citizens.
Many of my colleagues have already discussed the terrible provisions
that the legislation now before the House would implement. For example,
this bill would institute a means test for eligibility to file Chapter
7 bankruptcy that two national commissions have concluded would be
counter-productive, difficult to administer, and would yield little
revenue to creditors. It would remove critical automatic stay
provisions that currently prevent the eviction of those who are seeking
to clear arrearages in their rent. S. 256 also would reduce the amount
of personal property that those filing for bankruptcy can retain.
The Republican-crafted and credit-industry driven bankruptcy reform
bill is inapposite the goals for which bankruptcy was conceived.
Bankruptcy is intended to provide a `fresh start' to those who file--
not leave them sinking in financial quicksand.
However, rather than highlight the numerous other misguided
provisions of S. 256, I want to look for a moment at the economic
policies of which this legislation is just one more disappointing part.
The sponsors of S. 256 claim that the rising number of people filing
bankruptcies in our nation is evidence that there is widespread abuse
of our current bankruptcy protections. Actually, the rise in bankruptcy
filings is a powerful and tragic reminder that our Administration's
economic policies are not raising living standards but are instead
contributing to the increases in bankruptcy filings. I note that
bankruptcy filings actually decreased in 2004.
In the Economic Report of the President delivered to Congress in
February of this year,

[[Page H2067]]

the Administration wrote that the ``President's policies are designed
to foster rising living standards at home, while encouraging other
nations to follow our lead.'' The President's policies are not worthy
of emulation in other nations--and they are not worthy of continuation
in our nation.
Job creation in our nation is failing to keep pace with the growth in
the labor force. The Brookings Institution has noted that since the
year 2000, there has been a 2 percent decrease in workforce
participation among young people aged 25-34, which is unprecedented
since World War II.
Slow job creation has also put little pressure on businesses to raise
wages. As a result, wages for many low- and middle-income workers are
now not keeping pace with consumer prices. Perhaps not surprisingly,
the Congressional Research Service found that in 2001, 27 percent of
families in the lowest one-fifth of household income distributions had
debt obligations that exceeded 40 percent of their incomes.
While workers are not seeing increases in their purchasing power,
they are also being left without health insurance to cover their
medical expenses. A recent Harvard Study published earlier this year
found that nearly half of all bankruptcy filings involve some major
medical expense. As recently as 1981, medical expenses accounted for
less than 10 percent of bankruptcy filings.

Forty-five million Americans are now uninsured--and countless
millions more regularly experience lapses in coverage. More than 38
percent of those who filed bankruptcy for medical reasons were found to
have experienced some type of lapse in their insurance coverage during
the two years preceding their filing.
In fact, 90 percent of the bankruptcies filed are by those who have
been injured, are sick, have been laid off, and/or are going through a
divorce. Laid-off workers are the fastest growing group of people
filing bankruptcy.
All the while, credit card company abuses are mounting in the form of
deceptive marketing practices, irresponsible accounting practices and
other predatory practices. Negative amortization by credit card
companies require minimum payments so low as to allow debt to increase
rather than be reduced. These practices are designed to give the debtor
a false sense of financial health while incurring more debt. The result
is often inevitable. The minute a tragedy strikes and a debtor falls
behind in one payment, debtors are often swarmed upon by all of their
credit card companies--who want to collect immediately. This is an
unfair result for these debtors and a boon for creditors.
And now, Congress is poised to add insult to uninsured injury by
destroying the basic protections that our bankruptcy laws have offered
to those most in need.
Mr. Speaker, the increase in personal bankruptcy filings in our
nation is not proof that our bankruptcy laws need reform. It is,
instead, proof that our economic policies need reform--and need reform
urgently.
This bill only serves to disadvantage those honest Americans
struggling to make ends meet. I urge my colleagues to oppose S. 256.
Ms. SOLIS. Mr. Speaker, I rise in strong opposition to S. 256,
legislation that will make it harder for individuals to eliminate their
debts after liquidating most of their assets by filing bankruptcy.
Thousands of women and their children are affected by the bankruptcy
system each year. This bill will only inflict additional hardship on
over a million economically vulnerable women and their families. In
fact, women are the fastest growing group to file for bankruptcy. More
than 1 million women will find themselves in bankruptcy court this
year, outnumbering men by about 150,000. Women who lose a job, have a
medical emergency, or go through divorce make up more than 90 percent
of the women who file for bankruptcy.
This legislation's means test provision would require even the
poorest filers--struggling single mothers, elderly women who are
victims of scam artists--to meet complicated filing requirements to
access the bankruptcy system. In addition, the bill would make it much
harder for women to collect child support payments from men who file
for bankruptcy because the bill gives credit card companies, finance
companies, auto lenders and other commercial creditors rights to a
greater share of the debtor's income during and after bankruptcy. This
bill pulls the rug out from under economically vulnerable women and
children. It increases the rights of creditors while making it harder
for single parents and others facing financial crises.
This harsh bankruptcy reform legislation will not help those families
that are struggling to get by. This bill will do nothing to reduce the
number of bankruptcy filings or address the problem of record-high
consumer debt. It is a gift to the credit card and banking industries;
but one that will be paid for by those least able to afford it. Instead
of giving a handout to credit card companies, we should ensure that
Americans losing their jobs or struggling with medical debt have a
second chance for economic security. That is what our bankruptcy laws
are intended to provide. This bill is terrible for consumers, working
families and women, and I urge my colleagues to vote against it.
Mr. CARDIN. Mr. Speaker, I support equitable reform of our nation's
bankruptcy laws.
I recognize that there has been abuse of our bankruptcy system, and
that reform is needed. I think we can all agree that those who can
afford to should pay their creditors back--that they should be
responsible for their debt. Those debtors who charge thousands of
dollars on luxury items prior to declaring bankruptcy, should be held
accountable. It is contrary to our values as Americans--this idea that
some people are able to abandon their debts by gaming the system. Their
actions are not fair to the vast majority of Americans who work hard to
pay their debts in full, and Congress should act to limit irresponsible
use of our bankruptcy system.
I have in the past supported reasonable bankruptcy legislation, and
although this bill does contain some good provisions, I regret that I
cannot vote for the bill before the House today.
S. 256 would make it more difficult for individuals and families who
have suffered bona fide financial misfortune to get a fresh start. It
does so by establishing a rigid means test to determine if an
individual is eligible for Chapter 7 relief. Regardless of the
circumstances that led the individual to seek bankruptcy, the court is
not permitted to waive the means test. In other words, ``one strike,
you're out.''
I am disappointed that we did not add some reasonable flexibility
measures to the ``means test.'' The stated purpose of the bill's means
test is to prevent consumers who can afford to repay some of their
debts from abusing the system by filing for chapter 7 bankruptcy. It
makes sense to require those who are able to repay their debts to do
so. However, there are some situations that warrant an exception to the
means test.
What are the reasons that individuals seek what we call ``bankruptcy
protection?''
Harvard Law School recently researched bankruptcies and found that
nine out of ten persons filing bankruptcy have faced job loss, severe
health problems, divorce or separation. Illness or medical bills drove
nearly half of these filings.
Unfortunately, the bill before us does not offer any relief in these
or other tragic circumstances. I voted against the rule because it
provides the House no opportunity to vote on amendments that would
allow a court to consider extreme circumstances that might have led to
bankruptcy filings.
I am disappointed that here in the House, the Judiciary Committee
failed to close a popular loophole used by the very wealthy to shield
millions of dollars by setting up asset protection trusts. If the
majority were truly interested in creating a more fair bankruptcy
system for all Americans, this would have been included in the bill.
The Judiciary Committee also failed to rein in some of the practices
of credit card companies that are in part responsible for the rise in
bankruptcy filings. They refused to provide credit card users with more
detailed information to assist them in handling debt. Why not help
consumers understand the consequences of their financial decisions,
such as making only the minimum payment each month, so that they can
avoid some of the missteps that can lead to higher debt?
We do need bankruptcy reform, and I wish that we had an opportunity
to address many of these valid concerns.
I want to address the concerns of elderly Americans. The number of
senior citizens in bankruptcy tripled from 1992 to 2001, representing
the largest increase of any group of Americans. According to the
Baltimore City Department of Aging, bankruptcies among elderly city
residents have increased by nearly 50 percent over the past year.
Their costs of living are increasing steadily, including their rent,
food, and heating costs. Many of them routinely use credit cards to
cover their daily expenses. They are not spending frivolously--they are
just getting by.
During previous Congresses when this bill was considered, employers
were less likely to file for bankruptcy to shed health care and pension
obligations to their retirees. More than one million Americans have had
their pension plans taken over by the Pension Benefit Guarantee
Corporation. From 2003 to 2004 alone, 192 plans were taken over by the
PBGC. These retirees have seen their benefits reduced and so they must
pay more for health care. But they have not had their debts reduced
accordingly. An amendment in the other body that would have required
companies that dropped retiree health benefits to reimburse each
affected retiree for 18 months of COBRA coverage upon reemerging from
bankruptcy was defeated.
Many seniors who do not yet qualify for Medicare or who have
prohibitively high copays also pay medical bills and prescription

[[Page H2068]]

drug costs with credit cards. Often they skip dosages or forgo care
entirely because they cannot afford it. We know the result, which is
that many end up with much more severe conditions and many wind up in
nursing homes. That translates into greater burdens on our federal and
state budgets, and higher costs for us all.
I am disappointed that the victims of identity theft cannot seek
relief under this bill. We have just learned that between ChoicePoint
and Lexis-Nexis, thousands of individuals have been the victims of
identity theft. In the last few years, the Ways and Means Committee has
held fifteen hearings on a bill to reduce Social Security Number theft,
and last year, we reported out a responsible bipartisan bill, but it
was not brought to the floor. This year, I am again an original
cosponsor of this bill, but it is not yet law, and so virtually every
American remains at great risk for identity theft. Unfortunately, our
vote on the previous question--to allow bankruptcy judges to take into
consideration the fact that persons are forced into bankruptcy because
of identity theft--was defeated.
Mr. Speaker, I want to vote for an equitable bankruptcy reform bill.
So many Americans have been driven into bankruptcy not from a desire to
game the system, but because of circumstances beyond their control.
This legislation fails to adequately protect their legitimate needs. It
is because of them that I must vote against this bill.
Mr. CANTOR. Mr. Speaker, we have before us today a bill that provides
a safety net for people who have lost a job, had health problems, or
served in the military and cannot repay their debts. It gives them the
opportunity for a fresh start while continuing to hold accountable
those who are able to repay their debts.
Bankruptcy abuse represents a ``hidden tax'' on the American people.
When businesses have to raise the cost of their products due to unpaid
liabilities, that cost is passed unfairly to all of us.
When people file for bankruptcy and cancel out their debts, small
businesses suffer major financial setbacks. Bankruptcy to a small
business triggers a change in its bottom line. A smaller bottom line
means less money to pay employees, which leads to job cuts--something
nobody would like to talk about, and certainly nobody would like to
encourage.
This legislation will modernize the system and make it more difficult
to hide behind the protections of filing for bankruptcy. With this bill
we will lessen the impact of the unpaid debt that is a hindrance to
thousands of businesses and hurts our ability to create jobs.
Mr. SHAYS. Mr. Chairman, I rise in support of S. 256, the Bankruptcy
Abuse Prevention and Consumer Protection Act. It is a basic principle
of commerce in our country that when a person makes an obligation to
pay someone for a good or service, they do so. We ought to address the
fact that our nation had over 1.6 million bankruptcy filings last year,
and an estimated $44 billion in debts are discharged annually. When
creditors are unable to collect money owed to them, we all pay the cost
in the form of higher costs, higher interest rates and higher
downpayments.
I want to be very clear that this legislation will not prevent those
who have incurred oppressive indebtedness from filing. It will apply a
means test that weighs whether a debtor has enough disposable income to
repay creditors. If, after applying this test, the debtor has little or
no disposable income, they will be able to file for straight bankruptcy
just as they always have. Those who earn wages and have the ability to
repay, however, will be required to file for Chapter 13 bankruptcy,
restructure their debt and repay a portion of it.
I have heard from a number of my constituents concerned about high
credit card rates, predatory loan practices and identity theft. I share
their concern and believe that after passing this legislation today, we
must redouble our efforts to pass legislation curbing predatory
lending, and we must build on the legislation we passed during the last
Congress regarding identity theft.
This is comprehensive legislation and while supporting its passage,
this body should pledge strong oversight and the willingness to review
its effect on bankruptcy filers and the economy at large.
Mr. HONDA. Mr. Speaker, today, the Republican majority continues its
assault on hardworking Americans by ramming through the House of
Representatives bankruptcy legislation that harms even the most ethical
among us. The legislation before us today is an indefensible gift to
the credit card industry, and I urge my colleagues to join me in voting
against it.
S. 256, The Bankruptcy Abuse Prevention and Consumer Protection Act,
purports to introduce a greater level of personal responsibility into
the bankruptcy system by eliminating various loopholes and incentives
that encourage consumer bankruptcy filings and abuse. The bill's
proponents argue that this kind of abuse is rampant, but expert
analyses suggest another story. According to a Harvard study, about 50
percent of all families that file for bankruptcy are forced to do so as
a result of medical expenses, and three-quarters of those individuals
actually have health insurance. Another 40 percent have been driven
into bankruptcy, at least in part, after suffering a job loss, divorce,
or death in the family. The American Bankruptcy Institute estimates
that no more than three percent of filers avoid repayment of debts by
gaming the system. The simple truth is that almost all individuals
declaring bankruptcy do so as necessity and a last resort!
Sadly, the mechanisms employed by this bill to crack down on
bankruptcy abuse will have a disproportionate impact on women, minority
communities, the elderly and the unemployed. It will impose a rigid
means test that will make it more difficult for debtors to get a
``fresh start.'' The bill also will endanger child support payments,
permit landlords to evict tenants, and frustrate efforts by debtors to
save homes and cars. It betrays veterans who accumulate debt following
an injury or disability sustained on active duty. In a final insult,
the Republican leadership denied the opportunity for Democrats to offer
amendments that would have protected veterans and other vulnerable
communities.
While the Republican majority wishes to hold the average American
accountable, it seeks to preserve privileges and loopholes for the
financial industry and the rich. The bill does nothing to reign in
credit card companies that engage in reckless lending, and it allows
wealthy debtors in five states to declare bankruptcy and keep their
multimillion-dollar homes without penalty. Once again, the Republican
leadership thwarted amendments that would have evened the playing field
for debtors and creditors. Amendments to close loopholes for
millionaires, discourage predatory lending, and cap interest on
extension of credit were flatly rejected by the Republican majority on
the Rules Committee.
Reasonable bankruptcy reform may be necessary, but S. 256 is an abuse
of the legislative process and a threat to the financial security of
all Americans. I urge my colleagues to oppose S. 256.
Mr. ALLEN. Mr. Speaker, I rise in opposition to S. 256. This bill
helps big credit card companies at the expense of working families in
crisis.
A Harvard University study reports that more than forty-five percent
of all bankruptcies are filed because of a health emergency.
Approximately ninety percent of all bankruptcies are due to a health
care debt, job loss, or a divorce. When this personal crisis happens,
families are driven into crushing credit card debt that they ultimately
cannot manage.
Working families are being squeezed by skyrocketing health care
costs, gas prices, and housing costs. At the same time, this Republican
Congress is reducing the social safety net for working families:
Medicaid, Social Security, and now, bankruptcy protections.
Mr. Speaker, I know there are people abusing the bankruptcy code. But
There are also companies marketing loans to people who cannot afford
them. Credit unions and community banks make responsible loans and do
responsible underwriting. But this bill does nothing to make big credit
card companies curb their abusive marketing strategies or practice
responsible underwriting.
Vote ``no'' on S. 256.
Mr. UDALL of Colorado. Mr. Speaker, I do not support this bill in its
present form--and, since the Republican leadership has made it
impossible for the House to even consider any amendment, I have no
choice but to vote against it.
In recent years, Colorado has been one of the states with the
greatest increase in bankruptcy filings. Opinions vary about the
causes, but this fact does suggest a need to consider whether the
current bankruptcy laws should be revised. So, I am not opposed to any
change in the current bankruptcy laws, and in fact I think some of the
bill's provisions would make reasonable adjustments in those laws.
But this legislation was first developed years ago and neither its
supporters nor the leadership have been willing to give any real
consideration to adjusting it to better reflect current conditions.
In particular, I think that the bill should have been amended to more
appropriately address the financial problems being encountered by some
members of the regular Armed Services as well as by members of the
National Guard who have been called to active duty in Iraq or
elsewhere.
If the motion to recommit had prevailed, the bill would have been
amended to exempt from the means test at least those National Guard and
Reservists whose debt resulted from active duty service or was incurred
2 years of returning home from their service. Unfortunately, the motion
was not adopted.
For me, this is a very serious matter and the lack of such an
amendment is one of the main reasons I cannot support the bill.
Under these circumstances, I am not persuaded that the bill now
before us is the right

[[Page H2069]]

prescription for Colorado or our country. I think it still needs work--
and because of both its shortcomings and the refusal of the leadership
to permit consideration of any changes, I cannot support it.
Mr. KIND. Mr. Speaker, I rise today in support of this legislation
because the current system needs reform to protect those people truly
in need of debt relief, while holding accountable those who can repay
their debt.
Bankruptcy filings have risen steadily in recent years, an indication
that our current system is an ineffective one that discourages
consumers from saving and planning responsibly and ultimately isn't
good for consumers, families, or a society that values individual
responsibility. I believe bankruptcy should be a last resort--one that
allows people who need protection to receive it and people who can
repay all or some of their debts to do so. The system in place now
gives incentives to people in trouble and encourages them to steamroll
headfirst into Chapter 7 liquidation of all their debts, even when they
could get back on their feet through a reasonable repayment plan or
basic credit counseling.
While S. 256 is not a perfect bill, I do believe it goes great
lengths in addressing the growing problem of bankruptcy in this
country. I believe there is great misunderstanding about what this bill
does and who will be affected. Only those earning above the median
income and who have the ability to pay will be required to pay back
their debt. However, millionaires who use bankruptcy law as a method of
financial planning will no longer be able to buy extravagantly and
subsequently have all of their debt written off.
It is also important to note that many families and small businesses
will benefit because of changes to this law. Bankruptcy costs are
passed on to other consumers, and the average family pays hundreds of
dollars each year in higher prices. Additionally, small businesses that
might otherwise not be paid for their goods or services will have a
better chance of gaining compensation as a result of this bill. A very
positive aspect of S. 256 is that it makes permanent Chapter 12 of the
bankruptcy code. I, along with other members of Congress, have been
working for years to make permanent this much-needed source of relief
for our family farmers.
There have been accusations that this bill will be detrimental to the
most needy; in fact, there are a great deal of safeguards. S. 256
includes protections ensuring that alimony and child support payments
are made. I believe single parents and dependent children need our help
far more than millionaires who benefit from current bankruptcy laws.
Additionally, families who have exorbitant medical bills they cannot
afford can still file for Chapter 7, and judges will still have a great
deal of discretion when it comes to the issue of means-testing.
In addition, this legislation will create new disclosure requirements
for lending institutions to provide better information to consumers
about credit cards and debt. This is particularly important for young
adults who are bombarded by credit applications and have limited
knowledge about the risks that accompany credit card ownership.
It is important to note that this legislation is only the first step
in addressing the bigger problems underlying savings in this country.
With an over-reliance on credit cards and a lack of saving for
retirement, too many Americans find themselves on shaky financial
ground. Addressing this problem must be our next goal, and we must
encourage more personal responsibility in consumers.
The Bankruptcy Abuse Prevention and Consumer Protection Act will
benefit consumers and provide all Americans with better access to
credit. It helps prevent abuse of the system while providing debt
protection to those who truly need it. I urge my colleagues to support
this legislation.
Ms. KILPATRICK of Michigan. Mr. Speaker, I rise in opposition to S.
256, the Bankruptcy Abuse Prevention and Consumer Protection Action.
The title of this bill is a misnomer. It should be titled the
``Corporate Protection and Improved Profitability Act''. If passed,
this Act will be a boon for credit card and financial lending
institutions and a nightmare for American families who are struggling
to stay strong in an economically depressed society. Essentially, the
House is contemplating legislation that is more punitive to individuals
seeking bankruptcy protection than corporations that resort to filing
for bankruptcy.
I also have concerns about House procedures for S. 256. A closed rule
was employed, resulting in thirty-five Democratic amendments being
rejected from consideration. Debate on an amendment to the bill was
prevented. Thirty-five amendments were submitted before the Rules
Committee and not one was accepted. Not only were members of the House
prevented from engaging in debate but also the American people have
been denied the opportunity to hear legitimate debate regarding this
Act we are considering today. I am especially distressed about the
majority's refusal to accept amendments that related to identify theft
and exemptions for disabled veterans whose indebtedness occurs after
active duty.
My review of S. 256 compels me to conclude that the framers of the
bill failed or refused to recognize that recent economic policies by
the current administration have directly contributed to the
proliferation of bankruptcy filings by consumers. Burgeoning deficits,
perpetual and high unemployment, and the exportation of jobs overseas
are just a few of the by-products of failed and poorly conceived
government policies that have contributed and continue to contribute to
the need for individuals to seek bankruptcy protection.
I also oppose S. 256 because it does absolutely nothing to stem the
predatory practices employed by credit card companies, or the abusive
fees and penalties imposed on individuals who make just one late
payment. Further, the wealthiest citizens in our country are able to
insulate their assets by placing them in trusts that are protected in
bankruptcy proceedings.
I staunchly oppose S. 256. Democrats were denied the opportunity to
offer amendments, the American people have been denied a full
opportunity to determine the full implications of the changes in
bankruptcy law, and the Act is fundamentally anticonsumer.
Mr. Speaker, my conscience dictates that I oppose S. 256. I encourage
my House colleague to vote No on the Bankruptcy Abuse Prevention and
Consumer Protection Act.
Mrs. DAVIS California. Mr. Speaker, I rise to voice my opposition to
the bankruptcy reform legislation before us today.
Unfortunately, there are individuals who abuse the credit system and
use it for their own gain.
This is wrong and we should be working to stop those who take
advantage of the bankruptcy laws.
However, I worry S. 256 will hurt the thousands of Americans who have
absolutely no choice but to file bankruptcy as a last resort.
Specifically, I am concerned about the impact on our brave service
members and our military families.
The numerous activations and extended tours of duty in Iraq and
Afghanistan are causing our military families to face debt and serious
financial strain.
Studies show that the incomes of military, families decrease
significantly when the service member is deployed.
Four out of 10 Reservists, for example, take a drop in pay once they
are deployed overseas.
I have met with military families in San Diego who are facing the
realities and the financial strain that come with activation.
I worry about the military spouse whose husband is activated to serve
in Iraq for a year and must leave his job or his business.
Somehow, we expect the spouse to care her children, to make the house
payment, and to pay the bills on an income that is significantly lower.
Some military families will have no choice but to file for bankruptcy
because of the environment we have created for them.
The bankruptcy reform bill before us today does not address the needs
of our military families and the realities they are facing.
S. 256 will make it harder for military families to recover from a
bankruptcy because of the additional costs and the stricter
requirements.
The Senate did include provisions exempting military personnel
serving in combat from certain provisions of the bill.
But, unfortunately, the financial impact of an extended deployment
could remain long after the service member returns home to his family.
S. 256 does not recognize this reality and does not consider the
difficult circumstances facing military families today.
I am against passing legislation only adding to the enormous burden
we are already placing on those defending the United States and the
families sending a loved one into harm's way.
I urge my colleagues to vote against the Bankruptcy Abuse Prevention
and Consumer Protection Act.
Mr. UDALL of New Mexico. Mr. Speaker, thank you for allowing me the
opportunity to offer my remarks today regarding S. 256, the so-called
``Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.''
The issue of bankruptcy reform is extremely important and it is
critical that we pass a measure that will ensure greater personal
responsibility of debtors, as well as ensure that credit card companies
and other creditors take responsibility for their irresponsible
lending. Unfortunately, this bill does neither. In fact, this bill
overly penalizes working families and takes no action against reckless
and predatory lending.
Mr. Speaker, in addition to my reservations about the legislation, I
also strongly object to the rule under which S. 256 is being debated.
The majority has, once again, passed a rule that stifles debate and
blocks serious and substantive amendments. There were more than 30
thoughtful amendments brought before the

[[Page H2070]]

Rules Committee, yet they did not allow a single one to be brought
before the full House. These amendments would have addressed the impact
that this bill would have on groups such as disabled veterans returning
from Iraq, single parents, families experiencing a catastrophic medical
event, and people who are victims of identity theft. This continued
smothering of the democratic process by the majority is shameful and
must stop.
As to the substance of the legislation, it is no secret that the
number of bankruptcies has risen considerably in the past twenty years.
In 1980, there were 330,000 bankruptcies in the United States. In 2003,
that number rose to over 1.66 million. The number of filings has
dropped 3.8 percent in 2004 down to 1.59 million. Though this is headed
in the right direction, I understand that more has to be done. S. 256,
however, is not the answer.
S. 256 is full of provisions that I adamantly oppose. It imposes a
rigid means test, endangers child support, and allows millionaires to
continue to shelter their assets in mansions. These provisions result
in an unbalanced and punitive measure that will have a devastating
effect on women, the unemployed, and the elderly. Reform in this bill
is skewed toward restricting the consumer's access to relief from
overwhelming debt, while making it easier on those creditors who
encourage additional unwise borrowing.
S. 256 fails to find a middle ground between lenders and borrowers.
While it is critical that individuals begin taking greater
responsibility for their debt, so too must the credit card industry
take greater responsibility for shamelessly targeting individuals with
their credit card applications. It is these creditors who subsequently
grant these individuals higher levels of credit at high interest rates.
It is the creditors who saddle these individuals with insurmountable
levels of debt. S. 256 does nothing to help break this vicious cycle.
I would like to reiterate that I strongly support the principle of
increased personal responsibility for debt, but I believe this bill
does more harm than good. I believe we would be better served if we
could fully debate the merits of this legislation, as well as
substantive amendments that were disallowed from consideration by the
full House. Unfortunately, once again, we cannot, and I urge my
colleagues to oppose this legislation.
Mr. SMITH of Texas. Mr. Speaker, it's time for Congress to enact
meaningful bankruptcy reform. Unless we take action, people will
continue to abuse the system by filing for bankruptcy as an easy out.
When people avoid their debts, someone still has to pay. Companies
absorb the cost of unpaid debts by passing along these costs to
consumers.
Over a million people file for bankruptcy each year. Many of these
filings are legitimate attempts by debtors to pay their debts and
obtain a fresh start. However, bankruptcy is too often used as a way to
avoid responsibilities.
Unnecessary bankruptcy filings continue to increase at dramatic
rates. Often, individuals go on spending sprees for luxury goods and
services just before filing for bankruptcy, knowing that they can wipe
the slate clean and avoid paying for what they bought.
This is bad for consumers and bad for our economy. When individuals
avoid their debts when they could be paid off, the costs are passed on
to America's businesses and consumers. We must ensure that debtors
actually belong in bankruptcy and are not using the system to avoid
their obligations.
This bill stops abuse by eliminating incentives in the current
bankruptcy system that actually encourage consumer bankruptcy filings
and abuse. It requires those who can repay their debts to do so. It
also gives courts greater power to dismiss frivolous or abusive
bankruptcy filings and punish lawyers who encourage these filings.
This bill also contains provisions I support to address those who
abuse state homestead laws and attempt to shelter their wealth in
multi-million dollar mansions. It requires a debtor to own their
homestead for at least 40 months before he or she can use state
exemption law. And, if a debtor has committed an intentional tort, a
criminal act, or violated securities laws, their homestead exemption
will be capped at $125,000. These provisions will close the loophole
that currently allows debtors to abuse the homestead provision.
This legislation will encourage personal responsibility, protect
consumers, and ensure that bankruptcy is used only as a last resort and
is not abused by those who can afford to repay their debts.
Mr. WELDON of Florida. Mr. Speaker, for years, honest but unfortunate
consumers have had the ability to plead their case to come under
bankruptcy protection and have their reasonable and valid debts
discharged. The way the system is supposed to work, the bankruptcy
court evaluates various factors including income, assets and debt to
determine what debts can be paid and how consumers can get back on
their feet. The bill before us preserves that right for those
individuals who simply get in over their heads and have no other way
out
Unfortunately, some dishonest individuals have taken advantage of our
bankruptcy laws by hiding assets, racking up debt in anticipation of
filing for bankruptcy, using bankruptcy as a financial planning tool,
and walking away from that which they owe. This hurts our economy
because it forces retailers and businesses to simply raise the prices
of goods and services for honest Americans. All Americans end up paying
the costs for those who have gamed the bankruptcy laws.
I support S. 256, the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005. I am a cosponsor of the House version of this
bill. This common sense legislation preserves the right to file
bankruptcy for those who truly cannot repay their debts while ensuring
that those who do have the ability to repay a portion of their debts do
so.
S. 256 provides the same kinds of bankruptcy reforms the House has
approved twice before. It restores the principles of fairness and
personal responsibility to our bankruptcy system and protects the
rights of consumers. S. 256 also requires creditors to help prevent
credit card abuse through new disclosures and educational provisions.
This is a good bill for average American consumers, for American
businesses, and our economy as a whole.
Mrs. BIGGERT. Mr. Speaker, it is with great pleasure that I rise
today to express my strong support for The Bankruptcy Abuse Prevention
and Consumer Protection Act.
A Chinese proverb says: ``Give a man a fish and you feed him for a
day. Teach a man to fish and you feed him for a lifetime.'' And that's
exactly what this bill before us today will do.
There are many reasons to support this Bankruptcy Reform Bill, but I
want to focus on one that is important to many of my colleagues, to me
and to the American people. We should support the bill because it
contains important financial literacy provisions. Financial literacy
goes hand-in-hand with helping our citizens of all ages and walks of
life to negotiate the complex world of personal finance. Financial
literacy can help Americans avoid or survive bankruptcy.
We have passed many laws that require the disclosure of the terms and
conditions of the rich mix of financial products and services that are
available to consumers.
Unfortunately, for too many Americans, knowing the terms and
conditions of financial products and services is challenging enough.
However, understanding those terms and conditions is often an even
greater challenge. Recognizing this fact, Congress included provisions
in the Fair and Accurate Credit Transactions Act to address the issue
of financial literacy.
The Bankruptcy Abuse Prevention and Consumer Protection Act, S. 256,
also contains important provisions addressing economic education and
financial literacy. These provisions are designed to ensure that those
who enter the bankruptcy system will learn the skills to more
effectively manage their money in an increasingly complicated
marketplace.
Before the House considers S. 256, I want to highlight, for my
colleagues, some of the bill's important financial literacy provisions:
First: the bill will facilitate educating future generations. It
expresses the ``Sense of the Congress'' that personal finance curricula
be developed for elementary and secondary education programs. If we
teach our children, early-on, how to manage money, credit, and debt,
they can become responsible workers, and heads of households and keep
their parents out of bankruptcy court.
Second: the bill will provide for pre-filing credit counseling. It
requires debtors, prior to filing for bankruptcy, to receive credit
counseling from a nonprofit counseling agency. The counseling must
include a budget analysis and disclosures regarding the possible impact
of bankruptcy on a debtor's credit report.
Next: the bill will provide for pre-discharge financial education,
requiring debtors to complete an approved instructional course on
personal financial management prior to receiving a discharge under
Chapter 7 or 13.
The bill will also include important exceptions. It authorizes phone
and Internet counseling for both the pre-filing and pre-discharge
education requirements to assist debtors in rural and remote areas. In
addition, either or both requirements may be waived if services are not
available or in exigent circumstances.
Finally, the bill requires the Director of the Executive Office for
U.S. Trustees to: (1) develop a financial management training
curriculum and materials to educate individual debtors on how to better
manage their finances; and (2) evaluate and report to the Congress on
the curriculum's efficacy. This will ensure that Congress can evaluate
the effectiveness of these financial literacy provisions in the long-
term.
Last week, we passed House Resolution 148, a bill that supports the
goals and ideals of Financial Literacy Month, which is this

[[Page H2071]]

month, April 2005. H. Res. 148 was co-sponsored by 82 Members of this
body and 409 Members of this body voted for it.
Mr. Speaker, the number of bankruptcies remains at a historic high--
over 1.6 million bankruptcy cases were filed in federal courts in 2004.
With that in mind and in the spirit of Financial Literacy Month, I urge
my colleagues to pass S. 256, the Bankruptcy Abuse Prevention and
Consumer Protection Act, which contains important financial literacy
provisions that will provide Americans with the skills needed to
successfully navigate the world of personal finance.
Mr. Speaker, let's help our fellow citizens avoid bankruptcy
altogether. ``Give a man a fish and you feed him for a day. Teach a man
to fish and you feed him for a lifetime.'' Vote for S. 256.
Mr. CASTLE. Mr. Speaker, I am submitting for the Record the following
remarks from Mr. Arkadi Kuhlmann, CEO of ING DIRECT, in opposition to
the bankruptcy reform legislation under consideration. I remain a
strong supporter of S. 256; however, I believe Mr. Kuhlmann's statement
should be made part of the record.

Statement of Arkadi Kuhlmann, CEO, ING DIRECT

Mr. Speaker, I am Arkadi Kuhlmann, CEO of ING DIRECT, a
federally chartered thrift headquartered in Wilmington,
Delaware. ING DIRECT launched in the U.S. in September 2000
to challenge traditional banking by touting the high
interest, no fee and no minimum Orange Savings Account as its
signature product, with a brand vision to lead Americans back
to saving.
ING DIRECT has since expanded its product line to include
the Orange Mortgage, the Orange Home Equity Line of Credit,
Orange CDs and the Orange Investment Account. With over 2.5
million customers and more than $43 billion in assets, ING
DIRECT is the fourth largest thrift in the U.S.
The House is now considering consumer bankruptcy
legislation that would make major changes to how consumers'
debts and obligations are treated in the bankruptcy process.
Thank you for this opportunity to submit testimony for the
record on this legislation.
Despite the many important and positive changes this bill
would make to our bankruptcy laws, this proposal remains
seriously flawed. One significant oversight is the bill's
failure to consider one of the biggest problems we face in
business today: identity theft.
The Washington Post ran a story recently about a woman
whose identity was stolen, yet her credit card company forced
the fraudster's debt on her by using the arbitration clause
in her card agreement.
The Bankruptcy Bill must address the possibility that
identity theft could lead to financial devastation through no
fault of the person's own. In addition to overlooking the
problem of identity theft, this proposal had additional
shortcomings. It actually encourages further bad lending
decisions by removing an important market discipline--the
possibility of a clean bankruptcy.
Without important changes, millions of consumers, who might
otherwise be savers, will be encouraged into debt by
aggressive credit card and other lending. We believe it is
crucial that a serious study of the connection between credit
card marketing and personal bankruptcy be completed. The bill
as drafted requires such a study. We challenge the Congress
to take a very hard look at the results of the study and
consider further legislation, if necessary.
Another important issue is the Bill's creation of a ``means
test.'' By giving disparate treatment to secured versus
unsecured debt, the law would treat secured creditors even
more favorably than under current rules. We believe the means
test should be applied across the board or not at all.
We at ING DIRECT believe this country is still willing to
give working Americans--the engine of our economy--a second
chance when debt overwhelms them. This bill seriously limits
that second chance.
Thank you for the opportunity to present our views.

Mr. FARR. Mr. Speaker I rise in strong opposition to the misnamed
``Bankruptcy Abuse Prevention and Consumer Protection Act,'' (S. 256).
Current bankruptcy law needs some adjustment, but this bill is not the
solution. It hurts middle-class consumers in a variety of ways: the
bill would allow landlords to evict battered women without bankruptcy
court approval, even if the eviction poses a threat to the women's
physical well-being; and, it permits credit card companies to reclaim
common households goods which are of little value to them, but very
important to the debtor's family.
It is very important to note that the bill does absolutely nothing to
discourage abusive underage lending, nothing to discourage reckless
lending to the developmentally disabled and nothing to crack down on
unscrupulous pay-day lenders that prey on members of the armed forces.
Last year nearly one and a half million middle class individuals
filed for bankruptcy. Their average income was less than $25,000 and
the principal causes for their filings were layoffs, health problems
and divorce. In my judgment, it is a grave mistake to punish these
individuals while rewarding credit card companies and business
lobbyists at a time when corporate greed has already destroyed the
lives of millions of American workers. I will support a balanced
bankruptcy reform bill, but S. 256 is in no way balanced and I believe
does more harm than good, therefore I strongly oppose this bill.
Mr. GENE GREEN of Texas. Mr Speaker, I rise today in opposition to
this bill.
This bill will weaken homestead protections currently in place under
state laws, hurting my constituents, the citizens of Texas, and the
citizens of any other states that have laws protecting individuals'
homes valued over $125,000, which is the limit this bill sets.
Texas, which has the longest and oldest history of homestead
protection laws in our country, has no cap on homestead protection,
along with Kansas, Iowa, Florida, and South Dakota.
Minnesota, Rhode Island, and Nevada's laws protect home equity of
$200,000.
Property values across the nation vary widely. The median resale
price of a home in California is $215,000. In Nebraska it's $70,200.
While I understand there must be a sensible cap on exemptible home
equity to ensure the law is not protecting million dollar mansions,
$125,000 is unreasonable given the skyrocketing price of real estate in
Texas and many other parts of the country.
This bill will make bankruptcy even more expensive and burdensome
than it already is, on hardworking Americans who have fallen on hard
times and seniors on fixed incomes, while doing nothing to address the
out of control lending practices by credit card companies.
Mr. Speaker, I cannot support a bill that will hurt hard-working
Texans, and I oppose this bill.
Mr. LEVIN. Mr. Speaker, I rise in opposition to the bankruptcy bill
before the House.
This legislation has two fundamental flaws. The first problem is that
the bill does not distinguish between those individuals who abuse their
credit and then seek to wipe the slate clean through Chapter 7, and
those who enter bankruptcy as the result of a costly medical emergency
or after one of the breadwinners in a family loses their job. We need
to make a distinction between a family who is struggling to pay for a
medical operation for a child and a person who maxes out their credit
cards on a shopping spree at the mall. This bill does not do so.
A recent Harvard University study underscores the fact that the
bankruptcy bill's impact will extend well beyond cracking down on
people who abuse credit. The study looked at 1771 bankruptcy filers in
five states. The results were striking: Half of the people in the study
said that illness or medical bills drove them into bankruptcy. Most of
these people actually had some health insurance; but high co-payments,
deductibles, exclusions from coverages left them liable for thousands
of dollars in out-of-pocket costs when serious illness struck. Other
people in the study suddenly lost their jobs and therefore their health
insurance. In many cases, people were let go from their jobs soon after
the onset of a debilitating illness, so the medical bills begin to
arrive just as the insurance and paychecks disappear.
The second fundamental problem left unaddressed by the bill is the
credit card industry's role in the surge of bankruptcy filings in
recent years. The industry hands out credit cards like popcorn, and
then loads on extraordinary penalty fees and higher interest rates
after a payment is late. The result is that even if someone wants to
pay off their credit debts, they are unable to do so because of
thousands of dollars of punitive fees and penalty interest rates that
can run as high as 40 percent. The lending policies of the credit card
companies themselves is a major factor in driving consumers into
bankruptcy, yet the legislation before the House does nothing to end
these abuses.
I include with my statement an article from the March 6 edition of
the Washington Post entitled, ``Credit Card Penalties, Fees Bury
Debtors; Senate Nears Action on Bankruptcy Curbs.''

[From the Washington Post, Mar. 6, 2005]

Credit Card Penalties, Fees Bury Debtors; Senate Nears Action on
Bankruptcy Curbs

(By Kathleen Day and Caroline E. Mayer)

For more than two years, special-education teacher Fatemeh
Hosseini worked a second job to keep up with the $2,000 in
monthly payments she collectively sent to five banks to try
to pay $25,000 in credit card debt.
Even though she had not used the cards to buy anything
more, her debt had nearly doubled to $49,574 by the time the
Sunnyvale, Calif., resident filed for bankruptcy last June.
That is because Hosseini's payments sometimes were tardy,
triggering late fees ranging from $25 to $50 and doubling
interest rates to nearly 30 percent. When the additional
costs pushed her balance over her credit limit, the credit
card companies added more penalties.

[[Page H2072]]

``I was really trying hard to make minimum payments,'' said
Hosseini, whose financial problems began in the late 1990s
when her husband left her and their three children. ``All of
my salary was going to the credit card companies, but there
was no change in the balances because of that interest and
those penalties.''
Punitive charges--penalty fees and sharply higher interest
rates after a payment is late--compound the problems of many
financially strapped consumers, sometimes making it
impossible for them to dig their way out of debt and pushing
them into bankruptcy.
The Senate is to vote as soon as this week on a bill that
would make it harder for individuals to wipe out debt through
bankruptcy. The Senate last week voted down several
amendments intended to curb excessive fees and other
practices that critics of the industry say are abusive. House
leaders say they will act soon after that, and President Bush
has said he supports the bill.
Bankruptcy experts say that too often, by the time an
individual has filed for bankruptcy or is hauled into court
by creditors, he or she has repaid an amount equal to their
original credit card debt plus double-digit interest, but
still owes hundreds or thousands of dollars because of
penalties.
``How is it that the person who wants to do right ends up
so worse off?'' Cleveland Municipal Judge Robert J. Triozzi
said last fall when he ruled against Discover in the
company's breach-of-contract suit against another struggling
credit cardholder, Ruth M. Owens.
Owens tried for six years to pay off a $1,900 balance on
her Discover card, sending the credit company a total of
$3,492 in monthly payments from 1997 to 2003. Yet her balance
grew to $5,564.28, even though, like Hosseini, she never used
the card to buy anything more. Of that total, over-limit
penalty fees alone were $1,158.
Triozzi denied Discover's claim, calling its attempt to
collect more money from Owens ``unconscionable.''
The bankruptcy measure now being debated in Congress has
been sought for nearly eight years by the credit card
industry. Twice in that time, versions of it have passed both
the House and Senate. Once, President Bill Clinton refused to
sign it, saying it was unfair, and once the House reversed
its vote after Democrats attached an amendment that would
prevent individuals such as anti-abortion protesters from
using bankruptcy as a shield against court-imposed fines.
Credit card companies and most congressional Republicans
say current law needs to be changed to prevent abuse and make
more people repay at least part of their debt. Consumer-
advocacy groups and many Democrats say people who seek
bankruptcy protection do so mostly because they have fallen
on hard times through illness, divorce or job loss. They also
argue that current law has strong provisions that judges can
use to weed out those who abuse the system.
Opponents also argue that the legislation is unfair because
it ignores loopholes that would allow rich debtors to shield
millions of dollars during bankruptcy through expensive homes
and complex trusts, while ignoring the need for more
disclosure to cardholders about rates and fees and curbs on
what they say is irresponsible behavior by the credit card
industry. The Republican majority, along with a few
Democrats, has voted down dozens of proposed amendments to
the bill, including one that would make it easier for the
elderly to protect their homes in bankruptcy and another that
would require credit card companies to tell customers how
much extra interest they would pay over time by making only
minimum payments.
No one knows how many consumers get caught in the spiral of
``negative amortization,'' which is what regulators call it
when a consumer makes payments but balances continue to grow
because of penalty costs. The problem is widespread enough to
worry federal bank regulators, who say nearly all major
credit card issuers engage in the practice.
Two years ago regulators adopted a policy that will require
credit card companies to set monthly minimum payments high
enough to cover penalties and interest and lower some of the
customer's original debt, known as principal, so that if a
consumer makes no new charges and makes monthly minimum
payments, his or her balance will begin to decline.
Banks agreed to the new rules after, in the words of one
top federal regulator, ``some arm-twisting.'' But bank
executives persuaded regulators to allow the higher minimum
payments to be phased in over several years, through 2006,
arguing that many customers are so much in debt that even
slight increases too soon could push many into financial
disaster.
Credit card companies declined to comment on specific cases
or customers for this article, but banking industry
officials, speaking generally, said there is a good reason
for the fees they charge.
``It's to encourage people to pay their bills the way they
said they would in their contract, to encourage good
financial management,'' said Nessa Feddis, senior federal
counsel for the American Bankers Association. ``There has to
be some onus on the cardholder, some responsibility to manage
their finances.''
High fees ``may be extreme cases, but they are not the
trend, not the norm,'' Feddis said.
``Banks are pretty flexible,'' she said. ``If you are a
good customer and have an occasional mishap, they'll waive
the fees, because there's so much competition and it's too
easy to go someplace else.'' Banks are also willing to work
out settlements with people in financial difficulty, she
said, because ``there are still a lot of options even for
people who've been in trouble.''
Many bankruptcy lawyers disagree. James S.K. ``Ike''
Shulman, Hosseini's lawyer, said credit card companies
hounded her and did not live up to several promises to work
with her to cut mounting fees.
Regulators say it is appropriate for lenders to charge
higher-risk debtors a higher interest rate, but that negative
amortization and other practices go too far, posing risks to
the banking system by threatening borrowers' ability to repay
their debts and by being unfair to individuals.
U.S. Bankruptcy Judge David H. Adams of Norfolk, who is
also the president of the National Conference of Bankruptcy
Judges, said many debtors who get in over their heads ``are
spending money, buying things they shouldn't be buying.''
Even so, he said, ``once you add all these fees on, the
amount of principal being paid is negligible. The fees and
interest and other charges are so high, they may never be
able to pay it off.''
Judges say there is little they can do by the time cases
get to bankruptcy court. Under the law, ``the credit card
company is legally entitled to collect every dollar without a
distinction'' whether the balance is from fees, interest or
principal, said retired U.S. bankruptcy judge Ronald
Barliant, who presided in Chicago. The only question for the
courts is whether the debt is accurate, judges and lawyers
say.
John Rao, staff attorney of the National Consumer Law
Center, one of many consumer groups fighting the bankruptcy
bill, says the plight consumers face was illustrated last
year in a bankruptcy case filed in Northern Virginia.
Manassas resident Josephine McCarthy's Providian Visa bill
increased to $5,357 from $4,888 in two years, even though
McCarthy has used the card for only $218.16 in purchases and
has made monthly payments totaling $3,058. Those payments,
noted U.S. Bankruptcy Judge Stephen S. Mitchell in
Alexandria, all went to ``pay finance charges (at a whopping
29.99%), late charges, over-limit fees, bad check fees and
phone payment fees.'' Mitchell allowed the claim ``because
the debtor admitted owing it.'' McCarthy, through her lawyer,
declined to be interviewed.
Alan Elias, a Providian Financial Corp. spokesman, said:
``When consumers sign up for a credit card, they should
understand that it's a loan, no different than their mortgage
payment or their car payment, and it needs to be repaid. And
just like a mortgage payment and a car payment, if you are
late you are assessed a fee.'' The 29.99 percent interest
rate, he said, is the default rate charged to consumers ``who
don't meet their obligation to pay their bills on time''
and is clearly disclosed on account applications.
Feddis, of the banker's association, said the nature of
debt means that interest will often end up being more than
the original principal. ``Anytime you have a loan that's
going to extend for any period of time, the interest is going
to accumulate. Look at a 30-year-mortgage. The interest is
much, much more than the principal.''
Samuel J. Gerdano, executive director of the American
Bankruptcy Institute, a nonpartisan research group, said that
focusing on late fees is ``refusing to look at the elephant
in the room, and that's the massive levels of consumer debt
which is not being paid. People are living right up to the
edge,'' failing to save so when they lose a second job or
overtime, face medical expense or their family breaks up,
they have no money to cope.
``Late fees aren't the cause of debt,'' he said.
Credit card use continues to grow, with an average of 6.3
bank credit cards and 6.3 store credit cards for every
household, according to Cardweb.com Inc., which monitors the
industry. Fifteen years ago, the averages were 3.4 bank
credit cards and 4.1 retail credit cards per household.
Despite, or perhaps because of, the large increase in
cards, there is a ``fee feeding frenzy,'' among credit card
issuers, said Robert McKinley, Cardweb's president and chief
executive. ``The whole mentality has really changed over the
last several years,'' with the industry imposing fees and
increasing interest rates if a single payment is late.
Penalty interest rates usually are about 30 percent, with
some as high as 40 percent, while late fees now often are $39
a month, and over-limit fees, about $35, McKinley said. ``If
you drag that out for a year, it could be very damaging,'' he
said. ``Late and over-limit fees alone can easily rack up
$900 in fees, and a 30 percent interest rate on a $3,000
balance can add another $1,000, so you could go from $2,000
to $5,000 in just one year if you fail to make payments.''
According to R.K. Hammer Investment Bankers, a California
credit card consulting firm, banks collected $14.8 billion in
penalty fees last year, or 10.9 percent of revenue, up from
$10.7 billion, or 9 percent of revenue, in 2002, the first
year the firm began to track penalty fees.
The way the fees are now imposed, ``people would be better
off if they stopped paying'' once they get in over their
heads, said T. Bentley Leonard, a North Carolina bankruptcy
attorney. Once you stop paying, creditors write off the debt
and sell it to a

[[Page H2073]]

debt collector. ``They may harass you, but your balance
doesn't keep rising. That's the irony.''

Mr. LANGEVIN. Today I rise in support of the Pomeroy substitute to
H.R. 8, the Estate Tax Repeal Permanency act, and in opposition to the
underlying bill. As the son of a small business owner, I know firsthand
the tax burden placed on entrepreneurs and working families, and I
support efforts to responsibly protect small business owners.
The Pomeroy substitute provides needed relief by eliminating estate
taxes for assets totaling $3.5 million per individual or $7 million per
married couple. Increasing the exemption to this level would mean that
99.7 percent of all estates will not pay a single penny of the estate
tax. Small businesses and farm owners should not be penalized for their
success, nor should they need to worry about their ability to pass the
family business on to future generations, and the substitute addresses
these concerns.
H.R. 8 goes far beyond providing fair tax relief to small businesses
and family farms. While the benefits overwhelmingly go to the
wealthiest 0.3 percent of estates, Republican leaders fail to mention
that their proposal actually raises taxes on thousands of estates,
including those not previously affected by the estate tax. This is
because their legislation increases capital gain taxes owed on
inherited property. The Department of Agriculture estimates that this
change will raise taxes on more farms than would benefit from repealing
the tax.
The Republicans' call for repealing the estate tax comes at a time
when our government is already in fiscal crisis. Ending the estate tax
will reduce revenues by $290 billion over ten years, and by 2021, this
legislation will have added a total of more than $1 trillion to our
debt. With a $400 billion deficit projected this year, now is not the
time to add trillions in debt to the tab that future generations must
pay. These added costs also come as the President proposes to privatize
Social Security at a cost of up to $6 trillion. In addition, the House
recently passed a budget that cuts $20 billion from Medicare and
underfunds critical priorities including veterans' health care and
homeland security. We must work to meet our existing obligations rather
than cutting taxes for the wealthiest 0.3 percent of families in
America.
Based on Internal Revenue Service data for 2004, out of approximately
10,000 deaths in my home state, only 312 Rhode Island decedents filed
estate tax returns. This number would be much lower with the $3.5
million exemption under the Pomeroy substitute. Under our Democratic
alternative, most small business owners and family farmers would
receive estate tax relief.
I urge my colleagues to join me in supporting permanent reform of the
estate tax, but not irresponsibly repealing it. Our small business
owners are in need of relief, and we must provide it without leaving
future generations to pay the bill.
Mr. ROYCE. Mr. Speaker, today, Congress has the opportunity to finish
the task of preventing corporate malfeasance by agreeing to pass S.
256.
Included in this bill is a sensible provision that sharply limits to
$125,000 the homestead exemption that many CEOs and corporate officers
have used to shield their assets from creditors after they plunder
their shareholders' wealth.
By empowering the government to go after the ill-gotten gains that
crooked corporate officers tie up in offshore mansions, shareholders
and pensioners who have been swindled can have their hard-earned
savings returned to them.
In addition, this bill prohibits people convicted of felonies like
securities fraud from claiming an unlimited exemption when filing for
bankruptcy, protecting taxpayers from having to bear the cost of
corporate malfeasance.
It also guards against fraud and abuse by requiring that high-income
debtors who have the ability repay a significant portion of their debts
do so, preventing them from sticking responsible borrowers with their
tab. It accomplishes all of this while preserving the ability of people
who truly need to discharge their debts to do so.
For far too long, Americans who work hard and pay their bills have
been held accountable for the debts incurred by those who irresponsibly
file for bankruptcy.
This long-overdue legislation will reform the critically-flawed
bankruptcy process, and prevent affluent filers from gaming the system
and passing on their bad debt to hard-working families while preserving
the ability of people who truly need to discharge their debt through
bankruptcy to do so.
Bankruptcy should be preserved as a last resort for those who truly
need the protections that the bankruptcy system has to offer--not a
tool for those who could pay their debts but choose to discharge them
instead.
By agreeing to this legislation, Congress will make the existing
bankruptcy system a needs-based one and correct the flaw in the current
system that encourages people to file for bankruptcy and walk away from
debts, regardless of whether they are able to repay any portion of what
they owe; and it does this while protecting those who truly need
protection.
I commend my colleagues for their hard work on this legislation, and
I strongly urge my colleagues to vote in favor of this report and help
honest taxpayers by closing the loopholes in the current bankruptcy
system.
Mr. MACK. Mr. Speaker, I rise today in support of the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005.
I came to Congress to promote the ideals of freedom, security and
prosperity. Embodied within these principles is the duty of the
American people to take responsibility for their actions--including
control of one's personal finances and investments--without undue
influence from the federal government.
Under current law, bankruptcy protection has increasingly become a
first stop rather than a last resort. Our credit markets have been
undermined on a daily basis because of the abuse of the existing laws.
All too often, people run to the shelter of bankruptcy to escape the
consequences of their actions, all to the detriment of the rest of
society. That is fundamentally wrong.
Mr. Speaker, the Bankruptcy Abuse Prevention and Consumer Protection
Act reforms existing bankruptcy law to stem the rise in bankruptcy
abuse while maintaining its protections for those who really need them.
The act places compassionate, coherent, and common-sense reforms on the
current system. It ensures that frivolous costs are no longer unfairly
passed on to American families.
Mr. Speaker, as a supporter of the Bankruptcy Abuse Prevention and
Consumer Protection Act, I encourage my colleagues to vote for this
well-balanced measure that will protect those individuals who need a
fresh start while cracking down on abuse of the system.
Mr. CASTLE. Mr. Speaker, I rise today in strong support of S. 256,
the ``Bankruptcy Abuse and Consumer Prevention Act of 2005.''
It has been seven years since we made our first attempt to reform the
bankruptcy system in the 105th Congress and thanks to the tireless
efforts of Chairman Sensenbrenner's Committee, we can see a real chance
for passing a full and comprehensive bill this year.
Mr. Speaker, we have seen a sharp increase in bankruptcies over the
past 25 years. In 2003, consumer filings peaked at over 1.6 million
filings--a 465 percent increase from 1980. Those who believe credit
card companies, mortgage lenders and other financial institutions are
bearing the costs of consumer's filing for bankruptcy don't understand
how business works. American families are paying the price for this
debt--some studies reflect $400 per year in every household--by higher
interest rates on their credit cards, auto loans, school loans and
mortgages. When the legislation before us passes today it will be the
American families that are the real winners.
This legislation balances the consumer's challenge of debt repayment
with the needs of businesses to collect money rightfully owed to them.
In an effort to better educate consumers and improve financial
literacy, the legislation requires many filers of bankruptcy to attend
financial counseling. This change, coupled with Congressional
encouragement for schools to incorporate personal finance curricula in
elementary and secondary education programs, are both useful methods of
curbing future debt. As Chairman of the Education Reform Subcommittee,
which has jurisdiction over all K-12 programs, I feel strongly that
educating future spenders can prevent debts incurred as adults.
I also support the new requirement for lending institutions, which
will now have to take additional steps to ensure consumers fully
understand the ramifications of credit spending. Credit card billing
statements will now reflect the actual time it would take to repay a
full balance at a specified interest rate; contain warnings to alert
consumers that paying only the minimum will increase the amount of
interest; and list a toll-free number for consumer's to call for an
estimate of the time it would take to repay the balance if only the
minimum is paid. With these steps, lending institutions can improve
their chances of repayment while pro-actively educating consumers of
true costs associated with borrowing.
I believe the ``Bankruptcy Abuse and Consumer Protection Act''
reflects fair solutions to minimizing spending abuse, while protecting
those with genuine hardship. Relief is still available for low and
moderate income families. However, this legislation will end the
protection for those who make obvious attempts to abuse their credit.
Those who are able to pay their debts--will now be held to those
commitments--through means testing. A means test would be used to
determine a debtor's eligibility for Chapter 7 bankruptcy relief, where
the majority of debt is excused, or Chapter 13, where a significant
portion of debt

[[Page H2074]]

must be repaid. Importantly, disabled veterans would be exempt from the
means test if their debts occurred primarily as a result of being
called to active duty or for homeland defense operations.

Lastly, Mr. Speaker, this legislation also includes four additional
judges for Delaware's bankruptcy court. This increase is long overdue,
as the bankruptcy caseloads in Delaware continue to exceed other
districts' caseloads for Chapter 11 businesses cases. Last year alone,
weighted filings for Delaware judges were 11,789, while the national
average was 1,763--in other words, the Delaware caseload was 10 times
the national average. The Delaware District tends to have the largest
Chapter 11 business cases, often referred to as the ``mega'' Chapter 11
cases which are ``those involving extremely large assets, unusual
public interest, a high level of creditor involvement, complex debt, a
significant amount of related litigation, or a combination of such
factors.'' These are complex cases in which the judicial system in
Delaware has built a high level of expertise as well as a sound
reputation for fair practices. I am pleased the legislation before us
today takes a solid step towards alleviating Delaware's heavily
burdened bankruptcy court system.
Again, Mr. Speaker, I want to thank Chairman Sensenbrenner for his
years of strong and tenacious support for this legislation and thank
him for not giving up on these important, common-sense changes to our
bankruptcy system. I urge my colleagues to support this bipartisan
legislation.
Mr. TERRY. Mr. Speaker, in pertinent part, section 202 of S. 256, the
``Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,''
amends section 524 of the Bankruptcy Code by making the discharge
injunction inapplicable to certain acts by a creditor having a claim
secured by a lien on real property that is the debtor's principal
residence, so long as the creditor satisfies certain criteria. First,
the creditor's act must be in the ordinary course of business between
the creditor and debtor. Second, such act is limited to seeking
periodic payments associated with a valid security interest in lieu of
pursuit of in rem relief to enforce the lien.
Section 202 was included because Congress recognized that there are
many consumer debtors who, despite filing bankruptcy, desire to repay
secured obligations in order to retain their principal residences.
Under current law, however, some secured creditors stop sending monthly
billing statements or payment coupons for fear of violating the
discharge injunction. Section 202 is intended to reassure these secured
creditors that if consumer debtors want to continue making voluntary
payments so they can keep their principal residences, then secured
creditors may take appropriate steps to facilitate such payment
arrangements, such as continuing to send monthly billing statements or
payment coupons.
Moreover, despite the express reference in this provision to liens on
real property, section 202 should not, by negative inference or
implication, be construed as limiting any rights that may have
developed through existing case law, or otherwise, that permit secured
creditors to send, or consumer debtors to request and receive, monthly
billing statements or payment coupons for claims secured by real or
personal property. See, e.g., Ramirez v. GMAC (In re Ramirez), 280 B.R.
253 (C.D. Cal. 2002); Henry v. Associates Home Equity Services, Inc (In
re Henry), 266 B.R. 457 (Bankr. C.D. Cal. 2002).
Mr. KOLBE. Mr. Speaker, after eight years of intense Congressional
scrutiny and debate, this long-overdue legislation is now close to
becoming law. I will vote in favor of this legislation, just as I have
supported similar bills in the past, and I encourage my colleagues to
pass S. 256 without amendments so it can go directly to the President
for his signature.
Without a doubt, bankruptcy reform is needed. Under current law, it
is far too easy for debtors with significant cash resources to declare
bankruptcy and walk away from their debts, even when they have the
ability to pay a substantial portion of those debts. Bankruptcies cost
the rest of us American taxpayers billions of dollars each year. Why?
Because commercial institutions have to pass their losses on to
everyone else in the form of higher prices and higher interest rates.
The Bankruptcy Abuse Prevention and Consumer Protection Act is a well-
balanced measure that will permit people with real financial need to
get a fresh start, but lessen the burden placed on other working
Americans who now must support people who are taking advantage of the
system.
This bankruptcy reform bill will force those who have the ability to
repay their debts to do so. At the same time, it provides safeguards
such as child and spousal protections, debtor education, and mandatory
credit counseling before someone files for bankruptcy. The bill also
makes common-sense revisions to homestead exemptions to reduce the
ability of a wealthy individual shielding his money in an extravagant
home just prior to filing bankruptcy.
Put simply, this legislation helps restore the fundamental concept of
personal responsibility in the bankruptcy system. I urge my colleagues
to adopt.
Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Putnam). All time for debate has
expired.
Pursuant to House Resolution 211, the bill is considered read for
amendment, and the previous question is ordered.
The question is on the third reading of the bill.
The bill was ordered to be read a third time, and was read the third
time.

Motion to Recommit Offered by Ms. Schakowsky

Ms. SCHAKOWSKY. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
Ms. SCHAKOWSKY. Yes.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.

Ms. SCHAKOWSKY moves to recommit the bill (S. 256) to the Committee
on the Judiciary, with instructions to report the bill back to the
House forthwith, with the following amendment:

Page 14, after line 6, insert the following:

``(E) Subparagraphs (A) through (C) shall not apply, and
the court may not dismiss or convert a case filed under this
chapter based on any form of means testing--
``(i)(I) while the debtor is on, and during the 2-year
period beginning immediately after the debtor is released
from, active duty (as defined in section 101(d)(1) of title
10); or
``(II) while the debtor is performing, and during the 2-
year period beginning immediately after the debtor is no
longer performing, a homeland defense activity (as defined in
section 901(1) of title 32); and
``(ii) if--
``(I) after September 11, 2001, the debtor was called to
active duty or to perform a homeland defense activity; and
``(II) a substantial portion of the debts arose on or after
September 11, 2001 and resulted from the debtor's service on
active duty or the debtor's performance of a homeland defense
activity.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Illinois (Ms. Schakowsky) is recognized for 5 minutes in support of her
motion.
Ms. SCHAKOWSKY. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, I rise today with the gentleman from Ohio (Mr.
Strickland) to offer this motion on behalf of our brave citizen
soldiers who are risking their lives for us and then, as a thank you,
risking their homes and their businesses, too. Our motion simply
shields financially distressed National Guard and Reservists from the
means test found in S. 256 while they are in service and for the 2
years after they have transitioned back to civilian life if a
substantial portion of their debt is due to their service.
This motion is a narrow protection for those who suffer financial
hardship, financial disaster, as a direct result of serving our
country. It builds on Senator Durbin's amendment to the Senate
bankruptcy bill which exempts from the bill's means test disabled
veterans if their debts were incurred primarily when they were on
active duty or performing homeland defense duties.
Regardless of Members' position on the overall bill, we owe it to
those who risk their lives and their livelihoods to prevent financial
catastrophe caused by their service. This motion is the least we can do
to ease their pain.
According to the National Guard, 4 out of 10 members of the guard and
reserve forces lose income when they leave their civilian jobs for
active duty. Many left for the war thinking they would be deployed for
6 months and have ended up staying for a year or even longer and may be
shipped out again. There is no reasonable way they could have
financially anticipated and prepared for those extensions of their
service. Their families struggle to pay the bills. Some face the
reality of losing their homes, as this cartoon depicts: Tie a yellow
ribbon around the old oak tree, and for some of those returning from
Iraq, it is a foreclosure sign around their house.
Many Guard and Reservists are self-employed or run small businesses
and face the daunting task of reestablishing their businesses after
their release from active duties. The 2 years after they return from
service are the

[[Page H2075]]

most difficult, and we owe it to them to provide a safe harbor from the
means test.
Since 9/11, approximately 470,000 Guard and Reservists have been
called to active duty, tens of thousands more than once. Some of these
patriotic Americans are facing financial crisis not because they are
exploiting loopholes in the bankruptcy law, they are not scheming to
avoid paying their debts, they are in a financial hole their country
dug for them.
Some will argue we do not need this motion because our solders are
already covered by the Servicemembers' Civil Relief Act, but that is
not true. Even with that minimal help, many are forced to file for
bankruptcy and the relief act provides no assistance once they file. It
is hard enough under current law for them to pick up the pieces. The
special circumstances and sacrifices of Guard and Reserve forces
require that we not make recovery even harder for them. Soldiering is
not their livelihood, but they take it on. They leave their day-to-day
lives and jobs behind because their country asks them to do so.
Exemption from the means test is the least we can do to tell our
citizen soldiers and their families not only do we appreciate the
physical and emotional risks they have taken, we recognize their
financial risk.
To do any less than this simple, narrow protection would be morally
bankrupt.

Disabled American Veterans,

Washington, DC, April 1, 2005.
Hon. John Conyers, Jr.,
Ranking Minority Member, House Committee on the Judiciary,
Rayburn House Office Building, Washington, DC.
Dear Representative Conyers: The Disabled American Veterans
(DAV) is a nonprofit organization of more than one million
veterans disabled during time of war or armed conflict. The
DAV is the official voice of our nation's service-connected
disabled veterans, their families, and survivors.
On behalf of the DAV, I ask you please keep in mind the
sacrifices of the brave men and women of our Armed Forces as
you consider S. 256, the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005.
Returning service members often experience financial
difficulties during their transition back to civilian life.
They should be afforded protections to ensure that the
already significant burdens upon military members and their
families are not compounded by unintended consequences from
this bill. Specifically, disabled veterans who incur debt
during the initial 24 months following completion of active
duty should not be subject to the bankruptcy means test. Such
heroic citizens deserve the utmost consideration with regard
to bankruptcy laws.
Thank you for your consideration. I look forward to
continuing to work with you to ensure better lives for
America's service-connected disabled veterans and their
families.
Sincerely,
Joseph A. Violante,
National Legislative Director.

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr.
Strickland), a champion for our service men and women.
Mr. STRICKLAND. Mr. Speaker, I support this motion to recommit
because it provides added financial protections for veterans, military
personnel and their families who are enduring financial hardships as a
direct result of serving this country.
Additionally, this motion to recommit offers help to members of the
Reserves and National Guard who all too often must leave behind their
family jobs and businesses. It provides protection not just during
service but also for the 2 years after service when our veterans make
the transition back to civilian life. This measure will guarantee what
the Servicemembers Relief Act does not. It will provide exemptions from
the means test, financial assistance and time, something our
servicemembers selflessly give to the Nation and something we should
give to them.
The Servicemembers Civil Relief Act does not provide substantial
bankruptcy protections. Rather, it provides a simple, temporary 90-day
delay in bankruptcy proceedings once a servicemember is released from
active duty.

{time} 1500

Let us be clear. No bankruptcy safe harbor or exemption exists for
our citizen soldiers under the Servicemembers Civil Relief Act
currently. This motion is not an attempt to kill the bill. It is simply
a reaction to a real problem that has been highlighted in countless
news stories, by the National Military Families Association, Disabled
Veterans of America, and individual servicemembers. These are people
experiencing real and difficult financial situations. I support this
motion to provide this narrow protection for those men and women who
have served our country, and I urge my colleagues to do the same.
I thank my dear colleague for her efforts in this behalf.
Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to
recommit.
The SPEAKER pro tempore (Mr. Putnam). The gentleman from Wisconsin
(Mr. Sensenbrenner) is recognized for 5 minutes.
Mr. SENSENBRENNER. Mr. Speaker, the motion to recommit creates a
blanket exemption from the bill's needs-based test, and I do not think
that that is necessary because it would exempt a wealthy debtor from
the needs-based test solely based on the debtor's military service.
People who fall behind the lines of the needs-based test will continue
to have bankruptcy protection under chapter 7 as is provided in the
current law. The bill also contains an exception from the needs-based
test for disabled veterans who incurred indebtedness while on active
duty.
CRS and even the New York Times recognized that the Servicemembers
Civil Relief Act of 2003 provides a broad spectrum of protection to
servicemembers, their spouses and their dependents; and the revised
statute, according to the New York Times, is clearer and more
protective than the old one. The Times also recognized that the news
was apparently slow in reaching those who would have to interpret and
enforce the law, which apparently includes the people who are offering
this motion to recommit.
Let me summarize. Already there is in law, signed by President Bush
in 2003, we have responded to the special financial burdens that
members of the military may encounter. CRS has said the Servicemembers
Civil Relief Act provides protection for servicemembers in the event
their military service impedes their ability to meet financial
obligations incurred before their entry into active military service,
as well as during that service. There is a cap on the interest rates of
6 percent. It clarifies that the balance of interest for the period of
the servicemember's military service is to be forgiven by the lender.
There are protections against evictions from rental property or
foreclosures on mortgaged property. There are restrictions on
cancellation of life insurance and more flexible options to allow
servicemembers on active duty to terminate residential and automobile
leases.
We do not need this motion to recommit. Congress has already passed a
law that provides those types of protections. The motion to recommit
should be defeated, and the bill should be passed.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Ms. SCHAKOWSKY. Mr. Speaker, I object to the vote on the ground that
a quorum is not present and make the point of order that a quorum is
not present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clause 9 of rule XX, the Chair will reduce to 5 minutes
the minimum time for any electronic vote on the question of passage.
The vote was taken by electronic device, and there were--yeas 200,
nays 229, not voting 6, as follows:

[Roll No. 107]

YEAS--200

Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boren
Boswell
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Butterfield
Capps
Capuano
Cardin
Cardoza
Carnahan
Carson
Case
Chandler
Clay
Cleaver
Clyburn
Conyers
Cooper
Costa
Costello
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)

[[Page H2076]]

Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Harman
Hastings (FL)
Herseth
Higgins
Hinchey
Hinojosa
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (IL)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick (MI)
Kind
Kucinich
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren, Zoe
Lowey
Lynch
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy
McCollum (MN)
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Melancon
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Schakowsky
Schiff
Schwartz (PA)
Scott (GA)
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Spratt
Stark
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn

NAYS--229

Aderholt
Akin
Alexander
Bachus
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boucher
Boustany
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carter
Castle
Chabot
Chocola
Coble
Cole (OK)
Conaway
Cox
Crenshaw
Cubin
Culberson
Cunningham
Davis (KY)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Everett
Feeney
Ferguson
Fitzpatrick (PA)
Flake
Foley
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Green (WI)
Gutknecht
Hall
Harris
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Hulshof
Hunter
Hyde
Inglis (SC)
Issa
Istook
Jenkins
Jindal
Johnson (CT)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
Kuhl (NY)
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McKeon
McMorris
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pombo
Porter
Portman
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schwarz (MI)
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (NJ)
Smith (TX)
Sodrel
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walden (OR)
Walsh
Wamp
Weldon (PA)
Weller
Westmoreland
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)

NOT VOTING--6

Berkley
Gillmor
Gutierrez
LaHood
Solis
Weldon (FL)

{time} 1529

Messrs. TURNER, TANCREDO, CRENSHAW, and BRADLEY of New Hampshire
changed their vote from ``yea'' to ``nay.''
Ms. EDDIE BERNICE JOHNSON of Texas and Messrs. RUSH, BOREN, and
JOHNSON of Illinois changed their vote from ``nay'' to ``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
Stated for:
Ms. SOLIS. Mr. Speaker, during rollcall vote No. 107 on motion to
recommit with instructions (S. 256) I was unavoidably detained. Had I
been present, I would have voted ``yea.''
The SPEAKER pro tempore (Mr. Putnam). The question is on passage of
the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 302,
nays 126, not voting 7, as follows:

[Roll No. 108]

YEAS--302

Aderholt
Akin
Alexander
Andrews
Baca
Bachus
Baird
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Bean
Beauprez
Berry
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boren
Boswell
Boucher
Boustany
Boyd
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardoza
Carter
Case
Castle
Chabot
Chandler
Chocola
Cleaver
Coble
Cole (OK)
Conaway
Cooper
Costa
Cox
Cramer
Crenshaw
Crowley
Cubin
Cuellar
Culberson
Cunningham
Davis (AL)
Davis (FL)
Davis (KY)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Edwards
Ehlers
Emerson
English (PA)
Etheridge
Everett
Feeney
Ferguson
Fitzpatrick (PA)
Flake
Foley
Forbes
Ford
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gingrey
Gohmert
Gonzalez
Goode
Goodlatte
Gordon
Granger
Graves
Green (WI)
Green, Al
Gutknecht
Hall
Harman
Harris
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Herseth
Higgins
Hinojosa
Hobson
Hoekstra
Holden
Hooley
Hostettler
Hoyer
Hulshof
Hunter
Hyde
Inglis (SC)
Israel
Issa
Istook
Jefferson
Jenkins
Jindal
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kind
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
Kuhl (NY)
Larsen (WA)
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
Matheson
McCarthy
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McIntyre
McKeon
McMorris
Meek (FL)
Meeks (NY)
Melancon
Menendez
Mica
Michaud
Miller (FL)
Miller (MI)
Miller, Gary
Mollohan
Moore (KS)
Moran (KS)
Moran (VA)
Murphy
Murtha
Musgrave
Myrick
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Ortiz
Osborne
Otter
Oxley
Pastor
Paul
Pearce
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pombo
Pomeroy
Porter
Portman
Price (GA)
Price (NC)
Pryce (OH)
Putnam
Radanovich
Rahall
Ramstad
Regula
Rehberg
Reichert
Renzi
Reyes
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Royce
Ruppersberger
Ryan (WI)
Ryun (KS)
Salazar
Saxton
Schwartz (PA)
Schwarz (MI)
Scott (GA)
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Smith (NJ)
Smith (TX)
Sodrel
Souder
Spratt
Stearns
Strickland
Sullivan
Sweeney
Tancredo
Tanner
Tauscher
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walden (OR)
Walsh
Wamp
Weldon (PA)
Weller
Westmoreland
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wu
Wynn
Young (AK)
Young (FL)

NAYS--126

Abercrombie
Ackerman
Allen
Baldwin
Barrow
Becerra
Berman
Bishop (NY)
Blumenauer
Brady (PA)
Brown (OH)
Brown, Corrine
Butterfield
Capps
Capuano
Cardin
Carnahan
Carson
Clay
Clyburn
Conyers
Costello
Cummings
Davis (CA)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle

[[Page H2077]]

Emanuel
Engel
Eshoo
Evans
Farr
Fattah
Filner
Frank (MA)
Green, Gene
Grijalva
Hastings (FL)
Hinchey
Holt
Honda
Inslee
Jackson (IL)
Jackson-Lee (TX)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick (MI)
Kucinich
Langevin
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren, Zoe
Lowey
Lynch
Maloney
Markey
Marshall
Matsui
McCollum (MN)
McDermott
McGovern
McKinney
McNulty
Meehan
Millender-McDonald
Miller (NC)
Miller, George
Moore (WI)
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Owens
Pallone
Pascrell
Payne
Pelosi
Rangel
Roybal-Allard
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Schakowsky
Schiff
Scott (VA)
Serrano
Sherman
Slaughter
Smith (WA)
Snyder
Stark
Stupak
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey

NOT VOTING--7

Berkley
Gillmor
Gutierrez
LaHood
Lantos
Solis
Weldon (FL)

{time} 1539

So the Senate bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated against:
Ms. SOLIS. Mr. Speaker, during rollcall vote No. 108 on final passage
(S. 256) I was unavoidably detained. Had I been present, I would have
voted ``nay.''

____________________