Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, this is an important matter, but this amendment is too. I ask Members to vote no on the amendment.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today in opposition to the Feingold amendment. I explained yesterday why I oppose this provision and would like to summarize my remarks today. First off, I commend Senator Feingold's commitment to the elderly. He is very sincere in his efforts. We all are concerned about our senior citizens. I have worked particularly hard on this bill to make sure there are provisions that protect the elderly along with women and children and I think that my colleagues who have worked with me on this bill recognize this fact. We have lots of protections in this bill. Senator Grassley is the lead sponsor of this bill and he has a long track record of working with the elderly on Social Security and Medicare and other issues, as I do. I serve on the Finance Committee with Senator Grassley, who chairs that committee. We were both proud to have played a role in bringing prescription drug coverage to our seniors under the Medicare program in the landmark medicare reform bill that was enacted last Congress. My opposition to this amendment has nothing to do with the elderly. I believe that this bill takes their concerns to heart. I would not object if every State in the Nation passed laws that would put a similar floor--or a higher floor--in their respective homestead laws. But that choice belongs to the States, and not the Federal Government. There is a long history in bankruptcy law of deference to States on issues like homestead provisions. The hard reality is that nearly every State in the country has vehemently defended their homestead laws. If you do not believe me you can ask the Senators from States like Texas, Florida, and Kansas. They have all been involved in reaching the compromise that has been achieved in this legislation on this issue over the past 8 years. It is a grand compromise that both sides of the Hill will accept if we vote down the Feingold amendment. The Feingold amendment would bring the bill down. If some States wish to change their laws, that is their prerogative. A key purpose of this bill, and the purpose of the current homestead provisions, is to curb fraud and abuse. The provisions of S. 256 impose a 10-year look back for fraud. They impose a 2-year residency requirement that is designed to prevent wealthy debtors from moving from States with low homestead exemptions to States with high or unlimited exemptions and then filing for bankruptcy. They are a compromise--a balance--of States' rights and Federal imperatives under bankruptcy law, and we must let the provisions stand as written. This amendment will upset that balance and could act to bring this bill down. The reason has nothing to do with a hostility to the elderly, or to any other class of persons, but because the homestead provisions have taken years to negotiate and are the result of difficult choices and compromises. There are many members of this body who would like to see the homestead provisions changed in some fashion, but to accommodate them any further than what presently exists in the bill would likely force other Senators to oppose the legislation. I urge my colleagues to reject the Feingold amendment, however well intentioned it may be, because this is a grand compromise of a bill that I don't believe the distinguished Senator from Wisconsin has ever supported. The fact of the matter is, if his amendment were agreed to, he would not support this bill. And the reason he would not is because he would not agree to the compromise we have in the bill which the vast majority of Members of Congress on both sides of the aisle in both Houses have agreed to. I hope we can vote down the Feingold amendment. I reserve the remainder of my time.

Mr. HATCH. Mr. President, it is my understanding the distinguished Senator from Alabama will have 2 minutes before the Akaka amendment. Is that correct?

Mr. HATCH. He does not need time from my time at this time.

Mr. HATCH. Mr. President, I would be happy to yield some of my time at this point, and then I will have an additional 1 minute immediately before the vote. Let me answer my dear colleague from Wisconsin. My point is he has never been for this bill. Frankly, he knows this language in this bill is the result of tremendous compromise between the House and the Senate. His amendment, would bring this bill down. All of us would like to make changes. This is a complex bill. I think all of us, if we could be dictator for a day, would put our own imprint on this bill. But this is 8 years of work, and I don't want to see this bill brought down because one person doesn't agree with one provision. In the viewpoint of the distinguished Senator from Wisconsin, most of the protections he doesn't agree with. He is not going to vote for this bill, whether his amendment is agreed to. All his amendment does is create a confusion and a situation where literally this bill could go down. We have to get this bill in a form which the House will accept, and this is the form in which the House will accept it. I yield the remainder of my time to the distinguished Senator from Alabama.

Mr. HATCH. Mr. President, I yield the remainder of my time.

Mr. HATCH. Mr. President, I ask for the yeas and nays.

Mr. HATCH. Madam President, I sat here and listened to my dear colleague from Massachusetts, and almost everything he has spoken about is a flaw in the current bankruptcy system we are trying to change. It is the current bankruptcy system that we have been trying to change for 8 solid years. And guess who one of the principal voices against changing it is? Why, none other than my distinguished friend from Massachusetts, and my distinguished friend from Illinois, who make these great populous arguments on the floor that sound so good. I do not want to characterize them in my Utah terminology, but they are not accurate. How is that for being a person who uses discretion? If you listened to the distinguished Senator from Massachusetts, you would think this country can spend trillions of dollars solving every person's problem. I have been here 29 years. I have never heard the distinguished Senator from Massachusetts once ask: Where are we going to get the money to pay for this? How do we pay for this? How do we justify it? It is easy to talk about taking care of everybody in every way, universal health care, and to decry a Medicare reform bill that adds no less than $400 billion, but maybe as much as $750 billion now-- according to CBO, OMB, and other analysts--and say it does nothing for the poor when that is exactly what it does do, a lot for the poor. In the 8 years we have tried to correct these infirmities in the bankruptcy bill, we have not had any help from many who are speaking on this floor criticizing this bill today. They have never been for any change unless it is their change in bankruptcy, changes they could not get through the Senate floor. And we have come up with a bill that has been basically passed by huge majorities every time it comes up on the floor because we are trying to correct some of the things the distinguished Senator from Massachusetts is complaining about. Yet I do not believe--and I can't speak for him--that we have a chance of having him vote for final passage of this bill. It may be because he differs with part of it, as I do. But I am trying to do the best we can in two legislative bodies that have great difficulty passing legislation as complicated as this with as many nuances and changes as this will make in the current laws that will be for the betterment of people in our society and in our country today. I rise today in total opposition to these two Kennedy amendments. I commend Senator Kennedy for his longstanding commitment to health issues. Most of the health care bills that work in this country are Hatch-Kennedy or Kennedy-Hatch bills over the last 28 years. He knows he can't accuse me of not having compassion for the poor and for those who have difficulty. We wouldn't have passed them had it not been for bipartisan efforts of Republicans and Democrats. So don't let anybody get on this floor and act as though only one side cares about the poor. That is not only a joke, it is a sad joke at that. I know how devoted the Senator from Massachusetts is, and I share his general concerns about people in our society today who are hard-working people. However, I do not believe these two amendments are the answer to their problems. We accepted the Sessions amendment yesterday. It speaks directly to the circumstances surrounding serious medical conditions, which would be a major change over current law that I believe the distinguished Senator from Massachusetts and others, including the distinguished Senator from Illinois, will vote against in the end because they don't agree with some aspects of this bill. I don't agree with some aspects of this legislation, but I have worked my guts out to try and get a compromise here that will help the poor, that will help our society and will make people more honest, that will stop some of the fraud and abuse. To continually make this sound as though it is a credit card company bill--give me a break. I note the distinguished Senator from Massachusetts mentioned the Warren study when he says that half or thereabouts of the people go into bankruptcy because of medical conditions. That study is so flawed, nobody who is in their right mind is going to accept everything in it. First of all, it includes all gambling; that is a medical condition. Drug abuse and alcohol abuse, they are medical conditions. I agree maybe that may be. But those are voluntary medical conditions. It may be somebody is crazy because they gamble all the time. I have known compulsive gamblers. But is it a medical condition that justifies allowing people to cheat their creditors, as is going on in this country today? I don't think most people would agree with that. If you look at the statistics in the Warren report, you have to say: My gosh, why would anybody rely on that? I believe it is worth pointing out that that report includes gambling debts as a medical condition under the rubric of medical expenses. Let's get real. This bankruptcy bill is fair. It is needed. I pointed out several abuses yesterday, and I am sure will point out more before this debate is over. The issues the distinguished Senator from Massachusetts has raised are important ones, as far as I am concerned. Make no mistake about it. But I think we ought to change current law to address them. This bill does to a large degree. All we hear from Democrats over the years is: We need a means test so the rich pay more. Why are they suddenly against a means test to protect the poor, a means test that requires those who can pay something against their debts rather than every 5 years go into bankruptcy after running up bills galore? Why shouldn't they have to pay or at least try to pay? A means test protects those who are designated poor. And frankly, there are other rules in this new bill that will protect those who are above the means test better than current law. I would suggest to the distinguished Senator from Massachusetts, if he wants to correct some of these problems--all of which he has raised under current law as though they are going to be caused by this bill-- he ought to vote for this bill, because it takes dramatic steps to change in current law the things he has been complaining about and that I happen to be concerned about as much as he is and others on this floor as well on both sides. For 8 years we have fought to bring both sides of this floor together. For 8 years we have fought to bring both Houses of Congress together. For 8 years we have tried to correct these deficiencies in the Bankruptcy Code. This bill doesn't correct everything, but it does make strides. It does make real efforts to try and not only be fair but to get people to be responsible for their debts when they have the ability to be responsible for their debts. The issues the distinguished Senator from Massachusetts has raised are important ones. Make no mistake about it. But let me shine a little more light on these issues. The people the distinguished Senator from Massachusetts and the distinguished Senator from Illinois have held out as victims of the means test will be in fact protected by that test. That is what is amazing to me, how we can hear these populous arguments on the floor as though that is reality. We have heard this so many times. As the decibel level goes up, the reality of those arguments is less and less real. The Sessions amendment yesterday makes sense, trying to do something about what the distinguished Senator from Massachusetts is complaining about. The things he is complaining about are in the current law we are trying to change. The means test protects the poor. Now are there going to be problems with any bill that comes out of the Congress? Sure. We have to make an effort to do the best we can to resolve these problems and this bill does make the best effort we can between both Houses of Congress to do so. I might add that the other amendment of the distinguished Senator from Massachusetts provides a homestead exemption for medically distressed debtors. Well, medically distressed debtors should be taken care of under the Sessions amendment because he specifically provides for that. We had a vote this morning on a homestead amendment. We all know we cannot accept the amendment. It is an issue for the States, pure and simple. The reason we can't is because after 8 years of careful, serious negotiations, after 8 years of that, we have arrived at a compromise that, though imperfect, is the best we can do. That is what legislating is all about. I wish we could make every bill perfect. Unfortunately, we have to deal with imperfect people. Some of us may think we are perfect and that everybody should do exactly what we think they should do. That isn't reality around here. So we do the best we can. After 8 years, after multiple votes, and after votes overwhelmingly in favor of this bill, because it makes tremendous changes from current law that do protect the poor, and others as well, and those who are losing billions of dollars because of it--at least millions, because of fraud--we are trying to do what has to be done. Let me make a few remarks about the Kennedy amendment and why it should be rejected. Yesterday, we acted to adopt the Sessions amendment by a broad 63-to-32 bipartisan vote. The Sessions amendment included medical costs as a factor to be considered under the special circumstances provisions under chapter 13. That amendment will allow those who make those decisions to determine whether people are going to be inordinately hurt by being pushed into chapter 13. You have to believe there are idiots in the system who will not resolve these types of major problems, especially the ones the distinguished Senator from Massachusetts has been talking about. Please recall that under the so-called means test Senators Durbin and Kennedy are trying to vilify today--when they are always arguing for means tests for the rich--will only result in about 10 percent of those who file for bankruptcy will be required to repay any of their debts out of future earnings. That is right, only 10 percent right off the bat. Eighty percent of those individuals who make under the median income will ever face the prospect of paying past debts out of future earnings. Of the remaining 20 percent, only about one-half will ever be required to pay. When all is said and done, only about 1 in 10 of those who filed for bankruptcy will ever be required to pay past debt from future earnings under the means test. Medical expenses will be eligible as a factor in determining if and how much money will be repaid by those relatively few--1 in 10--who qualify under the mischaracterized means test. That is not an onerous test; it is fair. It treats medical expenses fairly. That is what we accomplish with the bipartisan 63-to-32 basically overwhelming vote on the Sessions amendment yesterday. Now, the Senator from Massachusetts opposes this bill. That is no secret. He has opposed every bill we have brought up here in the last 8 years. We should oppose his amendment because the bill already adequately responds to the subject matter of his amendment. By the way, again, all of the litany of bad things that are happening to people, and especially the hard-working poor, are occurring under the current bankruptcy system we are trying to change and make better. I will also acknowledge that I wish I could make this bill even better. But in all honesty, we are to a point where if we want to correct the wrongs in society that are occurring in bankruptcy, this is the chance to do it, and then let us work in the future to correct what needs to be corrected in this bill. But this is the only chance we have to correct some of the ills the distinguished Senator from Massachusetts is bringing out here today. I commend him for being concerned about those ills, but if he is, he ought to be voting for this bill because we at least do something about it. It may not be exactly what he wants; it is not exactly what I want; but it is the best we can do when we consider this bicameral legislative body called the Congress of the United States. Again, I want to speak in favor of S. 256--and I think I have been-- the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This issue has become more important over the last 8 years, when we started to work on reforming the system. It is more important than ever today. Bankruptcies are up markedly. Over the past decade, look at how they have gone up on this chart. From 1947, all the way up to 2003, you can see how, since about the late 1980s, it automatically shoots up like mad. I know people in Utah who run up all the debts they can for 5 years, then go into bankruptcy, and then they do it again. This is happening much more than it should. As we pointed out yesterday, we have more bankruptcies in 1 year now than they had in the whole Depression of 10 years. The bankruptcy system can be improved. It seems unlikely that consumer bankruptcy abuses are going to get better without this legislation. I will recount some of the glaring facts about this problem. First, we are seeing more bankruptcies filed every year than in the entire decade of the Great Depression, as I have mentioned. Our economy has generally grown over the last 10 years, and we have enjoyed relatively low unemployment and low interest rates. But despite this, we continue to see record numbers of bankruptcy filings every year. Why is that? One factor may be that too many people view bankruptcy as an easy way to erase their debts, rather than as a means of last resort. This affects all consumers. When creditors are left without payment, they have to pass these costs on to all of the rest of us. It costs us in terms of higher interest rates, higher downpayment requirements, shorter grace periods, higher penalty fees, late charges, and retailers are forced to raise prices, all because of the abuse of the bankruptcy system, which this bill would do a great deal to correct. If you want to help the poor, vote for this bill because this bill will save the poor at least $400 a year, minimally, for each household. Bankruptcy can also cost job loss among those who are victims of uncollected obligations. Part of the problem with the current bankruptcy system is that it allows certain higher income individuals to wipe away debts that they can and should be required to pay. Some have mischaracterized provisions in the bill that require some individuals to repay past debts with future earnings. The provision in the bill--the so-called means test--applies only to those persons above the median income. Where a higher income debtor has the means to repay, the means test established in the bill would require such debtor to shoulder more responsibility in paying the bills they have incurred. For debtors below the median income--which is over 80 percent of all filings--there would be no presumption of abuse. But even for those above the median with means to repay a substantial part of their debts, a judge would still have the ability to allow a liquidation bankruptcy to proceed in cases of hardship. This is not the onerous bill that some of my colleagues would have you believe. Throughout the course of the debate over the last four Congresses, we have had different arguments from opponents of this legislation. It is always the same opponents. Some of those failing arguments are rearing their heads again in this debate. And again, the arguments they are making basically criticize current law that we are trying to change with the bankruptcy bill, we believe for the better. Can you find some flaws in this? Of course, and so can I. But it is head and shoulders over current law and over some of the illustrations my friends on the other side have brought up. Let me take a few minutes to dispel a few of the more prominent myths about the bill. First, some suggested that higher debt burdens have led to the dramatic spike in bankruptcy filings over the last 25 years. The basic measurement for establishing financial distress shows that this is simply not the case. The debt service ratio--a measurement of income to expenses--has remained relatively constant over the last 25 years, as this chart behind me illustrates. The bottom red line shows the bankruptcy filings per 1,000 families from 1980 up until 2001. The black line on the top is the debt service ratio. This shows that bankruptcies have not increased due to a decreased ability to make payments on debt obligations. Examining the lowest 20 percent of income earners shows that even when the debt service ratio in these categories declined or stayed the same, bankruptcies overall still climbed dramatically, as the next chart reveals. The bottom line, as you can see, is consumer liabilities between 1979 and 2001. The red line represents consumer assets between 1979 and 2001. The green line happens to be the consumer net wealth between 1979 and 2001. They have all gone up--even the bottom line, the consumer liabilities--but not very much. The others have gone up much more. The consumer assets and consumer net wealth have gone up much more. Another measurement of financial distress is net wealth, the amount of assets against liabilities. But this test, too, shows that even as net wealth has soared, as was shown on that prior chart, bankruptcy filings have soared as well. This chart makes the point. The bottom line is revolving disposable personal income. That has gone up from 1959 to 2003. The red line is the nonrevolving disposable personal income. As one can see, that has gone down. The black line on top is the total disposable personal income which has basically remained the same, except it has gone up a little bit in these past years. Another exaggerated myth is that increased use of credit cards is the cause for more and more bankruptcies. But, again, the facts strongly suggest this simply is not the case. When there has been an increase in the use of credit card debt, this was largely due to a substitution for other high-interest debt. The chart behind me shows that while revolving debts, such as credit cards, have increased as a percentage of disposable personal income, there is a corresponding decrease in nonrevolving debt. The net effect is that overall consumer indebtedness has remained roughly the same. Others have tried to argue that increases in housing costs are a major reason for skyrocketing bankruptcy filings, but the amount of income going into mortgage expenses has remained steady over the years. According to Professor Warren's book, ``The Two-Income Trap,'' which was cited favorably by the distinguished Senator from Illinois, Mr. Durbin, yesterday, in the early seventies, mortgage payments constituted 14 percent of a typical family's income. Here is a chart showing the allocation of income. The red part on the left, the large part, which is 46 percent, happens to be discretionary income. The purple small part is health insurance, and that amounts to 3 percent. Discretionary is 46 percent. The mortgage people are paying is now 14 percent, about the same as it has always been, in that little section of red. The yellow is automobile, which is 13 percent of income, and taxes are 24 percent. In all honesty, 30 years later, according to Professor Warren, this percentage actually fell to 13 percent. As this chart shows, the mortgage went down to 13 percent. Obviously, attributing the rise in the bankruptcy rate to higher mortgage payments does not appear to be borne out by the facts. Further debunking this myth is the fact that default rates on mortgages have also remained fairly steady over the years. Another prominent myth about this issue is that about 50 percent of all bankruptcy filings is caused by medical debts. We heard the distinguished Senator from Massachusetts in very excited terms talk about these type of debts, medical debts. Undoubtedly, there are many bankruptcies caused by medical debts. This is why this bill makes several exceptions for treatments of health expenses and health insurance, something that does not exist today. These exceptions do not exist today. This is why we were so pleased yesterday that the Senate adopted the Sessions amendment that explicitly identified medical costs as a factor to be taken under consideration by a bankruptcy judge in deciding whether there are special circumstances that affect a debtor's ability to pay. But the study cited for the proposition that 50 percent of bankruptcies are medically related is misleading at best. This claim is based on the study conducted by Professor Elizabeth Warren, but this study does not even purport to claim that medical bills were the primary basis for half of bankruptcy filings, as the charts of the Senator from Massachusetts seem to indicate; the study merely claims that about half the filings were medically related. This is a distinction with a real difference, but we did not hear the difference as our friend from Massachusetts was describing this. Only a definition of the health problem that is stretched beyond recognition could lead to the conclusion that these filings were medically caused. The study actually classifies gambling as a medical cause. Gracious, come on. Give me a break. Gambling? Finally, let us look at two other exaggerated explanations for bankruptcy filings: unemployment and divorce. With respect to unemployment, this chart shows that even as unemployment has dropped, bankruptcy filings continue to increase. Let me refer to this next chart. The red dots represent the unemployment rate. It has been going down since basically 1981. The black dots show the bankruptcies per 1,000 families, and they have gone up dramatically, as one can see. If there was a correlation between unemployment and bankruptcy, we would have expected bankruptcy filings to decrease over the last 25 years, but this obviously has not been the case. In fact, just the opposite has occurred. Again, on divorce rates, bankruptcies have increased by a huge percentage, even as we have seen a modest decline in the divorce rate over the last 25 or so years. The red line at the bottom shows bankruptcies per 1,000 households. Look how it has gone up since about 1987. The black dots represent the divorce rate per 1,000 households. That went up, but it is now headed down. That is a good thing for our society. I am glad to see that. But the bankruptcy rates keep going up. The bottom line is that despite the low interest rates, low unemployment, steady debt ratios, and steady increase in net wealth, bankruptcy filings continue to set record highs. Frankly, these facts suggest another reason to explain the increase in bankruptcy filings is that it is simply too easy for some relatively high-income debtors to simply wipe away their debts and stick all the rest of us in society with them, even where they have the means to pay a substantial share of the obligations. It is absolutely unfair to saddle all consumers with the increased costs associated with these off-the-chart levels of filings. This bankruptcy bill we are debating today will cut down on some of these abuses and bring back some sense of accountability to the high-income debtors. Let me say again, it is one thing to come on this floor and give these wonderful populist talks about how much they love to help the poor when, in fact, this bill will do more to help the poor than all those talks in the world. And to complain about this bill when what they are really doing is complaining about the current system, it is amazing to me. The only thing I can conclude is some people who make these arguments actually must believe the people out there are really stupid and that populist arguments really count today, like they used to when people did not have the education Americans have today. That is what those populist arguments are all about. It is easy to stand on the floor, shake your fist, scream and shout, and talk about how bad things are when they are bad because we are not changing them. It is amazing to me, absolutely mind-boggling to me. I respect anybody who wants to change these laws and make them better. The only way we are going to do that is to pass this bill, and the only way we are going to pass this bill through both Houses is to pass this bill without amendment. If we want to make some changes, let's do it. We have now been 8 years through this stuff, and the same old tired, wornout saw arguments are still being made by the people who complain about the current system as though this bill is going to make the current system worse. It is going to make it better. Again, I will acknowledge it is not a perfect bill. My gosh, nothing is around here. But it will make a great difference in some of the complaints that have been lodged against current law. This bankruptcy bill we are debating today will cut down on some of these abuses and bring back some sense of accountability to these high- income debtors. It will stop some of the fraud and abuse that is going on. It will make everybody a little more responsible. We put in a lot of other provisions that make corporate America more responsible as well. Could we do more? I suspect we could, but not and pass the bill. That is my bottom line right now after 8 years of doing this, after passing it four times overwhelmingly in the Senate and overwhelmingly in the House but not being able to get it signed because the one time it did go to the President, President Clinton pocket vetoed it. So I urge my colleagues to join me in supporting this measure. I hope my colleagues will help us finally pass this important measure because it is long overdue. It will help to resolve an awful lot of the problems that we hear complaints about on the floor today by those who have done everything they could over the last 8 years to kill this bill. If we passed both of the amendments of the distinguished Senator from Massachusetts, even if we could agree that they were good amendments-- and they are not--I guarantee my colleagues he is not going to vote for this bill. He never has, and I do not think he ever will. His reasons are his own, and they are important reasons to him, but I suggest that if our colleagues really mean they want to do something about these awful current situations, this is the bill to do it with. If this bill does not prove to be everything that we would like it to be, let us work in the next session of Congress or immediately thereafter to start trying to make changes that might help. This bill is a step in the right direction. It is a very important step forward, and we certainly should not allow any killer amendments on this bill that would make it impossible to pass once again. Hopefully I have been fair to my colleagues. I have tried to be. But I cannot just sit here and let these type of arguments be made without some response, especially since I have heard them over and over again. The complaints are always about current law and some of the aspects of this bill that they just do not like that are essential in order to pass the bill. So I hope my colleagues will vote against both of these amendments. I am going to do everything in my power to see that they are both defeated. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on March 2, 2005, at 4:30 p.m., in closed session to receive a classified briefing regarding Department of Defense human intelligence activities.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Wednesday, March 2, 2005, at 10 a.m., to receive testimony on the President's proposed budget for fiscal year 2006 for the Forest Service.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, March 2, 2005, at 9 a.m., to hold a hearing on foreign assistance.

Mr. HATCH. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on March 2, 2005, at 2:30 p.m., to hold a closed briefing.

Mr. HATCH

Mr. HATCH. Mr. President, as I listened to the distinguished Senator from West Virginia speak against filibuster reform, I wanted to make a few points that he did not say, at least as far as I could tell. I did not hear every word of his speech, but I did hear enough of it. Number one, he did not say that killing judicial nominations by filibuster is part of Senate tradition, nor could he have said that because for the first time in history, we have had filibusters of judicial nominees. Only President Bush's judicial nominees have been filibustered by our colleagues on the other side, and in every case where they were filibustered, those nominees had majority support. So filibustering judges is not a part of the tradition of the Senate, nor has it ever been. Some have said that the Abe Fortas nomination for Chief Justice was filibustered. Hardly. I thought it was, too, until I was corrected by the man who led the fight against Abe Fortas, Senator Robert Griffin of Michigan, who then was the floor leader for the Republican side and, frankly, the Democratic side because the vote against Justice Fortas, preventing him from being Chief Justice, was a bipartisan vote, a vote with a hefty number of Democrats voting against him as well. Former Senator Griffin told me and our whole caucus that there never was a real filibuster because a majority would have beaten Justice Fortas outright. Lyndon Johnson, knowing that Justice Fortas was going to be beaten, withdrew the nomination. So that was not a filibuster. There has never been a tradition of filibustering majority supported judicial nominees on the floor of the Senate until President Bush became President. Number two, if I recall it correctly, the distinguished Senator from West Virginia did not say ruling such filibusters out of order is against the rules. I do not believe he said that because it is not against the rules. At least four times in the past, some of which occurred when Senator Byrd, the distinguished Senator from West Virginia, was the majority leader in the Senate, there have been attempts to change the Senate's rules on the filibuster. Admittedly, I think in some of those cases the Senate backed down and changed the rules, but the effort was made to change the rules, and in the eyes of the Senator from West Virginia and others they should have and could have been changed by majority vote. Let me say, in fact, all of the examples the Senator from West Virginia cited of legislative filibusters would not be affected by the constitutional option. That is a constitutional option that would allow judicial nominees an up-or-down vote. That is a very important distinction because never before have judicial nominees been filibustered. Never before has one side or the other, in an intemperate way, decided to deprive the Senate as a whole from not just its advice function, but its consent function. We consent, or withhold that consent, when we vote up or down on these nominees. Filibustering against the legislative calendar items has been permitted since 1917, and with good reason. I, for one, agree that this is a very good rule. But those filibusters happen on the legislative calendar. That is the calendar of the Senate; it is our legislative responsibility. The filibuster rule, Rule XXII, is to protect the minority. Frankly, I would fight for that rule with everything I have. But executive nominees, filibustering on the executive calendar is an entirely different situation. And it is one that was not addressed in Senator Byrd's remarks. I myself had never looked at this very carefully until this onslaught of filibusters against 11 appellate court judges took place on this floor. Then I started to look at it, and others have, too, and we now realize there is a real disregard of a constitutional principle by these unwarranted and, I think, unjustified and unconstitutional filibusters. In these particular cases, every one of those people-- every one--had a bipartisan majority waiting to vote on the floor. This distinction is ultimately the critical one. Should a minority be able to permanently prevent a vote on a majority supported judicial nominee? I think the answer is clearly no, and there is nothing in the distinguished Senator from West Virginia's remarks that contradict that conclusion.

Mr. HATCH

Mr. HATCH. Mr. President, I listened with a great deal of interest to my colleague's remarks with regard to the bankruptcy. I will have a few things to say about those remarks in just a few minutes. Mr. President, I rise in support of the bill, S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The essence of this bill is simple. This legislation is designed to make our bankruptcy system more fair and efficient. As well, this bill would cut down on the ability to abuse the current system. Before I detail some of the abuses of the system that is being abused, I want to make some other points. First, as I said yesterday, this bill has been in the making for 8 years. The Senate passed it three times already. Prior to Senate passage, the Judiciary Committee held an extensive set of hearings and several markups on this bill. This bipartisan, bicameral bill is ripe for passage. I am pleased to report that yesterday the White House released the following statement of the administration policy on the bill. It is short and to the point and it says the following: The administration supports Senate passage of S. 256 as reported by the Senate Judiciary Committee. These commonsense reforms to the Nation's bankruptcy laws will help curb abuses of bankruptcy protections, reduce uncertainty in financial markets through improved financial contract netting rules, increase financial education to prevent unnecessary filings and help avoid future credit problems, promote international trade through coordination of cross-border insolvency cases, and provide increased protection for family farmers facing financial distress. I am pleased that the administration's SAP stressed some of the pro- consumer aspects of the bill. While we want to see that those people who borrow money pay it back and that the value of personal property and responsibility is observed, we also want to help keep citizens out of bankruptcy in the first place. When honest people simply get over their heads financially, we want to give them a fair chance to have a fresh start. Where there are some who are clearly gaming the present system, there are many who find themselves in unfortunate financial circumstances. Given a chance to begin fresh, they can learn from their experiences and once again become the prudent, bill-paying consumers all of us are taught to be. The data tell us there is a problem and it is a growing problem. Bankruptcy filings are way up, and I mean way up. We are fortunate to live in a time of unprecedented economic growth. Stretching all the way back to the Presidency of Ronald Reagan, we have generally seen a sustained increase in economic activity. Personal assets and net worth have grown, when compared with individual liabilities. Yet, precisely at this time, bankruptcy filings have blown through the roof. These facts might help to put it in perspective. Bankruptcies doubled in the 1980s. They doubled again from 1990 to 2003. In 2004 alone, there were 1.6 million more bankruptcies than during the entire Great Depression. There will be more bankruptcies filed this year than in the entire decade of the Great Depression combined. What explains this dramatic rise in filings? Probably several reasons are at play. Certainly, one of the critical reasons behind the rising tide of filings under the Bankruptcy Code, as years of study document, are the actions of those who flagrantly abuse our generous bankruptcy laws. Many of those opposed to the bill suggest that bankruptcy filings were up because more and more people face economic hardship. To some extent, this is no doubt true. But we also know, however, that many bankruptcies stem from old-fashioned, outright fraud and abuse. This potential for abusing the system was not fully anticipated when Congress created our current Bankruptcy Code in 1978. A key purpose of this bill is to help crack down on the abuses of the system. In its simplest terms, our bankruptcy laws attempt to distinguish between those who can and those who cannot repay their debts. When a case is filed under chapter 7 of the Bankruptcy Code, the debtor is required to surrender his assets to a bankruptcy trustee for liquidation and distribution to creditors, except for those assets that are exempt under State or Federal law. Yet under this provision of law, the debtor's future income is protected from creditors. By contrast, those who file for bankruptcy under chapter 13 retain possession of their assets, but pay all or a portion of their debts through plans approved by the bankruptcy court. For some contemplating bankruptcy, this makes for a simple strategy: Do everything you can to get into chapter 7. Chapter 7 protects all of your future income from creditors. Once you are protected by chapter 7, you pay off secured creditors--such as your mortgageholder--first. Only then do unsecured creditors get their chance to get paid back. Experts tell us about 70 percent of consumer bankruptcy filings are chapter 7 filings, and 95 percent of those make no distribution at all to unsecured creditors. Let me repeat those statistics because they are important. About 70 percent of consumer bankruptcy filings are chapter 7 filings, and 95 percent of those make absolutely no distribution at all to unsecured creditors. If you are listening to this debate and you are a creditor, these statistics mean you have only a small chance to be repaid if you are an unsecured creditor. The problem with this is, according to the FBI, about 10 percent of these chapter 7 filings are fraudulent. So what if only 10 percent of filers are abusing the system? This represents $3 billion in costs that can be recovered rather than being passed along to consumers. You and I and everybody else pay for these abuses of the system. We all end up paying for it. The problem with this is, according to the FBI, about 10 percent of these chapter 7 filings are fraudulent. One can understand the financial motive of a debtor running up his or her unsecured credit card debt to pay down his or her secured mortgage just before filing chapter 7, even though he or she knows full well the debts will never be paid back. The data suggest to many experts that some relatively high-income debtors truly belong in chapter 13 where they will have to establish a plan for repayment for at least some debts. In theory, our bankruptcy courts have the opportunity to defy chapter 7 filing because of ``substantial abuse.'' Yet with so many bankruptcy filings, our courts are often overwhelmed, and in practice few people are bounced out of chapter 7, no matter their actual ability to repay their debts. It should come as no surprise, then, that a few bad apples who could afford to pay some of their debts actively seek to avoid chapter 13 and get into the often less onerous treatment of chapter 7. A key component of S. 256 is a means test that will help prevent such gaming of the system. Some have attempted to criticize this commonsense safeguard as somehow taking away bankruptcy protection. Let me be clear. The means test does no such thing. All it does is identify those who can repay at least some of their debts. It makes certain they enter into a chapter 13 reorganization and repayment plan rather than let them simply walk away from their obligations, no matter how steep or outrageous. Believe me, there is strong evidence to support this improvement in the law. The U.S. Trustee Program has been challenging and documenting abuse now for some time. The following examples show why changes are needed in the current system. The primary function of the U.S. Trustee Program is to identify fraud and abuse in the bankruptcy system. In fiscal year 2002, there were 1,470,430 bankruptcy case filings. With such a large number of filers, there will always be those who will try to game the system. Although some opponents of the bill may minimize the problem of abuse, consider these facts: The U.S. Trustee Program successfully pursued 5,000 chapter 7 debtors for ``substantial abuse'' of the bankruptcy system. The program prevented the discharge of an estimated $59 million of unsecured debt through fraudulent chapter 7 filings. In addition, the Trustee Program obtained disgorgement of more than $1.3 million in attorney's fees in consumer and business cases and imposed almost $534,000 in sanctions against attorneys. This indicates that bankruptcy fraud is no small problem and that reforms are in order. The evidence of fraud is so widespread that many believe it is no longer sufficient to rely on watchdogs to police these abuses after they have occurred. We must take proactive steps to prevent them from happening in the first place. That is what S. 256 does. The means test contained in the bill will provide a uniform standard to bankruptcy judges to evaluate the ability of bankruptcy filers to repay debts. With some people gaming the current system to avoid paying debts they have taken on, we must make sure that the people who file in chapter 7 actually belong in chapter 7. We should not absolve people of their debts when they have the means to pay them back. Bankruptcy law has always meant that. This is no exaggeration. Just consider these examples, if you will. I am told one debtor in California sought to discharge $188,000 in unsecured debt. This person had more than $10,000 a month in expenses. She paid $4,500 a month on the mortgage for her house in San Juan Capistrano and then paid another $2,500 a month on rent for an apartment in Silicon Valley. This woman was spending $7,000 a month for two homes. The simple fact was, however, if the woman got rid of just one of the homes, she would likely be able to fund a chapter 13 plan and repay, rather than ignore her debts. This does not seem to me to be too much to ask. In fact, it just makes common sense. In another instance, a woman in Dallas filed for chapter 7 bankruptcy attempting to discharge $122,527 in credit card debt. But this is not exactly a hard-luck case, by the way. She was a commercial airline pilot who earned $11,500 per month and paid $3,100 per month for a mortgage on a $385,000 home. Some have cast a skeptical eye on her decision to buy a $50,000 Mercedes just before declaring bankruptcy in order to replace the recently repossessed $90,000 Mercedes. If that is what happened, it just plain is not right. When somebody obtains 36 credit cards, runs up $283,075 in bills, and then tries to discharge that debt through a chapter 7 filing--as I understand was the case of one gentleman in California--it is not enough to sit back and blame aggressive marketing by credit card companies. We have heard that old saw year after year. Frankly, there is a lot of abuse out there. One person in Miami sought to discharge $163,744 in unsecured debt even though he had the means to purchase $232 in lottery tickets every month. Then there is the case of a Tampa couple who had a combined monthly income of $7,000 and a monthly budget of $6,756. Included in that budget was a car payment of $965 a month. In addition to their secured debt, they owed $350,000 in unsecured debt. This consisted of $200,000 in credit card debt and $150,000 in personal loans. They attempted a chapter 7 filing. This couple was bringing in more than they were spending, but they wanted to walk away from it all. Yet a review of their banking records showed that one spouse withdrew hundreds of dollars every month at ATM machines at local casinos. They had money to play blackjack but not pay back there debts. Something, it seems to me, is just not right about that. We are a compassionate nation, but we should not be fools. A discharge of debt is serious business, but for sound public policy reasons, the United States has decided to allow it in certain circumstances. We want to give our neighbors who get in over their heads a chance to get out of their financial troubles. Frankly, I suspect that for a majority of those individuals who file for bankruptcy, it must be their worst nightmare, but for some, as I just described, it is a way to avoid responsibility. We do not want to encourage bankruptcy for anyone. When a person takes on a debt, that person makes a promise to pay, and they ought to pay it if they have the capacity to do so. There is something inherently unfair in denying full restitution to creditors. That being said, as a matter of longstanding public policy, we have decided to allow some people a fresh start and the opportunity to discharge their debts through a chapter 7 liquidation. But many fear that in some instances, our lax policing of those who attempt a chapter 7 filing actually encourages additional bankruptcies. As a matter of public policy, we must say that those relatively high- income debtors, those capable of paying back their substantial debts, should at least pay something back, and that is all we are requiring here. From now on, those who are capable of financial reorganization, rather than outright liquidation, will have to keep their promises or at least some of their promises. Some opponents of this legislation minimize these abuses. They deride the means test we devised to solve this problem. The fact is, 80 percent of people filing for bankruptcy will be automatically removed from the means test because their incomes fall below the safe harbor of the median State income. Only 20 percent are asked to answer this rather reasonable question: After medical expenses, schooling expenses, health care premiums, living expenses, and a regular budget, do you have an ability to pay back some of your debt? That is all. Only 10 percent of the people currently filing for bankruptcy will be moved into chapter 13 under this test. Contrary to the image of a crippling lifetime commitment to one's debtors, those repayment plans are only between 3 and 5 years. Who passes the means test of this bill? Eighty percent are excluded for falling below the State median income. Another 10 percent are excluded after taking into account school, health, and living expenses. So only 10 percent of bankruptcy filers will ever be moved into repayment plans. I do not think it is too much to ask that these relatively high-income debtors, who can afford to pay their debts, pay back some of what they owe. To the extent that our current Bankruptcy Code encourages some bankruptcies, I am hopeful that this reform will discourage some of them. The experts and data tell us there are some with high salaries, profligate spending habits, and the ability to pay back their debts. Our laws should not be to just allow them to walk away. The fact that this type of misconduct is occasionally prevented does not undo the need for permanent systemic reform of our laws. For every one person who is discovered in an abuse of the system, it is likely there are many others whose abuses never see the light of day. There is a culture of abuse in our bankruptcy system that should be addressed. I am told that in Kentucky one debtor filing for chapter 7 protection failed to mention that he had transferred his one-half interest in a Florida house to his son approximately 7 years before filing for bankruptcy. How convenient. He also failed to mention his transfer of stock to his daughter within 1 year of filing. He was unable to account for the disappearance of $1.125 million in assets, including $300,000 in personal property and even $400,000 in race horses. His hope was to discharge almost $1.8 million in unsecured debt and $795,175 in secured debt. While this may be an outlier case, the underlying problem of abuse is too frequent an occurrence. The point is not that this person is an average filer; the point is that the system is such a mess that someone would even contemplate making this type of a case. Unfortunately, this misconduct is all too often encouraged by a bankruptcy bar that ushers people into chapter 7 without ever fully considering the client's ability to repay. The U.S. trustees had to pursue 653 actions seeking disgorgement of debtors' attorney's fees in fiscal year 2002. At the same time, they pursued 243 other actions for attorney misconduct that resulted in $533,813 in sanctions. Over 75 attorneys were referred to State bar associations or other disciplinary boards. In the Eastern District of Pennsylvania, a U.S. trustee review discovered that in bankruptcy filings it was common to have boilerplate information entered without regard to the individual debtor's circumstances, internally inconsistent information, and missing financial information. These are bankruptcy factories that appear to attempt to get as many as possible into chapter 7 without so much as a cursory look at the filer's ability to repay his or her loans or debts. For the most part, I am proud of our bankruptcy laws. When a debtor gets in over his or her head, we do not ask why. We do not cast blame. Instead, we attempt to help that person pay back the debts. Bankruptcy protection gives Americans the ability to pause, to reorganize, to start over. Bankruptcy offers those with unsustainable debts an opportunity for a fresh start. No one here wants to change this fundamental guarantee. No one wants to alter this basic framework. Yet people are taking advantage of this system. Abuses are increasingly rampant and well documented. When some people game the system to walk away from debts that they are perfectly able to repay, an injustice occurs that has ramifications for our entire economy. And guess who has to pay for their dishonesty. You and I and everybody else because we pay an average of $400 a year for this bankruptcy system. This bill will help to bring it into a forceful, reasonable purpose. It was estimated that in 1997 alone more than $44 billion of debt was discharged through bankruptcy. This amounts to a loss of $110 million per day. Someone has to pay for this. The American people, you and I and everybody else, end up paying the bill for at least these dishonest people. According to one estimate, as I have said, these losses translate into a $400-a-year tax on every household in the country. That might not seem like a lot to some, but for many families $400 is a mortgage or a rent payment. The cost of bankruptcy to taxpayers: $44 billion in debt discharged per year, or $110 million every day, a $400 yearly bankruptcy tax on every household in the country. For all the reasons I have laid out, I urge my colleagues to support S. 256. This is a good bill. We have been at this legislation too long to allow this commonsense reform to fail. By the way, this very same bill, with the Schumer amendment, passed with 83 votes. Without the Schumer amendment, the bill that President Clinton pocket-vetoed was basically the same as this, and it passed with 70 votes, meaning a bipartisan passage. I will make a few comments on the Durbin amendment that seeks to address some potential problems relating to debt carried by members of our military. We all honor our military for their sacrifices, no question about it. While I am supportive of the intent of the underlying Durbin amendment, the fact is, only about 20 percent of those filing for bankruptcy will ever be subject to a means test. Only about half of those will end up having to repay some of their obligations under the means test. That means that only about 10 percent of those filing for bankruptcy will ever have to actually pay back some of their past debts with future earnings. I suspect the 1 in 10 fraction will be smaller, perhaps much smaller, for those serving in the military. So when my friend from Illinois calls the means test an onerous test, he is overstating the case. The purpose of the means test is simple. We are trying to determine which debtors can afford to pay a portion of their past debts from their future earnings. The Durbin amendment has several problems, but its goals are well intentioned and I commend him for his efforts. For example, it is my understanding that under the definition of ``service member,'' all of those employed as commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration will qualify for this special treatment. There are few, if any, greater supporters of the commission core of the Public Health Service, but I do not understand why a public health service officer, working side by side with a career civil servant member at the Department of Health and Human Services, should receive any special consideration during bankruptcy proceedings. If a member of the PHS or NOAA is able to pay, as determined by this new means test, which is estimated to affect only 1 in 10 of those filing for bankruptcy today, he or she should pay like any other civil servant or member of the public. They are well paid. They do not have to go off and borrow beyond their means. They do not have to live beyond their means. They should not have any breaks any better than the regular citizens. I think the distinguished minority whip has raised and will continue to raise very important points, and I look forward to working with him and the entire Senate to address those points. If bad actors are preying on our military personnel through nefarious payday loans or other questionable practices, then I encourage Senators Shelby and Sarbanes, the head of our Banking Committee in the Senate, to look into the issue. If there are other social issues that face our military personnel, then we as Members of Congress have an obligation to examine those issues indepth and find the right fixes. The Durbin amendment also has an additional problem. This involves his creation of a broad exemption to the delicate homestead compromise already so painstakingly embodied in this bill. We have gone over and over it and have finally come to this compromise that does not please everybody, or anybody for that matter, but it is an important compromise and an important aspect of this bill. We know the Senators from the States of Florida and Texas have made it clear that this issue is important to them. This is an area where we have tried to defer wherever possible to the States, even though other Senators view some of the States' exemptions with skepticism. We should all recognize that opening the door on the homestead provision could work to unravel this bill. This is also the case with Senator Feingold's amendment on the homestead exemption. This issue is not new. We have debated it year after year, and we have come to a plausible compromise that has passed year after year. This question has been debated over and over again. We have achieved a compromise on the homestead exemption that has demonstrated the ability to win overwhelming support in both Chambers. Both the Durbin amendment and the Feingold amendment tend to upset the balance that has been achieved on this important issue. As I look at and examine the Durbin amendment, I have identified a few additional concerns. For example, under the terms of the amendment both ``real or personal property that the debtor or dependent of the debtor uses as a residence,'' what does this language mean? How could personal property be used as a residence? The bottom line is this amendment has many ambiguities. In addition, several of its principal components come into tension with long-settled provisions of this bill such as the homestead and the means test As all of my colleagues know, there is a right way and a wrong way of doing things. Indeed, many Members of the minority and some of the majority have made that very point with regard to how the USA PATRIOT Act was put together. Senator Durbin has raised some important issues we must take the time to explore properly, and I believe Senator Sessions has appropriately and adequately addressed the central concern of the Senator from Illinois, which is to allow the facts and circumstances of military personnel to be considered in bankruptcy proceedings. I support S. 256, the bankruptcy bill, and I hope others will as well. We have come very far with this bill, after 8 tough years of work, after repeatedly passing it by overwhelming votes, and then having it shot down because of a killer amendment that gets put on by our colleagues who claim they are working in support of it. We should pass this bill. We should pass it in as clean a form as possible. Let me say with regard to credit card debt, I think it is a nice, populist appeal here, to blame all the credit card companies for the problems everybody has in our society today. Look, we have an intelligent society, a highly educated society, and I think everybody knows when they take those credit cards and they accrue debt, they are supposed to repay that debt. Frankly, we have far too many people taking advantage of credit cards and not paying their debt. Where there is fraud, we should go after any credit card company that commits fraud or abuse against our fellow citizens. But this bill does not fail to resolve these issues. Could we improve this bill? Yes, I think we could improve it. But if we did, some on the other side would say that is too tough of an improvement. Could others on this side improve it? I suppose so. Could some on that side improve it? I would hope so, but so far we have accepted an awful lot of what the other side has wanted. This bill has been passed by overwhelming votes over the last 8 years, at least four times, as I recall it. At one time it passed through both Houses of Congress and was pocket vetoed by President Clinton. I would like to make one last point. Unfortunately I have to oppose the Feingold amendment on the homestead matter. I think the purported purpose of the amendment is well intentioned, but I am concerned that it may act to upset the delicate balance and painfully negotiated provisions relating to homestead exemptions. This amendment by Senator Feingold is, I know, well intentioned. But this amendment confuses an important and bipartisan issue, namely the care of the elderly, in a way that could sink this important legislation. I have worked tirelessly to make sure there are provisions in this bill to protect the elderly, along with women and children, and I think every one of my colleagues who has worked with me on this bill recognizes that fact. The simple truth is this amendment and others like it could kill this bill. The reason has nothing to do with a hostility to the elderly or to any other class of persons, but because the homestead provisions have taken years to negotiate and are the result of painful choices and compromises. They are not totally satisfactory to me, either. But the fact of the matter is, it is the best we can do. There are many Members of this body who would like to see the homestead provisions changed in some fashion, but to accommodate them any further than what presently exists in this bill would force other Senators who are strong supporters of this legislation to oppose it. My opposition to this amendment has nothing to do with the elderly and I would not object if every State in the Nation passes laws that would put a similar floor or a higher floor under their respective homestead laws, but that choice belongs to the States and not to the Federal Government. There is a long history in bankruptcy law of deference to States on this issue. Nearly every State in the country has vehemently defended their homestead laws. I must say I think some States wish to change their laws. If they do, that is their prerogative. The purpose of this bill and the purpose of the current homestead provisions is to curb fraud and abuse. The current provisions impose a 10-year look back for fraud. They impose a 2-year domiciliary requirement that is designed to prevent wealthy debtors from moving from States with low homestead exemptions to States with high or unlimited exemptions and then filing for bankruptcy. These provisions are a compromise, a balance of States rights and Federal imperatives under bankruptcy law and we must let the provision stand as written. I oppose the Feingold amendment and I hope my colleagues on the floor will oppose these amendments as well. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I ask that my remarks be as in morning business. THE PRESIDING OFFICER. The Senator from Utah is recognized.

Mr. HATCH. I thank the Chair. boy scouts of america land transfer act of 2005

Mr. HATCH. Mr. President, I rise today to speak to the Boy Scouts of America Land Transfer Act of 2005. This important legislation will allow the exchange of two small parcels of land between the Utah National Parks Council of the Boy Scouts of America and Brian Head Ski Resort. In a 1983 land patent, the Bureau of Land Management granted roughly 1,300 acres to the Utah National Parks Council of the Boy Scouts of America to be used as a Boy Scout camp. The Scout camp, known as Camp Thunder Ridge, is situated in the mountains adjacent to Brian Head Ski Resort and near Cedar Breaks National Monument. At the time the land patent was granted, a local rancher owned a parcel of land adjacent to the camp and another parcel right in the middle of the camp. Several years ago, the rancher gave those lands to Brian Head Ski Resort. The Scouts need to obtain the land, totaling 120 acres, from Brian Head. However, under the patent, land cannot be sold or exchanged without an act of Congress. While Camp Thunder Ridge is located in a steep, rough, mountainous area, much of the land the Boy Scouts seek is flat, making it particularly important for the camp. Obtaining the land would make it possible for the Scouts to make the camp's shooting area and archery range safer and would allow them to improve and expand their camping facilities. It also would allow for the installation of much-needed septic tanks. I am a strong supporter of the Boy Scouts of America. The Boy Scouts have a long tradition of instilling strong values in young men. Scout camps such as Camp Thunder Ridge give young men the opportunity to learn vital skills, fulfil merit badge requirements, and otherwise improve themselves. This small land exchange will allow Camp Thunder Ridge to more fully help these young men learn and grow. For their part, Brian Head Ski Resort is seeking to expand their operations and have received preliminary approval from local officials. The local planning commission, however, has required them to build an emergency exit from their property. The only place to build such a road is through land owned by the Boy Scouts. The exchange will allow Brian Head to construct the access road and comply with county fire safety regulations. The Boy Scouts have been working for more than 20 years to secure the lands in question, and Brian Head needs to build a road on lands currently owned by the Scouts. This exchange is desperately needed by both parties, and I urge my colleagues to support this important legislation.

Mr. HATCH. Mr. President, I rise in support of S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The purpose of this bill is to make our bankruptcy system more fair and efficient. Every citizen has a stake in this bill. It is obvious that bankruptcy filers have a lot at stake in this legislation. In recent years, the number of bankruptcies has been on the rise, and I understand that today more bankruptcies are filed every year than during the entire decade of the Great Depression, and this chart shows that. It begins in the year 1900. It is basically a flat line until we get to about 1984--actually, 1995--and then it heads straight up. These are bankruptcy filings per 100,000 population, and they have gone up dramatically over the years. Annual bankruptcy filings have now reached about 1.6 million Americans, and this is up significantly since the time we started working on the overhaul of the bankruptcy system now 8 years ago. One of the key goals of legislation we have before us today is to make sure the system is not abused by the unscrupulous who leave their creditors high and dry. At the same time, the concept of allowing those citizens who have become saddled by debt to use bankruptcy to get a fresh start is firmly entrenched in the American legal system. Gone are the days of debtor prisons. We want to treat debtors fairly and give those who become overwhelmed by debt a second chance. We do not want to send a signal to those who for whatever reason get into a financial hole that it is okay to go deeper in that hole prior to filing for and become absolved by bankruptcy. We want to give those in debt a fair second chance to bring their fiscal houses in order. We also want to treat creditors fairly. At the end of the day, it is law-abiding, bill-paying citizens who pay for the bankruptcy of others, regardless of whether the debts involved were taken on by con men or those whose situations simply got out of hand. As this debate goes forward, it is important for all to understand that according to some experts, a conservative estimate is that every American family pays about $400 a year in a hidden tax associated with bankruptcies, taxes they should not have to pay. I am told that others place the fair estimate of this hidden bankruptcy tax in the range of $550 per person per year. There are numerous examples of people who take advantage of loopholes today at the expense of everyone else tomorrow. We recently heard from a Wisconsin credit union president who testified before the Judiciary Committee about a young couple who wanted a clean financial slate before they got married. What did they do? They ran up their credit card purchases. One of them prepaid a car loan with the credit union to have the other cosigner released. Then, although they were both employed full-time, they filed for bankruptcy to wipe out their debt. Their credit union and its members had to absorb the $3,000 in credit card debt and then another couple of hundred dollars on the car itself. Bankruptcy relief was never meant to allow this kind of abuse. Hard-working Americans, including the members of credit unions nationwide, have been victimized by abusers of the current bankruptcy system long enough. Bankruptcy abuse also hurts our Nation's small businesses. Without reforms from this bill, losses from bankruptcy abuse will continue to break the backs of the Nation's small businesses and retailers, which work with slim profit margins and have even smaller margins for error. Throughout this debate, I want those who pay their bills in full and on time to understand that our attempt to rebalance some of the aspects of the bankruptcy system will have a positive impact on their pocketbooks each time they go to the store. In effect, we all pay for the bankruptcies of others through this ``hidden tax.'' In some respects, I suppose one could view this bill as a tax cut for the responsible people. While one large impact of bankruptcy is felt in the wallet, perhaps the most important principle involved in this is when one borrows money, they need to take personal responsibility to pay it back. Personal responsibility is a core American value. This legislation, which has been crafted over years of debate and compromise, reflects that basic value. We are mindful of the old adage there is no such thing as a free lunch. When some people do not pay their credit card bills, the rest of us pay for them in the form of increased prices. We do not get off. We have to pay for it. Great strain is placed on businesses, particularly small businesses, when customers do not pay for their purchases. While we want to be fair to those who are in serious debt, we must also be mindful that sometimes it is employees and their families who have to pay through lost salary increases or even pay cuts or job loss when some do not pay their bills. No firm can expand or even maintain its operations or stay in business for long if a substantial portion of goods and services it sells is not paid for by its customers. We all simply have a stake in bankruptcy policy and, therefore, we all have a stake in this bill. Unfortunately, our current system allows certain people with the ability to repay at least some of their debt load to take advantage of the system at the expense of everyone else. Today, individuals with relatively high incomes can run up substantial debts and then too easily use bankruptcy to get out of honoring them. In the end, all of us pay for those who abuse the system. As I will describe, one of the key improvements made by this bill is to devise a new and equitable system to see that those who declare bankruptcy will be called upon to repay a fair portion of their past debts with future earnings if they are able to do so. This is the so- called means test that I will describe in a few minutes. First, I will take a few minutes to highlight some of the key proconsumer provisions of this bill. S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, includes a debtor's bill of rights with new consumer protections to prevent the bankruptcy mills from preying upon those who are uninformed of their legal rights and needlessly pushing them into bankruptcy. This is an important improvement over current law and helps rectify the current practice whereby some, both debtors and creditors alike, lose out in the long run to some shady legal advisers who take their fees and run. The bill also includes new consumer protections under the Truth in Lending Act, such as new required disclosures regarding minimum monthly payments and introductory rates for credit cards. It protects consumers from unscrupulous creditors with new penalties on creditors who refuse to negotiate reasonable payment schedules outside of bankruptcy. Our bill provides penalties on creditors who fail to properly credit planned payments in bankruptcy. It includes credit counseling programs to help people avoid the cycle of indebtedness. This is an important provision for consumers. Except for those with evil motivations and a willingness to take advantage of the system, no one likes to be in debt. This bill helps consumers learn how to better protect their financial resources. S. 256 provides for a protection of educational savings accounts, and it gives equal protection for retirement accounts or retirement savings in bankruptcy. These provisions will help our children and our parents have adequate resources. The bankruptcy legislation also contains important changes in current law that will benefit women and children. We have heard some people complain that our bankruptcy laws do not adequately take care of women and children. Through our years of work on this bill, we have tried to make the law more protective in these areas, and this bill accomplishes that goal. Current law provides that child support obligations are seventh in overall priority among unsecured claims. This bill dramatically changes the world with respect to child support. This bill contains a large set of provisions addressing the treatment of child support, including making domestic support obligations first in priority after certain required expenditures. I will repeat that for emphasis. Child support goes from seventh to first in priority within its category for repayment under this bill. From seventh in line to top priority, this is a big change. Unfortunately, those who have slow walked this bill for the last 8 years have prevented this important change from taking effect. The legislation also includes a provision that makes staying current on child support a condition of getting a discharge in bankruptcy. It makes debt discharge in bankruptcy conditional upon full payment of past due child support and alimony. S. 256 makes domestic support obligations automatically nondischargeable without the costs of litigation. It prevents bankruptcy from holding up child custody, visitation, and domestic violation cases. It helps eliminate administrative roadblocks in the current system so children can get the support they need. All of these measures are valuable additions and changes in the bankruptcy laws. It is in the best interests of women and children to pass this bill. It is a tremendous improvement for children and families over current law. That is why there is such overwhelming support for this legislation from the child support professionals across the country-- the very people who go after deadbeats to help get children the financial support they need. That is not all. Let me cite a few more improvements over current law for women and children. The bill makes the payment of child support arrears a condition of plan confirmation. It provides stronger and more comprehensive notice requirements and more information for easier child support collection. It provides help in tracking down deadbeats. It allows for claims against a deadbeat parent's property. It allows for payment of child support with interest by those with means. It facilitates wage withholding to collect child support from deadbeat parents. As I have just described, there are many important provisions in this bill for children, women, and the aged. I hope that we can finally get this bill to the President's desk for signature. This is a bill that is way overdue. This legislation, S. 256, also requires extensive new disclosure requirements by creditors in the area of reaffirmations and more judicial oversight of reaffirmations to protect people from being pressured into agreements against their interests. These are important provisions. Let me explain why. Reaffirmation agreements commonly occur in conjunction with bankruptcy proceedings when debtors agree to repay a debt they would not otherwise have to pay. These reaffirmation agreements can be very helpful to debtors as they seek to reestablish their good financial status with their creditors as they emerge from bankruptcy. By increasing disclosure requirements and judicial oversight, the reaffirmation process can operate to the advantage of debtor and creditor alike. Next, I would like to briefly describe one of the key features of the bill, the means test, and how it relates to, and will improve, the overall operation of our bankruptcy system. The premise behind the means test is that those who are able to pay all, or some, of their past debts should do so. The means test helps the courts determine who can and who can not repay their debts and, perhaps most importantly, how much they can afford to pay. The challenge is to set this figure at the right level, neither too high nor too low. If the figure is set too high, the debtor may be placed in a vicious cycle from which he or she can never escape and get a fair chance to start over. Of course, if the repayment schedule is set too low, the debtors will escape responsibility at the expense of those who they owe. Through this new means test, in certain circumstances, the bill requires those filing for bankruptcy to pay a fair but not overly burdensome portion of their future earnings. The means test allows for a straight deduction of actual expenses for the care and support of an elderly, chronically ill, or disabled household member, or member of the debtor's immediate family. This test allows for a straight deduction for food and clothing expenses. This test allows for up to $1,500 to be deducted per child for educational purposes. This test includes an allowance for housing and utilities costs. This test includes all the categories enumerated under the National Standards, Local Standards and Other National Expenses issued by the Internal Revenue Service. This test allows for the straight deduction of expenses incurred in maintaining the safety of the debtor and the family of the debtor from family violence. This test includes a special circumstances safety valve that allows debtors to adjust their income or expenditures based on unforeseen circumstances such as military activation and deployment or unexpected and catastrophic medical conditions. Finally, this test includes a safe harbor provision which exempts debtors below their respective State median incomes. After all of these exemptions are applied, including the safe harbor, it is estimated that 90 percent of debtors will not be affected by the changes in the repayment provisions of this bill. Who constitutes the remaining 10 percent? They are the people who can afford to pay at least some of their debts. And that is what the means test is all about. All of these changes that I have described are important. Many of us have worked for many years on this bill. Frankly, some of us think this bill has already taken way too many years to complete. I want to take a few minutes describing the extensive legislative history of the bill. This is important for many reasons. One of those reasons is that this history will reveal that this measure has already been fully debated and this bill reflects literally dozens and dozens of compromises along its 8-year journey. I will describe the nadir of this bill when President Clinton pocket vetoed the legislation after Congress adjourned in the fall of 2000. This bill has had broad bipartisan support from the very beginning. In the Senate, Senators Grassley and Biden have been at this for a long time, as have many others on both sides of the aisle. When we debate amendments over the next few days, I want my colleagues to pay close attention to those who are offering amendments. If what occurred at the Judiciary Committee mark-up of the bill repeats itself on the floor, it might be the case that many amendments will be offered by that relatively small group of Senators who have steadfastly opposed this bill each step of the way during the last 8 years. If that is the case, we must examine their amendments with both exacting scrutiny and heavy skepticism. It is one thing to attempt to improve a bill and bring it more to your liking, it is another matter altogether to try to scuttle a bill. This can be a fine line on any bill. But with a bill with the extensive history as this, it is easier to assess who is trying to get this bill over the goal line finally and who is trying to push us out of bounds and into yet another period of legislative overtime. The House and Senate have been engaged in the process of deliberating on this issue since 1997, back during the 105th Congress. Turning back the clock to 1997, we see that the comprehensive bankruptcy reform bill was developed and passed in both bodies by overwhelming votes. The actual substance of bankruptcy reform legislation has been a bipartisan, bicameral effort. The successful work by each chamber of Congress in 1997 was followed by the appointment of conferees, negotiations with the House, and, in October of 1998, an overwhelming vote by House Members in favor of the conference report. Unfortunately, the Senate did not complete its vote on final passage before the end of the Congress. Next, in February of 1999, Congressman Gekas and Senator Grassley reintroduced the same bankruptcy bill agreed to by both bodies during the previous conference committee. That bill passed the House in May by an overwhelming margin. Later that same month, the Senate Judiciary Committee marked up our bill and we reported it from committee. Finally, in February of 2000, after months of procedural delays and debate on the Senate floor, the reform legislation passed by another impressive margin of 83 to 14. I suspect this body will approve this bill by a similar lopsided margin when a vote on final passage is taken in this Congress if we can get to a vote on final passage. There are some who have indicated they are going to filibuster this bill. We will have to see. But there have been far too many people, on both sides of the aisle, who promised they would work to get this bill through, and they should fight against any filibuster. Turning back to the year 2000 after the bipartisan 83-14 vote, the Senate then requested a conference. This should be a routine matter, but the objection of a single Senator blocked the appointment of conferees. As a result, the House and Senate had to turn to an informal conference process. With a great deal of effort by Members on both sides of the aisle, we reached a compromise agreement on over 400 pages of legislation. Ultimately, both the House and Senate were able to pass that conference report in another series of decisive votes in the fall of 2000. However, President Clinton chose to pocket-veto the legislation and (refused to sign it into law, despite the overwhelming support. Once again, the stone pushed by Sisyphus was at the bottom of the mountain. Representative Gekas introduced the bill, yet again, in January of 2001. The conference report for that bill, H.R. 333, became the backbone of the legislation pending before us today. It too, had overwhelming support, except for what is now understood to be a poison- pill amendment. I will not take the time today to discuss just how this important comprehensive change in the bankruptcy bill got waylaid in the eleventh hour by this problematical and, many believe, perhaps mostly hypothetical and politically motivated, provision. We all know that this bill has repeatedly won the overwhelming approval of our colleagues in both Houses of Congress. Before we began a conference meeting on an earlier version a few years ago I referred to that meeting as being the last leg of a legislative marathon. I was wrong then--but I hope, and I have every confidence, that this floor debate represents the final beginning of that last leg. We succeeded in finally enacting the class action reform bill 2 weeks ago and I am hopeful that we can duplicate this success with the bankruptcy bill over the next several days. As many have said, this is a compromise bill that enjoys broad bipartisan support among Democrats and Republicans, and conservatives and liberals. Even after having worked for 8 years already, we agreed to make some additional compromises in the Judiciary Committee during mark-up 2 weeks ago to satisfy some concerns of our colleagues on the other side of the aisle. Those compromises were difficult to make, but we have made them. I should add that there are some on our side of the aisle, such as Senator Cornyn, who would like to make additional changes in this bill. He has a very substantial proposal addressing the issue of venue reform. It is an area in which he has special expertise from his experiences with some important bankruptcies that affected many citizens of Texas but were litigated out of State. There are things I would like to see changed in the bill. But I also recognize that many have cooperated and compromised in order to reach the state where this legislation is today. Given the extensive and lengthy history of this bill, I think it best for my colleagues to refrain from offering controversial amendments on this vehicle at this time--and I will do so because I know that any further amendments might scuttle this bill. This bill provides new consumer protections, helps children in need of child support, and makes other necessary reforms to a system that is open to abuse. I want to stress the fact that this legislation does not make it more difficult for people to file for bankruptcy, but it does eliminate some of the opportunities for abuse that exist under the current system. This is a good bill. We should pass it promptly and send it to the House. It is possible that during this debate that some may falsely suggest that this bill unfairly treats low-income persons. Let me tell you at the outset that the poor are not affected by the means test. The legislation provides a safe harbor for those who fall below the median income, so they are not subjected to the means test at all. What the means test is designed to do, and what it will do, is to prevent abuse by those who can and should pay a portion of their debts wit future earnings. It will stop the fraud. It will stop the abuse of a system that has been going on through some of these unscrupulous lawyers and bankruptcy helpers. Another misconception that I have heard again and again from opponents of the bill is that this legislation will not let people file for bankruptcy relief when they need it. The fact is that this legislation does not deny anyone access to bankruptcy relief, it just requires those who have the means to repay their debts based on their income and ability to pay. It is that simple. It is fair. It is a long overdue change for the better. Some opponents of this legislation have also claimed that it somehow hurts women and children. This falsehood is particularly disturbing for me to hear, because I have had a long history of advocating for children and families in Congress, and I have worked tirelessly, provision by provision, to make this legislation dramatically improve the position of children and ex-spouses who are entitled to domestic support. I have already told you in some detail why these allegations are baseless and how this bill works to help women and children. I look forward to participating in this debate. This is a very good bill. It represents years of bipartisan, bicameral work. It is time we pass this bill. This President will sign this bill. I hope that we will not get sidetracked by nonrelevant or counterproductive, controversial amendments on a consensus bill that has been so long in the making. I hope there will not be any frivolous amendments or amendments designed to kill the bill or message amendments trying to make political points rather than solve the problems we have regarding bankruptcy. Let us pass this bill for the fourth and final time and get on to other business. I urge all of my colleagues to support S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Mr. President, I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, just before we went into recess on February 17, the distinguished majority leader introduced, and the Senate passed by unanimous consent, a resolution commending the public life of our dear former colleague, Senator Howard Baker. I did not have the opportunity to speak to this resolution then, and I wish to add a few words today. I commend the current majority leader for taking a few moments from our busy Senate schedule that Friday to introduce and pass a resolution commending a former majority leader, my former colleague and dear friend, Howard Baker, for his lifetime of public service. All of us who know Ambassador Baker, or have had the great pleasure of serving under him, on either side of the aisle, will see this as certainly the least controversial act this Senate will pass this year. I have known Howard Baker my entire Senate career--there are very few here who came to this body before Senator Baker did, back in 1966. And to know Howard Baker is to know consummate Southern grace and manners, to know a man who it is almost as much a pleasure to disagree with as it is to agree with. In my many years serving with Senator Baker, and under him, as my Republican Leader, when I first arrived, and as the majority leader, during the first 6 years of the Reagan administration, I had a few occasions where we stood on different sides of an issue, but many more where we did the people's business side-by-side. Our cause was always stronger when we had the intelligence and perseverance of Howard Baker on our side, and, on the few occasions where we did disagree, my arguments always had to be stronger because of the scrutiny and deliberation of my colleague's same intelligence and perseverance. Majority Leader Baker did such a superb job during the first 6 years of the Reagan administration that President Reagan wisely chose him as his Chief of Staff for the last, often difficult, 2 years of his administration. It was a wise choice. A few years later, Howard Baker made his own very wise choice. After being widowed, he married another one of our most distinguished colleagues, former Senator Nancy Landon Kassebaum. I can honestly say that I have never seen a better collaboration between two Senators I hold in the highest regard. As we all know, our distinguished former colleague's service to the Nation was not over yet. He served our Nation with great distinction in one of the most important ambassadorial positions we have, the United States Ambassador to Japan. Mr. President, when they teach civics in our primary and secondary schools today, the textbook writers would be wise to have a lesson on the career of Howard Baker. His character and example, and the policies he advanced, would be admired by all who, unlike some of us, have not had the opportunity to know this man in person. The textbook writers should wait a while longer, however, as I hope and expect that Howard Baker's life of public service continues, for the good of the Nation and the good of all of us. I heartily co-sponsor this resolution and offer my warmest congratulations to former Senator Baker, and his wife, former Senator Kassebaum.

Mr. HATCH

Mr. HATCH. Mr. President, today I rise to speak on the recent passing of Corporal Matthew Reed Smith of the United States Marine Corps. Corporal Smith was a native of West Valley City, UT, who died in a helicopter crash near the town of Rutbah, Iraq. Corporal Smith was one of 29 Marines and one Navy sailor who lost their lives in that fateful accident. Today, I know the Senate will join me in honoring their memory as heroes who died in performance of their duty. The sacrifice of these brave servicemen will be remembered forever. Corporal Smith, during his younger years, often dreamed of being in the Armed Forces. I have been told that as a child he would play make- believe with his brothers on the hill in front of their home and that he always insisted on being the ``Marine.'' Nicknamed the ``Three Musketeers'' by their mother, Corporal Smith and his two brothers grew up doing the things they loved most, camping, hunting, wrestling, and riding their motorbikes in the mountains. Corporal Smith joined the Marines because ``they were the first ones in there.'' As a Marine, he fought bravely to expel the insurgents from the city of Fallujah. There were times during the fighting when he could hear the bullets whistling past his head. His best friend lost an arm and a leg in the Battle for Fallujah. Being unable to obtain leave in order to attend the wedding of his brother last March, members of his family made a life-size cutout of Corporal Smith and moved it around the dance floor as the night progressed. On learning of Corporal Smith's death, his family placed the cutout in the living room of their home. That silhouette of Corporal Smith, dressed sharply in his Marine uniform, today remains in our hearts as a symbol that he served his country with honor and courage. Recently, I had the opportunity to visit a website created to honor him. I was struck by the number of comments and sentiments that clearly showed that Corporal Smith was a true friend and loved by all who knew him. In one particularly moving tribute, a fellow mourner wrote that he could not imagine Corporal Smith departing this life ``in any other way than selflessly serving others.'' Mr. President, it is a privilege to learn about the extraordinary life of such a man.

Mr. HATCH

Mr. HATCH. Mr. President, today I rise in strong support of the nomination of Judge Michael Chertoff to become Secretary of Homeland Security. Voting in favor of Judge Chertoff and commending him on his remarkable accomplishments is beginning to become a habit for us. At the beginning of President Bush's first term, Judge Chertoff was nominated to become Assistant Attorney General for the Criminal Division. To this position, he brought years of experience as a Federal prosecutor in New York and a highly successful term as the U.S. attorney for the District of NewJersey. As a prosecutor, Judge Chertoff handled a wide variety of complex crimes that included successfully prosecuting a RICO murder case involving the third-ranking member of the Genovese La Cosa Nostra Family and others. The principal defendants were convicted of conspiring to murder John Gotti and murdering a mob associate. They each received 75 to 80 year prison terms. He also successfully prosecuted the Mafia Commission Case, which charged the bosses of all five New York La Cosa Nostra Families with operating a national commission through a pattern of racketeering acts such as extortion, loan sharking, and the murders of a mafia boss and two associates. Upon his confirmation, Mr. Chertoff ran the Criminal Division of the Department of Justice during the trying days after September 11. As Senator Collins stated: since 9/11, Judge Chertoff has established himself as a leading expert on the legal and national security issues surrounding the war on terror. After this period, in which I worked closely with the Criminal Division of the Justice Department to formulate the PATRIOT ACT, Judge Chertoff was nominated to the third Circuit and was confirmed by a vote of 88 to 1. As we all know, becoming a judge on the 3rd Circuit is a lifetime appointment and the culminating achievement of many outstanding legal careers. Few leave the bench before retirement. However, Judge Chertoff is not a man who will shirk from his duty. His nation called and asked him to sacrifice. He answered that call and stood up to be counted during a period of war. This is true not only for the time that he spent affiliated with the Justice Department but in his everyday practice. For example, Judge Chertoff served as special counsel to the New Jersey Senate Judiciary Committee in its investigation of racial profiling. Under his counsel, the committee held nine hearings examining racial profiling allegations, concluding that the former attorney general had misled the committee and had attempted to cover up the extent of racial profiling in New Jersey from the U.S. Department of Justice. After a convicted rapist was mistakenly released from prison, Mr. Chertoff again served as special counsel for the New Jersey Senate Judiciary Committee during its hearings into the application of Megan's Law, which requires State correction officials to notify prosecutors 90 days prior to the release of a sex offender, and the reasons why it was not being systematically employed by the State. Mr. Chertoff also represented three indigent defendants on death row in Arkansas through a program operated by the NAACP Legal Defense Fund. The death sentences of all three defendants were overturned on the appeal that he handled. I understand that Judge Chertoff received the unanimous approval of the Homeland Security and Governmental Affairs Committee, with one member voting ``present.'' I believe that this is not only a reflection on the judge's credentials but a realization that securing the homeland is not a partisan issue, but a commitment by the Government to its people that we will find the best leaders to defend our Nation. Judge Chertoff time and time again has set the standard by which others will have to follow. Mr. President, it has been my privilege to know Judge Chertoff for a number of years and I can honestly say that the President has made an inspired decision in this nomination.

Mr. HATCH

Mr. HATCH. Mr. President, today is going to be an important day for the American public because the Senate will adopt legislation that takes a significant step forward in improving our Nation's civil justice system. I commend my colleagues on both sides of the aisle for coming together on this very important bipartisan bill. Our work in this body bodes well for the Senate's ability to tackle important issues in the 109th Congress. Let me now take a couple of minutes to address the pending amendment, Senator Feingold's amendment, that would add a provision to S. 5 requiring Federal courts to consider remand motions in class actions within a specified period. This amendment is based on the questionable premise that Federal courts move too slowly and consumer claims will stall while plaintiffs are waiting for courts to rule on jurisdictional issues. In fact, in many cases, Federal courts move more quickly than the State courts. Resolving remand motions is always their first course of business, and we are moving these cases to Federal courts. The amendment also fails to recognize the important considerations a judge must make as part of a remand decision. Like other amendments that have been offered, this proposal would result in a less workable bill, not a better one. This amendment should be rejected. The fact is, the Federal courts do not drag their feet in dealing with remand motions. Federal courts always consider jurisdictional issues first, as they must, before allowing discovery or other substantive motions. The Supreme Court has repeatedly held that jurisdiction is a threshold matter that must be decided prior to other substantive issues in a case. Courts take up jurisdiction as the first course of business already. The amendment is, therefore, unnecessary. I also want to correct the misunderstanding that Federal courts drag their feet in dealing with class actions generally. This is not the case. In fact, Federal courts generally move more quickly than State courts when it comes to class actions. A recent 2004 study by the Federal Judicial Center found that State courts are far more likely than Federal courts to let class actions linger without ruling on class certification. Moreover, the median time for final disposition of a civil claim filed in Federal court throughout this country is 9.3 months; the median time to trial in a civil matter in State court is 22.5 months. Let me repeat that: 9.3 months in Federal courts versus 22.5 months in State courts for civil claims to be disposed. The dates showing the Federal courts act more than twice as fast as State courts come from the nonpartisan Administrative Office of the United States Courts. There is simply no evidence that States proceed more quickly. Thus, the alleged problem that this amendment would fix is nonexistent. It does not exist. Take, for example, the case cited by Senator Feingold yesterday, Lizana v. DuPont. It did take a year to rule on the motion to remand, but it is my understanding that the court's docket reveals at the time the court was considering the motion, there were numerous briefings and motions on both sides and numerous hearings to determine whether to remand. The court was hardly sitting on its hands. If anything, this case shows that the courts may require more than 180 days to make a correct decision. They were moving, and moving ahead, and moving ahead with dispatch. But it was a complicated case and it took a little longer. It may very well take more than 180 days, and in some cases, it certainly will. Another case cited in support of the amendment was Gipson v. Sprint. But when you look at the facts, the facts do not show much support for the amendment at all. Again, it is my understanding the docket reveals that the court was very busy on the case before the ruling on the motion to remand was even handed down. In fact, one of the motions the court was contending with was a motion for continuance filed by, you guessed it, plaintiffs' counsel. This means it was the plaintiffs who wanted the court to delay its ruling. How can anyone complain about the time it takes for a district court not to rule on a remand motion when there are scores of docket entries in a single year and the plaintiffs themselves were seeking delays? Some opposed to this amendment suggested that defendants will use removal as a delay tactic, but Federal law already penalizes defendants who engage in such tactics. The Federal law governing removal gives judges discretion to make a defendant pay the plaintiff's attorney's fees if remand is granted. In addition, rule 11 of the Federal Rules of Civil Procedure gives Federal judges the authority to levy sanctions for frivolous filings. Thus, the law already addresses concerns about improvident removals. The bottom line is that this amendment will make it unnecessarily difficult for judges to issue fair rulings in these more complicated cases. And class actions generally are more complicated cases. By forcing judges to decide remand motions by a certain date, as the Feingold amendment would do, that amendment fails to recognize that in some cases the jurisdictional issues will be complex, requiring discovery, substantial briefing, and hearings before the judge. At times, courts consider several remand motions jointly in order to conserve judicial resources, such as in multidistrict litigation, or MDL, as it is called, and this may, in a limited number of complex cases, result in a slightly longer time period for resolution as well. Forcing judges to rush these issues in all cases regardless of their complexity could result in a denial of due process in these cases where the judge cannot fully comprehend and resolve the issue, or issues, in the time allotted by the Feingold amendment. The reality is that most remand motions will be decided in less time than the amendment requires, but in some cases they will require more time. We should not create rules of law that force judges to decide issues without full and fair consideration. And that is exactly what the Feingold amendment would do. Finally, there is a reason the time limits make sense for remand appeals and not for initial rulings on remand motions. In contrast to district courts, which often must develop a factual record to address remand issues, an appeals court that is asked to review a remand order will be provided with a full record from which to reach a decision. Often, the appeals court's decision will be based simply on a reading of the law, and it will, thus, be less time-consuming than the district court's decision. Even a 180-day time limit may be too stringent in some circumstances. Extending it to district court judges will make it more difficult for them, in some cases, to do their jobs in a fair and efficient fashion. So I hope our colleagues will vote down the Feingold amendment. Frankly, it is another poison pill amendment that would probably scuttle this bill for another year. We have already been on this bill for 6 solid years. We have a consensus in this body to pass it. We know if we pass it in the form that it is in, the House will take it. We know it will become law because the President will sign it into law. Frankly, I hope this amendment will be voted down for all of those reasons. Mr. President, I suggest the absence of a quorum.

Mr. HATCH. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HATCH. Mr. President, I would like to talk more generally about the Class Action Fairness Act because it responds to a serious abuse of the class action system that is on the rise; namely, the filing of copycat or duplicative lawsuits in State courts. Over the past several years, we have seen a rise in the number of class action lawsuits filed in a few State courts known for tilting the playing field in favor of the plaintiffs' bar; in other words, dishonestly, basically, getting the courts to not do justice. These courts, referred to as ``magnet courts'' for their attractive qualities to enterprising plaintiffs' lawyers, certify class actions with little regard to defendants' due process rights. They award substantial attorneys' fees as part of class settlements, and they approve coupon settlements to the class members that are sometimes worth little more than the paper on which they are printed. It has not taken the plaintiffs' lawyers long to figure out which courts are good for their bank accounts. There was an 82-percent increase in the number of class actions filed in Jefferson County, TX, between the years of 1998 and 2000. During the same time span, Palm Beach County, FL, saw a 35-percent increase. The most dramatic increase, however, has occurred in Madison County, IL. Madison County has seen an astonishing 5,000-percent increase in the number of class action filings since 1998. Let me just refer to this bar chart. It shows that the number of class actions filed in State courts has skyrocketed under current law: Palm Beach County, 35 percent in just 2 years or 3 years; Jefferson County, 82 percent in the same 2 or 3 years; and Madison County, over 5,000 percent. And then this chart shows the overall increase in State courts: 1,315-percent growth. Now, in their effort to gain a financial windfall in class action cases, some aggressive plaintiffs' lawyers file copycat class action lawsuits. This tactic helps explain the dramatic increase in filings in these magnet courts. Here is how the copycat class action strategy works: Competing groups of plaintiffs' lawyers, and sometimes even the same lawyers, file nearly identical class action lawsuits asserting similar claims on behalf of essentially the same class in State courts around the country. Some lawyers file duplicative actions in an effort to take a potentially lucrative role in an action. Other times, these duplicative actions are the product of forum shopping by the original lawyers who file similar actions in different State courts around the country, perhaps with the sole purpose of finding a friendly judge willing to certify the class. Because these duplicative actions are filed in State courts of different jurisdictions, there is no way to consolidate or coordinate these cases. As a result of the separate, redundant litigation of copycat lawsuits, our already overburdened State courts can become clogged with complicated class actions that potentially affect the rights and recoveries of class members throughout the entire country. There is not a single magnet State court in this country that has not encountered the copycat phenomenon. For example, it is my understanding that in Shields v. Allstate County Mutual Insurance Company, filed in Jefferson County, TX, in the year 2000, three named plaintiffs sought certification of a nationwide class comprised of members who were insured by three insurance companies. At the very same time this action was brought in Jefferson County, no fewer than nine similar actions, representing a similarly situated class and alleging the identical claims, were pending in Madison County, IL, against the same insurance companies. Another example of copycat lawsuits is Flanagan v. Bridgestone/ Firestone, filed in Palm Beach County, FL. Now, this lawsuit was but one of the approximately 100 identical class actions filed in State courts throughout the country in the wake of the Ford/Firestone tire recall in the year 2000. One of the most obvious problems with copycat lawsuits is that they place new burdens on an already stressed State court system. Class actions are large, complex lawsuits with potential ramifications in jurisdictions across the country. Our State courts are courts of general jurisdiction that deal with issues ranging from domestic disputes to routine traffic offenses. They are simply not the best entity to handle the growing number of these complex lawsuits being filed across the country where multiple parties and multiple issues are involved. S. 5 will mitigate the growing burden on our State courts by providing a means through which truly national class actions will be resolved in the most appropriate forum; that is, the Federal courts. Over the past several months, I have heard some opponents of this bill argue that the Class Action Fairness Act will somehow result in a delay or even a denial of justice to consumers. They have argued that State courts resolve claims more quickly, and that removing these actions will result in the overburdening of our Federal courts. I have yet to see or hear a single shred of persuasive evidence to support these claims. In fact, according to the data, a strong case in the opposite direction can be made. According to two separate examinations of the State and Federal court systems conducted by the Court Statistics Project and Administrative Office of the U.S. Courts, the average State court judge is assigned nearly three times--nearly three times--as many cases as a Federal court judge. The increase of State court class actions further compounds this burden and interferes with the ability of the State court judges to provide justice to their citizens. In fact, the Illinois Supreme Court has repeatedly criticized its own Madison County, IL, State court for its horrible backlog. The backlog is the result of the local court's willingness to take on cases that have nothing to do with Madison County, the county in which they sit. In fact, one Madison County State court judge expressed his willingness to take on cases that have little or no connection to Madison County, or even Illinois, for that matter, when he stated: I am going to expand the concept that all courts in the United States are for all citizens of the United States. . . . The fact is, when cases are accepted that have nothing to do with the State in which they are filed, it is difficult to see how justice is served. When the cases are forced to remain in State court because some plaintiff's lawyers have exploited the system by engineering the composition of the class and the defendants, both the class members and the defendants can easily be deprived of justice. In some cases, it appears that the interests disproportionately served are those of the class counsel who stand to receive millions in attorney's fees upon the swift approval of a proposed settlement while their clients receive next to nothing. Despite claims to the contrary, S. 5 will not flood or remove all class actions to Federal court. Instead the bill acts to decrease the number currently falling in State court dockets. Most of the cases that would be removed to the Federal courts under the bill are precisely the type of cases that should be heard by such courts in the first place; namely, large national class actions affecting citizens in and around the country, including the very copycat lawsuits I have discussed today. Class actions generally have three things in common. No. 1, they involve the most people. No. 2, they involve the most money. And No. 3, they involve the most interstate commerce issues. Taken as a whole, the national implications of class actions are far greater than many of the cases filed and heard by the Federal courts today. With this in mind, one is left to wonder how anyone could argue that these actions are not deserving of the attention of our Federal courts. As Chief Justice Marshall noted: However true the fact may be, that the tribunals of the States will administer justice as impartially as to those of the nation, to parties of every description, it is not less true that the Constitution itself either entertains apprehensions on this subject, or views with such indulgence the possible fears and apprehensions of suitors, that it has established national tribunals for the decision of controversies between aliens and citizens, or between citizens of different States. When the Framers of the Constitution created the Federal courts in article 3 of the Constitution, they gave them jurisdiction over cases involving large interstate disputes, cases such as class actions. Contrary to the claims of opponents of this bill, article 3 does not require complete diversity amongst parties to a claim. The Class Action Fairness Act will also help protect the interests of consumer class members from copycat lawsuits. When duplicative lawsuits are pending in different States, a settlement or judgment in any one case has the potential to make every other pending case moot. This winner-takes-all scenario acts as an incentive for plaintiffs' lawyers with multiple class actions to seek a quick settlement in the case, even if the settlement does no more than make the lawyers involved rich. The bona fide claims of the plaintiffs to the other class actions are wiped out by the settlement. That is not fair, but that is what is happening. Sometimes they file multiple suits so they can force a settlement with a simple settlement demand. And what company wouldn't pay the defense costs to get out of this type of abusive jurisdiction of the various courts throughout the country. What this means is that while one injured consumer in one court of the country recovers for their injuries, an identically injured consumer in another part of the country may get nothing. The quick settlement of a copycat lawsuit may essentially steal the ability for similarly situated plaintiffs to fully or fairly recover for their injuries, especially if the forum-shopped court is going to pull this kind of stuff and favor certain attorneys over others and certain clients over others rather than do what is just under the law. Under S. 5, many of these copycat lawsuits would be removed to Federal court and consolidated to ensure that all similarly situated plaintiffs received the same recovery under any settlement. Unlike State courts, Federal courts are equipped with a mechanism for consolidating similar claims. In the Federal court system, a judge may consolidate multiple identical lawsuits found in various jurisdictions into one proceeding before a single Federal court known as the multidistrict litigation panel or MDL. The MDL panel has proven to be a valuable tool for preventing abuse, judicial waste, and disparate outcomes in Federal courts. Under this system, much of the time-consuming pretrial activity in the lawsuit is heard by a single court. This serves to help protect against the plaintiffs' lawyer from making a separate deal for some plaintiffs that is not in the best interests of all class members. And by the way, for those who argue that consumers are being hurt by this bill, guess how many consumers are hurt by a collusion between plaintiffs' counsel and a particular corporation to settle in one State that wipes out everybody else throughout the country. That happens. It happens because we have not solved these problems. This bill goes a long way toward solving some of these problems. S. 5 solves this very problem by ensuring that a plaintiff's claim is not extinguished by the settlement of the duplicative action in another part of the country. This bill protects consumers in areas where they are not protected under current law. Before I close, I want to stress that this bill does not change substantive law. The Class Action Fairness Act does not make it any harder or easier to file or win a lawsuit unless, of course, winning is unjustly based upon an uneven playing field. In other words, courts who homer the cases because they want to help certain attorneys who have supported them for their election to those State court positions. This bill is one that is long overdue. As Chief Justice Rehnquist stated: We can no longer afford the luxury of State and Federal courts that work at cross-purposes or irrationally duplicate one another. This bill is a procedural bill that applies common sense to streamline the court system. The underlying substantive law is the same for class actions whether they are in Federal or in State court. This bill is a balanced, modest approach to solving some of the most abusive problems in our current civil justice system. Members on both sides of the aisle have worked long and hard to formulate a bipartisan bill, and we are succeeding in this bipartisan effort on behalf of the American people. I steadfastly support the Class Action Fairness Act and urge my colleagues to do so as well, because it is the right thing to do. It is the right thing to do for the legal profession and for the plaintiffs who deserve compensation. I have been in some pretty tough cases in my day, but I have never seen a case I could not win if the case was the right thing to bring. I would not bring it if it were not the right thing to bring. I loved being in Federal court, time I could get there. I also loved being in State court. I never wanted a judge to lean my way or the other way. I wanted the judge to be down the middle, and if that is the case, I thought I stood a good chance of winning the case. We are talking about unfair advantage here in these magnet courts, these forum-shopped areas. Madison County has become the ``poster child'' for magnet courts. It deserves its reputation. This is an important bill. This is a bill that makes sense. This bill does not deprive anybody of rights. This is a bill that will resolve a lot of these conflicts and problems, and it is a bill that I think will help all within the legal community to live within certain legal and moral constraints. Mr. President, I suggest the absence of a quorum.

Mr. HATCH. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.