Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I suggest the absence of a quorum.

Mr. HATCH. Mr. President, I am happy to be here and finally get this bankruptcy bill underway. We have done it year after year after year. It certainly is time to pass this bill. I hope there won't be any frivolous amendments or amendments trying to kill the bill or amendments trying to make points rather than solve the problems we have regarding bankruptcy. As I have indicated before, the bankruptcy reform legislation we are considering today, is the same legislative language that was contained in the conference report passed by the Senate in December by a vote of 70-28. In addition, the language was marked up in the Judiciary Committee, and has added several provisions sought by Democratic members of the committee. I am asking that Members recognize and respect the compromises and agreements that have already been made with respect to this bill. While I do not believe that further amendments are necessary, I recognize that it is the right of any Member to offer amendments. It is my sincere hope that Members will exercise reasonableness in the offering of any amendments. This being said, If Members do have amendments, I ask them to come down and offer them now, so that we can avoid any further undue delays and move forward. While we are waiting for them, let me talk about the bankruptcy reform proconsumer provisions. This bill requires extensive new disclosures by creditors in the area of reaffirmations and more judicial oversight of reaffirmations to protect people from being pressured into agreements against their interests. It 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. It 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. It provides penalties on creditors who fail to properly credit plan payments in bankruptcy. It includes credit counseling programs to help people avoid--we go that far--the cycle of indebtedness. It provides for protection of educational savings accounts, and it gives equal protection for retirement savings in bankruptcy. S. 420 contains improvements over current law for women and children. We have heard people complain that the bankruptcy laws do not take care of women and children. We have tried to do that in this bill, and we have accomplished it. It gives child support first priority status, something that has not existed up until now. Domestic support obligations are moved from seventh in line to first priority status in bankruptcy, meaning they will be paid ahead of lawyers and other special interests. It includes a key 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. It makes domestic support obligations automatically nondischargeable without the costs of litigation. It prevents bankruptcy from holding up child custody, visitation, and domestic violence cases. It helps eliminate administrative roadblocks in the current system so kids can get the support they need. These are all valuable additions and changes in the bankruptcy laws that this particular bill makes. It is in the best interests of women and children to pass this bill. 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 better notice 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. All of that is critical. All of that amounts to needed changes in the bankruptcy laws that we have worked very hard to bring about. As I have said before, the compromise bill we passed 70-28 was an effective compromise among Democrats and Republicans, among conservatives and liberals and independents. It was a bill that basically brought almost everybody into the picture. Even after having done that, having introduced that bill this year in the committee, we made some additional compromises to satisfy our colleagues on the other side. Those compromises were difficult to make, but we have made them. We have made every effort to try and bring as many people on to this bill as we possibly can and to try and resolve the various conflicts and difficulties that have existed in the past. It is a very good bill. It is time we pass it. I hope people will come and bring their amendments to the floor so we can begin the amendment process and get this bill passed. With that, I suggest the absence of a quorum.

Mr. HATCH. I agree with the Senator. We will stack the amendments until we can have a reasonable chance of getting Members here to vote. We would like to move ahead on amendments and vote on them later today. I suggest the absence of a quorum.

Mr. HATCH. Mr. President, we are looking at the amendment. It is the first time I have seen it. We will look at it and see if this is an amendment we can support. We would like to continue to call up amendments and stack them. There is Habitat for Humanity and a funeral today, but we will stack the votes and this will be the first vote.

Mr. HATCH. If the Senator will yield, I do not disagree with my good friend and colleague from Nevada. I think we need to find out who is here. We know a lot of Senators are working in the Habitat for Humanity Senate home they are building, and I surely have to get some time for that. We also will try to be fair to our colleagues who had to be necessarily absent to go to a funeral. On the other hand, we do have one amendment up. We are prepared to vote on that. I think we probably will before the afternoon is up. We should stack the other amendments. I am requesting that those who have amendments get here and let's argue the amendments and then stack them and we will vote at the earliest convenience, and hopefully we will be able to move this bill forward. Mr. President, let's get over here and offer our amendments, debate them, and do the orderly legislative process. Then we will vote at our earliest possible convenience. We are working on just when those votes will start because of the inconveniences to a wide variety of Senators right now. We will try to start those votes as soon as we can, but we can stack them and debate them right now and not waste this time. I suggest the absence of a quorum.

Mr. HATCH. Mr. President, I ask unanimous consent the order for the quorum call be dispensed with.

Mr. HATCH. Mr. President, I do request Senators get over here. As far as I know, there may be one or two amendments on this side. Most of the amendments are on the Democrat side. We can move this quickly if they will get here and offer their amendments. I am requesting Republicans, if there are any Republican amendments-- I am only aware of one on the Republican side. I am aware of probably 27 on the Democratic side. So I am requesting Republicans and Democrats, if they have amendments, to get over here and let's get it done. But I only know of one on this side.

Mr. HATCH. I am happy to yield.

Mr. HATCH. I understand he is at a markup--here he is.

Mr. HATCH. If the Senator will withhold, I appreciate the Senator's comments. I note the presence of the distinguished Senator from Minnesota. As he prepares to offer his amendments, I suggest the absence of a quorum to give him a little bit of time to do so.

Mr. HATCH. Mr. President, if the Senator will yield, we should lay the Leahy amendment aside so the Senator may call up his amendment.

Mr. HATCH. Mr. President, listening to my colleague, I wonder if he has read this bill because most of what he said is untrue. I have respect for him as a former professor of political science, but on the other hand, this bill has been around for a long time; we have worked on it with virtually everybody in the Congress, everybody in the Senate. We provide for people right and left and provide the means of taking care of women and children. We have made it so that people who owe their debts and who can pay really ought to; the game is over. Sometimes I get the impression some of our colleagues on the other side think the Federal Government is the last answer to everything and it is the only answer to everything. It is the last answer sometimes, but it is not the only answer. I have to tell you, this amendment of the distinguished Senator is unnecessary. Let me just say one thing about ergonomics. I distinctly stayed away from the debate yesterday because we had plenty of good people on both sides arguing that debate. The distinguished Senator from Minnesota, his side lost. The reason they lost is that anybody who has any brains at all knows we do not need to create a Federal welfare system or Federal workers compensation system. Everybody who has any brains knows the minute you start doing that, there is going to be a plethora of people who will take advantage of it. It is just human nature. We do need to come up with a really workable, nonbudget-busting, ergonomic-stress-related bill that I think will work. Certainly that regulation was way out of line and should not have been supported. I was amazed there were as many Democrats who supported it as did. It was a bipartisan rejection of those regulations. If the Senate of the United States had any guts or any consideration for its own power at all, that is what had to be done. We just can't let bureaucrats go do whatever they want to regardless of what the law says, and that is why we came up with that particular act, to provide a means whereby we can get rid of regulations such as that, that really are improperly written, way excessive in their tone and their delivery and in their practicality. It is, frankly, very detrimental to the country in the long run. They would cause a lot of difficulty. The thing I can remember that best reminds me of that kind of legislation was the catastrophic bill a few years ago--just take care of everybody's catastrophic illness. It was wonderful to hear that and find out the Federal Government was going to take care of everybody, until the people found out they had to pay for it. Then they were jumping on top of Danny Rostenkowski's car, the chairman of the Ways and Means Committee, because they weren't about to pay the kind of rates that would have been required of them to have the kind of catastrophic coverage we Members of Congress were going to give them because we know it all. Let me say, this amendment is unnecessary, the amendment of the distinguished Senator from Minnesota. There is a means test in S. 420 that takes care of it and already accounts for 100 percent of a person's medical expenses. Thus, if their medical expenses prevent them from being able to repay their debts, they don't have to under the means test. It takes care of the truly poor. We have taken great pains to take care of the truly poor. But there are some people in our society who are using the bankruptcy rules, the bankruptcy laws, the current laws, to get around debts for which they are very capable of paying. Or they run up huge bills and then expect society to pay for them. It is costing the average family $550 a year because of the inadequacies of our current bankruptcy laws which this bill cures. The means test takes care of the poor. But if the Senator gets his way and this amendment is agreed to, let me tell you who will benefit from it. Donald Trump is going to benefit from it. Bill Gates will benefit from it. Anybody who is wealthy who goes into bankruptcy and has medical bills, they are going to be able to avoid those; they will not have to pay them. The way I read this, if a wealthy person files for bankruptcy and the reason they filed was to extinguish their debts from medical expenses, then the means test will not apply to them even if they are fully capable of paying their medical expenses, paying their debts. What this provision of the distinguished Senator from Minnesota does is it puts hospital creditors at the head of the line. That is not what we want to do. The amendment says the entire act and amendments do not apply if you file for bankruptcy because of medical expenses. This means the new protections in the bill for women and children don't apply--or don't apply to them. Credit counseling provisions don't apply that we have put in here. Homestead provisions don't apply. I know the distinguished Senator is trying to do right here, and I know he is well intentioned. I respect that. But we thought of these problems, and I think we have solved them, cured them in this bill. This bill does an awful lot to cure the problems of our country in bankruptcy. It does an awful lot to stop the fraud that is going on in bankruptcy. It does an awful lot to reduce the annual cost of every family in America--now estimated at $550 a year. It does a lot to alleviate those problems and reduce those costs of every American citizen. It does an awful lot to help people be more responsible for their debts. It sends a message to everybody that you must be responsible, even if you are having trouble paying your debts. We provide all kinds of mechanisms so that they can pay their debts--maybe not in full but at least can get discharged in bankruptcy after having made a good-faith effort to live up to the terms of the law we would pass. I sometimes get the impression that our colleagues on the other side believe that Government is the last answer to everything. I know not all of them do, but it just seems as though more and more that seems to be the argument, that only the Government can take care of health care, only the Government can take care of savings and investment, only the Government can take care of education--only the Federal Government, that is. We all know the Federal Government's share is only about 6 percent or 7 percent of the total cost of education in this society. Yet they can come up with this idea that only the Federal Government has the last answers and can solve all these problems. The Federal Government isn't any brighter than the State governments. I have to say the State and local governments are closer to the people and, as a general rule, do a better job than we do. But we can do a good job. This bill is a very good bill. Is it perfect? I have to say I have never--well, maybe not never but hardly ever--seen a bill around here that is perfect because we have to satisfy 535 people, and more; we have to satisfy the administration. We have to satisfy a lot of people out there. This bill takes care of a lot of problems in the current bankruptcy system that need taking care of. We can argue these matters until we are blue in the face, but it is time to vote on it. Frankly, I respect anybody for their sincerely held opinions. I know the opinions of the distinguished Senator from Minnesota are sincerely held. He is a very bright man, and he raises some interesting issues from time to time. But on this one, he is just dead wrong. Very frankly, the only people who are going to benefit from this amendment are the rich who can afford to pay for their medical expenses because we take care of those who are poor under the means test. This particular bill resolves that problem. I wonder if we can go on to another amendment. I suggest we stack this amendment behind the Leahy amendment and go to the next amendment. I hope our colleagues are prepared.

Mr. HATCH. Mr. President, I ask unanimous consent that the Senate resume consideration of the pending Leahy amendment No. 13 at 5:30 pm and there be up to 20 minutes equally divided in the usual form. I further ask consent that at the conclusion of this debate, the amendment once again be laid aside and the Senate resume consideration of the Wellstone amendment No. 14 and there be up to 60 minutes equally divided in the usual form. I further ask consent that at the conclusion of the debate on the Wellstone amendment, the Senate proceed to vote in a stacked sequence on or in relation to the Wellstone amendment, to be followed by a vote on or in relation to the Leahy amendment, and that no amendments be in order to either amendment. Further, I ask that there be 2 minutes equally divided for closing remarks prior to the second vote in the series.

Mr. HATCH. As a result of this agreement, at least two back-to-back votes will occur at 6:50 this evening. So I put all colleagues on notice that we will have at least two back-to-back votes. Amendment No. 17 Mr. President, as I understand it, the amendment of the distinguished Senator from Illinois, the predatory lending amendment, takes away the lender's right to satisfy a claim to get paid on the debtor's bankruptcy if there was any ``material'' Home Ownership Equity Protection Act violation. The Home Ownership Equity Protection Act is not a predatory lending law. Any attempt to characterize it as such is misleading and inflammatory. Many legitimate lenders--banks, community banks, and finance companies--make home equity loans which fall under this act, codified section 129 in the Truth in Lending Act. Section 129 recognizes a legitimate sector of the home lending market, certainly one that is not ``predatory'' and already provides ample protection for consumers, both in the form of disclosures and substantive prohibitions and remedies for violations of this act. First, this is a banking amendment. This is outside the jurisdiction of this committee. Second, and more importantly, this amendment is problematic in its effect in a number of ways. For instance, it will adversely affect the availability of credit to certain consumers, many of whom may be low income and minorities whom this amendment purports to protect. Moreover, the secondary markup for such mortgages will also be affected, thereby placing upward pressure on the pricing of such loans. A number of the horror stories given are already covered by current law, and we should be enforcing those laws. It appears this amendment, though seemingly well meaning, might create more problems than it might remotely solve. Already there are numerous protections and built-in super-remedies afforded the borrowers under the Homeownership and Equity Protection Act. For example, a consumer can rescind any loan that violates the provision. This alone takes care of any conceivable problem in bankruptcy. Furthermore, all material violations result in civil liability under the Home Ownership Equity Protection Act and enhance civil remedies such as ``an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material,'' in addition to actual damages, statutory damages, attorney's fees, and costs. Furthermore, to justify the harsh punishment it creates, in addition to those penalties already available in the Home Ownership Equity Protection Act, this amendment does not even require any finding that such a violation was the cause of the debtor going into bankruptcy. That is not good law. That is not the way we should be making law. Nor does it require that a violation of the Home Ownership Equity Protection Act had to have been found for this draconian remedy to take place. The result, I am afraid, will be litigation within a bankruptcy proceeding and a bankruptcy judge passing judgment on Federal lending laws. Furthermore, I don't know why every debtor will not allege a violation of the Home Ownership Equity Protection Act in the hopes of winning this lottery of getting your home mortgage wiped out for even minor violations which did not contribute in any way to the bankruptcy of the debtor. This is just plain bad policy. We can't permit this type of an amendment on this bill. It is one thing to use rhetoric about predatory lenders, but I believe the current law takes care of that, and, frankly, I don't think we should try to disturb it with an amendment that doesn't do the job and, in fact, can do an awful lot of harm. We have to oppose the sincere amendment of the distinguished Senator. I hope our colleagues will vote it down. It would cause tremendous problems. Last, but not least, I know my colleague is not trying to do this--or at least I believe he is not trying to do this--but this would lead to all kinds of unnecessary litigation, unnecessary failures, to be able to resolve problems as they arise and, frankly, fly in the face of good bankruptcy legislation. I think the bill and current law in the bill, combined, do take care of some of the problems about which the distinguished Senator is concerned. But his amendment would cause an awful lot of problems. In the end I think all it would do is lend a lot of solace to a lot of lawyers who want to make a lot of money off what clearly are not reasons for the bankruptcy. We have to oppose this amendment. I yield the floor.

Mr. HATCH. Will the Senator from Florida yield for one last comment?

Mr. HATCH. Mr. President, when we had this amendment in the committee, it had to be a substantive violation. The current amendment, as we view it, would provide for triggering with even a technical violation. That would be catastrophic in bankruptcy law. We just cannot support this amendment. I know the distinguished Senator is trying to do something worthwhile, and I do not believe there should be predatory lending any more than he does, but I do think we take care of it in this bill. But under this current amendment, it is even worse than the amendment he was prepared to offer in committee because even a technical violation would trigger what he wants to do. So I just need to make that point for the record, and I am happy to yield the floor.

Mr. HATCH. Reserving the right to object, I ask Senators how much time they intend to take?

Mr. HATCH. I have no objection.

Mr. HATCH. Mr. President, I thank my colleague. I appreciate all the work he has done on this bill through the years and here today as well. He and I have walked arm in arm on this bill for a long time. We have tried to accommodate our friends on the other side in innumerable ways. We have accommodated them. It seems as if we can never quite satisfy some on the other side. I am not finding fault with them; they are very sincere on these amendments, but there is no way we could go with some of the amendments that have been offered. I am going to talk about the amendment of the distinguished Senator from Minnesota, excepting those with high medical expenses from all provisions of this reform legislation. The effect of that amendment: If a debtor can demonstrate ``the reason for filing was a result of debts incurred through medical expenses,'' the debtor is exempt from every provision of S. 420, except those they might elect to have covered. I can imagine that is not going to be much of an election. The amendment would create a major loophole, if we were to accept or vote up the Wellstone amendment. S. 420 already allows all medical expenses to be deducted in determining the ability to pay. If for some reason a debtor could not deduct them under the IRS guidelines, the debtor can demonstrate that there are ``special'' circumstances. So the only people this amendment would help are well- off people who have the ability to pay but also suffered medical problems. The amendment unwisely creates two classes of debtors. One class must use the bankruptcy bill as S. 420 would amend it, and another class can use bankruptcy law as it exists today or pick and choose what provisions of this new law apply to it. To allow some group of citizens, no matter how unfortunate, to pick and choose what parts of the law will apply to them is absolutely unprecedented. But that is what the amendment of the Senator from Minnesota would do. It would allow debtors to evade the child support, alimony, and marital property settlement provisions of this bill that help women and children. The debtor who owed child support could evade his basic responsibilities to pay child support by fitting under the loophole created by this Wellstone amendment. I have worked long and hard to solve these problems. I have to tell you, I think we have them solved, to a large degree, in this bill. I think people on both sides of the aisle are appreciative we have worked so hard for women and children. The Wellstone amendment would allow debtors to evade the homestead exemption caps imposed by this bill. His amendment is unworkable. Creditors would not know if they had to make the truth in lending disclosures this bill imposes on them until after the debtor filed for bankruptcy. Yet the disclosures must be given in credit card solicitations and on monthly statements. The amendment would have the strange effect of apparently exempting creditors from complying with consumer protections in this bill, such as the reaffirmation reforms that we have here, such as the restrictions on creditors who fail to credit plan payments properly, such as the privacy protections, and so forth. So I hope my colleagues will recognize this amendment for what it is. It is an amendment that will not work. It is not fair. It would benefit only those who could afford to pay their medical bills, and it would not do anything for others. It would allow a loophole so people could pick and choose in legislation that we ought to all be subjected to or have to comply with, or that we ought to all benefit from, depending upon the use of the particular bill because all of those factors are part of it. I hope our colleagues will vote against this amendment. It is an unwise amendment. It would devastate this bill in many respects, and it would not accomplish what the distinguished Senator would want to accomplish because I know his goal is to help those who are unfortunate. That is our goal, too. That is why we have special circumstances in this bill, to help those who are unfortunate, who should not have to comply with some of the aspects of the bill. His amendment basically helps those who should not be helped, who ought to be able to pay for their own expenses, and who can pay for them. With that, I suggest the absence of a quorum.

Mr. HATCH. I ask for the yeas and nays on the Wellstone amendment.

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

Mr. HATCH. Mr. President, I listened to our distinguished colleague from Minnesota. I have to say this bill takes care of people who cannot afford to pay their medical expenses. His amendment would allow those who can afford to pay for them a loophole to get out of paying for them. The poor really are taken care of in this bill because of the means test we have provided. But the wealthy, even though they have a tremendous capacity to earn money in the future, would be able to get out of all of the provisions of this bill under his amendment if they have medical expenses they can't afford to pay for at that particular time, but they clearly have the ability to pay for it in the future. This bill is to try to stop that kind of abuse. That is why I cannot support the amendment of the Senator. I know he is trying to do what is right. As a practicality, under bankruptcy law, it would be one of the worst things you could put in this bill. So this is a harmful and unnecessary amendment that would undermine the important reforms in the bankruptcy bill. Under this amendment, all the debtor who is fully able to repay his debts would have to do to get out of repaying them is to show he filed for bankruptcy because of medical expenses--somebody fully capable of paying his or her bills. S. 420 already allows for unlimited medical expenses to be deducted in determining the ability to pay, and its means test only applies to those who have income above the national median income and have the ability to pay at least 25 percent of their debts over 5 years. So the amendment of the distinguished Senator is ill-advised. It would be a travesty as part of this particular bill, where we are trying to solve problems and trying to get those who can pay to live up to the responsibilities and not use the bankruptcy laws as a methodology of getting out from under debts they are capable of paying. I hope our colleagues will vote against this amendment.

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

Mr. HATCH. Mr. President, do we have the yeas and nays on both amendments?

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet in executive session during the session of the Senate on Wednesday, March 7, 2001, at 9:30 a.m.