Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I rise to introduce today a bill to amend title 36 of the U.S. Code, to codify certain laws related to patriotic and national organizations that were enacted after the cut-off date for the title 36 codification recently enacted by Public Law 105-225. The bill makes technical corrections in title 36 and repeals obsolete and unnecessary provisions.

Mr. HATCH

Mr. HATCH. Mr. President, I would like to commend my colleague, the distinguished Senator from Connecticut, for his initiative on this particular amendment, as well as his contributions to this legislation as a whole. We have worked closely on several issues on this bankruptcy legislation, including providing for enhanced protection of domestic and child support payments in bankruptcy. And I have appreciated both his and his staff's dedication, sincerity, and cooperation on this important bankruptcy legislation. I am sure my colleague, the chairman of the subcommittee, Senator Grassley, feels the same way. Mr. President, this amendment is well intentioned. I fully support the policy of providing enhanced protections for educational savings accounts in bankruptcy. That is why we have agreed to this amendment. However, Senator Dodd is aware that I have some concerns with the amendment as currently drafted, because it may have the unintended consequence of encouraging and rewarding fraud and abuse in bankruptcy. I thank the Senator from Connecticut for agreeing to work with us on this amendment as this legislation progresses to ensure that it will do just what it is intended to do; that is, protect funds that have been set aside for the education of the child of the debtor. Some of my specific concerns include the fact that under the amendment as currently drafted the debtor will not have to disclose the existence of these accounts in any way in the bankruptcy case, or the schedules filed with the court because they are deemed ``not the property of the estate.'' The trustees will not even know these accounts exist, and they cannot be audited. I would like to see these accounts to be created exempt properties of the estate of the bankrupt similar to the treatment we have given pension plans and retirement savings accounts in this legislation. Moreover, we need to place some limits on these accounts to prevent them from becoming bankruptcy shelters for those seeking to abuse the bankruptcy system as a financial planning tool. Again, this could be done by placing limits similar to those we have imposed on individual retirement accounts and the way we have done that. Finally, we need to ensure that the funds protected in such accounts will actually be spent on the education of the bankrupt's child, not simply withdrawn after bankruptcy to be used as the bankruptcy wishes, leaving the future education of the child in jeopardy. I know that the Senator from Connecticut shares my concerns that this amendment not provide a new means for fraud and abuse. Again, I thank him and his staff for their willingness to work with us to address these concerns. Mr. GRASSLEY addressed the Chair.

Mr. HATCH. Mr. President, S. 1301, the Consumer Bankruptcy Reform Act of 1998, was reported out of the Judiciary Committee with strong bipartisan support and is one of the most important legislative efforts to reform the bankruptcy laws in 20 years. I would like to begin by commending my colleagues, Senators Grassley and Durbin, respectively, the chairman and ranking minority member of the Subcommittee on Administrative Oversight and the Courts, for their tireless efforts in crafting this much needed legislation. I also want to thank them for conducting numerous important hearings at the subcommittee level on the complex issue of bankruptcy reform. I particularly appreciate the dedication they have shown to making the passage of this bill an inclusive and bipartisan process. The compelling need for reform is underscored by the dramatic rise in bankruptcy filings each year. The Bankruptcy Code was liberalized back in 1978, and ever since that time, consumer bankruptcy filings have gone up at an unprecedented rate. Even during the economic boom years of 1994 to 1997, consumer bankruptcy filings almost doubled. Mr. President, the bankruptcy system was intended to provide a ``fresh start'' for those who need it. We need to preserve the bankruptcy system within limits to allow individuals to emerge from financial ruin, which may have been precipitated by unforeseen events such as medical problems or unemployment. What we don't need is to preserve those elements of the system that allow it to be abused, and that allow some debtors to use bankruptcy as a financial planning tool rather than as a last resort. I firmly believe that by allowing people to escape from their financial obligations, we are doing them a great disservice by not encouraging them to manage their finances and control their debt. It always has been my view that individuals should take personal responsibility for their debts, and repay them to the extent possible. Under the present system, it is too easy for debtors who have the ability to repay some of what they owe to file for Chapter 7 bankruptcy. Under Chapter 7, debtors can liquidate their assets and discharge all debt, while protecting certain assets from liquidation, irrespective of their income. Mr. President, I believe that the complete extinguishing of debt should be reserved for debtors who truly cannot repay their debts. According to the Wall Street Journal (Nov. 8, 1996) bankruptcy protection laws give an alarming number of ``obscure, but perfectly legal places for anyone to hide assets.'' For instance, one Virginia multimillionaire incurred massive debt, but under State law was entitled to keep certain household goods, farm equipment, and ``one horse.'' This particular individual opted to keep a $640,000 race horse, noting that the law only limits the number of horses, but not the individual value of a horse. While this is a particularly egregious example, these kinds of loopholes exist in the Bankruptcy Code, and people are using them to avoid paying their debts. As a result, the rest of us end up footing the bill through higher prices and higher interest rates. S. 1301 provides a remedy for these abuses by adopting a needs-based approach to bankruptcy reform. It is important to note that the administration has urged that bankruptcy law should ``discourage bad faith repeat filings and other attempts to abuse the privilege accorded by access to bankruptcy.'' This bipartisan legislation, created by Senators Grassley and Durbin, is carefully structured to achieve an appropriate balance between debtor and creditor rights. The legislation maintains the aspects of the bankruptcy system that serve those in need of a ``fresh start.'' At the same time, S. 1301 reforms current bankruptcy laws to prevent the system from being abused at the expense of all Americans. The impact of this important legislation will not only be to curb the rampant number of frivolous bankruptcy filings, but also to give a boost to our economy. Mr. President, again I would like to applaud the bipartisan efforts of my colleagues who have made S. 1301 a broadly supported bill.

Mr. HATCH. As I have indicated to my colleague, I will, as the chairman of the Judiciary Committee, review this matter early next year and work with my colleague from Iowa, Senator Grassley, in a good-faith effort to consider this issue early next year.

Mr. HATCH. I agree with the view that there appears to be a workload problem facing a number of district courts in Florida and some other areas. The Senate Judiciary Committee intends to act to review the matter and where necessary provide the additional judicial resources to those jurisdictions in need, if warranted and appropriate.

Mr. HATCH. Mr. President, I am pleased to engage in a discussion with the distinguished Senator from Florida on the substance of this matter.

Mr. HATCH. Mr. President, let me take a moment to speak about an amendment that has not been discussed in the last several days. Under the unanimous-consent agreement, I am permitted and had planned to offer a scaled-down version of broadly supported and bipartisan patent reform legislation, which was favorably reported to the Senate by the Judiciary Committee more than a year ago. Nevertheless, having spoken with the majority leader, and in the interest of expediting activity on pending Senate business, I have agreed to withhold my amendment. But I want to take a moment to clarify why I believe this amendment is so important. In short, the provisions of this amendment represent the most important and most comprehensive reforms to our nation's patent system in nearly half a century. In the last 50 years, our nation has witnessed an explosion of technology growth and a tremendous expansion of the global market for American intellectual property. Yet our patent laws have remained largely unchanged. My bill would effect those changes that are necessary to bring our patent system up to speed with the growing demands of the global economy, to preserve American competitiveness into the 21st century, and to ensure adequate protection for American innovators, both at home and abroad. In all, there have been nine days of hearings and 78 witnesses who have testified in the House and Senate on the provisions of this legislation. Seventeen of those witnesses appeared before the Senate Judiciary Committee. In addition, I have engaged in endless negotiations to address concerns regarding the effect of the bill on small businesses and independent inventors. The result of that process was a comprehensive package of amendments that was endorsed by the Judiciary Committee, including several outspoken opponents of the original bill, in an overwhelming bipartisan 17-1 vote last year. Since then, I have sought a vote on the Senate floor for this legislation, thus far without success. The failure to bring this bill to a vote in the Senate has largely been the result of the opposition of a very few Senators who have objected to even its consideration by the full Senate. Over the past year, I have made numerous additional changes to the bill in an attempt to address their concerns. As a result of those changes, the bill now enjoys even broader support, ranging from the smallest of American entrepreneurs and innovators to Fortune 100 companies. It is endorsed by the small business community, as well as by the experts on the subject, including 5 of the past 6 commissioners of the Patent and Trademark Office and thousands of patent practitioners and patent owners. Unfortunately, despite my efforts, and despite this broad support, a vocal minority, which apparently opposes any patent reform, continues to object this bill. Repeated invitations to sit down with them to fashion a reasonable accommodation have been rejected. Mr. President, at some point, the interests of inventors, the continued strength of our intellectual property base, consumers, and an overwhelming majority of the Senate must prevail over the interests of the few who would oppose any patent reform. I believe that this legislation must be debated and real patent reforms enacted if America is to retain its competitive edge into the next century. In acceding to the majority leader's request to refrain from exercising my rights in offering this bill as an amendment to the bankruptcy bill, I am relying on his assurance that this patent reform legislation will be brought up for floor consideration and a vote early next year, with the expectation being that we complete action on the measure prior to March 1999. I would reiterate my willingness and desire to work with my colleagues to resolve any outstanding concerns, and I hope any Senator who still has genuine concerns with this bill will take me up on my offer. I look forward to working with my colleagues and to seeing reasonable patent reforms enacted by the Senate next year. Drunk-Driving Victims

Mr. HATCH

Mr. HATCH. Mr. President, the Committee on Veterans' Affairs would like to request unanimous consent to hold a hearing on quality of care in the Department of Veterans Affairs health care system. The hearing will take place on Tuesday, September 22, 1998, at 10:00 a.m., in room 418 of the Russell Senate Office Building.

Mr. HATCH. Mr. President, I ask unanimous consent that the Subcommittee on Antitrust, Business Rights, and Competition, of the Senate Judiciary Committee, be authorized to meet during the session of the Senate on Tuesday, September 22, 1998, at 1 p.m. to hold a hearing in room 226, Senate Dirksen Office Building, on: ``The BP/Amoco Merger: A Competitive Review.''

Mr. HATCH. Mr. President, I ask unanimous consent that the full Committee on Environment and Public Works be granted permission to conduct a hearing on S. 2470, a bill to direct the Secretary of the Interior to make technical corrections to a map relating to the Coastal Barrier Resources System, Tuesday, September 22, 9:00 a.m., Hearing Room (SD-406).

Mr. HATCH. Mr. President, I ask unanimous consent that the Senate Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, September 22, 1998, at 10:00 am on nominations of Amtrak Reform Board nominees.

Mr. HATCH. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet on Tuesday, September 22, 1998, at 10:00 a.m. in open session, to consider the nominations of Richard J. Danzig to be Secretary of the Navy; Bernard D. Rostker to be Under Secretary of the Army; Stephen W. Preston to be General Counsel of the Department of the Navy; Herbert L. Buchanan III to be Assistant Secretary of the Navy for Research, Development and Acquisition; and Jeh C. Johnson to be General Counsel of the Department of the Air Force.

Mr. HATCH

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

Mr. HATCH. Mr. President, I always enjoy listening to Members of Congress talk about how the minimum wage is going to benefit this society as we raise the minimum wage. Some of us have worked for the minimum wage in our lifetimes. We know what it is like to work for the minimum wage. We also know what it is like to lose your job because you raise the minimum wage too much, and small business people who do not make all that much money have to either reduce employment or get out of it. That is what happens. The Senator from Minnesota, the Senator from Illinois, and the Senator from Massachusetts I think are looking at the wrong numbers. They should be looking at employment--not unemployment. They should be comparing it to what might have occurred without the mandatory minimum wage increases. There is no question that we have a good economy right now. A rising tide lifts all boats, thank goodness. I notice that my colleagues are not discussing the plunging youth employment rates following the minimum wage increases in 1978 or 1989. The 1996 legislation that raised the minimum wage included a package of tax cuts. To some extent, of course, that helped mitigate the impact. You would think that by increasing the minimum wage we were going to have an increase in jobs. Really, I don't know any responsible economist who makes that argument. The fact remains, however, that unskilled workers are not helped, they are often hurt, by increases in the minimum wage, particularly in areas where the market wage for entry-level workers is lower. You are looking at one of the main sponsors of the child care development block grant. I wonder how many children are not being cared for because we keep increasing the minimum wage and freezing people out of child care. Yes, there are a lot of issues involved here. Wouldn't it be better to cut Americans taxes? We could give everyone more money in their paychecks without jeopardizing jobs and at the same time without hurting small businesses or without triggering price increases for consumers. I think instead of having minimum wages we ought to have minimum taxes. But where do we get the help from the other side on that? We don't get much of it. If you cut taxes, you actually give people an increase in wages, because they actually take more money home. Frankly, that is what we ought to be interested in doing to help these people along the way. It would help small business people, where most of the jobs are created. Better than 50 percent of all jobs are created by small business people, who would be the most severely impacted and who are the most severely impacted by increases in the minimum wage, other than those who never get a chance to enter into the workforce as a result of increases in the minimum wage. Let's be honest about it. This is not the simple little economic interest, as some on the other side have been saying. There is a lot involved here. We ought to be reducing taxes, not increasing minimum wages.

Mr. HATCH. Mr. President, I have very much enjoyed listening to my colleague once again on this very important issue, which seems to come back on an annual basis. The ink is barely dry on the announcement for last year's increase in the minimum wage and the Senator from Massachusetts is back asking for another serious, mandatory wage hike. The distinguished Senator from Massachusetts, and those who support this concept, believes that an increase in the minimum wage is the quick, painless way to help the disadvantaged in our society. They believe that a minimum wage hike is absolutely costless, and they believe that it has no adverse impact whatsoever. I can only wonder, then, why they have not offered an amendment raising the minimum wage to $15 an hour or $20 or $25 or $30, because if it has no impact and it really is going to benefit people, why not do that. In fact, if raising Senators' salaries $1.50 an hour over the last year is right, why not give everybody whatever the amount of money the Senators make-- $100,000, $130,000, or whatever it is--to even things up and make everybody equal in our society? I am sure the Senator is not arguing that so I do not mean to raise that type of ridiculous argument. Frankly, if raising the minimum wage was all it took to raise people out of poverty--or to make life better for the working poor--I would vote for it. But, I believe the proponents of this amendment and of the underlying concept have greatly oversimplified the issue. And, I believe they know they have oversimplified it. employment impact I will admit to my colleagues that the most elusive aspect of the economic debate on the minimum wage is an estimate of its impact on employment. Study after study has been done to quantify the employment effects of an increase in the wage floor. And, economists have disagreed about the severity of the employment impact. There is, however, overwhelming consensus that there is indeed an adverse effect on employment. Three-quarters of the 22,000 members of the American Economic Association agree that minimum wage hikes have a disemployment effect that stifles employment opportunities for low- skilled workers. In 1981, the Minimum Wage Study Commission, which was formed under the Carter administration, concluded that for every 10 percent increase in the minimum wage, the disemployment effect was between 100,000 to 300,000 jobs. Disemployment means jobs not only eliminated, but also jobs that are never created in the first place. For example, if a retail store planned to hire five additional workers and, as a result of the higher labor costs, only hired two, the disemployment effect is three jobs. For the sake of argument, let's take the more conservative boundary of this range of impact. The Kennedy-Wellstone amendment proposes a 19.4 percent increase in the minimum wage over two years. That means that, using the most conservative multiplier, nearly 200,000 entry level jobs would be lost. Now, Mr. President, let's line up 10 applicants for entry-level jobs. Which two of them are most likely to lose out at this higher minimum wage level? The suburban teenager working to pay the insurance on his car? The spouse working to put a little extra money into the household budget? The senior citizen who is supplementing his retirement income and trying to stay active? Are they the people who would lose out? Or, would it be the new immigrant still learning a new language? Perhaps the young woman just out of a drug rehabilitation program, or a young man recently paroled from prison. Perhaps those who will miss out are high school drop outs. Michgan State University economist David Neumark suggests that the employment effects of a higher minimum wage are actually most acute on certain subgroups. In his paper ``The Effects of Minimum Wages on Teenage Employment, Enrollment, and Idleness,'' Neumark finds that higher minimum wages act as an incentive for teenagers to seek employment and that those with more experience and greater skills crowd out those with fewer skills. Those who are displaced find themselves ``idle,'' i.e., neither enrolled in school nor employed. I certainly do not consider this a positive effect of the minimum wage increase. But, it gets worse. The probability that a black or Hispanic teenager will be displaced is five times greater than for the general population of teenagers. But, perhaps the perverse impact of minimum wage increases is summed up best by two of President Clinton's own appointees to the Federal Reserve Board, William Baumol and Alan Blinder: ``The primary consequence of the minimum wage law is not an increase in the income of the least skilled workers, but a restriction on their employment opportunities.'' [Baumol and Blinder, cited in Glassman, Washington Post, 4/9/96] This is pretty serious stuff. The ones who really get hurt are the ones who need the help the most. The long and the short of it is simply that you cannot mandate an increase in the price of entry level or unskilled labor--which is exactly what the statutory minimum wage is--without reducing the demand for that labor. The term ``labor costs'' is complicated. It includes lots of things: wages, insurance, FICA taxes, unemployment taxes, training, uniforms or other expenses. But, for now, let's just say it's wages and FICA taxes. Some may be tempted to say that another dollar an hour is no big deal for an employer. Well, let's take a hypothetical employer in my home state of Utah. Let's see how big of a deal it is. Is it only $1 for the ABC Company in Salt Lake City, UT? ``Hey, it's only $1, what's the big deal?'' they say. Assume you are a business owner with 25 part-time employees who work 30 hours a week. How much would a minimum wage hike cost you? You fill in the blanks. First year, 50 cents times 25 employees times 30 hours per week times 52 weeks per year equals $19,500 in the first year. The second year, $1 times 25 employees time 30 hours per week times 52 weeks per year equals $39,000 in the second year. Add in the additional FICA and other taxes--I'll bet you forgot about those--that is $5,265, just use 9 percent, if you will, to keep it easy. And the grand total is $63,765. Think about that. This is the average small business. The average small business owner takes home less than $25,000 per year. So where is the money going to come from? Where is the money going to come from? If you stop and think about it, under the Kennedy-Wellstone amendment, the 2-year increase in labor costs would be more than $63,000. Actually the figure is $63,765. That is 2\1/2\ times what a typical small business owner takes home. The median take-home for small business owners, as I have said, is $25,000. That's based on the National Federation of Independent Businesses, the representative of the small business people in this country, and that is using CPS data. Exactly what would you do, Mr. President, if you were this small business owner faced with a dollar per hour mandatory increase in your labor costs? The answer should be obvious. As one small business owner noted: Unfortunately, many entry-level jobs are being phased out as employment costs grow faster than productivity. In that situation, employers are pressured to replace marginal employees with self-service or automation or to eliminate the service altogether. . . . I should mention that the small business owner I just cited is former Senator George McGovern. His eyes were opened once he left the distinguished U.S. Senate and went into a small business himself and found out it is pretty tough to be in business. There are a lot of demands on you. That was Senator George McGovern, who I believe voted for every minimum wage increase the whole time he was in the U.S. Senate. I give him credit for being willing to call it the way it is. Harriet F. Cane, owner of the Sweet Life restaurant in Marietta, Georgia, after the last minimum wage increase reports that she went from 16 employees to 9. She voiced her frustration in the Wall Street Journal: Money for minimum wage increases has to come from somewhere. . . . If you pass another increase in the minimum wage, you can tell the teenagers and working mothers I employ why they no longer have jobs. Then try asking for their votes. And, I also share Senator McGovern's concerns about one other aspect of the minimum wage. He goes on to ask: When these jobs disappear, where will young people and those with minimal skills get a start in learning the ``invisible curriculum'' we all learn on the jobs? Senator McGovern is right. Entry level jobs are only the first run of the ladder. How many of us are today doing the same job we did as teenagers? Quite obviously none of us in Congress. And, I would venture very few outside of Congress. Ed Rensi started in 1965 in Columbus, Ohio, at 85 cents an hour. Today, he's the president and CEO of McDonald's. [Shlaes, WSJ, 8/15/95] Just think about that. James Glassman, writing in the Washington Post, quotes this finding by David Macpherson, professor of economics at Florida State University: ``A year after having been observed working at the minimum wage of $4.25, the average wage for these workers was $6.08 an hour.'' [Glassman, Washington Post; 4/9/96] That is a $1.83 increase--43 percent. Amity Shales, writing in the Wall Street Journal, cites a 1992 study in the Industrial Relations and Labor Review that stated that 63 percent of minimum wage workers earn higher wages within 12 months and that the increases average 20 percent. [Shlaes, WSJ, 8/15/95] So, let me get the proponents' argument straight: Someone who has a minimum wage job is going to be better off with a 19.4 percent increase under the Kennedy-Wellstone amendment--if he or she doesn't lose his job or have his hours reduced--than under current law where there is a greater probability of keeping the job and getting a 20 percent or greater raise in their wages? I find this logic terribly twisted. It is a great myth that everyone currently earning the minimum wage gets `stuck'' in a minimum wage job. The fact is that people cycle through these jobs regularly. They get raises; they get more education; they learn a new skill; they prove themselves reliable; they move on and up. And, I'll say one more thing about jobs at the bottom. I am proud that I worked my way through school. I even worked as a janitor. Some of my colleagues might poo-poo that experience. Well, I am proud of it. Not only was I a darn good janitor, but I met good, decent people doing it as well, and I have to tell you I made 65 cents an hour. I like to think maybe I have progressed in life and that little bit of training I got as a janitor helped me to appreciate what working is. It helped me to put myself through school. It helped me to have the dignity that comes from working, the discipline that I learned from having to meet hours, meet work schedules, and meet work expectations. All of that was pretty darned important. One thing I learned was that there is no such thing as a menial job-- only people who do not understand the importance of any job performed well. And maybe that's one thing wrong with our society today--but that's a subject for another day. Winners and Losers First jobs are for learning as well as earning. If we continue to raise the bar for entry, how many adults will we have who have never worked? How many teenagers and young adults who need a chance are not going to get one? According to the conservative estimate, at least two out of every 10. My colleagues on the other side may not think that is too high a price to pay in order to benefit the other eight. But, considering the evidence that hiking the minimum wage is a lousy way to help the working poor, I can't agree--I cannot agree, to make it even more clear. It is true that some workers will reap the benefit of the increase. Some workers will get a $40 a week raise. But, by mandating wage increases, two out of 10 entry-level job seekers won't have a job at all--very likely those who need a chance the most. Senator Kennedy has gone to great lengths to disassociate this minimum wage increase from organized labor's legislative wish list. He has tried to convince us that this is a women's issue and a children's issue. He has tried to tell us that we should enact this 19.4 percent increase in order to lift the poor and working poor out of poverty. The distinguished Senator from Massachusetts is attempting to give this perennially bad idea a Cinderella-like transformation. I must point out to my friend and colleague that there is no way this pumpkin is going to turn into a handsome coach. Let's look at the demographics of who will be helped and who will be hurt by the loss of job opportunities. There are twice as many minimum wage earners in families earning more than $25,000 per year--that is 51 percent of them--than in families earning less than $12,500 per year. That is 25 percent of them. And, one of five lives in a family earning $50,000 or more. [Deavers; Employment Policy Foundation, 3/5/98 briefing, p. 21] Nearly 43 percent of all minimum wage earners are teenagers and young adults living at home; 16.5 percent are spouses of other earners; 22.5 percent are not heads of household. Only about 20 percent are heads of household supporting dependents. In Utah, the distribution is even more lopsided. Who really benefits from the minimum wage hike in Utah? The average family income of Utah employees who will benefit from President Clinton's proposed minimum wage hike is $37,816. According to the U.S. Census Bureau data, fully 89 percent of Utah employees whose wages will be increased by President Clinton's proposed minimum wage hike either live with their parents or another relative, live alone, or have a working spouse. Just 11 percent of them are sole earners in families with children, and each of these sole earners has access to supplemental income through the earned income tax credit. As you can see, Mr. President, only 11 percent are single parent with kids or single earner in couple with kids. Stop and think about it. That is important to look at. Our State is maybe a little bit better than the national average where it is 22 percent. That 11 percent is doubled to 22 percent. But it still means that 78 percent of the people are those who need that entry-level job, that first job, that opportunity of starting on the ladder climbing higher. Of course, we should be concerned that certain families are struggling with minimum wage incomes. There should be no insinuation that those of us who oppose this amendment do not care about these struggling families. minimum wages can't fight poverty But, we need to understand the limits of a minimum wage increase to reach these families with any tangible benefits. The minimum wage increase cannot be targeted only to certain workers. We cannot say that Mrs. Jones who is trying to raise two kids on the minimum wage gets the increase, but Mrs. Brown who is working to supplement her husband's earnings does not. The reality is that those who are not poor are more likely to get raises and those whose skills do not justify the higher wage will be out of jobs. Study after study has concluded that raising the minimum wage is an ineffective means of helping those who are disadvantaged. David Neumark of Michigan State and William Wascher of the Federal Reserve Board concluded that: On balance, we find no compelling evidence supporting the view that minimum wages help in the fight against poverty. Rather, because not only the wage gains but the disemployment effects of minimum wage increases are concentrated among low- income families, the various trade-offs created by minimum wage increases more closely resemble income redistribution among low-income families than income redistribution from high- to low-income families. Given these findings, it is difficult to make a distributional or equity argument for minimum wages. [Neumark & Wascher, ``Do Minimum Wages Fight Poverty?'' NBER Paper, August 1997]. Peter Brandon, of the Institute for Research on Poverty at the University of Wisconsin has found that ``welfare mothers in states that raised their minimum wage remained on public assistance 44 percent longer than their peers in states where the minimum wage remained unchanged.'' [Brandon, cited in Understanding the Minimum Wage, 1995] A conference paper prepared by Robert V. Burkhauser (Syracuse University), Kenneth A. Crouch (University of Connecticut), and David C. Wittenburg (The Lewin Group) reports the results of a simulation model on the effects of the 1990-1991 minimum wage increase. After holding the employment variable constant (which was not the actual effect), ``only 19.3 percent of the increase in the wage bill caused by that minimum wage increase went to poor families. This is less than the 22 percent of workers whose wages were increased by the minimum wage increase who live in poor families.'' [Burkhauser, Crouch, Wittenburg, ``The Behavioral and Redistributional Consequences of Minimum Wage Hikes: Evidence from the 1990s;'' AEI Conference, May 4, 1998, p. 5] Yes, Mr. President, raising the minimum wage sounds like an easy way to help those who are working but still struggling to find their way out of poverty. It is no wonder that, lacking the facts, the American people would support this. But, upon examination, using minimum wage increases to alleviate poverty is like trying to shoot a fly off an elephant--and we are not even aiming at the fly but at the entire elephant. The amendment proposed by Senator Kennedy and Senator Wellstone is not directed to workers who are poor, but rather at the entire universe of minimum wage workers. And, even former Secretary of Labor Robert Reich has acknowledged that most minimum wage workers are not poor. conclusion The idea that there is no adverse impact from a mandatory increase in the cost of hiring workers is delusional. But, what is worse, is that this adverse impact is for nothing. And, those very individuals who need entry level jobs the most are the ones most likely to be displaced by the increased competition for those jobs. This proposal, like the emperor who has no clothes, is specious--it is still specious, and I haven't even touched on inflationary or geographic inequities. I would need another hour to do that. It is disappointing that some of my colleagues on the other side of the aisle remain so enamored with this discredited dinosaur of a labor policy. Even the Democratic Leadership Council, citing findings of the Progressive Policy Institute, has repudiated minimum wage hikes, correctly claiming that they are counterproductive. Hiking the minimum wage is not the only way to assist working Americans and those struggling to make ends meet. Let's work on some of those ideas. Personally, I would like to raise people's paychecks by cutting their taxes. That is probably a far better way of doing it than doing it this way. That would increase their paychecks without the risk they might lose their jobs, which is a big risk that will happen with this giant albatross. I think we can work together on education. We passed the A+ Education bill earlier this year with bipartisan support. Education--or the lack of it--is the single biggest factor in determining an individual's earning capacity. Let's tackle illiteracy and other root causes of low-skills and low- earnings potential. But, for Heaven's sake, let's recognize the minimum wage as the mirage it really is. I urge my colleagues to defeat the Kennedy-Wellstone amendment. It deserves to be defeated, and it is time we start approaching these problems in a better way, in a way that really will help people, especially those who are at the lowest level of poverty in this country. I yield the floor.

Mr. HATCH. I yield 12 minutes to the distinguished Senator from Wyoming.

Mr. HATCH. Mr. President I yield 10 minutes to the distinguished Senator from Vermont.

Mr. HATCH. Mr. President, I reserve the remainder of our time. Mr. DURBIN addressed the Chair.

Mr. HATCH. I yield 3 minutes to the distinguished Senator from Iowa.

Mr. HATCH

Mr. HATCH. As you can see--I hope we can vote down this amendment--a lot of hard work has been put into this. Mr. President, I move to table and ask for the yeas and nays.

Mr. HATCH. I oppose the amendment. Under the provision, in any 707(b) case brought by a creditor, the court would consider whether the creditor had used good faith in the extension of credit. This determination necessarily would involve looking at underwriting decisions. The bankruptcy court shall not be asked to interfere in the complicated process of making credit underwriting decisions. This is particularly true when current underwriting practices are quite successful, with an average of 95 to 97 percent of consumer credit extended today repaid on time. Mr. President, this amendment permits new uncontrolled and virtually unlimited inquiries into creditor conduct. It encourages complicated and involved discovery and burdensome court proceedings. It introduces unwarranted defenses to strong enforcement of the needs-based provisions of S. 1301, this bill. The amendment permits a debtor to avoid repaying all his creditors by attacking the good faith of any creditor who brings a motion to enforce the needs-based provisions. And the amendment has no standard for what is good faith. So this is a killer amendment. Moreover, S. 1301 already contains numerous provisions to make sure creditors are acting appropriately. As I have noted in my previous remarks, this is a well balanced bill that is a combination of months and months of deliberations and cooperation between Senators Grassley and Durbin and other members of the Senate Judiciary Committee. They, along with other members of the Judiciary Committee, have done a fine job in ensuring that this bill is a fair bill. This balanced and broadly supported legislation not only curbs abuses of the bankruptcy system but also provides unprecedented consumer protections. Let me begin by saying being a creditor and winding up in bankruptcy court to collect unpaid bills is not a desirable situation for any creditor. Creditors who deal with debtors in bankruptcy, even in the best of circumstances, are likely to recover only pennies on every dollar they are owed. In any event, S. 1301 already contains nine provisions with rather severe penalties to creditors for improper behavior. We have given due consideration to these concerns. First, if a creditor brings a motion to dismiss a chapter 7 case and fails, the debtor gets attorney's fees and costs if the creditor was not substantially justified or if the creditor filed the motion in an effort to coerce the debtor. Second, if a creditor unreasonably refuses a debtor's offer to work out a repayment schedule, the creditor is barred from asserting any claim of nondischargeability or any claim of denial of discharge. Third, if a creditor willfully violates the automatic stay, the creditor pays the debtor's attorney's fees, actual damages, and punitive damages, if appropriate. We have really gone a long way here. Fourth, if a creditor fails to comply with the requirements for a reaffirmation agreement, the court can order heavy sanctions and penalties. Fifth, the legislation will make it much harder for creditors to get determinations of nondischargeability. Only false representations by a debtor that are considered ``material'' will be actionable. If a creditor makes an unsuccessful claim of nondischargeability or denial of discharge, the creditor is liable for the debtor's attorney's fees, costs, and punitive damages, if the creditor's claim is not substantially justified. The reverse is not true. If the creditor wins the nondischargeability proceeding, the debtor does not have to pay the creditor's attorney's fees. So it isn't reversible. Sixth, if a creditor willfully violates the postdischarge injunction, the creditor is liable for minimum damages of $5,000 and attorney's fees and costs, with the possibility of treble damages. Seventh, if a creditor fails to comply with Truth in Lending Act requirements for certain mortgage loans, the creditor's claim will not be recognized or paid in bankruptcy. For instance, if a creditor does not provide for certain disclosures, or fails to meet the requirements of the act, even if it is a technical violation, the creditor's claim will be denied in bankruptcy. In other words, the debt, both principal and interest, will be completely forgiven. These new penalties are in addition to those penalties already present in the Truth in Lending Act itself. Eighth, if a creditor willfully fails to credit payments to a bankruptcy plan, the creditor is liable for minimum damages of $5,000 and attorney's fees and costs, with the possibility of treble damages. And ninth, if a creditor's proof of claim is disallowed or reduced by 21 percent or more, the debtor gets attorney's fees and costs, and so forth.

Mr. HATCH

Mr. HATCH. Mr. President, yesterday, my colleague Senator Grassley introduced Senate Joint Resolution 56, a bill cosponsored by Senator Kyl and me that expresses the sense of Congress in opposing efforts in various States to legalize marijuana and other Schedule I drugs for so- called medical use. I am proud to be a cosponsor of this bill, and I want everyone to understand that current drug laws should not be circumvented by allowing illegal harmful drugs to be introduced freely in our society. Last week, an identical measure sponsored by Congressman McCollum passed in the House of Representatives by a vote of 310 to 93. Mr. President, proponents of legalization argue that marijuana and other drugs are needed by those living with pain and disease. They stress that these drugs improve the quality of life and should not be denied to those suffering. I understand their argument that we need to be compassionate to those that are suffering. My heart goes out to those people living with disease and to the families that care for them. Nevertheless, those arguments are flawed, and we cannot allow this legalization effort to contravene our Federal drug laws. In 1996, the Judiciary Committee held a hearing and examined the drug legalization initiatives in California and Arizona. We heard testimony from many of those involved in the war on drugs including General Barry R. McCaffrey, Director, Office of National Drug Control Policy, and Mr. Thomas A. Constantine, Administrator, Drug Enforcement Administration. As a result of chairing that hearing, I learned that there is overwhelming evidence showing that marijuana is not a medicine and that its use by those suffering from cancer and other diseases is contradicted by the many side effects of the drug use. The testimony given at that hearing proved to me that the growing legalization movement in our States is harmful to the very people they are proposing to help. As many of you know, I have not been afraid to speak out and to urge that this administration do more to stem the rising tide against teenage drug abuse in our country. Illegal drug use by teenagers is one of the most serious domestic problems facing our Nation today: in my mind, it may be the most crucial issue for our Nation's ability to craft productive and law-abiding citizens. The worsening problem of drug abuse among our children and teens wreaks havoc on the lives and potential of thousands of young people each year. Legalization movements send a confusing message to the Nation's youth and threaten to increase the already alarming rise in drug use among teenagers. If we do not act decisively, we will pay a heavy price. For example, the results of the latest National Household Survey on Drug Abuse found that drug use among our children is climbing at an alarming rate. The number of children ages 12 to 17 using illicit drugs has more than doubled since 1992. Between 1996 and 1997 alone, drug use among 12- and 13-year-olds increased almost 75 percent. The abuse of marijuana, a drug many widely consider a gateway drug to more serious substance abuse, more than doubled among children between 1992 and 1997, increasing 75 percent between 1996 and 1997 alone. Not surprisingly, the rate of minors first trying heroin is at its highest level in 30 years, and the rate of minors trying cocaine and hallucinogens has more than doubled in the 90's. Although deeply troubling, this disturbing trend should come as no surprise to this administration. I warned this administration as early as 1993 that its failure to take the issue seriously and take strong action to fight drug abuse would prove disastrous to our children. Unfortunately, the evidence is now in and my predictions were all too prophetic to the great detriment of our children and future generations. Our country's laws prohibiting narcotic and dangerous drug use are not arbitrary. These laws are designed to protect our children and to protect mature adults from harmful chemicals. These laws should be fully enforced because they help prevent drug experimentation and drug addiction. Promoting the use of marijuana for so-called medical purposes is nothing more than a sham effort to legalize drugs through the back door. If we do not act decisively, we will pay a heavy price. In the words of General McCaffrey, our Drug Czar, ``[additive drugs were criminalized because they are harmful; they are not harmful because they were criminalized.]'' The more a product is available and legitimized, the greater will be its use. If drugs were legalized in the U.S., the cost to the individual and society would grow astronomically. The Federal Food, Drug, and Cosmetic Act is the key law by which legitimate drug products are evaluated and regulated in this country. A central precept of this law is that all drugs be proven safe and effective under their labeled indications. Proponents of medicinal uses of marijuana should not be exempt from this basic public health requirement. Anecdotal reports that marijuana may be beneficial should not cloud the fact that only controlled clinical trials can meet the exacting licensure requirements of the Federal Food, Drug, and Cosmetic Act. If there is, in fact, a medical benefit from marijuana then it is imperative that the necessary scientific studies be conducted to assess and confirm such benefit. To date, proponents of medical uses of marijuana have been unwilling or unable to come through the front door of the FDA with evidence of its safety and efficacy. The pharmacological armamentarium contains many proven drugs to treat pain. It is poor public policy to acquiesce in back door mechanisms that permit unsafe and unproven products like marijuana to reach the bedsides of American patients. I believe this to be an important resolution and urge my colleagues to join me and Senators Grassley and Kyl in sending a clear message to those who advocate the legalization of marijuana and other Schedule I drugs for medical use in our States. I ask for their support when this joint resolution comes to the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the only amendments in order to S. 1645, the child custody bill, other than the substitute, be the previously filed amendments which are at the desk and limited to the following: Senator Feinstein: to exempt adult family members of a minor from prosecution; Senator Boxer: to allow consent of a parent after a minor's abortion; Senator Kennedy: to require deference to State authorities; Senator Kennedy: to provide an exception for State laws that have been enjoined or held unconstitutional or that State enforcement authorities have declined to enforce; Senator Harkin: to provide an exception in the case of rape or incest; Senator Leahy: to provide a complete substitute, which makes the offense the use of force or threats of force to transport a minor; And a relevant amendment by Senator Abraham. I further ask unanimous consent that there be no other amendments in order, including second degrees; that following the disposition of the above-listed amendments, the bill be read a third time and the Senate proceed to vote on passage of the bill, with no intervening action or debate.

Mr. HATCH

Mr. HATCH. Mr. President, I move to reconsider the vote by which the motion was agreed to.

Mr. HATCH. I move to table the amendment and ask for the yeas and nays.