Jeff Sessions

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I ask unanimous consent that with respect to S. 420 there be debate only until 10:30 a.m.

Mr. SESSIONS. I think it hinges on the same problem. If we don't have on overall agreement, there might be more votes.

Mr. SESSIONS. Mr. President, I ask unanimous consent that a vote occur in relation to the Kerry amendment No. 26 relative to small business at 3:30 p.m. today and that no second-degree amendments or further debate be in order prior to the vote. Finally, I ask consent that there be 10 minutes equally divided in the usual form prior to the vote in relation to the Kerry amendment.

Mr. SESSIONS. Mr. President, I send to the desk an amendment to establish a procedure to safeguard the surpluses of the Social Security and Medicare hospital insurance trust fund.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. SESSIONS. I object.

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

Mr. SESSIONS

Mr. SESSIONS. Mr. President, on behalf of the leader, I announce that the Senate will immediately resume consideration of S. 420, the Bankruptcy Reform Act. The Durbin amendment regarding lending practices is the pending amendment. Further amendments will be offered during today's session, and therefore votes will occur. Members with amendments are again urged to work with the bill managers in an effort to finish the bill in a timely manner. Senators will be notified as soon as votes are scheduled.

Mr. SESSIONS

Mr. SESSIONS. In my capacity as a Senator from the State of Alabama, I ask unanimous consent that the Senate now stand in adjournment under the previous order.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I would like to proceed on the bankruptcy bill in reference to the amendment offered by the Senator from Minnesota, Mr. Wellstone. I know Senator Wellstone opposes this bill for any number of reasons, but I think we ought to analyze carefully what he is saying to consider actually what the impact of the amendment he offered would be. I think when we do that, we find it would be a curious thing for him to offer and certainly would not be good public policy. Basically, the Senator's amendment would say that if a person files bankruptcy because of health care expenses--I believe the words are ``as a result of medical losses or expenses''--he would then be exempted from the new bankruptcy law. I think that is an odd thing to say, and I think it focused more of his concern about people filing bankruptcy as a result of medical expenses than the remedy that he would effect by the amendment. We know that a number of people do get in financial trouble as a result of medical expenses. But, first, I say without fear of contradiction, those medical expenses will not impact a person in a way that would require him to pay any of those back, unless he or she--the person filing bankruptcy--made below the median income. Probably 80 percent, I would guesstimate, of the people who file personal bankruptcy make below the median income. So they would not be impacted by the means test requirement that they pay back some of the medical expenses that they have incurred. Also, I think we ought to ask ourselves what expenses is he or she not being required to pay back. Hospital expenses? Now, let's say a person makes $150,000 a year--and people such as that are filing bankruptcy today. They are quite capable of paying back a substantial portion of their debts--maybe all of them. But they can file chapter 7 and wipe out all of their debts, with very little fear of any alternative consequences occurring to them. It is done every day. As I read this amendment, it basically says that hospitals are the big losers. You don't have to pay them back. If you owe hospitals a big debt, and you are making above the median income, and you could easily pay 25 percent of that back to the hospital, and a judge would require you to do so, Senator Wellstone says, no, you can't be made to pay your hospital back. But if you owe some disreputable person--say, your liquor distributor, or somebody who has done those kinds of things-- under his amendment they would all be required to be paid back. Just not the hospitals. I have visited 20 hospitals this year in Alabama. I have talked to administrators, nurses, and doctors. They are having a tough time with their budgets. I am concerned about them. They do not believe in having people try to pay debts. They write off debts every day that people can't pay. It is one of the things they share with me--that bankrupts and others are just not able to pay their debts and they write them off. The Federal Government has some form to help to compensate for that. Probably not enough. At any rate, the question simply is, Why should a person, if he is capable of paying back some debts, not pay his community hospital? It was a hospital that served him, presumably, or his family, and took care of their health needs; it exists to serve other people in the community--a good, noble, valuable institution. Why should that be the institution that doesn't get paid, when you can pay certain debts? I think the amendment is rather odd, and it makes it less likely that there would be good health care in the community. There is a concern about, well, if you got continuing medical expenses, and this is going to leave you in debt, well, the way we wrote the bill--and we thought about this very subject--what about a person who had substantial medical expenses on a recurring basis? How should that factor into your median income or special circumstances? We created two situations that deal with that. If a family of four has a median income of around $50,000, and if they had $2,000 of recurring medical expenses for some reason and had to pay it every month, under IRS standards, which we adopted in this bill, that $2,000 adds on to the median income. The median income would not be $50,000, it would be $2,000 a month--$24,000 more, $74,000. If the income then was $70,000, the family could wipe out all debts, hospital and otherwise, without any problem because the median income calculated under IRS standards would not prevent them from going straight into chapter 7 and wiping out the debt, rather than being put in chapter 13 where the judge will say you pay back some of the debt as you are able over a period of years. We also have a provision referred to as ``special circumstances.'' A bankruptcy judge can find special medical hardship or circumstances and exempt it from the bankruptcy. I do not think this is particularly good. The Senator says just because your bankruptcy filing was a result of medical expenses, you should be exempted from all the law. What does that do? That eliminates the great benefits we placed in this bill for women and children who, under current law, rank down in the list of priority payments of limited debts from the bankruptcy estate. Under this new bill, they go to No. 1. If the bankruptcy was the result of medical expenses and the bankrupt individual could pay his alimony and child support, it would not be the first priority on the estate like it is under present law. The women and children would lose that benefit. We have had some discussion about the homestead provisions. There is a much stricter standard under this current law under homestead to stop the abuse of people putting their money into large homesteads in States that have unlimited homestead exemptions. Tightening of that provision would not apply here, leaving other people to lose more significantly. This amendment is more out of the Senator's frustration over medical care in America. I know he wants the Government to take care of everything that it can in that regard and more. I am willing to debate that under a different circumstance. It does not apply here. This bill makes provisions for people who have high medical expenses. Indeed, historically the bankruptcy law does not question why someone is in debt. One can be in debt because one made a risky investment. One can be in debt because one messed up on some contract and then was sued. They were wrong, badly wrong, perhaps. One can be in debt because of health care. One can be in debt because of gambling or alcohol. Maybe just a lack of personal discipline drives people into bankruptcy. We have never, and should not in my view, turn the bankruptcy court into some sort of social institution that starts to evaluate everybody's personal conscience to see whether or not they were justified or unjustified into going into debt. Remember, what we are crafting today is simply a procedure in a Federal court, a bankruptcy court, by which people who are unable to pay their debts can wipe those debts out all or in part. Basically, the law says that if you are below median income, then you do not have to pay any of them back. If you make above median income and you are able to pay some of those debts back, you should do so. That is a reasonable approach. The Senator's amendment, whereas it might be well-intentioned, is curious and I do not believe is helpful to this bill. I oppose it. I thank the Chair. I yield the floor and suggest the absence of a quorum.

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

Mr. SESSIONS. Mr. President, I am pleased to be here today to support S. 420, the Bankruptcy Reform Act of 2001. I know this bill has cleared the Senate on at least three different occasions, as I recall, and with large majorities. I know a number of people have amendments they would like to offer. As a courtesy to the Members who had concerns about the legislation, Majority Leader Lott allowed the bill to go to the Judiciary Committee. We had amendments and debate there for a good bit of time. It is now on the floor. It is appropriate for amendments that are to be offered to be offered now. I urge my fellow Senators who have amendments they would like to offer to this legislation to bring them to the floor. This is the time that has been set aside and announced for that purpose. It certainly would not be courteous to the work of this body if people have amendments and don't take advantage of the chance to bring them forward. I see the chairman of the Judiciary Committee, Senator Hatch, has arrived. Perhaps he will have some opening remarks at this time. If he does, I would be pleased to yield to Senator Hatch. Senator Grassley had asked that I start this off. I believe we have a good piece of legislation that has been examined. Every jot and tittle of it has been looked at. Compromises and improvements have been undertaken time and again. I believe the act will withstand scrutiny. It will eliminate a number of the abuses that have been occurring under the new modern- style bankruptcy. The time has come, and I am confident that as this debate goes forward, this bill will pass and become law. I yield the floor.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I appreciate the opportunity to make some remarks on the bankruptcy bill that will be pending this week. I also express my admiration for the work of Senator Enzi in the health subcommittee on labor issues that he chairs and his intensive work and concern to make sure we handle repetitive motion injuries in the right kind of way. In my personal view, it would be unwise for us to dump a regulatory burden on American business, one that has been estimated to cost as much as $90 billion, at a time when the economy is in a slowdown and we are not really sure about the science that would justify that and all experts tell us the regulations are incredibly difficult to write. In fact, they are not able to write them. I think we are right to heed Senator Enzi's advice. Mr. President, one of the objections to the bankruptcy bill was expressed in a letter that has been circulated from 91 law professors who wrote to show their opposition to the bankruptcy bill. We are continually seeing our professors sign off on letters that appear to have some substance, but when you examine them, they are not sound. This is a very unsound letter. Since it has been referred to by Senator Kennedy in the past, and I think maybe earlier today--although I don't think he relied on it in depth here today--we ought to talk about those charges. In their letter, these professors claim to be representing the interests of children and women in divorce. They claim to be concerned about poor people who are bankrupt and they want to help them. So do I. So let's listen to what they say their complaints are. I would like to talk about them. It is in many ways quite stunning how inaccurate their opinions are. The letter from the professors says women and children will have to compete with powerful creditors to collect their claims after bankruptcy. The fact is this bill subjects assets, such as homestead, household effects, and tools of the trade--these are assets that cannot be seized and sold in bankruptcy. These are assets that the person who filed bankruptcy can keep--their homestead and household effects and so forth. But for the purposes of children and women and past-due alimony, this law will give them greater power than ever before, and they can seize those. They can be seized for child support and alimony. That is clearly a superior position under this bill than before. Wives and mothers will not have to compete with anyone before, during, or after bankruptcy for these key assets. In addition, Philip Strauss of the San Francisco Department of Child Support Services--this is one of the agencies around the country that was formed to help women and children collect their child support and alimony from deadbeat parents, or those who refuse to pay--wrote to us and made a firm statement on this matter. He said competition between these creditors and child support claimants just doesn't happen. As he said: No support collection professional that I know believes this concern to be serious. If support-- He means child support and alimony-- and credit card creditors were playing on a level playing field, banks with superior resources might have an advantage. However, nonbankruptcy law-- This is the nonbankruptcy collection law that favors alimony and child support-- has so tilted the field in favor of support creditors-- That is child support creditors-- that competition with financial institutions for the collection of post-discharge debt presents no problems for support creditors. Senator Biden said it was laughable at our hearing recently to suggest that this bill does anything but enhance the position of women and children who may be claimants in bankruptcy. The letter from the professors says: Credit card claims increasingly will be excepted from discharge and remain legal obligations after bankruptcy. The fact is this: Credit card debt that is incurred as a result of fraud is already nondischargeable under current law. This bill simply makes it slightly easier for creditors when a debtor has obtained the money from the creditor by fraud to win their case; only slightly more. They will still have to prove that the borrower--the debtor--defrauded them. And debtors who defraud creditors should not be able to discharge their debt in bankruptcy. If somebody loans me money and I obtain that loan through fraud, why should I be able to go into bankruptcy court and never pay that person back the money I defrauded him out of? That is the current law. That is historic law. This bill makes little or no change in it. It tightens it up slightly. If you have been defrauded, you will be able to collect your money. The letter further says: . . . large retailers will have an easier time obtaining reaffirmations of debt that legally could be discharged. The fact is that in order to obtain a reaffirmation under this bill, retailers will have to make sure that new and comprehensive disclosures are given. They will be required to disclose material terms of debt obligation before the creditor and debtor can reaffirm any discharged debt. Judicial review is required in certain cases. Thus, it will be much more difficult--not easier--for retailers to reaffirm or get a reaffirmation of a debt that is being discharged in bankruptcy. I know this. I was asked to negotiate this very question on behalf of Senator Grassley and Chairman Hatch. I met with the White House and Senator Reed from the other side. We worked hard and came up with language that is not excessively burdensome on the court but really provides substantial new procedural protections from anyone who would think about reaffirming a debt. The reason people reaffirm the debt is they may have a washing machine, and they have paid on it for a while. They would rather reaffirm and keep that machine than have it taken away. Sometimes they do it on automobiles and things of that nature. It is a perfectly voluntary thing. Frankly, I thought the issue was greatly overblown. But we worked this out. We increased the control under the new bankruptcy bill that is before us today compared to what it was before. A vote to reject this bill is a vote to continue the less restrictive reaffirmation practices that prevail in the absence of this bill. Again, it makes you wonder what these professors are writing about. The letter says: Giving ``first priority'' to domestic support obligations does not address the problem . . . and that ``95 percent of bankruptcy cases make no distributions to any creditors because there are no assets to distribute. Granting women and children a first priority . . . permits them to stand first in line to collect nothing. The fact is, the bill's means test will come into play only if the person filing bankruptcy makes more than the median income for the state in which he files. Only then will he be required to pay back some of his debt, and under that scenario his situation will be different from current law. This bill's means test will place above-median income deadbeat dads into chapter 13--a 5-year repayment plan that will require them for 5 years under court-ordered direction to pay their money into court, and the first fruits of that money go to child support and alimony. That is a powerful incentive and guarantee that women and children will receive the support obligations due them. The bill also will stop how chapter 13 is used today by deadbeat dads to delay or defeat their payment of child support--sometimes for as long as 5 years. This bill will strengthen the ability of women and children to receive their child support. The letter goes on with another charge. It says: Under current law, child support and alimony share a protected post-bankruptcy position with only two other current collectors of debt--taxes and student loans. The bill would allow credit card debt and other consumer credit to share that position thereby elbowing aside women trying to collect on their own behalf. The fact is, the bill only slightly expands what consumer debt is nondischargeable. The credit card has to be used for more than $250 worth of luxuries, and the debt has to be fraudulent to be nondischargeable. Even if you had a fraudulent debt of less than $250, it would be dischargeable. Moreover, only alimony and child support claimants will be able to levy on the deadbeat dads' exempt assets, as I mentioned before, such as homestead and household furniture. Thus, mothers will not have to compete with the IRS, the student loan companies, credit card companies, or anyone else to attach exempt assets after bankruptcy. Further, as Philip Strauss, a child support professional, said--he has 24 years of experience in collecting assets for women and children-- No support collection professional that I know believes this concern to be serious. I agree with Senator Biden. It is laughable. Really. State attorneys general will be helping women collect child support and alimony. Further, this bill will provide more assets for distribution to women and children before, during, and after bankruptcy. Before bankruptcy, debtors will have to attend a credit counseling session that will help put fathers on a budget, keep them out of bankruptcy, and keep them paying this alimony and child support in the first place. I offered an amendment to this bill that says before a person runs down to some bankruptcy lawyer whose primary motivation will be to get his fee and file bankruptcy with the least possible cost and time on his part in the case, they should at least talk with a credit counseling agency. Many of them can show debtors how to establish a budget, how to prioritize their debt payment. They can call creditors and ask: Would you hold off for 2 months? Then we will start paying next month. Otherwise, my client would have to file bankruptcy. They are working marvelously well throughout the country to avoid bankruptcy, to teach families and deadbeat dads or others how to manage money more effectively, and actually preserve families because experts say fights over credit are the No. 1 cause of divorce in this country. That is a good provision in this bill that would not be enacted into law if this bill is not passed. I go on to note that during bankruptcy, deadbeat dads will be required to pay all past due alimony and child support and to undergo court supervision for up to 5 years under chapter 13 as they pay their first priority alimony and child support claims. After bankruptcy, it is more likely that a father who has undergone credit counseling, has been subject to 5 years of court-ordered supervision of his finances where alimony and child support were the No. 1 priority, and knows he cannot shield his exempt assets from alimony and child support claims, will be up to date on all his post- bankruptcy payments, including alimony and child support. The letter further charges: [A] single mother with dependent children who is hopelessly insolvent and whose income is far below the national median income would have her bankruptcy case dismissed if she does not present copies of income tax returns for the past three years--even if those returns are in the possession of her ex- husband. The fact is, although a prior version of the bill did require 3 years' tax returns to be submitted to the bankruptcy court--and there was good reason for that because people do not always tell the truth about their income, and 3 years of returns gives you some indication of what their true worth and financial ability is--but while it was in the previous bill, the conference report version, the present bill today that came out of committee only requires that 1 year's return be submitted. This bill only requires the current year's return be submitted, and even that obligation can be satisfied by a transcript of your return obtained from the IRS. These transcripts are free and promptly provided by the IRS. Further, the bill relieves the obligation of filing even the current tax return if the debtor--the destitute mother, in this case--can show that she cannot file the return due to circumstances beyond her control. I think that more than answers that charge. The letter further says: A single mother who hoped to work through a Chapter 13 payment plan would be forced to pay every penny of the entire debt owed on almost worthless items of collateral, such as used furniture or children's clothes, even if it meant that successful completion of a repayment plan was possible. The fact is, a single mother would only be placed in a chapter 13 repayment plan if, one, she was above the median income, and that is adjusted for family size--and for a family of four, the median income in my home state of Alabama is $47,000 a year--two, her income after deducting medical payments, private school tuition, and medical expenses exceeded the lesser of $10,000 or 25 percent of nonpriority unsecured debts--but at least $6,000; and special circumstances did not make completion of the payment plan impossible. So there is an out for the judge. If he finds there are special circumstances that provide a hardship for a family, he can avoid this plan. Even then, if she did not want to pay for the worthless items of collateral, her plan needs only provide for their return to the creditor. Why should she have to keep a piece of furniture if she does not want to pay that debt on it, and it has been mortgaged? The letter says: The homestead provision in [this bill] will allow wealthy debtors to hide assets from their creditors. The fact is, the current law presents two problems: One, debtors stuffing their cash into homesteads immediately before declaring bankruptcy, sometimes moving to another State that has a more favorable homestead law, to defeat the creditors; and, two, another problem is, wealthy people exempting their long-held homestead from the bankruptcy estate. The Senate bill that preceded the conference report last year would have solved both of these problems with a $100,000 hard cap on all homestead exemptions. I supported that. Senator Kohl and I were the prime advocates of that amendment. I debated it on the floor, and we won that vote on the floor. The companion House bill that was passed by the House of Representatives would have solved neither one of those two problems. We solved both of them in our bill in the Senate. So what about the bill that has come out of committee and is the bill before us today? The bill today solves the more egregious problem by providing, one, that all new equity added to a home within 2 years prior to filing bankruptcy in excess of $100,000 will be subject to the creditors and cannot be protected; and, two, if you move into a new State 2 years before filing bankruptcy, your homestead exemption is set by the law of the State you left. So you cannot carry on the kind of effort that has been done in Alabama where a person leaves my hometown of Mobile and drives 50 miles to Pensacola, Florida, where they have no homestead exemption, puts all their money in a million-dollar house, files bankruptcy, and they do not have to pay their creditors because all their money is in the home. You would have to plan that at least 2 years in advance under this law. So there is no doubt, as Senator Grassley has stated so clearly, that this law will be substantially more effective in cracking down on homestead abuse than current law. We had problems. We had a number of people from Florida, from Texas, from Kansas, and some other States out West, whose State constitutions provided unlimited homestead protection for farmers and others. They did not want to give that up. They fought us tooth and nail, and it compromised the ability of this bill to even be passed. But by reaching a compromise on this language in the bill, it solved one of the two problems, the most egregious problem really, and we made progress over current law. We ought to pass this bill. To kill this bill would leave even the weaker current law in effect. The letter further says: Well-counseled debtors will have no problem timing their bankruptcies or tying up court in litigation to skirt the intent of [this bill's two-year look-back] provision. The fact is, it will be very difficult for a debtor to plan 2 years ahead to place large amounts of cash into a homestead. Such planning, however, could establish a record of the debtor's intent to hinder or delay his creditors. If you can show they maneuvered over a 2-year period to establish a new homestead in a different State, or put extra money in there, then you have a remedy under this bill. If so, our legislation contains a 7-year look-back provision to bring any amount added to a homestead to defraud, hinder, or delay creditors back into the bankruptcy estate, used to pay off debtors of the estate. So in conclusion, Mr. President, I reject the assertions in the October 30 letter by the anti-reform professors. This bankruptcy bill will place women and children in a better position than ever before. That is a major reason why an overwhelming bi-partisan majority of the House and the Senate supported this bill last year. And that is why we should pass it again this year, and the President should sign it. I know there is a lot of talk about this bill being harsh and somehow unfair to poor people. But all debtors--all poor people filing bankruptcy--if the claimants are for child support or alimony, will be much advantaged. The alimony and child support people will have much greater power under this bill to collect their money than under current law. Second, anybody making below median income for their State will not be affected by the means test and will not be converted to Chapter 7. And I do not know how many that is, but I would be willing to guess that at least 80 percent of the individual bankruptcy filings in this country are by people who make below median income. It is only a few at which we are looking. The same people who are concerned about those abusing the homestead law to defraud their creditors ought to also be concerned about doctors and other rich people who have run up a bunch of debts, bankrupt against them, and then the next year make $100,000 to $150,000 a year. By doing that, these people have effectively gotten out of their legitimate debts that could easily have been repaid by them. Make no mistake, that is the truth. You can go into bankruptcy court today, file under chapter 7 and if your income is $250,000 a year, wipe away the debt that you owe and, effectively, never pay your creditors. That is not right. It's an abuse. If you can pay part of your debts, you ought to. We have come up with a bright line rule. If you make above median income for your State and you can pay the lesser of 25 percent or $10,000 of your debts over 5 years, you are required to pay at least a portion of those debts you can pay; in other words, you must file in Chapter 13. The judge will decide how much you pay and will set up a repayment schedule. In short, people should try to repay the debts that they owe. We don't need to create a bankruptcy system that is running out of control where lawyers are advertising night and day on the TV and in the free shopping guides in the grocery stores about how you can wipe out your debts and you don't have to pay what you owe. When somebody fails to pay what they owe, whether it is to a hospital, whether it is to a doctor, whether it is to a bank, whether it is to a credit card company, what happens? It drives up the cost of those people's business. They have to raise the charges on the honest people who pay them. There is no free lunch in this country. That is basic economics. There is no free lunch. If you don't pay your debt, then somebody else is going to pick up the burden. We need to have a law that enhances our capacity to ensure people don't abuse bankruptcy; that if you are capable of repaying a portion of your debts, you do. That is fundamental and what most Americans do. When I think about those families sitting around their kitchen tables right now worrying about their budgets, trying to decide whether or not they can afford to take vacation, and who ultimately decide that they can't because they have bills to pay - those are the people we ought to honor. Those are the people who demonstrate the kind of character and discipline that ought to be affirmed. We ought not to affirm people who make above the median income in America and who can easily pay back part of their debts, but who decide not to do so. I don't believe you can assert one fact in this bill that is not fair and just. We have fought over this bill for 4 years. It has passed this body at least three times by overwhelming numbers. Unfortunately, it is not yet the law. I plan to listen carefully to the complaints about this bill that will surely be made on this floor, but frankly I don't believe that anybody's complaints will hold water. I yield the floor.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I rise today to discuss the concept of prepaid tuition plans and why they are so critically important to America's families. As a parent who has put two children through college and who has another currently enrolled in college, I know firsthand that America's families are struggling to meet the rising cost of higher education. In fact, American families accrued more college debt in the 1990's than during the previous three decades combined. The reason is twofold: the Federal Government subsidizes student debt with interest rate breaks and penalizes educational savings by taxing the interest earned on those savings. In recent years, however, many families have tackled rising tuition costs by taking advantage of prepaid college tuition and savings plans. These plans allow families to purchase tuition credits years in advance. Families are able to pay for their child's future college education at today's price. Currently, 48 states have or are in the process of creating a tuition savings or prepaid tuition plan. These plans are extremely popular with parents, students, and alumni. They make it easier for families to save for college, while at the same time taking the uncertainty out of the future cost of college. My home State of Alabama was one of the first in the nation to establish a prepaid college tuition plan. Nearly 50,000 Alabamians are currently enrolled in the Prepaid Alabama College Tuition Plan. Families across the State of Alabama are setting aside a few dollars each month to pay for the future college education of their child. Alabama is not the only success story, 18,000 children have been enrolled in the College Savings Iowa plan. Mr. President, 2,500 families in Montana are saving for their child's college education through the Montana Family Education Savings Program: 13,000 are enrolled in the Alaska Advance College Tuition Plan; 100,000 are participating in the Texas Tomorrow Fund; 7,000 children have accounts in the West Virginia Prepaid College Plan; 38,000 have joined the Maine Next Generation College Investing Plan; over 10,000 parents have contracts in the Mississippi Prepaid Affordable College Tuition Program for their children. As you can see, people across the country are wisely taking advantage of these plans. Congress has supported participating families by expanding the scope of the prepaid tuition plans and by deferring the taxes on the interest earned until the student goes off to college. I believe that we must go one step further. That is why today, I along with Senators, Bob Graham, Collins, Bingaman, Phil Gramm, Frist, Breaux, Shelby, Helms, Inhofe, Tim Hutchinson, Santorum, Murkowski, Landrieu, and Roberts are introducing the Collegiate Learning and Student Savings, CLASS, Act. This is a common sense piece of legislation that will make the interest earned on all education tuition savings plans completely tax- free. Currently, the interest earned by families saving for college is taxed twice. Families are taxed on the income when they earn it, and then again on the interest that accrues from the savings. We strongly believe that this trend must no longer continue. In order to provide families a new alternative, the CLASS Act will provide tax-free treatment to all tuition savings plans. This bipartisan piece of legislation is sound education policy and tax policy that provides incentives for savings rather than bureaucratic solutions. It is a small tax break--estimated at less than $200 million over 5 years--but the CLASS Act will give families an extra incentive to be prudent savers for their children's education. Indeed, this small tax relief plan could produce billions in savings for college in the years to come. Many individuals have questioned whether these plans will benefit all types of students. Let me say this, it is wrong to assume that tuition savings and prepaid plans benefit mainly the wealthy. In fact, the track record of existing state prepaid plans indicates that working, middle-income families, not the rich, benefit the most from prepaid plans. For example, in 1996 families with an annual income of less than $35,000 purchased 62 percent of the prepaid tuition contracts offered by the State of Pennsylvania. In the same year, 71 percent of the 600,000 families participating in the Florida Prepaid College Program had an income of less than $50,000. It is clear this plan is helping middle income families save for college. In 1995, the average monthly contribution to a family's college savings account in Kentucky was $43. These families in Kentucky are putting a few dollars aside each month to save for their child's education. Tax-free treatment for tuition savings plans must become law. We passed this legislation as part of a larger tax bill last Congress. However, it was vetoed by President Clinton. President Bush articulated his support for this plan during the campaign. The time to act is now. This is not expensive, and the small cost will produce a huge benefit. I encourage my colleagues to work with me to push for passage of this common sense piece of legislation.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I rise today to discuss the concept of prepaid tuition plans and why they are so critically important to America's families. As a parent who has put two children through college and who has another currently enrolled in college, I know firsthand that America's families are struggling to meet the rising cost of higher education. In fact, American families accrued more college debt in the 1990's than during the previous three decades combined. The reason is twofold: the Federal Government subsidizes student debt with interest rate breaks and penalizes educational savings by taxing the interest earned on those savings. In recent years, however, many families have tackled rising tuition costs by taking advantage of prepaid college tuition and savings plans. These plans allow families to purchase tuition credits years in advance. Families are able to pay for their child's future college education at today's price. Currently, 48 states have or are in the process of creating a tuition savings or prepaid tuition plan. These plans are extremely popular with parents, students, and alumni. They make it easier for families to save for college, while at the same time taking the uncertainty out of the future cost of college. My home State of Alabama was one of the first in the nation to establish a prepaid college tuition plan. Nearly 50,000 Alabamians are currently enrolled in the Prepaid Alabama College Tuition Plan. Families across the State of Alabama are setting aside a few dollars each month to pay for the future college education of their child. Alabama is not the only success story, 18,000 children have been enrolled in the College Savings Iowa plan. Mr. President, 2,500 families in Montana are saving for their child's college education through the Montana Family Education Savings Program: 13,000 are enrolled in the Alaska Advance College Tuition Plan; 100,000 are participating in the Texas Tomorrow Fund; 7,000 children have accounts in the West Virginia Prepaid College Plan; 38,000 have joined the Maine Next Generation College Investing Plan; over 10,000 parents have contracts in the Mississippi Prepaid Affordable College Tuition Program for their children. As you can see, people across the country are wisely taking advantage of these plans. Congress has supported participating families by expanding the scope of the prepaid tuition plans and by deferring the taxes on the interest earned until the student goes off to college. I believe that we must go one step further. That is why today, I along with Senators, Bob Graham, Collins, Bingaman, Phil Gramm, Frist, Breaux, Shelby, Helms, Inhofe, Tim Hutchinson, Santorum, Murkowski, Landrieu, and Roberts are introducing the Collegiate Learning and Student Savings, CLASS, Act. This is a common sense piece of legislation that will make the interest earned on all education tuition savings plans completely tax- free. Currently, the interest earned by families saving for college is taxed twice. Families are taxed on the income when they earn it, and then again on the interest that accrues from the savings. We strongly believe that this trend must no longer continue. In order to provide families a new alternative, the CLASS Act will provide tax-free treatment to all tuition savings plans. This bipartisan piece of legislation is sound education policy and tax policy that provides incentives for savings rather than bureaucratic solutions. It is a small tax break--estimated at less than $200 million over 5 years--but the CLASS Act will give families an extra incentive to be prudent savers for their children's education. Indeed, this small tax relief plan could produce billions in savings for college in the years to come. Many individuals have questioned whether these plans will benefit all types of students. Let me say this, it is wrong to assume that tuition savings and prepaid plans benefit mainly the wealthy. In fact, the track record of existing state prepaid plans indicates that working, middle-income families, not the rich, benefit the most from prepaid plans. For example, in 1996 families with an annual income of less than $35,000 purchased 62 percent of the prepaid tuition contracts offered by the State of Pennsylvania. In the same year, 71 percent of the 600,000 families participating in the Florida Prepaid College Program had an income of less than $50,000. It is clear this plan is helping middle income families save for college. In 1995, the average monthly contribution to a family's college savings account in Kentucky was $43. These families in Kentucky are putting a few dollars aside each month to save for their child's education. Tax-free treatment for tuition savings plans must become law. We passed this legislation as part of a larger tax bill last Congress. However, it was vetoed by President Clinton. President Bush articulated his support for this plan during the campaign. The time to act is now. This is not expensive, and the small cost will produce a huge benefit. I encourage my colleagues to work with me to push for passage of this common sense piece of legislation.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, will the Senator yield?

Mr. SESSIONS. Mr. President, the letter was paid for by Donald V. Watkins of Birmingham, Alabama. He is one of Alabama's most prominent African American leaders, and he is an attorney. I went to law school with Don. He has been an active Democrat. He says in his letter that he supported the Gore-Lieberman ticket this time. He has been a lawyer for the NAACP and the Southern Christian Leadership Conference, a trial attorney, and ``a staunch supporter of each organization's missions and goals.'' Don says it is time for us to restore civility and dignity to the Senate confirmation process. In effect, he says that President Bush has been elected. He made some promises. He promised to have a more diverse Cabinet. This civil rights advocate, this skilled lawyer says that he has followed those commitments and that what the African American community should do is to insist that he follows the other commitments he made and judge him on what he does, because he is the President, and we should give him a fair chance to succeed. He says John Ashcroft should be confirmed. Quoting from the letter: Americans have watched the Senate confirmation process deteriorate over the years since the Bork nomination in 1987. What used to be a calm exploration of a nominee's qualifications now often becomes a trial by ordeal. A vote for John Ashcroft will not, in itself, restore civility to the confirmation process, but it will help. Don Watkins says: It is time for all Americans to stop fighting the outcome of last Fall's election and give President Bush a chance to govern. President Bush has selected a diverse and inclusive cabinet. We must give his team an opportunity to lead this nation. If Mr. Ashcroft does not live up to his commitment to enforce our federal laws on an even-handed basis, we can deal with that in the political arena at a later date. Until then, we should respect President Bush's choice for Attorney General. I think that says it well. I had no advance notice of this. I had no idea this would appear from this fine and skilled advocate for equal rights in America. I want to share a few matters that are important to correct. They have been repeated so often; I believe they are so incorrect that they ought to be responded to. First, in this town, people know who are honest and truthful--people who tell the truth, people who are straight shooters--it is pretty well known. And it is known those who cannot be trusted. There are not many you would trust on almost any matter whatsoever. John Ashcroft, though, is that kind of person. You have heard people say that repeatedly today and in days past. They know him. They respect him. He is a man of integrity, a man of religious faith, yes, a leader in his denomination, a man who is broadly respected all over America for the very qualities that are so much in need today. If anybody reads my mail and listens to the comments I am receiving from people with a longing and a deep concern about their country, that a man of this quality is beaten up and attacked and dismembered, in effect, while at the same time we have the same Members of this body who have been steadfastly and tenaciously defending the kind of spin that has gone on in this town that led to impeachment and other matters, they are having a difficult time comprehending that. Anyway, we are here. People have had their day. They have been able to appear at the hearing and present their charges. We, as Senators, are supposed to weigh them. It is all right. I believe in free debate. Nobody should be stifled--they ought to have their say. But we are not run here by special interest groups. Handgun Control does not control in this body. We take an oath to obey the law and to do justice here, not to kowtow to every group who builds up a campaign to pressure Members of this body to vote the way they want, threaten them that they won't support them in primary elections in the future, and otherwise make their lives miserable in every way they possibly can to get them to vote a certain way. They have a right to write and threaten and say they are not going to vote for somebody. It is a free country. But we, as Senators, have a right and a duty and a responsibility to do the right thing. I know there are some conservative groups who tried to pressure Chairman Hatch on some issues. He said: We are willing to listen to you and have your input, but I am a Senator. I happen to chair this committee. As long as I chair the committee, we are going to do this fairly and above board and no interest group is going to have an undue influence in how I do my job. That is a fact. People know that here. We need to remember that as we go forward with this process. One of the charges that has been made that is somewhat complicated, but at bottom is very simple, is this charge that John Ashcroft opposed integration. That is a bad thing to say. He came before the committee and looked us all in the eye and said: I support integration; I do not oppose integration. He said what he opposed was a Federal court plan that was extreme, in my view and in the view of a lot of legal scholars, to create a massive Federal intervention in the educational systems of Kansas City and St. Louis, Missouri. In fact, the Federal court plans ordered an additional $3 billion in funding to be spent to carry out these plans. A lot of it was for busing; a lot of it was for other activities. This was a big deal. His predecessor opposed that court activity. His successor opposed it. His second successor opposed it. His second successor as attorney general was Jay Nixon, with whom I served when I was Attorney General of Alabama. Jay Nixon opposed this. He is a Democrat and was supported by two Members of this body in his effort to run for the U.S. Senate while he was resisting this litigation in the State. Why would we want to oppose that? The wording the complainers have used is that he opposed voluntary court desegregation or voluntary desegregation in Missouri. Let me tell my colleagues how that happens. I was Attorney General of Alabama. I have been through this. It is a common thing in America, as we try to deal with the vestiges of segregation. Some of it was legal. Some of it has been by just the nature of the residences that segregation occurred, and various efforts have been made to deal with this. It has been said: How did he oppose voluntary desegregation? This is what happened. Plaintiffs sued St. Louis and Kansas City. They sued the suburbs, and they got to court and claimed the school system is segregated by design, in effect. They object to it. They want it to end. The school systems resist, and the litigation goes on. And the judge in this case essentially suggested or indicated that he just might render an order that would eliminate all the suburban cities and merge them--at least their school systems--merge them with the St. Louis school system. We would just have one big school system. That is just what he might do, he said. So threatened with their very educational system at stake, they voluntarily, under those kinds of threats, agreed to a plan to spend a massive amount of money to bus students around in an effort to achieve racial balance, which the judge was pushing to make happen. They said: By the way, state of Missouri, you pay for it. We run our school system here, the city of St. Louis runs theirs, but we want you to pay the cost of this. The Attorney General of the State of Missouri was the one person who had a responsibility and a duty, the lawyer for all the people of Missouri, to question whether or not citizens all over the State ought to pay for this kind of massive plan. He objected to that. He resisted as did two of his successors who resisted it. In fact, one of the most infamous of all court plans was because a Federal judge ordered one of the school districts to raise taxes to pay for his idea of the school. That is what we are talking about--a consent decree. I have seen them. They will sue the prison system. The prison system will put up a little defense, or the mental health system, or the school system will, and they will go in and say: Judge, I guess you are right. Order the State of Alabama to give more money to run the prison. Order the State of Alabama to give more money to the mental health system because these are the people who would like to have more money because it is their system they are running, and they don't have an objective position. The attorney general is the one who has to represent the entire State and to question what is happening. Let me tell you why an attorney general has a particular duty to resist. He has a particular duty because this unelected lifetime- appointed Federal judge who is saying he is going to abolish the school district and consolidate them into one, who is taking an action that violates the Constitution of the State of Missouri--violates the statutory laws of the State of Missouri, violates the duly elected school boards and districts, and the school boards' authority given to them by the people of the State of Missouri and people in that district. And he is going to rip all of that apart and impose his will on how education ought to be conducted in the targeted community in that state. Do you see how important this is for a principal attorney general. He should resist and defend unless it is absolutely clear that there is no other way that a constitutional deprivation can be ended. He should resist the compromise of the Constitution and laws of his State, as did his predecessor and as did his two successors. To say those acts of principal resistance to a Federal evisceration of the local educational scheme demonstrates lack of concern for children or somebody who wants to maintain segregation is just plain wrong. We ought not to twist those kinds of things today into that sort of mentality. I don't like that. There is one more thing I will mention--the Bill Lann Lee nomination, although I could do this on almost every allegation that is before us. Bill Lann Lee was opposed not just by John Ashcroft. He failed to come out of the Judiciary Committee on a tie vote, 9-9. I am not aware that John even spoke about it. Perhaps he did, but I do not know what he said. I do remember that I spoke against the Lee nomination. I remember Chairman Hatch of the Judiciary Committee made an eloquent argument against Mr. Lee. I would like to mention a couple of things about that. Oh, Mr. Lee, is so terribly pitiful, that he has just been put upon and he has been abused, is what they would say. But let me tell you. We had a full hearing on the Adarand case. We had a hearing on that. Mrs. Adarand even came. Adarand, for purposes of background, is the case that sets out the law for quotas in America. They said you can't have racial set-asides and quotas. Mr. Lee refused to acknowledge the real meaning of Adarand. He said he would support Adarand, but when questioned in detail, he defined it in such a way that it was clear that the chief of the Civil Rights Division would not support the principle that Adarand stated. That is why the chairman of the Judiciary Committee opposed it. He made something like a 15-page speech on this floor and delineated in high style and with great legal expertise why this was important and why he reluctantly opposed this nomination. He did not attack--nor did any of one of us at any time attack--the character of Bill Lann Lee. We simply said that we believed he did not understand the meaning of that case and would not follow the law of the United States and, as such, that he should not be confirmed. That is what happened. To suggest that John Ashcroft went out of his way to block this nominee is just one more statement that is inaccurate and unfair to the good and decent man whom I believe will soon be Attorney General and whom I am confident will be one of the greatest Attorneys General in the history of this nation. People are going to appreciate him. He will restore dignity. He will restore integrity. He will bring personal probity and decency to that office and will, I believe, be greatly respected when he concludes. I yield the floor.

Mr. SESSIONS. Mr. President, I have received a statement from the editor of the Southern Partisan magazine that has been attacked here to some degree. I have never read the magazine. But it is a refutation of many of the statements made about the magazine. It certainly is proof that the magazine is in a much better light than it has been reported to be here on the floor. I note that Senator Ashcroft, when he was interviewed by it, simply did a telephone interview with the magazine. There was no evidence he ever read it, or saw it, or knew much about it. I think it would be healthy for the statement of Chris Sullivan, editor of the Southern Partisan, to be made part of the Record in which he flatly denies that he favored, or the magazine favored, segregation or other kinds of racially--discriminatory activities. I ask unanimous consent that it be printed in the Record.

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

Mr. SESSIONS. Mr. President, I rise in support of the confirmation of John Ashcroft to be Attorney General of the United States. I spent 15 years of my professional career as a prosecutor, as a U.S. Attorney, in the Department of Justice. It is an institution for which I have the highest respect that I can express. The goal of equal justice under law is one of the highest and most valuable ideals any nation can have. I am convinced that this Nation's strength is because of our legal system, our pursuit of truth and accuracy and fairness in giving everybody their day in court. We need to give nominees here their day in court. And if we do, John Ashcroft will be found to be a sterling nominee. The complaints that are made against him collapse in the face of the facts. And I believe that is plain and accurate. I think that is an accurate statement. It disappoints me to hear people persist in pursuing objections and complaints that, if fairly looked at and considered objectively, are not meritorious. Before I make my general remarks--and I will just respond to a few things that have been said--I would like to have printed in the Record a letter that was published in the Washington Post today. I ask unanimous consent to have that printed in the Record.

Mr. SESSIONS

Mr. SESSIONS. I understand that is the position of the other side, that they would like this side to hush and have their full say all day. I see the Senator from Virginia is here. I yield to the Senator from Virginia such time as he desires.

Mr. SESSIONS. I was looking for Senator Warner. In the absence of Senator Warner, I will mention a couple of things. How long will the Senator from Michigan speak?

Mr. SESSIONS

Mr. SESSIONS. I ask unanimous consent that the resolution and preamble be agreed to en bloc, the motion to reconsider be laid upon the table, and that any statements relating to the bill be printed in the Record.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I ask unanimous consent that S. 21 be discharged from the Committee on Finance and be referred to the Committees on the Budget and Governmental Affairs per the order of August 4, 1977.

Mr. SESSIONS

Mr. SESSIONS. I ask for its second reading and would object to my own request.