Paul Wellstone

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I am actually going to take about 2 minutes. I know Senator Durbin wants to speak. I say to Senator Moynihan from New York that it is an important bill. There were a number of us, however, who objected. I know how strongly Senator Moynihan feels about this legislation. I know that this is an important issue in our trade policy. I want him to know, given the tremendous respect I have for him--I think the tremendous respect that every Senator has for him--that for my own part my standing objection was focused not so much on the substance of this legislation. It was what some of us have been talking about over and over again, which is that the Senate cannot function as a great institution when Senators are not allowed to bring amendments to the floor. There are some aspects of this bill that bother me. One of them has to do with hundreds of millions of dollars of subsidy for the tobacco industry to peddle tobacco in poor countries and in developing countries, which I think has the consequence of killing children. We don't need to be subsidizing this. Senator Durbin is far more the expert. He can speak more about the substance of it. I wanted to offer an amendment. I wanted to join Senator Durbin with an amendment to knock this corporate welfare subsidy to tobacco companies out. I am also concerned about additional subsidies that go to the pharmaceutical industry, and, frankly, the doubling of the subsidy that goes to arms exports. The point is that it is hard to be a good Senator and it is hard for the Senate to be a good Senate when we don't have the opportunity to come to the floor with amendments and try to improve a piece of legislation. Senators can vote up or down. I know that Senator Moynihan is in favor of this process. I take exception with the majority leader over the way we are doing this. Now we are at the very end of the process, and we certainly don't want to see harsh consequences as a result of this not going through. That is why I won't object. I will listen to the counsel of the Senator from New York. I find his counsel usually to be wise counsel. I hope the Senate will operate differently and that there will be an opportunity for Senators to come to the floor with amendments and to be legislators to try to improve policy. I find it outrageous, unconscionable, and egregious that we still have corporate welfare for the tobacco industry to peddle its death products to other nations and ultimately end up killing young people and children. That to me is outrageous. I yield the floor. I yield my time to Senator Durbin.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I thank the minority leader for his words. I yield 10 minutes to the Senator from North Dakota, Mr. Dorgan.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, first of all, let me thank Senator Harkin for his presentation. Let me thank other Senators who have spoken, both about what has happened to the Labor, Health and Human Services appropriations bill and also about this bankruptcy bill. I say to my colleague from Iowa, to tell you the truth, this is part of the same pattern. He is talking about abuse of the legislative process, talking about a complete breakdown of bipartisanship, a complete breakdown of trust. That is exactly what you have here when you have a State Department bill, a conference report that is completely gutted, not a word in there any longer about it, the only thing left is the number, and then what is put in, instead, is a bankruptcy bill. Democrats were not consulted at all, in an effort to jam it through. That is the same principle. I would think and hope every member of the minority party who cares about our rights, who cares about an open legislative process, who cares about integrity of the political process, would vote against cloture tomorrow because my colleague is talking about the same process. It might sound very much like an inside thing to people who are following this. I know everything is focused on the election. But honest to God, American people, it is not. When these kinds of decisions can be made by a few people with no sunlight, no scrutiny, no exposure, you have a real abuse of the process. What can happen is that usually the people who are hurt are the little people. Let me tell you, the people who are involved in this kind of process, the behind-the-doors process, sticking stuff in in conference committees, gutting conference reports, are folks who are well heeled, who have the lobbyists who know how to work this process for them. But the people who get hurt are not involved at all. That is what I want to talk about. I want to talk about the way in which this conference report, this bankruptcy bill harms the most vulnerable citizens in this country, people who find themselves in desperate economic circumstances. Please remember, Senators, 50 percent of the people who file for chapter 7 do it because of a medical bill that puts them under. Please remember: There but for the grace of God go I. You can be as frugal as possible. You can be prudent. You can try to manage your family finances. And then you can have a medical bill that can put your family under. It took my family, my parents, 20 years to pay off a medical bill of years ago. Many people cannot do that. They find themselves in a horrible situation and then as a last resort, in order to rebuild their finances and sometimes just stop the harassment by creditors, in order to get back on their feet, people file for bankruptcy. That is what this piece of legislation is all about--making it impossible for people who, through no fault of their own, find themselves in terrible financial circumstances, unable to rebuild their lives and instead wind up essentially in debt slavery for the rest of their lives. I think one of the things that has helped us in this debate--because I am confident Senators now see some of the harshness in this legislation--was a May 15, 2000, issue of Time magazine. The cover story was entitled ``Soaked By Congress.'' It deals with this bankruptcy bill. Although, frankly, not as harsh a version--it was a better version that Time magazine talked about--this article was written by reporters Don Bartlett and Jim Steele, who have, I think, won a Pulitzer for their work. They do great investigative research. It is a detailed look at the true picture of who files for bankruptcy in America. You will find a far different picture in this Time magazine than the skewed version that has been used to justify this mean-spirited and harsh legislation. This article carefully documents how low- and middle-income families, increasingly headed by a single person, usually a woman, are denied the opportunity of a fresh start if this punitive legislation is passed. I hope Senators will vote against cloture. As Brady Williams, who is chairman of the National Bankruptcy Reform Commission, notes in the article, the bankruptcy bill would condemn working families: . . . to what essentially is a life term in a debtors prison. Proponents of this legislation have tried to refute the Time magazine article. Indeed, during these final days of debate you will hear the bill's supporters claim that low- and moderate-income debtors will be unaffected by this legislation. Colleagues, if you listen closely to their statements, you will hear that they only claim that such debtors will not be affected by the bill's means test. Not only is that claim demonstrably false, the means test and the safe harbor have been written in a way that will capture many working families who are filing chapter 7 relief in good faith, but it ignores the vast majority of the legislation which still imposes needless hurdles and punitive costs on all families filing for bankruptcy, regardless of their income. Nor does the safe harbor apply to any of these provisions. You might ask, why has the Congress chosen to be so hard on ordinary folks down on their luck? How is it that this bill is so skewed against their interests and in favor of big banks and credit card companies? My colleague, Senator Feingold from Wisconsin, spoke to that. It is because these families do not have the million-dollar lobbyists representing them before Congress. They do not give hundreds of thousands of dollars in soft money to the Democratic and the Republican Parties. They do not spend their days hanging outside the Senate Chamber waiting to bend a Member's ear. Unfortunately, it looks as if the industry got to us first. Unfortunately, that is what this is all about. The proponents of this bill argue that people file because they want to get out of their obligations, because they are untrustworthy, because they are dishonest, because there is no stigma in filing for bankruptcy, but any look at the data tells us otherwise. In the vast majority of cases--again, 50 percent of the cases--it is a medical bill that has put people under or the main income earner has lost his or her job. There is a sudden illness, a major injury, major medical expenses, someone has lost their job, there has been a divorce, and what we are saying to these people is: We make it impossible for you to rebuild your lives. But when it comes to the lenders and the credit card companies, oh, it is a very different story. In the interest of full disclosure, something that the industry is not very good at, I want my colleagues to be aware of what the credit card industry is practicing, even as it preaches its sermon of responsible borrowing. After all, debt involves a borrower but also a lender. Poor choices or irresponsible behavior by either party can make the transaction go sour. So how responsible has the industry been? I suppose it depends on how you look at it. On the one hand, consumer lending is terrifically profitable, with high credit card cost lending, the most profitable of all, except for maybe the higher cost credit such as payday loans. I guess by the standard of responsibility to the bottom line, this credit card industry has done a great job. On the other hand, if you define responsibility by promoting fiscal health among families, educating on the judicious use of credit, ensuring that borrowers do not go beyond their means, then it is hard to imagine how the financial services industry could be bigger deadbeats. According to the Comptroller of the Currency, the amount of revolving credit outstanding, the amount of open-ended credit by credit cards being extended increased seven times during 1980 and 1995 and between 1993 and 1997. During the sharpest increase in bankruptcy filings, the amount of credit card debt doubled. It does not sound as if lenders were too concerned about the high number of bankruptcies. At least it did not stop them from pushing credit cards like Halloween candy. All of us know it: Our children are the ones who are solicited; our grandchildren are the ones who are solicited. It is unbelievable. This industry feels no responsibility, it feels no accountability, and in this one-sided, unjust piece of legislation, there is absolutely no standard they are asked to live up to. I again say to my colleagues that the case has been made that we have people in the country who are abusing the system, but I have not seen any report that has reported higher than 13 percent, and the American Bankruptcy Institute says 3 percent. So much for that argument. Then we have an argument that somehow these are people who feel no stigma, feel no shame. I have talked to colleagues--I cannot believe it--and they say: Paul, my gosh, shouldn't people manage their financial affairs, and if they don't, shouldn't they be held accountable? Yes. Pass a piece of legislation that does that, but do not pass a piece of legislation that says to a family which is in difficult, horrible financial circumstances, through no fault of its own, because of a major medical illness or because someone has lost their job or because there is a divorce, do not make it impossible for them to file chapter 7 and then unable to make it through chapter 13 and then essentially live a life of constant debt servitude, a life basically full of debt with no opportunity to rebuild lives. We are stripping away the major safety net, not just for the poor but for middle-class people as well. That is why so much of the religious community opposes this. That is why so many women and children organizations oppose it. That is why every consumer organization opposes it. That is why the civil rights community is opposed to it. The argument is then made that this is a reform piece of legislation. How can it be a reform bill when it is so one sided? How can it be a reform bill when it is so punitive? How can it be a reform bill when, in the name of going after abuse--only a tiny percentage of the population--it casts such a broad net and will make it so difficult for so many families, especially middle-income, low- and moderate-income families headed by women to rebuild their lives? And how can it be called ``reform'' when it is so one sided and does nothing whatsoever to call this credit card industry and these lending institutions to accountability? This legislation is unfortunately perfectly representative of an imbalance of power in America where some people--and I see the Chair is now looking at me. I appreciate that because he extends that courtesy to all of us. I never mean my arguments personally, especially of colleagues I trust at a personal level. In an institutional way, some people march on Washington every day. They are so well connected. They have the lobbyists. They have the money. They make the arguments. They have the prestige. They have the status. And that is what happened here. Up until this Time magazine expose, there were so many stereotypes and a lot of information about this legislation that was not accurate. As it turns out, it is imbalanced; it is unfair; it is unjust; it is too harsh, too punitive, and it is not right. This piece of legislation should not go forward tomorrow. I have tried to make arguments to defend this proposition, and other Senators have as well. What Senator Feingold said is true. In a lot of ways, institutionally, not one on one, this is also an example of an industry that has poured a tremendous amount of money into elections, an industry which has tremendous financial clout. What in the world is someone to do when her family or his family is going under because of a medical illness? Fifty percent of bankruptcy cases are filed as a result of that, and we are going to make it impossible for these people to rebuild their lives? What is someone to do when the low- and moderate-income earners do not have this clout and do not have these connections? What are single- parent homes to do, almost always headed by a woman? We should pass a bankruptcy reform bill, but this does not represent reform. One final thing, and I doubt whether I am going to get any Republican support, but I wish I would. I am not making a payback argument, and if I end up behaving differently, then call me a hypocrite, but this is no way to legislate. In the Senate, minority rights count. You should not be able to take a conference report and then--it is not even a question of putting a provision in, I say to the Chair, that is unrelated to the conference report. In this case, it is a State Department conference report, completely gutted--invasion of the body snatchers--not a word left about the State Department. The only thing left is a bill number. Now it is bankruptcy sent over here. The minority was not even consulted. Senators should vote against cloture for that reason alone because the minority one day is the majority the next and vice versa, and we should respect each other's rights. Someone can say to me: Senator Wellstone, you hypocrite. When you were in the majority, you did exactly the same thing; you, Paul Wellstone, were involved. I do not know of this having been done. I cannot remember. I certainly never did it; never would. I appeal to my colleagues on the basis of fairness. You might not agree with me on the substantive arguments--although this bankruptcy bill is now worse than it was before; and I went over two provisions that have been taken out--but you might agree with me just in terms of the rights of a legislator and the way in which this process ought to work. This is an affront to this legislative process. This makes a mockery of this legislative process. This is a reform issue. You wonder why people are so disillusioned and turned off about politics in the country? Here is one good reason why. People do not quite understand how a State Department bill all of a sudden becomes a bankruptcy bill, with a whole new set of provisions put in unrelated to the original bill. And then an effort is made to jam it through here. People do not get that. It might be clever, I say to the majority leader and others, but it does not meet the test of representative democracy. It does not meet the test of the Senate as a great institution. It does not meet the test of what this legislative process should be all about. It does not meet the test of how we can become good legislators and good Senators. For that reason, I hope colleagues will vote against cloture. I yield the floor and suggest the absence of a quorum.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, as of today, we are scheduled to have a cloture vote tomorrow. It is going to be on the bankruptcy conference report. One would think that in the final days of this Congress--of this Senate--we actually would be talking about debating and passing legislation that would promote the economic security of families in our country. We could focus on health security for families. We could focus on raising the minimum wage. We could focus on affordable child care. We could focus on affordable housing. We could focus on reauthorizing the Elementary and Secondary Education Act. Thank God people in the country are so focused on a good education for their children or their grandchildren. Instead, we are spending our final days debating an unjust and imbalanced bankruptcy bill which is entirely for the benefit of big banks and the credit card companies. In one way, I am very sad to say this piece of legislation is truly representative of the 106th Congress. It is an anti-consumer, giveaway-to-big-business bill, in a Congress which has been dominated by special interest legislation. And it is representative of the 106th Congress in another way, too: It represents distorted priorities. We could be doing so much to enhance and support ordinary citizens in our country. Instead, we now have this legislation before us. I want Senators to know, if they are watching, I will, as they come to the floor, interrupt my remarks so others can speak in opposition. We have a lot of ground to cover. We intend to cover that ground because this piece of legislation deserves scrutiny. It should be held up to the light of day so citizens in this country can see what an ill- made, mishandled attempt this piece of legislation is. Other Senators need to understand what bad legislation this is, how terrible its impact will be on America's most powerless families, and what a complete giveaway it is to banks, credit card companies, and other powerful interests. This is a worse bill than the bill we voted on earlier in the Senate. It is important for colleagues to understand that not only is this a worse piece of legislation, we had a provision in the bill that passed the Senate--albeit a flawed bill--the Kohl amendment, which said that while we are punishing low- and moderate-income people, families that have gone under because of bankruptcy, in 40 percent or 50 percent of the cases because of medical bills, you certainly don't want to enable millionaires to basically buy million-dollar homes in several States and in that way shield themselves from any liability. That provision was taken out. That is reason enough for Senators to vote against this bill. In addition, Senator Schumer had a provision that said, when people are breaking the law and blocking people from being able to go to family planning clinics, they should not be able to shield themselves from legal expenses and other expenses by not being held liable when it comes to bankruptcy. The Schumer provision was taken out. If that is not enough for Senators, the way in which the majority leader has advanced this bill makes a mockery out of the legislative process. If we love this institution and we believe in an open, public, and accountable legislative and political process, then I don't see how we can support taking a State Department conference report--I call it the ``invasion of the body snatchers''--completely gutting that so there is not a word about the State Department any longer and, instead, putting in this bankruptcy bill, far worse than the bill passed by the Senate. I see Senator Durbin on the floor. I can conclude in 5 minutes, if he is here to speak on this. I will summarize reasons for opposing this conference report and then come back a little later on and develop each of these arguments. First, the legislation rests on faulty premises. The bill addresses a crisis that does not exist. Increased filings are being used as an excuse to harshly restrict bankruptcy protection, but the filings have actually fallen sharply in the last 2 years. Additionally, the bill is based on the myth that the stigma of bankruptcy has declined. Not true. I will develop that argument later on. Second, abusive filers are a tiny minority. Bill proponents cite the need to curb ``abusive filings'' as a reason to harshly restrict bankruptcy protection, but the American Bankruptcy Institute found that only 3 percent of chapter 7 filers could have paid back more of their debt. Even bill supporters acknowledge that, at most, 10 to 13 percent of the filers are abusive. Third, the conference report falls heaviest on those who are most vulnerable. The harsh restrictions in this legislation will make bankruptcy less protective, more complicated, and expensive to file. This will make it much more difficult for low- and moderate-income citizens to have any protection. Unfortunately, the means tests and safe harbor will not shield from the majority of these provisions and have been written in such a way that they will capture many debtors who truly have no ability to significantly pay off this debt and therefore will be in servitude for the rest of their lives. Fourth of all, the bankruptcy code is a critical safety net for America's middle class. Low- and moderate-income families, especially single parent families, are those who are most in need to make a fresh start--the fresh start provided by bankruptcy protection. The bill will make it very difficult for these families to get out of crushing debt. Again, in 40 percent of the cases, these are families who have gone under because of a medical bill. Fifth of all, the banking and credit card industry gets a free ride. The bill as drafted gives a free ride to banks and credit card companies that deserve much of the claim for the bankruptcy filings in the first place, and the lenders should not be rewarded for this reckless lending. Sixth of all, this legislation actually might increase the number of bankruptcies and defaults. Several economists have suggested that restricting access to bankruptcy protection will actually increase the number of filings and defaults because banks and these credit card companies will be even more willing to lend money to marginal candidates. Seventh of all, the conference report, again, is worse than the Senate bill. We had a very reasonable provision; It was the Kohl amendment, which said, if you are going to go after women, and go after working families, and go after low- and moderate-income people, and go after families who are in debt because of a medical bill that is putting them under, then at least make sure you are not going to have wealthy Americans who are going to be able to go to several States and buy homes worth millions of dollars and shield themselves from any liability. That provision is knocked out. This is a worse bill than that passed in the Senate. The Schumer amendment, again, said if people are blocking people from family planning services, they have broken the law; they ought not to be able to shield expenses they incurred from liability when it comes to bankruptcy. The Schumer amendment was taken out. Finally, I say this one more time. This is a larger issue than bankruptcy reform. It is a question of the fundamental integrity of the Senate as a legislative body. Not one provision of the original State Department authorization bill, aside from the bill number, remains part of this legislation. To replace in totality a piece of legislation with a wholly new and unrelated bill in conference takes the Congress one step closer to a virtual tricameral legislature--House, Senate, and conference committee. If you believe in the integrity of this legislative process, and if you believe we all ought to be in a position to be good legislators, you should vote against this cloture motion on those grounds alone. I conclude this way. Other colleagues are on the floor. I will develop these arguments later on. At one point in time, the argument was suggested that only a tiny minority opposed this bill. Well, when I look at the opposition of labor unions, and I look at the opposition of every single consumer organization, and I look at the opposition from women and children's groups, and I look at the strong opposition from the civil rights community and a good part of the religious community, and when I see letters signed by bankruptcy professors, the academic community, judges, all the people who know this system well, who say this piece of legislation is egregious--it is one sided: it is imbalanced; it is unjust; it is too harsh--I realize that this piece of legislation should be stopped. I hope that tomorrow Senators, Democrats and Republicans, will oppose this on substantive grounds and also on the basis of the way in which this has been done. The way in which this has been done at the very end of this session is an affront to the integrity of this process. No Senator should vote for cloture who believes in an open, honest process with real integrity. Before I launch into my first point, Mr. President, I'd like to observe that in July my friend from Iowa, the author of this bill, referred to the opposition to this bill as the ``radical fringe.'' Well, I'm pretty proud of the company I'm keeping no matter now dismissive my colleague. Because you know what? The labor unions all oppose this bill. The consumer groups all oppose this bill. The women and children's groups all oppose this bill. The civil rights groups all oppose this bill and the many members of the religious community oppose this bill. Indeed one of the broadest coalitions I have ever seen united together opposes this so-called bankruptcy reform. I would say to my colleagues, you can tell a lot about a person--or a bill--by who its friends are. But you can also tell a lot about a bill by who its enemies are. The radical fringe? I see millions of working families who have nothing to gain and everything to lose under this legislation. Now, Mr. President, you have to give the proponents of this bill credit for chutzpah: They still preach the urgent need for this legislation despite the fact that nearly all the evidence points to the contrary. In fact, in the months since the Senate passed bankruptcy reform, any pretense of necessity has evaporated. The number of bankruptcies has fallen steadily over the past year, charge offs on credit card debt are down significantly and delinquencies have fallen to the lowest levels since 1995. Now proponents and opponents agree that nearly all debtors resort to bankruptcy not to game the system but rather as a desperate measure of economic survival and that only a tiny minority of chapter 7 filers--as few as 3 percent--could afford any debt repayment. And I have to congratulate my friends on another point, because they had almost convinced the Congress and the American public to view bankruptcy as a giant loophole for scam artists instead of a safety net. A key part of this argument is the belief--wholly unsubstantiated as far as any objective observer call tell--that the high number of bankruptcies in the 1990's is a result of a decline in the stigma of bankruptcy. In fact, my friend from Iowa said in July that ``With high numbers of bankruptcies occurring at a time when Americans are earning more, the only logical conclusion is that some people are using bankruptcy as a way out.'' With all due respect, while that has been a common assertion on the part of the bill's proponents that's all it is: an assertion. Virtually nothing backs it up. Indeed it's an assertion that flies in the face of all evidence that bankruptcy remains a deeply embarrassing, difficult and humbling experience for the vast majority of the people who file. I think my colleagues should actually talk to some folks who have filed for bankruptcy. Ask them how it felt to tell their friends and family about what they had to do, ask them how it felt to let down lenders to whom they owed money. Ask them how they felt about telling their employer. In fact, it's a shame that when a group of my colleagues and I hosted some of the debtors profiled in Time magazine expose of this legislation-- ``Soaked by Congress''--the bill's proponents attacked the credibility of the Time article but didn't bother to visit with Charles and Lisa Trapp, or Patricia Blake, or Diana Murray all who came to Washington to explain--from the perspective of people who have been there--what it's like to file for bankruptcy and why they were driven by that extreme. A review of the academic papers on bankruptcy suggests that the evidence for a decline in the stigma of bankruptcy is slim. This was the conclusion of a September 2000 Congressional Budget Office report entitled ``Personal Bankruptcy: A Literature Review.'' In fact, CBO found some objective evidence that argues that the stigma of bankruptcy is a strong deterrent to filing noting a study that showed that while 18 percent of U.S. households could benefit from filing for bankruptcy, only 0.7 percent did--suggesting that stigma might hold some back. In the book, ``the Fragile Middle Class'' by Theresa Sullivan, Elizabeth Warren and Jay Westerbrook--all academic bankruptcy experts-- the authors argue that the stigma remains: Bankruptcy is, in many ways, where middle class values crash into middle class fears. Bankruptcy debtors are unlikely either to feel in charge of their destiny or to feel confident about planning their future. Discharging debts that were honestly incurred seems the antithesis of middle-class morality. Public identification as a bankruptcy debtor is embarrassing at best, devastating at worst. It is certainly not respectable, even in a country with large numbers of bankruptcies, to be bankrupt. Bankruptcy debtors have told us of their efforts to conceal their bankruptcy. Arguments that the stigma attached to bankruptcy has declined are typically made by journalists who are unable to find any bankrupt debtors willing to be interviewed for the record and by prosperous economists who see bankruptcy as a great bargain. Of course the stigma argument isn't new. As early as the 1920's then Solicitor General of the United States Thomas Thacher argued that Americans were all too comfortable with filing for bankruptcy. Indeed, as David Moss notes in a 1999 American Bankruptcy Law Journal article, quote: ``those who today worry about declining stigma might be surprised to learn that the stigma associated with bankruptcy had, according to some observers, already disappeared by 1967.'' Of course there are other very logical explanations of why the filing rate in the 90's is quite high--they just aren't as convenient for the big banks and credit card industry. Mr. President, we know why people file for bankruptcy. Bankruptcy is the only solution for families who find their debt and the interest on their debt outstrips their income. The question is, why do families find themselves in those circumstances? And when they do, what do we as a society do to keep those families solvent. Or if we don't help them to remain solvent, how do we at least let them pick up the pieces, get on with their lives, reenter productive society. That's what this debate is about. That's exactly what's at stake in this debate; the solvency of the middle class. But, Mr. President, one not-so-small footnote that overshadows this whole debate is the fact that the number of bankruptcy filings have been dropping like a stone for the past 2 years. My colleagues are driving this heartless bill with talk of a bankruptcy ``crisis,'' a dramatic increase in the number of filings, but with all due respect they are trying to scare us with yesterday's ghosts. A study released on September 8 of last year by Professor Lawrence Ausubel of the University of Maryland notes that the peak increase in bankruptcy filings came and went in 1996. In fact, filings in 1998 were barely an increase over 1997 and we now know that there were 112,000 fewer bankruptcies in 1999 that there were in 1998--a nearly 10 percent decline. And the numbers so far have continued the sharp decline in 2000. We're being led to believe that it's the high number of bankrupts that are driving this legislation. And do you know what? They are, but for the wrong reasons. The credit card companies are counting on the United States Senate to overreact to the number of bankruptcies, they are counting on you to ignore their complicity in the huge debt burdens on most American families, the financial services industry is counting on the Congress to overlook the evidence that the bankruptcy crisis is self correcting. The problem may be abating, but they still want the fix to pad their profits. The high number of people filing for bankruptcy--most of whom have terrible circumstances that force them to do so--are an excuse, not a justification. Still, regardless of how many people file or why they file, my colleagues continue to maintain that this bill is driven by necessity. To do this they would track more debtors into chapter 13 instead of chapter 7 through the use of a means test. But again, their goal flies in the face of the evidence. First of all, we know through independent studies of those who file for bankruptcy that only about 3 percent of all debtors who file for chapter 7 could afford to pay any of their debts and that in 95 percent of chapter 7 filings there were no meaningful assets to be liquidated to pay back creditors. This is in line with other evidence that nearly all debtors file for bankruptcy do so because of some sudden, drastic economic disruption which it often takes years to recover from. Bankruptcy does not occur in vacuum. We know that in the vast majority of cases it is a drastic step taken by families in desperate financial circumstances and overburdened by debt. The main income earner may have lost his or her job. There may be sudden illness or a terrible accident requiring medical care. Certainly most Americans have faced a time in their lives where they weren't sure where the next mortgage payment or credit card payment was going to come from, but somehow they scrape by month to month. Still, such families are on the edge of a precipice and any new expense--a severely sick child, a car repair bill--could send a family into financial ruin. Despite the current economic expansion there are far too many working families in this situation. That is the true story behind the high number of bankruptcy filings in recent years and I want to make clear to my colleagues that the evidence shows that the very banks and credit card companies who are pushing this bill have a lot to do with why working families are in this predicament today. The bankruptcy system is supposed to allow a person to climb back up after they've hit bottom, to have a fresh start. There is no point to continue to punish a person and a family once their resources are over matched by debt. The bankruptcy system allows families to regroup, to focus resources on essentials like their home, transportation and meeting the needs of dependents. Sometimes the only way this can occur is to allow the debtor to be forgiven of some debt, and in most cases this is debt that would never be repaid because of the debtor's financial circumstances. The sponsors of this measure and the megabucks and credit card companies behind this bill don't like to focus on those situations. They paint a picture of profligate abuse of the bankruptcy system by irresponsible debtors who could pay their debt but simply choose not to. Such people do take advantage of the system, there is no question. But this bill casts a wider net and catches more than just the bankruptcy ``abusers.'' Again, a study done last year by the American Bankruptcy Institute found that only 3 percent of debtors who file under chapter 7--where debtors liquidate assets to repay some debt while the rest of the debtor's unsecured debt is forgiven--would actually have been able to pay more of their debt than they are required to under chapter 7. Even the U.S. Justice Department found that the number of abusive claims was somewhere between 3-13 percent. This means that the number of people filing abusive bankruptcy claims is astonishingly low. But this legislation seeks to channel many more debtors into chapter 13 bankruptcy--where the debtor enters a 3-5 year repayment plan and very little debt is forgiven. Yet in the pursuit of the few, this bill imposes onerous conditions, and ridiculous standards on all bankrupts alike. Additionally, under current law, 67 percent of the debtors in chapter 13 fail to complete their repayment plan often because they did not get enough relief from loans, and because economic difficulties continued. So this legislation would take individuals, the majority of whom desperately need a true fresh start, and force them into a bankruptcy process which two-thirds of debtors already fail to complete successfully. And my colleagues call this reform? And yet when given the opportunity to target real, proven abuses by wealthy deadbeats and scofflaws, the sponsors took a pass. Again, Mr. President, the very small number of abusive filers are an excuse not a justification for this bill that falls most heavily on those most in need of fresh start relief. This conference report does not match it's rhetoric. how the bill harms the vulnerable Mr. President, I want to take some time to talk about the effect this bill will have on low- and middle-class debtors. Remember, nearly all debtors file for bankruptcy are not wealthy scofflaws, but rather are people in desperate economic circumstances who file as a last resort to try and rebuild their finances, and, in many cases, end harassment by their creditors. And in particular I want to remind my colleagues of the May 15, 2000, issue of Time magazine whose cover story on this so- called bankruptcy reform legislation was entitled ``Soaked by Congress.'' The article, written by reporters Dan Bartlett and Jim Steele, is a detailed look at the true picture of who files for bankruptcy in America. You will find it far different from the skewed version being used to justify this legislation. The article carefully documents how low and middle income families--increasingly households headed by single women--will be denied the opportunity of a fresh start if this punitive legislation is enacted. As Brady Williamson, the chairman of the National Bankruptcy Review Commission, notes in the article, the bankruptcy bill would condemn many working families to ``what essentially is a life term in debtor's prison.'' Now proponents of this legislation has tried to refute the Time magazine article. Indeed during these final days of debate you will hear the bill's supporters claim that low and moderate income debtors will be unaffected by this legislation. But colleagues, if you listen carefully to their statements you will hear that they only claim that such debtors will not be affected by the bill's means tests. Not only is that claim demonstratably false--the means test and the safe harbor have been written in a way that will capture many working families who are filing for chapter 7 relief in good faith--but it ignores the vast majority of this legislation which will impose needless hurdles and punitive costs on all families who file for bankruptcy regardless of their income. Nor does the safe harbor apply to any of these provisions. Now, you might ask why the Congress has chosen to come down so hard on ordinary working folk down on their luck. How is it that this bill is so skewed against their interest and in favor of big banks and credit card companies? Well, maybe that's because these families don't have million dollar lobbyists representing them before Congress. They don't give hundreds of thousands of dollars in soft money to the Democratic and Republican parties. They don't spend their days hanging outside the Senate Chamber waiting to bend a members ear. Unfortunately it looks like the industry got to us first. They may have lost a job, they may be struggling with a divorce, maybe there are unexpected medical bills. But you know what? They're busy trying to turn their lives around. And I think it's shameful that at the same time this story is unfolding for a million families across America, Congress is poised to make it harder for them to turn it around. Who do we represent? So Mr. President, I'd like to take a few minutes to explain exactly what the effects of this bill will be on real life debtors--the folks profiled in the Time article. I hope the authors of the bill will come to the floor to debate on these points. There could be the opportunity for some real discussion on an issue that has yet to be addressed by the bill's supporters. Specifically, I challenge them to come to the floor and explain to their colleagues how making bankruptcy relief harder and much more costly to achieve will benefit working families. Charles and Linda Trapp Charles and Linda Trapp were forced into bankruptcy by medical problems. Their daughter's medical treatment left them with medical debts well over $100,000, as well as a number of credit card debts. Because of her daughter's degenerative condition, Ms. Trapp had to leave her job as a letter carrier about 2 months before the bankruptcy case was filed to manage her daughter's care. Before she left her job, the family's annual income was about $83,000, or about $6,900 per month, so under the bill, close to that amount, about $6,200, the average monthly income for the previous 6 months, would be deemed to be their current monthly income, even though their gross monthly income at the time of filing was only $4,800. Based on this fictitious deemed income, the Trapps would have been presumed to be abusing the Bankruptcy Code, since their allowed expenses under the IRS guidelines and secured debt payments amounted to $5,339. The difference of about $850 per month would have been deemed available to pay unsecured debts and was over the $167 per month triggering a presumption of abuse. The Trapps would have had to submit detailed documentation to rebut this presumption, trying to show that their income should be adjusted downward because of special circumstances and that there was no reasonable alternative to Ms. Trapp leaving her job. Because their current monthly income, although fictitious, was over the median income, the family would have been subject to motions for abuse filed by creditors, who might argue that Ms. Trapp should not have left her job, and that the Trapps should have tried to pay their debts in chapter 13. They also would not have been protected by the safe harbor. The Trapps would have had to pay their attorney to defend such motions and if they could not have afforded the thousand dollars or more that this would have cost, their case would have been dismissed and they would have received no bankruptcy relief. If they prevailed on the motion, it is very unlikely they could recover attorney's fees from a creditor who brought the motion, since recovery of fees is permitted only if the creditor's motion was frivolous and could not arguably be supported by any reasonable interpretation of the law (a much weaker standard than the original Senate bill). Because the means test is so vague and ambiguous, any creditor could argue that it was simply making a good faith attempt to apply the means test, which after all created a presumption of abuse. Of course, young Annelise Trapp's medical problems continue and are only getting worse. Under current law, if the Trapps again amass medical and other debts they can't pay, they could seek refuge in chapter 13, where they would be required to pay all that they could afford. Under the new bill, the Trapps could not file a chapter 13 case for five years. Even then, their payments would be determined by the IRS expense standards and they would have to stay in their plan for 5 years, rather than the 3 years required to current law. The time for filing a new chapter 7 would also be increased by the bill from 6 years to 8 years. Lucy Garcia Lucy Garcia was on the verge of eviction from her apartment when she went to her bankruptcy attorney. As described in Time, after she separated from her husband, it was difficult to make ends meet and she fell behind on her rent. When she filed her bankruptcy case, the automatic stay prevented her eviction temporarily. In that time, she received her tax refund and was able to catch up in her rent and thus prevent the eviction. Under the bill now before the Senate, Ms. Garcia and her two children would have become homeless, because there would have been no automatic stay of their eviction. Depending on how the means test is interpreted (and there are numerous ambiguities that will lead to widespread litigation that most consumer debtors cannot afford), Ms. Garcia might not even be allowed to file a chapter 7 case under the bill. For food, clothing, housekeeping supplies, personal care items and services, and miscellaneous she would be allowed to spend $863 per month and she actually spends $1,191. The deemed surplus of $328 multiplied by 60 is more than $6,000 and more than 25 percent of her debt and therefore her case could be deemed an abuse of chapter 7. The IRS budget used by the means test only allows $4.93 a day for food per person. No one could properly feed a child for $4.93, a day let alone an adult, especially in New York City where Ms. Garcia lives. The food budget for three people like Lucy's family with gross income of $2,600 a month is $444 per month according to the IRS website. The amount allowed for food for lower income families is even less, as low as $3.02 a day per person. under the bill, the trustees in all cases will be required to use the means test even if the debtor's income is under the national median as in this case. (Apparently, the credit industry is trying to confuse Senators by confusing two different sections of the bill. Credit card lobbyists mislead by telling Senators the means test does not apply if the income is below the median income in a case like Ms. Garcia's. This is false. The language of the bill says creditors cannot challenge cases if the income is below the median, but under the section about trustee duties the trustee must apply the means test whether the creditor challenges the case or not.) Ms. Garcia barely had the money to pay her attorney when she filed her bankruptcy case. She still barely has enough to meet expenses. She certainly would not have had the funds to defend against a motion filed under the means test. She would not have been able to afford the additional filing fees in the bill, combined with the additional attorney's fees that the bill will cause due to the substantial additional paperwork requirements. Because she did not have all of the bills she had received in the last 90 days before bankruptcy, her attorney would have had to spend significant time trying to determine the addresses at which creditors might ``wish to receive correspondence'' as required by the bill, and might not have been able to give notice to some creditors that would be deemed ``effective'' under the bill. These creditors would then be free to continue to harass Ms. Garcia even after she filed her bankruptcy petition. Ms. Garcia would also have been required to give up her television in which Sears claimed a security interest, since there was no room in her budget for payments to redeem (with payment of the retail value required by the bill) or reaffirm the debt. With two children, ages 6 and 9, loss of her television would have been a real hardship. allen smith Allen Smith is a resident of Delaware, which has no homestead exemption. In other words, he cannot shield his home from his creditors. Ironically, under this bill, wealthy scofflaws can shield multimillion dollar mansions from their creditors with a little planning, but not Mr. Smith. As a result when the tragic medical problems described in the Time article befell his family, he could not file a chapter 7 case without losing his home. Instead he filed a chapter 13 case, which required substantial payments in addition to his regular mortgage payments for him to save his home. Ultimately, after his wife passed away and he himself was hospitalized he was unable to make all these payments and his chapter 13 plan failed. Had Delaware had a reasonable homestead exemption, and had Mr. Smith been able to simply file a chapter 7 case to eliminate his other debts, he might have been able to save his home. Mr. Smith's financial deterioration was caused by unavoidable medical problems. Before he thought about bankruptcy he went to consumer credit counseling to try to deal with his debts. However, it appears that he went to consumer credit counseling just over 180 days before the case was filed, and he did not receive a briefing, so the new bill would have required him to go again. This would have been very difficult, considering his medical problems. In fact, his attorney, demonstrating dedication to clients that sharply contrasts with the creditor propaganda picture of bankruptcy lawyers just out to make a buck, made several home visits to Mr. Smith and his wife, who was a double amputee. The new bill would also have required a great deal of additional time and expense for Mr. Smith and his attorney, through new paperwork requirements and a requirement that he attend a credit education course. Such a course would have done nothing to prevent the enormous medical problems suffered by Mr. Smith and his wife. He did not get in financial trouble through failure to manage his money. He is 73 years old and had never before had debt problems. The bill makes no exceptions for people who cannot attend the course due to exigent circumstances, so Mr. Smith might never have been able to get any relief in bankruptcy under the new law. Under the new bill, Mr. Smith would also have had to give up his television and VCR to Sears, which claimed a security interest in the items. Under the bill, he would not be permitted to retain possession of these items in chapter 7 unless he reaffirms the debt or redeemed the items. Sears may demand reaffirmation of its entire $3,000 debt under the bill, and to redeem Mr. Smith would have to pay their retail value. After his wife died and her income was gone, Mr. Smith did not have the money to pay these amounts to Sears. Since he is largely homebound, loss of these items would have been devastating. Sadly, Mr. Smith's medical problems continue. Under current law, if he again amasses medical and other debts he can't pay, he could seek refuge in chapter 13, where he would be required to pay all that he can afford. Under the new bill, Mr, Smith cannot file a chapter 13 case for 5 years (until he is 78 years old). The time for filing a new chapter 7 has also been increased, from 6 years to 8 years. maxean bowen Maxean Bowen's case shows how every single bankruptcy debtor would be impacted by the bill. She didn't have the money to pay her bankruptcy attorney and had to get it from relatives. With the increased costs for paperwork, obtaining tax records and taking a credit education course, it is not clear that Ms. Bowen would even have been able to afford bankruptcy relief. Her debt problems stemmed from a disability that caused her to be unable to work at her job, reducing her income to $800 per month for herself and her 11-year-old daughter. Thus, her situation was not a result of mismanaging her credit, and a credit education course would not have prevented it. Nonetheless, unless she could find the money to pay for such a course, she could get no bankruptcy relief under the bill. chapter 13 made unworkable Mr. President, I want to talk for a moment about cross purposes in this bankruptcy measure because it highlights a fundamental reality about this legislation: it has become larded up with special interest provisions which not only hurt middle class consumers but also completely undermine the ostensible purpose of the legislation: to track more debtors into chapter 13 where they repay their creditors. Now, again, to repeat what I've stated earlier, I think this is a questionable premise to begin with. After all, under current law--where debtors are allowed to choose which chapter of the code to file under-- 67 percent of the debtors in chapter 13 fail to complete their repayment plan often because they did not get enough relief from loans, and because economic difficulties continued. So this legislation would take individuals, the majority of whom desperately need a true ``fresh star'', and force them into a bankruptcy process which \2/3\ of debtors already fail to complete successfully. And this is what my colleagues call reform. But I say to my colleagues, this legislation will make chapter 13 unworkable for many more debtors and will likely reduce the number of chapter 13 cases. In fact, the U.S. Trustees have estimated that one piece of this bill alone--the restriction on ``cramdown'' will reduce the number of chapter 13 cases by 20 percent. How would this happen? Well, ``cramdown'' refers to how certain secured debt--like an auto loan--is valued during bankruptcy. Remember, secured debt is made up of loans that are attached to some physical property the lender can repossess, such as a car. Under current law, if a debtors owes more on a car than it is worth, the amount she must repay to keep her car is equal to the current value of the car not the amount of the loan left unpaid. This is fair to the lender because it ensures that the lender gets repaid the same amount that it would get if it repossessed and sold the vehicle. The rest of the loan doesn't just go away, but it gets classified as unsecured debt--like credit card debt--which is less likely to be repaid. But under this conference agreement, the debtor must pay back the full value of the loan to keep her car. This will force debtors to pay more debt in chapter 13 cases, will cause more chapter 13 debtors to lose their cars--and jeopardize their ability to get to their job. Does it make sense to make chapter 13 harder to complete if \2/3\ of the cases fail already? In addition, the ability to cramdown debt is one of the major attractions of filing under chapter 13, so the effect of this provision of the bill will be to discourage debtors from filing chapter 13--the exact opposite of the supposed purpose of the bill. But wait, the authors didn't stop there at making chapter 13 harder. This bill will require many more debtors to file 5-year chapter 13 plans instead of 3-year plans. This extends the time in which debtors must have steady income and increases the amount of debt they must pay--significant and unworkable requirements for chapter 13 relief. This conference report will also force chapter 13 debtors to abide by strict IRS standards of ``disposable income'' which can disallow abnormally high housing or transportation costs. Mr. President, all of these provisions will make chapter 13 less attractive and harder to complete. As I said, the U.S. Trustees believe that the cramdown provisions alone will lower the number of chapter 13 cases by 20 percent. But the added impact of these other hurdles could well make chapter 13 cases impossible to complete for many debtors. Remember, 67 percent already fail to complete such plans. All of this raises a fundamental question for the supporters of this legislation: If you want more debtors to pay more of their debt back, why are you making it harder for them to do so? The reality, Mr. President is that between the means test barring relief under chapter 7 and the new restrictions and burdens making chapter 13 less workable, the legislation may well force thousands of debtors from gaining any relief under either chapter of the code. Such debtors will find themselves in bankruptcy purgatory--they will have to either lower their income (or borrow more money) so that they can qualify for chapter 7 or be denied a fresh start altogether and be left at the mercy of their creditors. Many such people might very well have filed chapter 13 cases under current law. But don't just take my word for it colleagues. In a July 12 ``Dear Colleague'' letter the author of the Senate bill admits that. The attachment to the letter states: ``the proposed bills will result in fewer chapter 13s.'' What does all of this add up to, Mr. President? Exactly this: on one hand, you have the bill's supporters claiming that this will cause more debtors to file under chapter 13 and result in greater repayment of creditors, and on the other you have a letter from the author of the legislation saying precisely the opposite. I say to my colleagues, this cuts to the heart of this entire debate. I hope the banks and credit unions that have been tricked into supporting this legislation ask some hard questions of their lobbyists here in Washington: why are you asking me to support this bill when it will result in fewer chapter 13 repayment plans that allow me to collect what I'm rightfully owed? Indeed the chief economist of the Credit Union National Association, Bill Hampel, now believes that the proposed changes to the Bankruptcy Code will not result in increased loan recoveries for credit unions. Where are the savings to consumers in this bill, Mr. President? Supporters are running around claiming billions in dollars will be saved under this bill. Well, if fewer people are filing for chapter 13, and those that do file will be more likely to drop out, where are the savings? I hope the sponsors come to the floor to answer this question. I think there could be two answers Mr. President. The first answer is that there will be no increased repayments under this bill. That there will be no lowering of the cost of credit for consumers. But the second answer is even more troubling, because I think the truth is, Mr. President, that the only way this bill could result in increased payments to creditors is that it will deny many debtors from filing for bankruptcy altogether. Fresh starts will be too costly and prohibitively difficult for many under this bill so lives will be ruined, wages will be garnished, homes will be lost, and cars will be repossessed. I mean we all know there aren't many assets out there to be seized, but I guess the theory is that if you squeeze enough stones you will eventually get some blood. But the cost will be increased misery, the cost will be more economic devastation for those who are already devastated. bankruptcy is a safety net for the middle class The proponents of this bill argue that people file because they want to get out of their obligations, because they're untrustworthy, because they're dishonest, because there is no stigma in filing for bankruptcy. But any look at the data tells you otherwise. We know that in the vast majority of cases it is a drastic step taken by families in desperate financial circumstances and overburdened by debt. The main income earner may have lost his or her job. There may be sudden illness or a terrible accident requiring medical care. Specifically we know that nearly half of all debtors report that high medical costs forced them into bankruptcy--this is an especially serious problem for the elderly. But when you think about it, a medical crisis can be a double financial whammy for any family. First there are the high costs associated with treatment of serious health problem. Costs that may not be fully covered by insurance, and certainly the over 30 million Americans without health insurance are especially vulnerable. But a serious accident or illness may disable--at least for a time--the primary wage earner in the household. Even if it isn't the person who draws the income, a parent may have to take significant time to care for a sick or disabled child. Or a son or daughter may need to care for an elderly parent. This means a loss in income. It means more debt and the inability to pay that debt. Are people overwhelmed with medical debt or sidelines by an illness, deadbeats? This bill assumes they are. For example, it would force them into credit counseling before they could file--as if a serious illness or disability is something that can be counseled away. Women single filers are now the largest group in bankruptcy, and are one third of all filers. They are also the fastest growing. Since 1981, the number of women filing alone increased by more than 700 percent. A woman single parent has a 500 percent greater likelihood of filing for bankruptcy than the population generally. Single women with children often earn far less than single men aside for the difficulties and costs of raising children alone. Divorce is also a major factor in bankruptcy. Income drops, women, again, are especially hard hit. They may not have worked prior to the divorce, and now have custody of the children. Are single women with children deadbeats? This bill assumes they are. The new nondischargeability of credit card debt will hit hard those women who use the cards to tide them over after a divorce until their income stabilizes. And the safe harbor in the conference report which proponents argue will shield low and moderate income debtors from the means test will not benefit many single mothers who need help the most because it is based on the combined income of the debtor and the debtor's spouse, even if they are separated, the spouse is not filing for bankruptcy, and the spouse is providing no support for the debtor and her children. In other words, a single mother who is being deprived of needed support from a well-off spouse is further harmed by this bill, which will deem the full income of that spouse available to pay debts for determination of whether the safe harbor and means test applies. Mr. President, you will hear my colleagues talk about high economic growth and low unemployment and wonder how so many people could be in circumstances that would require them to file for bankruptcy. Well, the rosy statistics mask what has been modest real wage growth at the same time the debt burden on many families has skyrocketed. At it also masks what has been real pain as certain industries and certain communities as the economies restructure. Even temporary job loss may be enough to overwhelm a family that carries significant loans and often the reality is that a new job may be at a lower wage level--making a previously manageable debt burden unworkable. So what does this bill do to keep people who undergo these wrenching experiences out of bankruptcy? Nothing. Zero. Tough luck. In stead, this conference report just makes the fresh start of bankruptcy harder to achieve. But this doesn't change anyone circumstances, this doesn't change the fact that these folks no longer earn enough to sustain their debt. Mr. President, there is not one thing in this so called bankruptcy reform bill that would promote economic security in working families. It is sham reform. When you push the rhetoric aside, one thing becomes clear: The bankruptcy system is a critical safety net for working families in this country. It is a difficult demoralizing process, but for nearly all who decided to file, it means the difference between a financial disaster being temporary or permanent. The repercussions of tearing that safety net asunder will be tremendous, but the authors of the bill remain deaf to the chorus of protest and indignation that is beginning to swell as ordinary Americans and Members of Congress begin to understand that bankrupt Americans are much like themselves--are exactly like themselves--and that they are only one layoff, one medical bill, one predatory loan away from joining the ranks. For the debtor and his family the benefit of bankruptcy--despite the embarrassment, despite the humiliation of acknowledging financial failure--is obvious, to get out from crushing debt, to be able to once again attempt to live within ones means, to concentrate ones income on clear priorities such as food, housing and transportation. But it is also the fundamental principles of a just society to ensure that financial mistakes or unexpected circumstances do not mean banishment forever from productive society. Mr. President, the fresh start that is under attack here in the Senate today is nothing less than a critical safety net that protects America's working families. As Sullivan Warren and Westbrook put it in ``The Fragile Middle Class'': Bankruptcy is a handhold for middle class debtors on the way down. These families have suffered economic dislocation, but the ones that file for bankruptcy have not given up. They have not uprooted their families and drifted from town to town in search of work. They have not gone to the underground economy, working for cash and saying off the books. Instead, these are middle class people fighting to stay where they are, trying to find a way to cope with their declining economic fortunes. Most have come to realize that their incomes will never be the same as they once were. As their comments show, they realize they can live on $30,000 or $20,000 or even $10,000. But they cannot do that and meet the obligations that they ran up while they were making much more. When put to a choice between paying credit card debt and mortgage debt, between dealing with a dunning notice from Sears and putting groceries on the table, they will go to the bankruptcy courts, declare themselves failures, and save their future income for their mortgage and their groceries. I say to my colleagues, there may be many different standards that different members have for bringing legislation to the floor of the United States Senate. We come from different backgrounds, we come from different states, we have different philosophies about the role of government in society. We have differing priorities. But for God's sake, there should be one principle that all of us can get behind and that is that we should do no harm here in our work to America's working families. That's what at stake here. This is a debate about priorities. This is a debate about what side you're on. This is a debate about who you stand with. Will you stand with the big banks and the credit card companies or will you stand with working families, with seniors, with single women with children, with African-Americans and Hispanics. But I would say to my colleagues on the floor of the U.S. Senate today that this is not a debate about winners and losers. Because we all lose if we erode the middle class in this country. We all lose if we take away some of the critical underpinnings that shore up our working families. Sure, in the short run big banks and credit card companies may pad their profits, but in the long run our families will be less secure, our entrepreneurs will become more risk adverse and less entrepreneurial. How so? Well this is how a Georgia Congressman described the issue in 1841: Many of those who become a victim to the reverses are among the most high-spirited and liberal-minded men of the country--men who build up your cities, sustain your benevolent institutions, open up new avenues to trade, and pour into channels before unfilled the tide of capital. Mr. President, this is still true today. This isn't a debate about reducing the high number of bankruptcies. No way will this legislation do that. Indeed, by rewarding the reckless lending that got us here in the first place we will see more consumers over burdened with debt. No, this is a debate about punishing failure. Whether self inflicted or uncontrolled and unexpected. This is a debate about punishing failure. And if there is one thing that this country has learned, punishing failure doesn't work. You need to correct mistakes, prevent abuse. But you also lead to lift people up when they've stumbled, not beat them down. Of course, what the Congress is poised to do here with this bill is even worse within the context of this Congress. This is a Congress that has failed to address skyrocketing drug costs for seniors, this is a Congress that has failed to enact a Patients' Bill of Rights much less give all Americans access to affordable health care. This is a Congress that does not invest in education, that does not invest in affordable child care. This is a Congress that has yet to raise the minimum wage. But instead, we declare war on America's working families with this bill. What is clear is that this bill will be the death of a thousand cuts for all debtors regardless of whether the means test applies. There are numerous provisions in the bankruptcy reform bill designed to raise the cost of bankruptcy, to delay its protection, to reduce the opportunity for a fresh start. But rather than falling the heaviest on the supposed rash of wealthy abusers of the code, they will fall hardest on low- and middle-income families who desperately need the safety net of bankruptcy. lenders should be held responsible You know, a lot of folks must be watching the progress of this bankruptcy bill over the course of this year with awe and envy. Can my colleagues name one other bill that the leadership has worked so hard and with such determination to move by any and all means necessary? Certainly not an increase in the minimum wage. Certainly not a meaningful prescription drug benefit for seniors, certainly not the reauthorization of the Elementary and Secondary Education Act. On many issues, on most issues, this has been a do nothing Congress. But on so- called bankruptcy reform, the Senate and House leadership can't seem to do enough. One can only wonder what we could have accomplished for working families if the leadership had the same determination on other issues. Unfortunately those other issues did have the financial services industry behind it. And you have to give them credit--no pun intended-- over the past couple of years they have played the Congress like a violin. And what do you know, here we are trying to ram through this bankruptcy bill in the 11th hour as the 106th Congress draws to a close. In reading the consumer credit industry's propaganda you'd think the story of bankruptcy in America is one of large numbers of irresponsible, high income borrowers and their conniving attorney using the law to take advantage of naive and overly trusting lenders. As it turns out, that picture of debtors is almost completely inaccurate. The number of bankruptcies has fallen steadily over the past months, charge offs (defaults on credit cards) are down and delinquencies have fallen to the lowest levels since 1995, and now all sides agree that nearly all debtors resort to bankruptcy not to game the system but rather as a desperate measure of economic survival. It also turns out that the innocence of lenders in the admittedly still high numbers of bankruptcies has also been--to be charitable-- overstated. As high cost debt, credit cards, retail charge cards, and financing plans for consumer goods have skyrocketed in recent years, so have the number of bankruptcy filings. As the consumer credit industry has begun to aggressively court the poor and the vulnerable, bankruptcies have risen. Credit card companies brazenly dangle literally billions of card offers to high debt families every year. They encourage card holders to make low payments toward their card balances, guaranteeing that a few hundred dollars in clothing or food will take years to pay off. The lengths that companies go to keep their customers in debt is ridiculous. So Mr. President, in the interest of full disclosure--something that the industry itself isn't very good at--I'd like my colleagues to be aware of what the consumer credit industry is practicing even as it preaches the sermon of responsible borrowing. After all, debt involves a borrower and a lender; poor choices or irresponsible behavior by either party can make the transaction go sour. So how responsible has the industry been? Well I suppose that it depends on how you look at it. On the one hand, consumer lending is terrifically profitable, with high-cost credit card lending the most profitable of all (except perhaps for even higher costs credit like payday loans). So I guess by the standard of responsibility to the bottom line they've done a good job. On the other hand if you define responsibility as promoting fiscal health among families, educating on judicious use of credit, ensuring that borrowers do not go beyond their means, then it's hard to imagine how the financial services industry could be bigger dead beats. According to the Office of the Comptroller of Currency, the amount of revolving credit outstanding--that is, the amount of open-ended credit (like credit cards) being extended--increased seven times during 1980 and 1995. And between 1993 and 1997, during the sharpest increases in the bankruptcy filings, the amount of credit card debt doubled. Doesn't sound like lenders were too concerned about the high number of bankruptcies--at least it didn't stop them from pushing high-cost credit like Halloween candy. Indeed, what do credit card companies do in response to ``danger signals'' from a customer that they may be in over their head. According to ``The Fragile Middle Class,'' an in depth study of who files for bankruptcy and why, the company's reaction isn't what you'd think. Many credit card issuers respond to a customer who is exceeding his or her credit limit by charging a fee--and raising their credit limit. The practice of charging default rates of interest, which often run into the 20 to 30 percent range, makes customers who give the clearest signs of trouble--missing payments--among the most profitable for the issuers. That may sound stupid to you and me colleagues, but it gets more bizarre: Banks actively solicit debtors for new credit after they file for bankruptcy--this way, the company knows this customer will take on debt, but will not be legally able to seek another bankruptcy discharge for another 6 years. As ``The Fragile Middle Class'' goes on to state: [Many] attribute the sharp rise in consumer debt--and the corresponding rise in consumer bankruptcy--to lowered credit standards, with credit card issuers aggressively pursuing families already carrying extraordinary debt burdens on incomes too low to make more than minimum repayments. The extraordinary profitability of consumer debt repaid over time has attracted lenders to the increasingly high-risk-high- profit business of consumer lending in a saturated market, making the link between the rise in credit card debt and the rise in consumer bankruptcy unmistakable. So in other words colleagues, those folks who may have come into your office this year or last year talking about how they needed protection from customers walked away from debts, who thought Congress should mandate credit counseling--to promote responsible money management--as a requirement for seeking bankruptcy protection, who argued that reform of the bankruptcy code is needed because of decline in the stigma of bankruptcy have been pouring gasoline on the flames the whole time. Of course, in the end, if his bill passes, it's working families who get burned. But guess what? It gets even worse, because the consumer finance industry isn't just reckless in its lending habits, big name lenders all too often break or skirt the law in both marketing and collecting. For example: In June of this year the Office of the Comptroller of the Currency reached a settlement with Providian Financial Corporation in which Providian agreed to pay at least $300 million to its customers to compensate them for using deceptive marketing tactics. Among these were baiting customers with ``no annual fees'' but then charging an annual fee unless the customer accepted the $156 credit protection program (coverage which was itself deceptively marketed). The company also misrepresented the savings their customers would get from transferring account balances from another card. In 1999, Sears, Roebuck & Co. paid $498 million in settlement damages and $60 million in fines for illegally coercing reaffirmations-- agreements with borrowers to repay debt--from its cardholders. But apparently this is just the cost of doing business: Bankruptcy judges in California, Vermont, and New York have claimed that Sears is still up to its old strong arm tactics, but is now using legal loopholes to avoid disclosure. Now colleagues, Sears is a creditor in one third of all personal bankruptcies. And by the way, this legislation contains provisions that would have protected Sears from paying back any monies that customers were tricked into paying under these plans. This July, North American Capital Corp., a subsidiary of GE, agreed to pay a $250,000 fine to settle charges brought by the Federal Trade Commission that the company had violated the Fair Debt Collection Practices Act by lying to and harassing customers during collections. In October, 1998, the Department of Justice brought an antitrust suit against VISA and Mastercard, the two largest credit card associations, charging them with illegal collusion that reduced competition and made credit cards more expensive for borrowers. Now Mr. President, this is just a few examples, I could go on and on. At a minimum, these illegal and unscrupulous practices rob honest creditors who play by the rules of repayment. And the cost to debtors and other creditors alike are tremendous. But other practices aren't illegal, merely unsavory. For example, credit card companies perpetuate high interest indebtedness by requiring low minimum payments and in some cases canceling the cards of customers who pay off their balance every month. Using a typical minimum monthly payment rate on a credit card, it would take 34 years to pay off a $2,500 loan, and total payments would exceed 300 percent of their original principal. A recent move by credit card industries to make the minimum monthly payment only 2 percent of the balance rather than 4 percent--further exacerbates the problems of some uneducated debtors. Lenders routinely offer low ``teaser'' interest rates which expire in as little as 2 months and engage in ``risk-based'' pricing which allows them to raise credit card interest rates based on credit changes unrelated to the borrower's account. Many credit card contracts now contain binding arbitration clauses--buried in the fine print of contracts which are often not even included with pre-approved card offers--that cut off the borrowers ability to seek redress in the courts in the case of a dispute. Even more ironic: at the same time that the consumer credit industry is pushing a bankruptcy bill that requires credit counseling for debtors, the Consumer Federation of America found that many prominent creditors have slashed the portion of debt repayments they shared with credit counseling agencies--in some cases by more than half. This may force some agencies to cut programs and serve fewer debtors. At the same time, the industry has stopped the practice of eliminating or significantly reducing the interest rates charged on debts being repaid with the help of a counseling agency making counseling less likely to succeed. Mr. President, let me repeat myself in case my colleagues somehow missed the blatant hypocrisy of what's going on here: The big banks and credit card companies are pushing to rig the system so that you cannot file for bankruptcy unless you perform credit counseling at the same time that they are jeopardizing the health the credit counseling industry and making it significantly more costly for debtors. That's pretty brazen, but as my colleagues will hear over and over in this debate, this isn't just an industry that wants to have it both ways, it wants to have it several different ways. Of course these are mild abuses compared to predatory lending. Schemes such as payday loans, car title pawns, and home equity loan scams harm tens of thousands of more Americans on top of those shaken down by the mainstream creditors. Such operators often target those on the economic fringe like the working poor and the recently bankrupt. They even claim to be performing a public service: providing loans to the uncreditworthy. It just also happens to be obscenely profitable to overwhelm vulnerable borrowers with debt at usurious rates of interest. Hey, who said good deeds don't get rewarded? Reading this conference report makes it clear who has the clout in Washington. There is not one provision in this bill that holds the consumer credit industry truly responsible for their lending habits. My colleagues talk about the message they want to send to deadbeat debtors, that bankruptcy will no longer be a free ride to a clean slate. Well what message does this bill send to the banks, and the credit card companies? The message is clear: make risky loans, discourage savings, promote excess, and Congress will bail you out by letting you be more coercive in your collections, by putting barriers in between your customers and bankruptcy relief, and by ensuring that the debtor will emerge from bankruptcy with his vassalage to you intact. This is in stark contrast to the numerous punitive provisions of the bill aimed at borrowers. So Mr. President, the record is clear: lenders routinely discourage healthy borrowing practices, encourage excessive indebtedness and impose barriers to paying of debt all in the name of padding their profits. It would be a bitter irony if Congress were to reward big banks, credit card companies, retailers, and other lenders for their bad behavior, but that is exactly what passage of bankruptcy reform legislation would do. I would characterize the debate like this and make it very simple for my colleagues. This is fundamentally a referendum on Congress's priorities and you simply need to ask yourself: whose side am I on? Am I on the side of working families who need a financial fresh start because they are overburdened with debt? Am I for preserving this critical safety net for the middle class? Will I stand with the civil rights community, and religious community, and the women's community, and consumer groups and the labor unions who fight for ordinary Americans and who oppose this bill? Or will you stand with the credit card companies, and the big banks, and the auto lenders who desperately want this bill to pad their profits? I hope the choice will be clear to colleagues.

Mr. WELLSTONE

Mr. WELLSTONE. First of all, I thank Senator Grassley. I very much appreciate his effort, with Senator Kennedy. He does not give in, especially when it is a matter of principle to him. I thank him for his good work.

Mr. WELLSTONE

Mr. WELLSTONE. I will grant 5 minutes to the Senator from Montana. I say to the Senator from Iowa, if I can get his attention, following the Senator from Montana, I think the Senator from Iowa wants to speak. So the Senator from Iowa will follow. I think he is going to take that time out of the Republican time.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I hope every Democrat or staff member heard the words of Senator Feingold. His words will be memorable in terms of the record of the Senate. They are prophetic for now and in the future. I thank the Senator for the power of his presentation, for the power of his words. I ask the Senator from Illinois how much time he thinks he will need.

Mr. WELLSTONE. Mr. President, I yield 20 minutes to the Senator from Illinois, Mr. Durbin.

Mr. WELLSTONE. I did tell Senator Harkin I would grant him some time. I want to allow some time for myself to speak in opposition to this as well. Let me see how things go.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I will take 1 minute because our leader is on the floor. I thank Senator Durbin. I only heard part of what he said but the conclusion especially. I will build on what he said, except I won't do it as well. Whatever Senators think about the content of this bill--and there is much to question--it is a much worse bill than the bill passed by the Senate before. Senator Durbin has more credibility on this because he worked on the original bankruptcy bill and was responsible for much of its content which was much better than what we have seen in recent days. This is a mockery of the legislative process. Any minority, any Senator, anyone who loves this institution, can't continue to let people in the majority take a conference report, gut it, and put in a whole different bill, and then bring it here and jam it down everybody's throats. I certainly hope Senators who care about this legislative process, and who care about the rights of the minority and about a public process with some accountability, will at least vote against cloture. I think that is almost as important an issue as the content, in terms of the future of this body. I am not being melodramatic about it. I hope we will have good support in the vote against cloture, much less the vote against the final product. I hope tomorrow we will be able to stop this. I yield the floor.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I object. We need to have a discussion about this.

Mr. WELLSTONE

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

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I don't think I will even need to take 5 minutes tonight. There will be time tomorrow to discuss this conference report. Then, if there should be cloture, we will see. There is also up to 30 minutes for postcloture debate. There are a number of Senators who will have a lot to say about this bill. I make one point tonight for colleagues because there will be plenty of opportunity to talk about it substantively later. This piece of legislation that comes before the Senate is what I call the invasion of the body snatchers. This was a State Department authorization bill that has been completely gutted. There is not one word about the State Department in this bill. The only thing that is left is the bill number. Instead of the bankruptcy bill, it was put into this conference report. This is hardly the way to legislate.

Mr. WELLSTONE. I am happy to yield to the Senator.

Mr. WELLSTONE. I say to the Senator from New York that is my understanding.

Mr. WELLSTONE. This conference report is worse than the bill that passed the Senate. The Schumer provision was taken out. The Kohl provision was taken out. It is absolutely amazing to me that we would try to jam through a bill, which I believe is very harsh toward the most vulnerable citizens, which purports to deal with the abuse--the American Bankruptcy Institute states, at best, a 3-percent abuse--but, at the same time, enables people who have millions of dollars to buy luxurious homes in some States in the United States of America and shield all their assets from bankruptcy. We do great for people who have millions of dollars to buy luxury homes and shield themselves from any liability, but we are going to pass a piece of legislation--and I will have the documentation tomorrow from bankruptcy professors, law professors, and judges across the country that have roundly condemned a piece of legislation that is one- sided--that doesn't call for the credit card companies to be accountable at all, is harsh in its impact on the most vulnerable citizens, is opposed by the civil rights community broadly defined, women's organizations, consumer organizations, labor organizations, and a good part of the religious community because of its one-sidedness. It is so harsh in its impacts on the most vulnerable citizens. I will lay this case out because it claims to deal with the problem of widespread abuse. The American Bankruptcy Institute tells us at best we are talking 3 percent. I have seen no high figures presented by anybody. The bill now is worse than what Senators voted on on the floor of the Senate. Again, the process is absolutely outrageous. A State Department bill, on which hardly anybody was consulted, was completely gutted, and a bankruptcy report put in instead. I hope my colleagues will defeat this piece of legislation. I come to the floor tonight to let Senators know there are a number of Senators ready to debate. We will have much to say tomorrow. If there should be cloture--we will see--we will have much to say after that cloture vote as well. The more people in this country know the substance of this piece of legislation and the outrageous way this is being done, I think the angrier people will become. It is important people in this country know what this piece of legislation is about and the harsh impact it will have on so many citizens--women, low-income people, moderate- income people, working income people. On this conference report, Senators who decided to do this, dared not do anything about a family being able to take millions of dollars and shielding themselves from liability. I yield the floor.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I rise today to voice my strong support for the passage of H.R.782, The Older Americans Amendments Act of 1999. Even with the support of seniors' advocacy groups, it has taken the Congress a full five years to reach bipartisan agreement on this legislation. We should not miss this opportunity to keep our commitment to our most vulnerable senior citizens. I want to applaud the persistence, commitment, and leadership of Chairman Jeffords and Senators DeWine, Mikulski and Kennedy, their staffs, and other colleagues on the HELP committee who have been unwilling to give up during this long process. With the enactment of the Older Americans Act in 1965, Congress created a new Federal program specifically designed to meet the social services needs of older people. In 1972, Congress added the best known program ``Meals on Wheels'' which brought nutritionally balanced meals to seniors' homes or to seniors in congregate settings. In Minnesota alone, 185,000 seniors benefit from this seniors' meal program. Whenever I talk with seniors or their family members in Minnesota, I hear about this valuable service that provides seniors with necessary nutrition and, in the congregate settings, necessary socialization. On the 35th anniversary of the Older Americans Act, it is fitting that in a bipartisan bicameral manner we vote to continue the Act's broad policy objectives of providing programs related to health, housing, long-term care, employment, retirement, and community services for low and moderate income seniors. I hope the Senate will overwhelmingly pass this legislation, as did the House yesterday, and signal America's continuing commitment to our senior citizens. In addition to Meals on Wheels, this legislation continues the popular senior jobs program which provides financial help for needy seniors, provides them with a sense of meaning and usefulness, and also expands their opportunities for needed socialization. During the 1999- 2000 program year, Green Thumb (one of the grantees) in Minnesota has exceeded the major goals set by Congress and the Department of Labor, DOL, for job placement, while serving 1,188 mature job seekers. In addition, Minnesota seniors provided nearly 640,000 hours of community services to almost 500 public and non-profit ``host agencies'', including schools, hospitals, rest homes, libraries, parks, senior dining sites and senior centers, museums, and many more. During this past winter, Green Thumb in Minnesota engaged in a special partnership with the Census Bureau to assist in recruiting older census workers. As a result of Green Thumb's advertising, over 2,700 mature workers were referred to the Census Bureau. With support of the Older Americans Act, Green Thumb provided job counseling and training to most of these workers. In total, for the 1999-2000 program year, approximately 2,260 Minnesota seniors were placed in jobs through all the grantee programs in the state. Programs like these are invaluable for the seniors involved, for their families, and for communities. We must vote to continue them. This legislation also contains a number of new programs which I wholeheartedly endorse because I believe they will protect seniors and provide support for their families and communities. Most noteworthy is the National Family Caregiver Program which is authorized at $125 million. Minnesota will receive about $1.8 million for the program. The Caregiver Program will provide grants to states for the following long- term care services: information about available services to caregivers, whether they be spouses, children, or grandchildren; assistance to caregivers in gaining access to services; individual counseling; organization of support groups and caregiver training to help families make decisions and solve programs related to their care giving roles; and, perhaps most important of all, respite services to provide families temporary relief from care giving responsibilities. This legislation also authorizes new programs for protection of older women from domestic violence and sexual abuse, rural health care model programs, and computer training. There are also grants to establish multi- disciplinary centers of gerontology to do research and train people in different disciplines to work with the elderly. As our elderly population grows so does the need for appropriately-trained people to meet their health and social needs. Every program in The Older Americans Amendments Act of 1999 is needed and will contribute to the emotional and physical well being of our seniors, those who love them, and the communities in which they live. I urge all of my colleagues to vote for this bill.

Mr. WELLSTONE. I move to reconsider the vote.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I rise today to introduce the Medicare Mental Health Modernization Act, a bill to improve the delivery of mental health services through the Medicare health care system. This improvement and modernization of mental health services in the Medicare system is long overdue, as it has remained virtually unchanged since it was enacted by Congress in 1965. In the 35 years since then, the scientific breakthroughs in our understanding of mental illnesses and the enormous improvements in medications and other effective treatments have dramatically changed our understanding and treatment of mental illness. Yet, the health care systems, both public and private, lag behind in its treatment of this potentially life-threatening disease, one that affects the young and the old. As we work to improve health care for all Americans, in all health care systems, the ever-growing population of older Americans make it all the more urgent that we bring the Medicare system into the 21st century, and bring mental health care to those in need. Though they are so often not recognized, mental health problems among the elderly are widespread and life-threatening. Americans aged 65 years and older have the highest rate of suicide of any population in the United States, and suicide rates increase with age. While this age group accounts for only 13 percent of the U.S. population, Americans 65 and older account for 20 percent of all suicide deaths. All too often, depression among the elderly is untreated or inappropriately treated, and this disease and other illnesses such as Alzheimer's disease, anxiety, late-life schizophrenia, can lead to severe impairment or death. Major depression is strikingly prevalent among older people, with between 8 and 20 percent of older people in community studies showing symptoms of depression. Studies of patients in primary care settings show that up to 37 percent are experiencing such symptoms, although they often go untreated. Depression is not a normal part of aging, but a serious debilitating disease. Almost 20 percent of the population of individuals age 55 and older experience a serious mental disorder. What is most alarming is that most elderly suicide victims--70 percent--have visited their primary care doctor in the month prior to their completed suicide. It is critical that the mental health expertise that is needed be provided within the Medicare system, and that screening, diagnosis, and treatment be provided in a timely manner. Medicare coverage for mental health services is markedly different from other outpatient services. In order to receive mental health care, seniors must pay, out of their own pockets, half the cost of a visit to their mental health specialist, an extremely unfair burden to place on the elderly, who are so often facing other health or life difficulties as well. We know too that substance abuse, particularly of alcohol and prescription drugs, among adults 65 and older is one of the fastest growing health problems in the United States, with 17 percent of this age group suffering from addiction or substance abuse. While addiction often goes undetected and untreated among older adults, aging and disability only makes the body more vulnerable to the effects of these drugs, further exacerbating underlying health problems, and creating a serious need for treatment that recognizes these vulnerabilities. Medicare also provides health care coverage for non-elderly individuals who are disabled, through Social Security Disability Insurance, SSDI. According to the Health Care Financing Agency, HCFA, Medicare is the primary health care coverage for the 5 million non- elderly, disabled people on SSDI. Up to 40 percent of these individuals have a diagnosis of mental illness and/or addiction, and also face severe discrimination in their mental health coverage. What will my bill do? The Medicare Mental Health Modernization Act has several important components. First, the bill reduces this discriminatory 50 percent copayment for mental health care to 20 percent, which is equal to the level that applies to every other outpatient service in Medicare. This is straightforward, fair, and the right thing to do. By doing so, this provision will increase access to mental health care overall, especially for those who currently forego seeking treatment, and instead, find themselves suffering from worsening mental health conditions. Secondly, the bill adds intensive residential services to the Medicare mental health benefit package. This provision will give people suffering from mental illnesses such as Alzheimer's disease or late-life schizophrenia an alternative to going to nursing homes. Instead, they will be able to be cared for in their homes or in more appropriate residential settings. I also ask the Secretary for Health and Human Services to conduct a study of the current Medicare coverage criteria to determine the extent to which people with these forms of illnesses are receiving the appropriate care that is needed. Finally, my bill expands the number of mental health professionals eligible to provide services through Medicare to include clinical social workers and licensed professional mental health counselors. Provision of adequate mental health services provided through Medicare requires more trained and experienced providers for the aging and growing population and should include those who are appropriately licensed and qualified to deliver such care. These changes are needed now. The mental health groups most concerned with medicare improvement are strongly supportive of this bill, including, among others, the American Counseling Association, the National Alliance for the Mentally Ill, the National Mental Health Association, the American Psychological Association, the Bazelon Center for Mental Health Law, and the National Association of State Mental Health Program Directors. The U.S. Surgeon General David Satcher recognized the urgency in his recent reports on mental health: ``Mental Health: A Report of the Surgeon General'' and ``The Surgeon General's Call to Action to Prevent Suicide''. Dr. Satcher stated, ``Disability due to mental illness in individuals over 65 years old will become a major public health problem in the near future because of demographic changes. In particular, dementia, depression, and schizophrenia, among other conditions, will all present special problems for this age group.'' For too long we have continued to neglect those with mental illness in our society, and the Medicare system is no exception. I urge your cosponsorship of this bill as we begin our work in this new century. It is time to treat the elderly in our society, particularly those with serious, debilitating diseases, with the care, respect, and fairness they deserve.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I want to thank my colleagues for their support for H.R. 5234, which I introduced in the Senate as S. 3060. I am so pleased that the Senate will pass this critical legislation. It will ensure that widows and widowers of Hmong veterans who died in Laos, Thailand and Vietnam are also covered by the Hmong Veterans Naturalization Act. This critical change applies fairness to the law so that widows, like spouses of surviving veterans, will be able to take the United States citizenship test with a translator. The United States owes a great debt to the widows of Hmong veterans. During the Vietnam War, in the covert operations in Laos, they sacrificed everything they had in service to this country. It is almost impossible to imagine the impact of the Vietnam War on the Hmong Community in South East Asia. Hmong soldiers died at ten times the rate of American soldiers in the Vietnam War. As many as 20,000 Hmong were killed serving our country. When adults were killed, children as young as twelve and thirteen rose up to take their place. When Hmong soldiers died, they left behind families with no means of support. They left their loved ones to fend for themselves in a hostile country. Because of the covert nature of the United States Operations in Laos, the heroics and sacrifice of this community long went unrecognized. By facilitating the naturalization of Hmong widows, we offer small compensation, but tremendous thanks and honor to people who gave us their lives and livelihoods. Twenty five years later, we cannot give them back their loved ones, though their loved ones gave their lives for us. All we can do is we honor their service in a way that is long overdue and give them the tools to become citizens in the nation for which they heroically fought, and died. No one in Congress understood better what we owe to the Hmong community than my old and dear friend, Congressman Bruce Vento. No one here did more for the Hmong people. He dedicated himself to ensure that Hmong and Lao veterans and their families received the honor and respect that was so long deserved and too long delayed. One of the many great legacies of his life will indeed be his work with the Hmong community in Minnesota. I wish to honor him today for that dedication and for that deep respect and compassion. But there is no tribute I can deliver that would bring him more greater pride than when 45,000 Hmong veterans, widows and spouses whom he was one of the first to recognize as American heroes, become American citizens. I thank my colleagues again for their support.

Mr. WELLSTONE

Mr. WELLSTONE. Mr. President, I rise today to offer a few remarks on the fiscal year 2001 VA-HUD Appropriations bill. First, I would like to commend my colleagues on the Appropriations Committee for doing some excellent work on this bill. Many important housing initiatives--including housing assistance for the elderly and disabled, the HOME Investment Partnership Program, the Community Development Block Grant, Housing for People With AIDS, and the Lead- Based Paint Hazard Reduction Program--will all receive funding increases under this bill in fiscal year 2001. Furthermore, an additional 79,000 Section 8 vouchers will be funded under this bill. These are all critical programs, program that help low-income working families find safe and affordable housing, and the authors of this bill should be commended for recognizing the need to continue to fund these programs at the appropriate levels. Having said this, though, I would also like to take a few minutes to express my disappointment that this bill does not include funding for a housing production incentives program, despite the fact that the need to produce more affordable housing in this country is critical. Unfortunately, a Senate provision which would have used $1 billion in excess Section 8 funds to pay for the production and preservation of affordable housing failed to make it into the final conference report. Yet many of the programs that are funded in this bill, including Section 8 housing assistance, only work when affordable housing units are available. It does low-income working families no good whatsoever to be given a rent voucher when they can't find an apartment on which to spend it. As it is written, this bill fails to address one of the most important problems underlying the current affordable housing crisis: the rapid erosion of this country's affordable housing stock. Every year, in fact, every day, we see the demolition of old affordable housing units without seeing the creation of an equivalent number of new affordable housing units. And while there can be no question that some of our existing affordable housing units should be demolished, we have yet to meet our responsibility to replace the old units that are lost with new, better, affordable units. We must do a better job of this, for our current policy simply results in too many displaced families, families who are forced to sometimes double-up or even become homeless in worst-case scenarios, overburdening otherwise already fragile communities. The National Low Income Housing Coalition reports that right now there are a record 5.4 million households, 12.5 million people, that pay more than one half of their income in rent or live in seriously substandard housing. Who are these people? One and a half million are elderly, 4.3 million are children, and between 1.1 and 1.4 million are adults with disabilities. Waiting lists for housing assistance are longer than ever, and there are still far too many people who simply lack shelter altogether--an estimated 600,000 people are homeless in this country on any given night. The fact is that incomes for our poorest citizens are simply not keeping pace with the increase in housing costs. A July 1998 study by the Family Housing Fund found that in Minneapolis-St. Paul rents increased 13 percent from 1974 to 1993 while real incomes declined by 8 percent. They found that there were 68,900 renters with incomes below $10,000 in the Twin-Cities and only 31,200 housing units with rents affordable for these families. That means that there were more than two families for every affordable unit available, and the situation has only gotten worse since then, as the vacancy rate has plummeted to below two percent. Housing is usually considered to be affordable if it costs no more than 30 percent of a household's income. In the Twin Cities area, however, 185,000 households with annual incomes below $30,000 pay more than this amount for their housing. Knowing this, it isn't hard to understand why the number of families entering emergency shelters and using emergency food pantries is on the rise. This situation certainly isn't unique to Minneapolis-St. Paul. Out of Reach 2000, a recent publication by the National Low Income Housing Coalition, finds that the cost of housing is exceeding the reach of low-income families across the country. This study estimates that the national ``housing wage''--a measure that represents what a full-time worker must earn to afford fair market rent, paying no more than 30 percent of their income--for a 2 bedroom apartment is $12.47 an hour, more than twice the minimum wage. The report notes that in no county, metro area, or state is the minimum wage as high as the corresponding housing wage for a 1, 2, or 3 bedroom home at the fair market rent; in more than half of metropolitan areas, the housing wage is at least twice the federal minimum wage. Such high rents are, of course, fueled at least in part by the shortage of housing. Demand for housing exceeds the supply, so rents spiral upwards, far beyond the reach of the poor and often well-beyond the reach of the middle class who find themselves priced out of the very communities in which they grew up. The shortage of affordable housing is so drastic that in Minneapolis-St. Paul, like many other cities, even those families fortunate enough to receive housing vouchers cannot find rental units. Landlords are becoming increasingly selective given the demand for housing and are requiring three months security deposit, hefty application fees, and credit checks that price the poor and young new renters out of the market. In my own State of Minnesota, a family must earn $11.56 an hour, 40 hours a week, 52 weeks out of the year to afford the fair market rent for a two-bedroom apartment, more than double the minimum wage. That's more than double the minimum wage. This means that a person earning the minimum wage in Minnesota would need to work 90 hours a week in order to afford a two bedroom apartment at the fair market rent. Here's the real secret of why so many single parents are in poverty, because it has become impossible for one parent, one worker, to support a family on the bottom rung of the economic ladder. So what happens to those families who are unable to earn $11.56 an hour? Families with a single worker at minimum wage who cannot work 90 hours? The answer is no secret, and is unfortunately too common in all parts of our country. These families quite simply can't afford adequate housing. Instead, families crowd into smaller units, a one bedroom, an efficiency. Sometimes these families double up, two or more families in a home, with multiple generations crowded under one roof. When the stress of multiple families becomes unbearable, they are left with no other option than homeless shelters. Families rent seriously substandard housing, exposing their children to lead poisoning and asthma, in neighborhoods where they don't feel safe allowing their children to play outdoors. They rent housing with leaky roofs, bad plumbing, rodents, roaches, and crumbling walls. And even for such substandard housing, many families find themselves forced to pay more than the recommended 30 percent of their income in rent, sometimes spending more than half of their income on housing costs. Families in this situation must then ``cut corners'' in other ways, sometimes doing without what others might consider necessities. Not luxuries like cable television, but necessities: gas, heat, electricity, food, or medical care. This is simply unacceptable. In an era of such tremendous economic prosperity, no family should have to choose between food and shelter, or heat and medical care. In a recent study of homelessness in Minneapolis-St. Paul, the Family Housing Fund reported that more and more children are experiencing homelessness. On one night in 1987, 244 children in the Twin Cities were in a shelter or other temporary housing. By 1999, 1,770 children were housed in shelter or temporary housing. Let me repeat that: 1,770 children in the Minneapolis-St. Paul area on one night alone spent the night in a homeless shelter or temporary housing. That's seven times as many homeless children in 1999 than in 1987. And families are spending longer periods of time homeless. If they had a family crisis, if they lost their housing due to an eviction, if they have poor credit histories, if they can't save up enough for a two or three month security deposit, they will have longer stretches, longer periods of time in emergency shelters before they transition into homes. Let me provide a stark and disturbing example of the desperate need for affordable housing in this country: for six days in February of this year, the Minneapolis Public Housing Authority distributed applications for families interested in public housing. They distributed applications for only six days, and then stopped entirely. This was the first time since 1996 applications were accepted for public housing and it is likely to be the last time for several years to come. Mr. President, 6,000 families sought applications for public housing in those six days --an average of 1,000 families each day requesting public housing in one metropolitan area. This is not free housing. Residents would be required to pay one-third of their income in rent. This is not luxury housing. Many families seem to look upon public housing with disdain, though I know those communities are rich with the talents and contributions of their tenants. This is not even immediate housing. Many of those families will wait years to get into public housing. Surely this should tell us there is a huge housing crisis. One thousand families a day sought to pay one-third of their income in rent to live in public housing in one metropolitan area. Surely, if this tells us anything, it tells us we must do more. Mr. President, I know this Nation is prosperous. I know we can afford to solve this problem. We can afford to take this step today. We must make a commitment to address the shortage of affordable housing. Although we were not able to include funding for housing production initiatives in this appropriations bill, it is my hope that each of my colleagues will join me next year in assuring that this critical need is met.

Mr. WELLSTONE

Mr. WELLSTONE. I object.

Mr. WELLSTONE

Mr. WELLSTONE. I object.

Mr. WELLSTONE. Mr. President, my understanding is we are on the bankruptcy bill, is that correct?

Mr. WELLSTONE. Mr. President, I withdraw my objection.