the one that passed.
Speaker: Senator Hillary Rodham Clinton (NY)
Title: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
Location: Washington, DC
Date: 03/11/2005
BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005
BREAK IN TRANSCRIPT
Mrs. CLINTON. Mr. President, while I strongly believe that Congress should act to fix the problems in our bankruptcy system, I also believe that this bill is misguided and deeply flawed.
This bankruptcy bill fundamentally fails to accord with the traditional purposes of bankruptcy, which recognize that we are all better off when hard-working people who have suffered financial catastrophe get a ``fresh start' and a second chance to become productive and contributing members of society. With the passage of this legislation, which makes obtaining this fresh start more expensive and more difficult, we are ensuring that many responsible Americans will continue to be buried under mountains of debt, and unable to take back control and responsibility for their lives.
Our Nation's bankruptcy law developed out of a recognition that the world can be a competitive, often unforgiving place. Bankruptcy reform should therefore be directed toward creating a civil society in which valuing individual responsibility is not incompatible with admitting the enduring truth that sometimes bad things happen to responsible, hardworking people. Sometimes, conscientious Americans need help and support against forces that are too big for them to stand against alone. It should be about making sure that both large corporations and individual citizens are held to the same standards of responsibility and accountability.
This bill is flawed in a number of ways. But I want to begin by commenting on one of its most distressing elements. As many people know, I have long been concerned about the burdens placed on America's families by a lack of health care insurance and by rising healthcare costs. In this bill, the Senate had an opportunity to take one important step to help citizens driven to the point of bankruptcy by unavoidable medical problems. Instead, the Senate rejected this opportunity to lighten the load on Americans dealing with the twin blows of medical and financial difficulties.
The Senate's failure to act is all the more striking to me today, because I must submit this statement into the RECORD while attending to a medical situation in my own family. Fortunately, my family is well-insured, and we are not in danger of losing that coverage. I am deeply aware and profoundly grateful for the good fortune we enjoy in having access to quality medical care in the face of significant medical needs.
And I know that many American families are not so lucky. Indeed, among those Americans whose illnesses led to bankruptcy, 75.7 percent of them had insurance at the onset of the illness. Employees with serious long-term illnesses often lose their jobs, which means they also lose their health insurance.
Medical bankruptcy has skyrocketed in recent decades. In 1981, only 8 percent of personal bankruptcy filings were due to a serious medical problem. By contrast, a recent study by researchers from Harvard Law School and Harvard Medical School found that half of personal bankruptcies filed in this country are now due to medical expenses.
In this bill, the majority simply refuses to acknowledge this current crisis of medical bankruptcy. It refuses to acknowledge that sometimes medical disaster strikes. ``Life Happens.' The family breadwinner is struck down by illness, and the entire family's financial future veers toward collapse.
This is not a rare occurrence; we all know people who have endured hardships like medical emergencies that break the bank, layoffs, or vanishing pension plans. These are the people the bankruptcy laws are designed to protect. They are facing hardships because of forces outside of their control.
I support real reform that would hold accountable people driven into bankruptcy because of their own irresponsibility. But the evidence shows that the vast majority of chapter 7 bankruptcy filers are not spendthrifts who have run up ther--it cards buying luxury goods. And this bill primarily targets the vast majority of chapter 7 bankruptcy filers who have lived responsibly but are nonetheless facing financial ruin because of the unavoidable vicissitudes of life.
The world has changed since this bill was first considered in 2001. During the past 4 years, workers have sustained unprecedented job losses, endured termination of pension plans, and faced wage cuts and elimination of health care and other benefits as a result of their employer's bankruptcy.
Many of these bankruptcies have been the direct result of wrongdoing by corporate mismanagement. The people who take the biggest hit when big companies go bankrupt aren't the top executives, but the ordinary employees whose pensions and healthcare coverage disappear overnight.
In the last 4 years, the global economy has become relentless. Workers are living with more employment insecurity, and many have to retrain mid-career to adjust to the changing dynamics of the American economy.
We are now a nation at war. And at a time when they are carrying the burden of sending loved ones off to war, military families have become the victims of payday loans charged at 400 percent interest, insurance scams, and other forms of financial chicanery that leave them economically devastated.
Yet this bill does nothing to help these responsible Americans who suddenly find themselves in dire financial straits. In fact, it makes things harder for these individuals to find refuge in bankruptcy. Why is the majority committed to making things harder?
Many of my colleagues on this side of the aisle have asked this question and have received no real answer. So the bottom line is that this bill's proponents, while touting the need for bankruptcy reform and accountability, are willing to address only part of the problem, dealing only with the most vulnerable in our society, and leaving the reform of corporate bankruptcies on the sidelines, requiring no additional accountability with respect to our Nation's companies.
A number of my colleagues in the minority offered amendments in an effort to address many of these changed circumstances, but amendment after amendment was rejected. I simply cannot understand why the Republican majority gave instructions to its caucus to oppose any and all amendments, no matter how reasonable they were or the circumstances they were designed to address.
I find even more disturbing the fact that the majority refused to more appropriately address the special needs of our troops in the context of this legislation. I am baffled by the majority's rejection of Senator DURBIN's ``G.I. Protection Amendment,' which I was proud to co-sponsor, and which was also supported by the Military Officers Association of America, the Air Force Sergeants Association, the National Association for the Uniformed Services, and the Enlisted Association of the National Guard of the United States, among other organizations. I can't understand why the entire Senate didn't cosponsor this amendment to better protect our men and women in uniform and their families. It is troubling and incomprehensible to me that most of my colleagues would refuse to vote for it.
And while refusing to support an amendment that would have helped military families in a meaningful way, the majority of the Senate had no problem rejecting an amendment that was designed to make it harder for millionaires to hide their assets from creditors, even after filing for bankruptcy.
Even though there appears to be a near universal recognition that the bankruptcy law contains a major loophole, one that enables wealthier Americans who file for bankruptcy to shield their assets through what are called ``asset protection trusts,' a majority of the Senate rejected a meaningful amendment to close that loophole.
To make matters even worse, yesterday the Senate, again led by the Republican leadership, rejected an amendment offered by Senator KENNEDY, which would have outlawed unlimited homestead exemptions. This would have prevented the wealthiest Americans from avoiding responsibility by hiding their assets from creditors.
The Senate also rejected an amendment that was intended to reinsert language that had been in the legislation the Senate passed in 2001, which would have prevented the discharge in bankruptcy of all liability for willful violation of protective orders and violent protests of providers of lawful services, such as reproductive health services.
Even though this language was in the 2001 Senate-passed bill, it is conspicuously absent from the bankruptcy bill that the Senate is now considering 4 years later.
In other words, bill proponents, led by the Republican leadership, have called for additional significant financial accountability, but not if you are a corporate entity, not if you are wealthy, and not if you are an organization that a court has found to have violated the law and infringed upon the rights of others.
Almost without exception, the majority has voted across the board against these and other amendments, apparently under strict orders from the Republican leadership to oppose any and all amendments, regardless of whether the amendments were designed to help our troops, to remove loopholes for millionaires, to help families facing medical and financial crisis. This is the antithesis of the American and family values that many of my colleagues so like to talk about.
This legislation, especially after refusal, after refusal, after refusal to support amendments to improve it, is unfair and unjust.
In short, the legislation that the Senate is voting on today, could have, with more careful and good-faith consideration, been a vehicle in which we could have thoughtfully addressed abuses in the bankruptcy process by both consumers and corporations. Unfortunately, the Senate leadership chose to go down a different road.
Because of unforeseen and unavoidable circumstances, I will not be present when the Senate votes on final passage of this bill today. But were I able to be here, I would vote no, because this bill is clearly not in the best interests of the American people.
http://thomas.loc.gov/
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