BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005; Congressional Record Vol. 151, No. 25
(Senate - March 07, 2005)

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[Pages S2111-S2143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
resume consideration of S. 256, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 256) to amend title 11 of the United States 
     Code, and for other purposes.

  Pending:

       Leahy amendment No. 26, to restrict access to certain 
     personal information in bankruptcy documents.
       Feinstein amendment No. 19, to enhance disclosures under an 
     open end credit plan.
       Kennedy amendment No. 44, to amend the Fair Labor Standards 
     Act of 1938 to provide for an increase in the Federal minimum 
     wage.
       Dorgan/Durbin amendment No. 45, to establish a special 
     committee of the Senate to investigate the awarding and 
     carrying out of contracts to conduct activities in 
     Afghanistan and Iraq and to fight the war on terrorism.
       Pryor amendment No. 40, to amend the Fair Credit Reporting 
     Act to prohibit the use of any information in any consumer 
     report by any credit card issuer that is unrelated to the 
     transactions and experience of the card issuer with the 
     consumer to increase the annual percentage rate applicable to 
     credit extended to the consumer.
       Reid (for Baucus) amendment No. 50, to amend section 
     524(g)(1) of title 11, United States Code, to predicate the 
     discharge of debts in bankruptcy by a vermiculite mining 
     company meeting certain criteria on the establishment of a 
     health care trust fund for certain individuals suffering from 
     an asbestos related disease.
       Dodd amendment No. 52, to prohibit extensions of credit to 
     underage consumers.
       Dodd amendment No. 53, to require prior notice of rate 
     increases.


                   Recognition Of The Majority Leader

  The PRESIDENT pro tempore. The majority leader is recognized.


                                Schedule

  Mr. FRIST. Mr. President, today, we are resuming consideration of the 
bankruptcy legislation. Under the order from last week, at 2:30, we 
will begin 3 hours of debate in relation to the Kennedy and Santorum 
amendments regarding minimum wage. That consent agreement provides for 
two votes to begin at 5:30 today on the Kennedy and Santorum minimum 
wage amendments.
  I do remind my colleagues that a cloture motion was filed on Friday, 
and that cloture vote will occur at 2:15 on Tuesday. Senators should 
also be aware that under the provisions of rule XXII, and pursuant to 
our unanimous consent agreement, all first-degree amendments should be 
filed by 2:30 today and second-degrees by noon tomorrow. We also have a 
unanimous consent agreement that provides for a vote in relation to the 
Schumer amendment at 12:15 p.m. tomorrow, on Tuesday.
  With that said, we will have busy sessions over the next couple of 
days as we try to finish our work on the bankruptcy bill. I do hope we 
can invoke cloture tomorrow afternoon and bring this bill to a final 
vote. As all Senators know, if cloture is invoked, germane amendments 
are still in order, and there could be up to an additional 30 hours of 
consideration.

  Last week, we had a productive week. We had full days of debate and 
votes. Therefore, I expect we will complete action on the bill either 
Tuesday or Wednesday of this week.
  Mr. President, I would be happy to turn to the Democratic leader.
  Mr. President, I would like to make a few comments on another issue 
now because at 2:30 today we will be going to the debate on the minimum 
wage amendments.


     Pilgrimage to Selma And The 40th Anniversary of Bloody Sunday

  Mr. President, I rise to spend a few moments reflecting on a 
historical event that occurred 40 years ago today. Historians view the 
1965 Selma to Montgomery Voting Rights March as one of the emotional 
high points of the modern civil rights movement that began in the 
1950s.
  Yesterday, a number of Members of Congress went on a pilgrimage to 
Selma and marched across that Edmund Pettus Bridge. I was part of that 
delegation. I had that opportunity to do that same march in remembrance 
of the Selma to Montgomery 1965 crossing of that bridge in the past.
  From a historical standpoint, as we look back, we recall that 40 
years ago today--actually on a Sunday--but 40 years ago today, on that 
Sunday, on

[[Page S2112]]

that march, approximately 600 people left historic Brown Chapel and 
walked a few blocks and then went around the corner and over that 
Edmund Pettus Bridge, going east toward Montgomery. They went on the 
other side of that arching bridge, and they encountered local law 
enforcement officers. The group of officers and some others drove the 
marchers back across the bridge in a violent episode and series of 
actions over the next few minutes. They were pushed back the equivalent 
of several blocks over the bridge and then back to the church.
  The activity was chaotic. They had billy clubs, tear gas. Most of us 
are familiar with the tragic story. That Sunday now has become known, 
since that time, as Bloody Sunday, and thus today is the 40th 
anniversary of Bloody Sunday. That Bloody Sunday earned, appropriately, 
national attention. And much of what happened in terms of the evolution 
of the civil rights movement, reaching that huge landmark on August 6, 
1965, when President Johnson signed the Voting Rights Act, was 
realized.
  Just a couple of comments about the course of the day. Again, it was 
a large bipartisan delegation of House and Senate Members. We arrived 
in Selma early yesterday morning and visited two of the museums there. 
We then went to the church service at the historic Brown Chapel AME, 
African Methodist Episcopal, Church.
  I had the opportunity to visit and worship in that church before, but 
yesterday it captured me. The church itself was packed. It is a 
historic church, and there is a large balcony in the back and balconies 
on either side.
  As our delegation, which was probably 40 or 50 House and Senate 
Members, crowded in with another several hundred people, with the 
balconies full, you could not help but to imagine what it must have 
been like 40 years ago--41, 42 years ago. In that period, that church 
became the real refuge, sense of security for the movement that evolved 
and really instigated, in many ways, the ability for all Americans to 
vote today, culminating in that signing by President Johnson later in 
1965, on August 6, 1965.
  Yesterday, in the church service, Rev. James Jackson, the pastor of 
that church, opened the service itself. And we had a wonderful sermon 
that was delivered in commemoration by the Rev. C.T. Vivian. Reverend 
Vivian was an inspirational speaker in his presentation.
  But what was fascinating to me was it was his early participation, 
really, in Nashville, TN, working alongside others who were there 
yesterday, Congressman John Lewis and so many others, that in Nashville 
that nonviolent movement, and the discipline involved in that movement, 
was developed. It was developed in meetings, in churches all over 
Nashville, TN, setting out a defined curriculum based on the great 
teachings in the Bible and from Gandhi and so many others.
  It was that same discipline that yesterday now-Congressman John Lewis 
shared with us, as they marched from Brown Chapel, two by two by two, 
where he and Hosea Williams led that march up on that sidewalk, dressed 
in their suits, recognizing that once they got over that bridge, or to 
the peak of that bridge, at the bottom of the hill down there, there 
were law enforcement officers whom they knew in all likelihood would 
drive them back.
  Yesterday was a gorgeous day. To be able to march arm in arm, linked 
across that bridge, with people like Congressman John Lewis and Fred 
Shuttlesworth, who played such a prominent role in Birmingham, and 
Bernard Lafayette, a close personal friend of mine who now lives in 
Connecticut, was a great privilege and a great opportunity.
  I share all this with my colleagues to thank those who could be with 
us but also in recognition of today being that 40th anniversary that, 
yes, was called Bloody Sunday, but did become a turning point and led 
to the rights that we all enjoy today, but underscoring the importance 
of fighting for, with discipline and nonviolence, those rights of 
justice and equality and freedom.
  Mr. President, I yield the floor.
  The PRESIDENT pro tempore. The Senator from Oregon.


                             Energy Prices

  Mr. WYDEN. Mr. President, with crude oil prices at almost $54 a 
barrel, and OPEC meeting in 9 days, I have come to the floor this 
afternoon to urge the administration to pursue what they promised; that 
is, to stand up for our consumers who are facing high oil and gasoline 
prices.
  The news just this last weekend was not good on the pricing front as 
it relates to the American consumer. The Lundberg survey of American 
gasoline retailers came out Sunday and confirmed what a lot of 
Americans suspected. The price of gas is rising high, and it is rising 
fast.
  According to the survey that came out Sunday, the price of gasoline 
has risen nearly 7 cents per gallon in the last 2 weeks, across the 
board, for all grades. And the Lundberg survey indicates that this is 
just the beginning, that higher prices are on the way.
  Now, last week, Mr. President and colleagues, I asked the U.S. 
Secretary of Energy, Mr. Bodman, whether he was going to do what the 
administration promised; that is, to stand up for the consumer and try 
to push OPEC as hard as possible to get some pricing relief when they 
meet in a few days.
  Mr. Bodman said, in response to my questions, that he had not made 
that call and, well, he had a whole lot on his plate. I do not think 
that is good enough. I think we have to ask this administration, and 
the President specifically, about using their political capital now to 
stand up for the American consumer who is getting clobbered by these 
gasoline and oil prices.
  If they are not going to use it now, when are they going to use it? 
Why not use it on behalf of American consumers when there is such a 
demonstrable cause and effect between the price of crude oil rising and 
the price of gasoline rising?
  Over the weekend, the Secretary of the Treasury, Secretary Snow, said 
rising energy prices have the potential to stifle economic growth in 
the near future. Maybe Secretary Snow is willing to get on the phone 
with OPEC if Secretary Bodman will not. But I know somebody ought to be 
doing it. And that is exactly what the President of the United States 
promised in 2000. He said that if the country elected him, he would 
push OPEC very hard to try to turn on the spigot and get some pricing 
relief.

  OPEC is making all the usual noises. They are concerned, they have 
said, about rising prices. They think the market has plenty of oil.
  As I said before, OPEC is going to look out for OPEC. The question is 
whether this administration is going to stand up for the American 
consumer as they promised in 2000. If the Secretary of Energy won't 
pick up the phone to do that, the American people deserve a better 
answer than to say, Well, gosh, I have a whole lot on my plate. If the 
average American didn't send their tax return in on April 15 saying, 
Gosh, I have a lot on my plate, I don't think that would be acceptable, 
not to this administration, not to me, not to anybody. So the excuse 
doesn't wash when it comes to the Energy Department's duty to go to bat 
against high oil prices.
  We need, at home, on a bipartisan basis, as it relates to OPEC 
abroad, to stand up for our consumers who are faced with escalating 
energy prices that seem to go up by the day. I don't think it is right 
to let OPEC run roughshod over the American consumer and we make no 
comment other than to say, Gosh, we have a lot on our plate.
  Nine days from now OPEC is going to meet. Time is ticking away. But 
there is still time for the administration to deliver on what they 
promised to the American people; that is, to protect our consumers from 
high oil and gasoline prices. I urge they take just that action. If Mr. 
Bodman won't do it, as he indicated last Thursday, maybe somebody else 
in the Bush administration will.
  I yield the floor.
  The PRESIDENT pro tempore. As a Senator from the State of Alaska, I 
suggest the absence of a quorum.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Sununu). Without objection, it is so 
ordered.
  Mr. McCONNELL. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending business is S. 256 which has been 
reported.

[[Page S2113]]

  Mr. McCONNELL. Mr. President, I rise today on behalf of every 
American who each year is forced unknowingly to pay a hidden tax. We 
all know we have to pay an income tax, a sales tax, a payroll tax, but 
what about a bankruptcy tax? You may not have heard of this tax, but 
you and every other man, woman, and child in America pay it every 
single year. It is the accumulated cost of higher interest rates on 
credit, higher downpayments on a car or other essential items, and 
higher penalty fees and late charges for financial transactions. It is 
the result of the abuse of America's bankruptcy system which allows 
people who still have the ability to pay back some or all of their debt 
to declare bankruptcy and escape responsibility for what they owe.
  Somebody has to pay those unpaid bills. And that somebody is you. 
Companies have no choice but to pass them on to the consumer.
  When I mention this bankruptcy tax, you may think I am talking about 
small change, the kind of money you can find under your couch cushions. 
You would be wrong. According to a Department of Justice study, the 
bankruptcy tax amounts to a staggering $400 for every man, woman, and 
child in America once a year every year. Let me repeat that so I can be 
sure it soaks in. That is $400 for every man, woman, and child in 
America once a year every year.
  That amount of money would mean a lot to a family in my home State of 
Kentucky where the median income is $36,936 a year. That means the 
average Kentuckian has to work 4 days a year to pay the bankruptcy tax. 
In fact, it is the lower income families who feel the sting of the 
bankruptcy tax the most. Higher interest rates can stop them from 
getting access to credit for a home, transportation to a necessary job, 
or even higher education.
  Our bankruptcy system was originally created to give those who were 
hopelessly mired in debt a way out and a second chance. As long as it 
was used sparingly and applied only to those who most needed its mercy, 
it was the compassionate way for America to make sure that none of her 
neediest became trapped in a lifetime of deficit and despair. But in 
recent years, too many are abusing the bankruptcy system. Last year 
nearly 1.6 million individuals filed for bankruptcy, a record high. 
This number is five times greater than the number of individual 
bankruptcy filings 20 years ago.
  It seems odd so many more Americans would choose bankruptcy over that 
20-year period, especially when you recognize that the last 20 years 
have set new records for economic growth, low unemployment, and low 
interest rates. The answer to this mystery is fraud and abuse of the 
bankruptcy system. In fact, the FBI has estimated over 10 percent of 
all bankruptcy filings involve at least some fraud.
  Bankruptcy was created as a ladder to greater economic opportunity. 
It should not be an escape hatch to avoid responsibility. A few weeks 
ago this Senate, on a bipartisan basis, passed the moderate, 
commonsense Class Action Fairness Act to curb some of the abuses of our 
legal system. It was the first substantive bill passed by this new 
Congress. It was supported by Democrats and Republicans and has been 
signed into law by President Bush. I am very pleased that this 109th 
Congress has started off in a tone of bipartisan agreement and 
cordiality. I think passing the Bankruptcy Abuse Prevention and 
Consumer Protection Act of 2005 can be the next step in furthering that 
sense of cooperation. Like the Class Action Fairness Act, this bill is 
a moderate, commonsense bill with bipartisan support. It passed out of 
the Judiciary Committee with bipartisan support. It has passed this 
Senate with bipartisan majorities before. It should be entirely within 
our power to pass it now and send it on to the President for his 
signature.

  Right now individuals have two options for declaring bankruptcy. They 
may file under chapter 7, surrender their assets to be sold, and then 
be released from all debt. They start again with a fresh slate, leaving 
their creditors unpaid.
  The second option is to file under chapter 13. In that case an 
individual must work with a bankruptcy court and draft a payment plan 
to satisfy as much outstanding debt as possible, given the debtor's 
income. The problem is too many people are filing under the more 
lenient chapter 7, leaving their debts unpaid even when they have 
sizable income and sizable assets. Some are choosing it as an avenue to 
commit fraud.
  The bill currently before the Senate will institute a means test to 
sort out those who file chapter 7 but actually have the ability to live 
up to their obligations. This is not a draconian measure, by any means. 
Only about 7 to 10 percent of chapter 7 filers will be screened out by 
the means test which will be administered by a bankruptcy court.
  Any debtor who earns less than their State's median income--and that 
includes about 80 percent of the debtors in question--will remain in 
chapter 7. Those earning more than the State median income will be 
allowed to deduct certain obligations and expenses from their net 
worth, thus allowing some of them to also remain in chapter 7. And 
anyone left will be able to show special circumstances for why they 
should be allowed to still file under chapter 7. So there will be 
plenty of opportunities for the neediest among us to file chapter 7 and 
use the safe haven of bankruptcy as it was originally intended.
  Those remaining will be required to file under chapter 13. It is not 
too much to ask people to pay back what they owe when they clearly have 
the means to do so. And those who are abusing the system will be 
exposed. Catching the individuals who are defrauding the system to 
avoid responsibility will save America $3 billion a year--a good start 
for reforming our system. That $3 billion rightfully belongs to the 
American people who are forced to pay the egregious bankruptcy tax. 
They are being robbed by an unscrupulous few.
  It is our responsibility to end the fraud and abuse in the bankruptcy 
system by passing this bill. It will strengthen our economy, and it is 
also the right thing to do.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Under the previous order, the hour of 2:30 having arrived, there will 
now be 3 hours of debate, equally divided, on the Santorum and Kennedy 
amendments.
  The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, as I understand it, we have an hour and a 
half on our side.
  The PRESIDING OFFICER. The Senator is correct.


                            Amendment No. 44

  Mr. KENNEDY. Mr. President, I ask unanimous consent that the pending 
amendment be temporarily set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
pending amendment is laid aside.
  Mr. KENNEDY. Mr. President, at 5:30, the Senate will have an 
opportunity to vote on an increase in the minimum wage, and we have not 
had an opportunity to increase the minimum wage for some 8 years. The 
purchasing power of the minimum wage is now probably at its second 
lowest purchasing level in the history of the minimum wage and is 
deteriorating every single day, in terms of purchasing power.
  These individuals that work at the minimum wage are hard-working 
individuals, men and women of great pride--primarily women, and women 
with children, and in many instances men and women of color. 
Historically, this issue has not been a partisan issue. Republicans and 
Democrats have joined together to raise the minimum wage because we 
have believed as a country and as a society that work is important, 
work should be rewarded, and that men and women who work hard, 40 hours 
a week, should not have to live in poverty, particularly those who have 
children. Nonetheless, we have seen that those millions of workers who 
work hard and work at the minimum wage have been falling farther and 
farther behind.
  People can ask, why is this relevant to the bankruptcy bill? In fact, 
a third of all bankruptcies take place from people who have income 
below the poverty level.

[[Page S2114]]

  What we see on this chart is the fact that the real minimum wage has 
fallen now to just about $10,000 a year for a family of three. It is 
about $5,000 below the poverty line. If you are able to get individuals 
up so they have more purchasing power, particularly against the 
background which has seen an explosion of health care premiums, housing 
costs--in my own State of Massachusetts, we have the second highest 
housing costs of any State in the country. The cost of the general 
standard of living has put enormous pressure on these individuals that 
are hard-working and are at the lower end of the economic ladder. So 
this has a direct relevancy to the bankruptcy bill--trying to raise 
individuals to a point where they are going to be able to meet their 
financial obligations; that is extremely important. We have seen, as I 
just mentioned, over the period of these past 5 years what has happened 
with health insurance, college tuition, housing, and gasoline.
  Most of these minimum wage workers have no such thing as health 
insurance, few are able to save for college tuition, housing has gone 
up dramatically, and many of them are dependent upon driving in order 
to get to available jobs. So they have been enormously impacted by the 
increase in costs. We have seen that four million more Americans have 
gone into poverty over the last 4 years. As a result of the census, 
more than 1 million more children have gone into poverty over the last 
4 years.
  These statistics tell the story. What also tells the story is this 
chart, which shows that Americans' work hours have increased more than 
any other industrialized country in the world. This chart indicates, 
using a baseline, what has happened from 1970, the last 30 years, in 
terms of people working. We found out that Americans are working longer 
and harder than in most other industrial nations in the world. What we 
find is that they are working longer and harder and, look at the 
results of working long and hard. They are producing more but making 
less. The increase in terms of productivity has been anywhere from 25 
to 30 percent American workers. Do you think that has been reflected in 
any increase in the minimum wage? Absolutely not. That is because 
Congress has been unwilling to increase the minimum wage. As a matter 
of fact, when I offered this legislation even on the welfare bill, 
which my friend and colleague from Pennsylvania says is where it 
belongs, the legislation was pulled last year, rather than having a 
debate and vote on an increase in the minimum wage.
  I offered it on State Department reauthorization because the other 
side--the Republican leadership--would not give us an opportunity or a 
vehicle on which to consider this legislation, or by itself, so it was 
necessary to try to amend existing legislation. They said, oh, no, and 
they pulled that legislation. When I offered it last year on the class 
action bill, they pulled the class action bill because they did not 
want to vote on an increase in the minimum wage.
  So we find that Americans are working harder; we find a dramatic 
increase in productivity; we see explosions in cost; we see the 
purchasing power of the minimum wage going down to its second lowest 
level; and we see that so many of these individuals who are below the 
line of poverty end up in bankruptcy.
  This is just the background. There will be those who will say we 
cannot really afford to have an increase in the minimum wage because it 
is going to add a great deal to the problems of inflation. Right? 
Wrong.
  First of all, this chart indicates exactly what the impact of the 
increase in the minimum wage is in our budget. All Americans combined 
earn $5.4 trillion a year. A minimum wage increase to $7.25 would be 
less than one-fifth of 1 percent of national payroll. Do we understand 
that? The payroll is $5.4 trillion a year and we are talking about less 
than one-fifth of 1 percent. This doesn't have an adverse impact on 
inflation in terms of this country. We have seen from the various 
studies, which we will refer to later, that neither does it have in 
terms of employment.
  This is an issue, ultimately, about fairness. That is why this is so 
important. It is interesting that this Congress has not hesitated to 
vote itself a pay increase during this period of time, but not for the 
minimum wage earners. The height of hypocrisy will be this afternoon. 
The height of hypocrisy will be this afternoon when those individuals 
in the U.S. Senate say no to $7.25 an hour for hard-working Americans 
after they have accepted a $28,500 pay increase for themselves over the 
last 8 years.
  Do you understand that? They have been willing to vote on a pay 
increase for themselves, and we will find out whether they are going to 
vote for hard-working Americans who are trying to make ends meet and 
provide for their families and their children.
  It is as stark as that. That is what happened. This is where the 
minimum wage has been since the last increase in 1997. It has been flat 
over all these years--but not for the Members of Congress. You can 
understand why Members don't want to vote on increasing the minimum 
wage; it is because of that.
  It is not very surprising to me because we had an increase under the 
first President Bush. We had an increase in the minimum wage under 
President Ford and one under President Eisenhower. We have had it in a 
bipartisan way throughout history. But absolutely not now. The 
Republican leadership in the House of Representatives and the Senate of 
the United States says, no way. This is the record of where we have 
seen it: Dwight Eisenhower, Jerry Ford, the first President Bush, 
Franklin Roosevelt, John Kennedy, Lyndon Johnson, Jimmy Carter, and 
Bill Clinton. It has been bipartisan over the period of history.

  It is baffling to me why in the world we cannot get an increase now. 
What is the reason? What is the reason we hear so much about values? 
Don't we figure that working hard is a value in our society? Don't we 
think that rewarding work is a value in our society? We will find out 
this afternoon. We will find out this afternoon, at 5:30, whether our 
colleagues think that rewarding the men and women who work hard, not 
just on one minimum wage job but often two or three minimum wage jobs, 
is a value.
  A principal, in surveys of children of these minimum wage workers, 
asked the children what their biggest complaints are. It is not that 
they are not able to get Christmas presents at Christmastime. It is not 
that they cannot afford to buy a birthday present for a fellow 
student's birthday. It is not that they cannot afford any skates to be 
able to join the other children skating. It is that they say they don't 
see their parents enough. They don't see their parents enough. There is 
not enough time with their parents. That is repeated time in and time 
out, again and again, as one of the primary concern of the children of 
minimum wage workers.
  Here we are debating the bankruptcy bill that has been written by the 
credit card companies, which have $30 billion in profits this year and 
are looking to collect billions of dollars more as a result of this 
legislation. That is going to turn our bankruptcy courts into 
collecting agencies for the credit card industry. And we are going to 
say, oh, no, no, we cannot afford $7.25 for working men and women.
  We can afford billions of dollars for the credit card companies--and 
I mean billions of dollars, probably the most profitable industry in 
this country--but we cannot afford to have an increase in the minimum 
wage. No, it adds to the payrolls of companies. It is going to be 
inflationary. Why are we setting a minimum wage? Let these people work 
harder.
  At 5:30 p.m., we are going to have two votes. One is going to be to 
increase the minimum wage to $7.25 an hour in three steps: 70 cents 60 
days after enactment, 70 cents a year later, and 70 cents a year after 
that. My friend from Pennsylvania has offered an alternative amendment, 
the Santorum amendment. For those who are giving some thought to the 
fact that maybe going to $7.25 is a little bit too much, maybe the 
Santorum amendment makes more sense. I hope they will listen to me now.
  The Santorum amendment gives half of the increase to minimum wage 
workers with one hand and then--listen to me--takes away minimum wage, 
overtime, and equal pay rights from over 10 million workers with the 
other hand. It takes just one page of the

[[Page S2115]]

Santorum amendment--here is my amendment, Mr. President. It is three 
pages to raise the minimum wage to $7.25. Here is the Santorum 
amendment--85 pages. If he was only raising the minimum wage half of 
what I propose, he would be able to do it in three pages, too. That 
ought to say something to our colleagues.
  What else is in the amendment? It is extraordinary. It takes one 
page, as I mentioned, to raise the minimum wage, and 84 pages are 
special interest giveaways that take rights away from workers.
  The Senator from Pennsylvania has a record of opposing the increase 
in the minimum wage, and I understand that. That is his record. He has 
voted against it at least 17 times in the last 10 years, so today is 
really no different.
  The Santorum amendment will increase the minimum wage by $1.10 cents 
an hour. It will benefit 1.8 million workers. Do we understand that--
1.8 million workers. He goes up to $6.25. Ours goes to $7.25 and 
benefits 7.3 million directly and an additional 8 million more 
Americans; 3.4 million of those are parents with children. But Santorum 
benefits only 1.8 million. He is not just saying we will take $6.25 in 
place of $7.25; we only want that. Oh, no, he is only covering 1.8 
million. That is enormously important.
  So what does he do? The Santorum amendment makes more than 10 million 
workers no longer eligible for the minimum wage, no longer eligible for 
overtime pay, no longer eligible for equal pay rights by repealing the 
individual coverage under the Fair Labor Standards Act and raising the 
threshold to $1 million a year from $500,000. Those workers who work in 
the small stores that are involved in interstate commerce who are 
covered under minimum wage, not under Santorum, are excluded. If there 
is a State minimum wage, they are covered. We have a number of States 
that do not have any minimum wage whatsoever. Then he raises the level 
from $500,000 to $1 million as a threshold for the coverage.
  This is what he does: By eliminating the individual Fair Labor 
Standards Act coverage and raising the business exemption to $1 
million, the Republican proposal jeopardizes worker protections for 
over 10 million workers. Those workers will lose minimum wage, 
overtime, and equal pay protections.
  What do I mean by they lose overtime? This is what the Santorum 
amendment does. Under current law, if the employer wants to work out 
flexible time with their employees, they can do it as long as it is 
done within the 40-hour workweek. That is all legitimate and fair. But 
under the current law, if an employer wants to work a worker 50 hours 
this week and 30 hours the next, they have 10 hours of overtime. Under 
the Santorum amendment, they can work 50 hours one week and 30 hours 
the next and no overtime. This affects millions of workers who are 
going to find out they are going to get a real pay cut. That is what is 
in the Santorum amendment.

  The Santorum amendment also prohibits States from providing stronger 
wage protections than the Federal Government for waiters, waitresses, 
and other employees who rely heavily on their tips for earnings. Do we 
understand that, Mr. President? The Santorum amendment puts the long 
Federal arm right at the throats of the States and tells them there is 
no way they can provide the extra reimbursement to these workers.
  In the State of Pennsylvania, employers are required to pay their 
tipped employees $2.83 an hour. Yet this amendment would deny the hard-
working waiters and waitresses the 70 cents an hour employee-provided 
wages. That is not true in every State, but Pennsylvania made that 
decision. And here on the floor of the Senate is an amendment to deny 
the people of Pennsylvania from carrying forward their judgment.
  Mr. President, 22-year-old Julie Phillips in Johnstown, PA, is 
working two part-time jobs--one at minimum wage making $5.15 an hour 
and another as a waitress at a Chinese restaurant. This amendment would 
deny Julie 70 cents an hour in wages from her minimum wage job. She 
would have to rely on unpredictable tips from her second job instead.
  The amendment also gives a free pass to violators of a broad range of 
consumer, environmental, and labor protections by prohibiting the 
Federal agencies from assessing civil fines for first-time reported 
violations. It also preempts the ability of States to enforce these 
laws. The States are enforcing these laws, but under the Santorum 
amendment, they will be denied the opportunity to enforce those laws. 
Those laws are there to protect the workers, but he preempts the 
ability of States to enforce these laws.
  Once again, we are on the Senate floor with legislation written by 
special interests which will help them the most. The bankruptcy bill 
was written by the credit card companies, the class action bill was 
written by corporations, deceiving and overcharging their customers, 
and now we have the minimum wage bill written by the restaurant 
industry and retailers looking for a way to fatten their bottom lines. 
If the Republicans were truly interested in raising the minimum wage, 
they would not have loaded their proposal with these antiworker poison 
pills that are special interest giveaways. It is hard to believe our 
Republican colleagues are serious about this thinly veiled attack on 
low-income workers.
  There are many ways to help small businesses without denying rights 
to millions of minimum wage workers. We worked together in the past to 
provide reasonable small business tax relief, along with the minimum 
wage. I would be willing to do that again. Three times in the last 
Congress, the Republican leadership brought down a bill rather than let 
us vote on it. So their actions speak louder than words.
  A week ago, our Republican friends were touting their so-called 
antipoverty agenda. But as we see with their agenda, what they really 
are doing is creating a deeper poverty agenda. If they are truly 
serious about helping hard-working families rise above the poverty 
line, they will support our amendment to give a fair raise to America's 
low-income workers.
  It is shameful that in America today, the richest, most powerful 
Nation on Earth, nearly one-fifth of all children go to bed hungry 
because their parents are working full time at the minimum wage and 
still cannot make ends meet. That is a key part of any real antipoverty 
agenda: ending childhood poverty. But the Republican proposal will 
actually plunge even more children into poverty.
  Mr. President, 3.4 million children have parents who would get an 
immediate raise under our proposal. Hundreds of thousands of those 
children will be left behind by the Santorum amendment. The poison 
pills in the Santorum amendment will be particularly harsh for 
children. Think about the single mother with two children working as a 
waitress in Minnesota. Under the Santorum amendment, she will lose her 
guaranteed right to the minimum wage, leaving her paycheck smaller and 
her children less secure. Think about a garment worker working 80 hours 
a week to provide for her family. Her husband, a janitor, relies on 
overtime as well to pay for food, rent, and clothes for their children. 
They will lose their overtime coverage under this amendment, and both 
parents will take a pay cut. Some antipoverty agenda.
  According to the Families and Work Institute, among the most 
important aspects children would most like to change about their 
working parents are these: They wish their parents were less stressed 
out by their work; they wish they were less exhausted by their work; 
and they wish they could spend more time with them. But this amendment 
will deny overtime for more than 10 million workers, leaving them less 
time to spend with their children.
  What is more, this amendment would tie the hands of Federal and State 
agencies trying to enforce the Federal laws that protect families, 
children, and communities. It weakens the gun safety protections under 
the Brady Act, which could lead to an increase in weapons sales to 
criminals, jeopardizing our neighbors and children's safety. It weakens 
environmental laws that require companies to disclose their toxic 
emissions. It weakens reporting requirements under the Clean Water Act 
and Safe Drinking Water Act. It undermines consumer protection laws 
that require companies to report on the safety of their food. These 
provisions put all Americans, especially

[[Page S2116]]

children, at risk of increased exposure to pollution, toxic substances, 
and serious illness from unsafe foods.
  We teach our children the importance of hard work. We encourage them 
to do their best in school and be good citizens. We tell them their 
reward will be good jobs that fulfill their hopes and dreams and enable 
them to support healthy families. That is what America is about. But 
for the 36 million Americans who live and work in poverty today, that 
dream is unfulfilled. They work as hard as any American--often harder--
but too often they are forced into bankruptcy because the minimum wage 
will not cover their bills and give their families the support they 
need.
  We can no longer turn our back on our fellow citizens, but that is 
exactly what is happening in the Senate. Raising the minimum wage is 
critical to preventing the economic free-fall that often leads to 
bankruptcy. Amending the bankruptcy bill to increase the minimum wage 
will help many of the people this so-called reform is likely to hurt: 
low-income families, minorities, and women.
  As I mentioned, nearly a third of those who file for bankruptcy are 
in poverty at the time they file. That is half a million families who 
are already living below the poverty line and will be plunged into 
further hardship with this bankruptcy bill, and many of them are 
minimum wage earners.
  In the current economy, millions of Americans are suffering: 8 
million are unemployed, 45 million are without health insurance, and 13 
million children live in poverty. Poverty has doubled for full-time, 
full-year workers since the 1970s. Minimum wage employees work 40 hours 
a week, 52 weeks a year, and they deserve to be fairly paid.
  Low-income families are being squeezed in every direction by the 
economy, and families are just barely balancing on a cliff of piling 
bills, hoping they will not topple over. Their costs are rising but not 
their wages.
  To make matters worse, the credit card companies prey on low-income 
workers. They know these workers are desperate. They offer loans at 
exorbitant interest rates that are made to seem cheaper than they are 
by three of the most deceptive words in the English language: minimum 
monthly payment.
  While workers struggle, credit card companies reap skyrocketing 
profits from their hardships. This is not only an economic issue, it is 
a family issue and women's issue. Divorced women are 300 percent more 
likely than single or married women to find themselves in bankruptcy 
court, often because they are owed child support or alimony and cannot 
collect it. They are trying to raise their children but they face a 
daunting challenge. This bill will make it harder for them to meet that 
challenge.
  Sixty-one percent of those who will benefit from the minimum wage 
increase are women and one-third of those women are mothers. The 
minimum wage is so low today that many workers have to work several 
minimum wage jobs in order to make ends meet.
  Look what our program will do: Raise the minimum wage to $7.25. That 
is $4,400 to a minimum wage family. That is 2 years of child care. That 
is full tuition for a community college. That is a year and a half of 
heat and electricity. It is more than a year of groceries. It is more 
than 9 months of rent. That may not sound like a lot for people around 
here, but that means a great deal to the people who can benefit from 
this.
  History clearly shows that raising the minimum wage does not have a 
negative effect on jobs, employment, or inflation. In the first 4 years 
after the last minimum wage increase, the economy had its strongest 
growth in three decades. More than 11 million new jobs were added at a 
rate of 200,000 a month. Compare that to the 530,000 private sector 
jobs lost since this administration took office.
  Minimum wage will not cause more job losses, but staying the course 
on failed economic policies will. Overwhelming numbers of our fellow 
citizens in Nevada and Florida showed the way last November by voting 
for a higher minimum wage in their States. It is time for the 
Republican Party to stop obstructing a fair increase in the minimum 
wage for all employees across the Nation, and I hope that our Members 
would support this.
  I ask unanimous consent that Senators Lieberman, Durbin, Sarbanes, 
and Harkin be added as cosponsors to the amendment.
  The PRESIDING OFFICER (Mr. Martinez). Without objection, it is so 
ordered.
  The Senator from New Hampshire.
  Mr. SUNUNU. Mr. President, I rise to oppose the Kennedy amendment. I 
appreciate very much the Senator's remarks and his commitment and 
passion on this issue, but I did want to make a couple of brief points 
before Senator Santorum, who is offering an alternative, has a chance 
to talk about the provisions of his amendment.
  While I appreciate the belief of the Senator from Massachusetts, I do 
think it is important to take a step back and allow this debate to 
include a sense of what the deeply held concerns are about raising the 
minimum wage, because it is not all a single-sided story. I do not 
support the Kennedy amendment because I do not support raising the 
minimum wage, and the reason is as follows: When the minimum wage is 
raised, workers are priced out of the market. That is the economic 
reality that seems to be missing, at least so far, from this 
discussion.
  When the minimum wage is raised, some workers are priced out of the 
labor market, and we could have a discussion about how many are priced 
out of the market, what mechanisms we might have to deal with that 
fact, but it is an economic fact and the proponents of raising the 
minimum wage like to dismiss this by saying, well, we have a hard time 
measuring it, or the economy is large, or we have not been able to 
measure significant increases in inflation as a result of increasing 
the minimum wage.
  I am not talking about inflation necessarily or economic growth. I am 
talking about the workers themselves who are priced out of the market, 
and if one does not believe that or they want to dismiss the economics, 
think about this: If there was not an economic impact, why are we not 
debating raising the minimum wage to $20 an hour?
  Well, the answer is obvious. Because if the minimum wage were raised 
to $20 an hour, even the proponents of the Kennedy amendment would have 
to admit it would be cost prohibitive. Thousands, if not millions, of 
people would be priced out of the market. The number of jobs would 
shrink. Certainly the number of entry level jobs would be reduced.
  Oh, but they say, we are not proposing raising the minimum wage to 
$20 an hour because we know that is not a good idea. Well, then why are 
they not proposing to raise it to $10 an hour? Because at $10 an hour 
they would still have to admit the negative economic effects on prices 
and on the total number of jobs, especially those at the entry level 
that would be priced out of the market. So instead they seek a lower 
level where the negative consequences are much more difficult to 
measure but they still exist, because it is an economic fact of life 
that when the minimum wage is raised, people are being priced out of 
the markets.
  The same economic fact is true for $8, $7, or $6 an hour. People are 
being priced out of the market. I think this is most disturbing because 
those priced out of the market are the very ones who most need the 
opportunity. They are entry level workers. They are first-time job 
seekers. They are people making the transition from welfare to work and 
they are teenagers experiencing their first time in the labor force. 
They are the ones who most need that job opportunity to build a 
foundation to develop the experience that will enable them to earn even 
more money in the future.
  If one does not believe that, they can go to any small business and 
ask them if they are hiring in at minimum wage--and there are very few 
firms that do hire in at minimum wage, but if they do, how long those 
employees actually earn at the minimum wage level. It is not long 
because once a person has shown 3, 4 or 6 months of ability in a role 
with an employer, their value has been proven and they are very quickly 
going to move above whatever the entry level threshold was.
  Those who are going to be priced out of the labor market by an 
increase in the minimum wage are those who most

[[Page S2117]]

need that first job opportunity, and that is why I strongly disagree 
with the Senator from Massachusetts and his amendment. The impact may 
be small, and our economy is $11 trillion. It may only be 10 jobs that 
are affected or 20,000 or 30,000 who never get that first job 
opportunity at a job. Unfortunately, it is very difficult to 
measure 10,000, 20,000, or 30,000 jobs in an economy the size of 
America's, but it is there. The economic consequences are real. Again, 
if one does not believe it, if they believe there are no economic 
consequences, then they should be willing to step down to the Senate 
floor and offer an amendment to raise the minimum wage to $20 or $30. 
Or why even stop there?

  One final point I do want to make is in regard to a phrase that was 
used by the Senator from Massachusetts. It was a question or a phrase 
about rewarding work. The question was whether we were willing to stand 
up in the Congress or, I suppose, the Senate in particular, and reward 
work by supporting an increase in the minimum wage.
  I have a concern about this phrase because it suggests that as 
Federal legislators it is our job to reward work. That may sound nice, 
but it suggests that it is our job to set prices, that it is our job to 
set wages, that it is our job to decide whether the work any citizen is 
doing in the economy, in the private sector, is worth a particular 
amount of money, whose work is worth more than someone else's and what 
kind of rewards does the Federal Government give the taxpayer for doing 
their job. That is not the role of the Federal Government. We should 
not be deciding who gets rewarded for work, whose work is of value and 
whose work is not of value.
  In fact, there are few countries left on Earth where the central 
government has the responsibility of rewarding work in and of itself, 
and those are countries such as Cuba and North Korea that decide only 
the federal government should be able to determine what one earns or 
does not earn, how much one can charge and or not charge for a given 
good. Our job is to pass good legislation that creates an economic 
environment where people have incentives to commit capital to start 
businesses to create economic opportunity and to create jobs and a good 
quality of life.
  It sounds nice to say we should reward work in the Senate, but the 
only way to do that in passing Federal legislation is to start and to 
try to set wages, to try to set prices, and to try to control the 
levers of the economy. We have seen where that slippery slope can be 
taken. We do not have to look farther than the former Soviet Union and 
the former eastern European countries that have rejected that kind of 
centralized state economy.
  I appreciate the passion and the commitment of those on the other 
side. I think they are wrong on the economics because the economics 
hurt the very individuals who most need these entry level, first-time 
job opportunities. They are certainly wrong with the idea that setting 
prices for labor, setting prices for goods and deciding whose work has 
value and whose work does not have value should start in Washington, 
D.C. That is not the way our market economy works.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I rise to offer an alternative to the 
Kennedy amendment on minimum wage. I listened in part to my colleague 
from Massachusetts describe that. Obviously I have a slightly different 
take on what my amendment does than the Senator from Massachusetts 
suggests, and I will go through that point by point and point out where 
the Senator from Massachusetts may have exaggerated some of the claims 
about what destruction this amendment would do to workers in my State 
or any State.
  I start out by suggesting why I am offering an increase in the 
minimum wage. On this first chart it is important to see this green 
line which is the percentage of hourly workers who are paid the minimum 
wage. Since the minimum wage was instituted--actually not since it was 
instituted but in the last 25 years we can see that the percentage of 
workers now covered by the minimum wage is actually the lowest it has 
been in quite some time. It is 2.7 percent of hourly paid workers who 
now get paid the minimum wage. When one looks at that number, it sort 
of cries out a bit and says it is time to bring it back up to be not 
the absolute bottom where no one is paying that and there is 
effectively no minimum wage--very few people are paid it--to a point 
which sort of comports with at least recent history. That is what we 
are trying to accomplish with our amendment, which is to bring it back 
up to about here.
  Our $1.10 increase over a period of 2 years would cover about 7.4 
percent of all workers, which is actually slightly higher than it has 
been over the last 15 years and is a little above historic trends. 
Senator Kennedy's increase would actually put it to about almost 17 
percent of workers in the economy who would be making minimum wage, 
which at least going back to the 1970s would be much higher than it has 
ever been as a percentage of wages.
  So I think what we are suggesting is something that comports with the 
current economy, certainly the way the economy has worked over the last 
20-plus years, as opposed to something that harkens back to long ago 
days where this was not just a minimum, it actually had, as Senator 
Sununu suggested, a dramatic impact on the economy and a potentially 
very inflationary impact if one looks at where the wages were of this 
percentage of payroll and we have hyperinflation. You remember the 20-
percent mortgages and all the other things that were going on during 
the time. That set the wages at a very high level. So look at how we 
are providing a responsible floor for workers without having, as 
Senator Sununu suggested, an impact on the economy, which could be 
inflationary and damaging to all workers, as well as, particularly, 
lower wage workers, looking at high rates of inflation, as well as 
making sure we do not disadvantage businesses by pricing them out of 
the ability to have workers, and also pricing laborers out of the 
marketplace.

  When you have extraordinarily high rates, as Senator Sununu 
suggested, $20-an-hour, $30-an-hour minimum wage, you are going to be 
pricing a lot of people out of the workforce.
  I think what we are suggesting is a responsible approach. It keeps up 
with the tradition over the past few years of a responsible floor for a 
minimum wage. I am very comfortable that our proposal keeps the balance 
between the ability of lower skill employees to enter the workforce at 
a wage in which they are compensated for the skills they bring to the 
job, and at the same time not forcing employers--because, again, see, 
we are pretty far down on the number of people working at this level--
not forcing employers to forego employment with people in that slightly 
increased amount we are suggesting. So it is not going to hurt 
employment, it is not going to hurt their businesses dramatically, and 
to the extent it does, as Senator Kennedy, at least, described the 
provisions--I don't know that he accurately described the provisions--
we do have provisions in the legislation that deal with the smaller 
businesses.
  It is a general rule in the Federal Government that we have lots of 
requirements--family and medical leave is one example, but there are 
others, labor laws--that exempt small businesses. We either do it by 
the number of employees or, in the case of the Fair Labor Standards 
Act, by the amount of revenue that employer happens to take in.
  In this case, we do raise the cap from $500,000 of revenue for your 
business as being exempt from this provision to $1.2 million. That 
provision was set, by the way, back in 1990. If you would have indexed 
that for inflation, it would be $1.5 million today. So we are not even 
keeping up with inflation. We are actually well below inflation in the 
proposal that is being put forward, but we are capturing more small 
businesses that are not affected.
  This just affects the States that sort of tie their minimum wage laws 
to the Federal laws. If you have a State that has no minimum wage--I 
think there are six or seven of those--they would stay at the $500,000 
level. We left that provision in place, in a sense to protect workers 
because the States have not spoken on this. But for States that are 
tied to the Federal level, we raised it. Obviously, if the States want 
to go back, they are certainly welcome to do

[[Page S2118]]

so. But it does provide an exemption for smaller businesses--those that 
are mom-and-pop stores, those who are just starting to build their 
business--from the Fair Labor Standards Act.
  It is important to understand. There are other things I will go 
through, but before I move off into the other areas of the bill I want 
to talk about how important it is not to dramatically increase the 
minimum wage the way Senator Kennedy has suggested.
  What we have seen about overtime is that this is where we are today 
with the real value, if you add in a combination of the minimum wage 
and the earned-income tax credit. Why do we say the earned-income tax 
credit? You heard the Senator from Massachusetts talk about trying to 
support a family, trying to make a living. I am sure he is not going to 
go out and try to argue for the teenage son of a wealthy businessman, 
that we have to make sure they earn a minimum wage because that wealthy 
businessman's son needs the money. He may need it in his own right, but 
that is not the purpose of the minimum wage. That is not what it is 
for.
  The argument for the minimum wage is we have to make sure those out 
there in society whom the Senator from Massachusetts talked about--the 
young lady in Johnstown, PA, making sure she had coverage. By the way, 
the provision we authored that Senator Kennedy said applied to her with 
the tip credit doesn't apply to the State of Pennsylvania. It is 
written specifically to exclude States that have spoken on the tip 
credit. It is only those that have not that this covered. So the young 
woman in Johnstown, PA, is not covered by the provision. So the example 
given by the Senator is inaccurate.
  But, again, going back to the central point, which is what are we 
trying to accomplish with the minimum wage, what we are trying to 
accomplish is helping those people trying to support a family or 
themselves out there working at low-wage jobs, welfare-to-work--that is 
the example that is used. I am someone, in my office, who takes that 
responsibility of making sure those who are on welfare have 
opportunities for employment and, in fact, in my office we have hired, 
over the course of my time in the Senate, eight people off of welfare-
to-work. I take that responsibility as an employer, and also going out 
and talking to employers about the importance of giving people who are 
transitioned off of welfare, trying to make a living for themselves and 
their families, the opportunity to do so.
  One of the ways we have done that is through the earned-income tax 
credit. What the earned-income tax credit does is target those who are 
trying to sustain a family. It helps them by building, on top of the 
minimum wage, some Federal support. But it is targeted support. That 
earned-income tax credit doesn't go to the teenager who is claimed on 
his father's income taxes who is a wealthy businessman. It goes to the 
mom who has two kids, who needs some help from the Federal Government 
to be able to support those children.
  This is much more targeted relief, if you will, than the blunt 
instrument of a minimum wage increase.
  Having said that, in this chart you see a decline--go all the way 
back to 1939. You see the earned-income tax credit comes in and you see 
the difference it makes up here recently. We are suggesting to bring it 
back up by $1.10. If you add $1.10 to $7.22, you are at $8.32, which 
would be higher than it has ever been with the combination of earned-
income tax credit and minimum wage.
  So, again, to suggest somehow or another, as the Senator from 
Massachusetts suggested, that his increase that would bring it off the 
chart, if you will, is a responsible increase--it is a blunt instrument 
that would benefit teenage kids of millionaires much more than it would 
benefit these moms here. Why? Because as you get into the higher income 
area, the earned-income tax credit goes away, it starts to phase out. 
So this blunt instrument of the minimum wage helps folks who are not 
the point of what a minimum wage is all about. When people come out 
here and say they need the minimum wage, they don't talk about the son 
of the wealthy businessman as the point. They talk about this mom. 
Increasing the minimum wage, yes, helps everyone--if you want to say 
``helps.'' Obviously, it will hurt many because they will not be able 
to keep their job at this high rate of pay, for the maybe low skills 
that the employee may bring to the business.

  But here is what we do. What we do is balance it. We raise it 
slightly to bring the level up to at least this level, which is where 
it was several years ago when we last raised the minimum wage, without 
affecting employers and the ability for low-skill workers to get the 
jobs they need and to hold on to them and not to disproportionately 
benefit a lot of workers out there making minimum wage who are not the 
point of the minimum wage, and that is folks who are doing so sort of 
as a side line and are not in need of Government interference in the 
market to make sure that they have plenty to eat and a place to sleep.
  It is a much more surgical attempt. I think what we are attempting 
makes a lot more sense, to help those in need more directly, more 
surgically, than the blunt instrument the Senator from Massachusetts 
has suggested. I encourage our colleagues, when they look at our 
amendment, I encourage Republican and Democrat colleagues to look at 
what we want to accomplish.
  Let me talk about another provision the Senator from Massachusetts 
seemed to focus on quite a bit, which is the issue of flextime. The 
Senator from Massachusetts talked about how flextime in this 
legislation is going to force workers into working more than 40 hours a 
week and deny them all of these--I will not repeat it. Read the 
transcript. Read the Senator's arguments about how devastating this 
would be to people, to have flextime imposed upon them.
  No. 1, this provision as written does not impose anything. What it 
says is that the employer and the employee have to enter into a written 
agreement, where both have to sign, to agree that the employee will 
work more hours in 1 week--no more than 10 in addition to the 40 hours, 
in exchange for commensurate hours off the following week. Again, it is 
mutual agreement. It has to be in writing. Of course, the employee can 
decide to withdraw himself or herself from that agreement.
  I happen to believe that flextime is a good thing. We have several 
employees in my office who job share, who use flextime. Federal 
employees have been able to use flextime for a long time. It is 
something that is very popular in the Federal workforce. What we are 
trying to do is make it available to others outside. Why? I can tell 
you an example in my own office. The people who job share and have 
flexible hours are moms who are in the workplace. Obviously, we have 
seen a dramatic change in the workplace in the United States since the 
minimum wage laws and the 40-hour workweek was put in place. This entry 
into the workforce of nontraditional workers, if you will, has given 
rise to a lot of workers seeking to have their hours reflected with 
their obligations at home. What we are trying to do is have the laws of 
the Federal Government reflect the changing dynamics in the workplace 
without forcing anybody into a situation where they are not getting 
fairly compensated.
  But as I talked to I don't know how many parents who are friends and 
neighbors and constituents, they suggested to me the most important 
thing they would like to get out of the workplace is more flexibility 
and more time to be able to do the things that their other job--most 
people think their more important job, and that is being a husband or a 
wife or a father or a mother--requires them to do at home.
  The most amazing thing is the Senator from Massachusetts opposes 
this. I know many who are supporters of the Kennedy amendment and 
oppose this, also. We just went on to the AFL-CIO Web site and just 
pulled off some things. This is their Web site. You can read the small 
print, the exact Web page:

       Alternative work schedules encompass work hours that do not 
     often necessarily fall inside the perimeters of the 
     traditional and often rigid 8-hour workday or 40 hour work 
     week. Such schedules allow working people to earn a paycheck 
     while having the flexibility to take care of children, older 
     relatives and other needs.

  The AFL-CIO says they want that, and we are providing that. And all 
of a sudden, maybe because we are providing it, maybe because it is in 
a Republican alternative, maybe this is not

[[Page S2119]]

a good idea. Again, this is right off the AFL-CIO Web site:

       Changes in the workforce and in the kinds of hours people 
     work are making alternative work schedules increasingly 
     important for working families trying to balance job and 
     family responsibilities.
       Suggested family friendly provisions: Compressed work week.
       Common examples of things asked are schedules that allow 
     workers to work eight 9-hour days and one 8-hour day for an 
     extra day off every 2 weeks.

  Under the provisions we have in this law, that is exactly what we 
have, allowing a mother or father who wants to stay at home instead of 
working 10 8-hour days a week, work 9 10-hour days. Work extra hours 
the days that you work for the day off. Again, that is not allowed 
under the current law. We would have provided that flexibility. Again, 
it would be upon a mutual agreement of both the employee and the 
employer.
  Look, there are some suggestions as to how we can make this more 
explicit, although from everything I read it is very explicit in the 
legislation as to how that would work. I am certainly happy to sit down 
and talk with the Senator from Massachusetts and see what we can work 
out in the future.
  What we do in these provisions--yes, we do provide some tax benefits 
for smaller businesses. We allow for small business expensing. We allow 
for restaurants to be depreciated. Again, who is going to be affected 
by this predominantly? It is going to be the restaurant industry that 
pays employees at this level, and the travel and tourism industry. 
Those are the folks who will be most affected. Those are the ones paid 
at the lower end of the wage scale. So, yes, we do provide some support 
for them because it is going to cost some of these businesses a 
substantial amount of money.
  We want to provide some relief from a Government mandate, mandating 
additional cost. So we want to provide additional relief in doing so.
  What I think we are trying to do is find an acceptable compromise to 
be able to pass in the Senate.
  I candidly don't believe--and I told the Senator from Massachusetts 
when I spoke to him last week--this is the appropriate place for his 
amendment. I understand there are a lot of dynamics at play here. But 
the Senator from Massachusetts feels compelled to offer it on the 
bankruptcy bill. I don't think there is any secret, after listening to 
the debate over the past week, that we very much would like to keep 
this bill on the Senate floor the way it came out of committee and the 
way it has been forged over a period of three Congresses. This 
compromise has almost passed this year, and time and time again for the 
last three Congresses. Now we have an opportunity to actually get this 
thing signed--passed by the House in the form it is right now on the 
floor of the Senate, and then to the President.
  I was hoping the Senator from Massachusetts would not offer his 
amendment and would allow this amendment to the minimum wage laws to be 
offered at a different time. I think we are marking up the welfare 
reform bill this week. It is an extension of the 1997 act. It is an 
appropriate place, in my opinion. We are talking about welfare-to-work, 
and we are talking about helping low-income individuals transition into 
the workplace and providing them with a quality of life that is family 
sustaining. I was hoping the Senator from Massachusetts would wait 
until that time, and maybe we could sit down and work out some sort of 
compromise that the President would sign. During the campaign, he 
talked about his willingness to sign a minimum wage proposal similar to 
what I put forward. I don't think he would support what the Senator 
from Massachusetts proposed.
  If you want to actually do something to bring this level up, and do 
it in a sort of targeted way that actually helps the people you are 
really wanting to help focus on--that is, those who are trying to 
provide for themselves and their families, not working summer jobs or 
part-time jobs or going to school; that is really what we are focusing 
on--we can do that in a way that I would argue does not have a poison 
pill attached to it.
  I take great exception to what the Senator from Massachusetts said. 
These are not poison pills. These are responsible, proworker, pro-
small-business provisions that greatly help the people in this new and 
dynamic workplace of America. It is a very different one than when the 
40-hour week was established.
  The Senator wants to offer his amendment and lock in a vote. But I 
hope, candidly, that we don't agree to either amendment at this time, 
although I would certainly vote for my amendment and vote against the 
amendment offered by the Senator from Massachusetts.
  But I am hopeful that we can get the requisite number of votes down 
the road on a welfare bill, actually pass this legislation, and get it 
over to the House. House leadership has not expressed a willingness to 
bring this up.
  Again, as we work on this, we have an opportunity to get it to 
conference and hopefully be able to do something which provides much 
more targeted relief to workers who are in need, as opposed to Senator 
Kennedy's approach which is very blunt, forceful, and destructive, I 
would argue, and brings a measure of damage to a lot of lower skilled, 
lower income workers. And it would be very damaging to business at the 
same time in that the economy is recovering very nicely right now.
  This is a modest approach. It has half the increase the Senator from 
Massachusetts is suggesting. It focuses on those who are most in need. 
At the same time, it doesn't hurt the small business community. In 
fact, it provides a much needed incentive for them to be able to 
continue to hire employees and grow, which is obviously the ticket to 
middle-class America.
  There are other provisions in the bill that I certainly want to talk 
about a little later. But we have other speakers. I don't want to use 
up all the time.
  With that, let me yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I will take a moment or two to respond to 
my good friend from New Hampshire and then also to the Senator from 
Pennsylvania with regard to the points they have made.
  First of all, I will respond to the Senator from New Hampshire about 
the question of whether the increase in minimum wage is really good for 
low-income working people and whether this isn't going to create more 
problems for working people because of the increase in the minimum 
wage.
  He mentioned, if this was such good medicine--$7.25--why aren't we 
going for $20 or $25? The obvious simple answer for that is we are 
talking about a minimum wage, we are not talking about a maximum wage.
  I haven't even gotten into discussing what has been happening at the 
upper end of the economic ladder and the stories over the weekend that 
showed the bonuses are going to the wealthiest individuals in the 
corporate world. They have increased astronomically in a period of the 
last few years.
  Since the midthirties, we have had a minimum wage because we believed 
as a matter of social justice men and women who are going to work in 
this country and have families should at least have some minimum 
standard, some minimum safety net; that this society is not the society 
of survival of the fittest, but it is also a ``we'' society, not just a 
``me'' society.
  There has been a recognition of the importance of the minimum wage.
  I will include in the Record the support for the increase of the 
minimum wage.
  Mr. President, 552 economists agree, including a number of Nobel 
laureates. This is a summation of what they say.
  We believe that a modest increase in the minimum wage would improve 
the well being of low-wage workers and would not have the adverse 
effect that critics have claimed. In particular, we share the view of 
the Council of Economic Advisers' economic report, that the weight of 
evidence suggests that the modest increase in the minimum wage has had 
very little or no effect on employment.
  That is what an outstanding group of economists have said. Let us not 
just take what they have said, let us take a look at the facts in terms 
of employment and job growth.
  If you look over at this chart, you will find the increase in the 
minimum wage in October of 1996. We had an increase in the minimum 
wage. In October of 1997, it went up again. The minimum wage increased 
to $4.75 in 1996, and then it went up to $5.15 an hour.
  This red line is an indication of the job growth during this period 
of time.

[[Page S2120]]

  I don't accept the arguments that my good friend from New Hampshire 
has made--that this is going to mean the loss of jobs. It just has not 
been so.
  If you look at the historic lows of unemployment after the minimum 
wage, if you look again in 1996, the minimum wage went to $4.75, and 
unemployment went up. It picked up a tenth of a point, but then it 
started down.
  The minimum wage goes up to $5.15, and what happened? It continues to 
go down.
  Here is the last time that we have the increase in the minimum wage, 
and we see it had absolutely no impact--none, zero--in terms of 
unemployment, as we reported, for good reason, because it is less than 
one-fifth of 1 percent of total payroll. So it has no impact in terms 
of unemployment, and it has virtually no impact in terms of inflation. 
But it does have an important impact in terms of social justice.
  This chart is interesting. It indicates that the States with the 
higher minium wage add more jobs. These are the 39 States with the 
minimum wage at $5.15. Their employment growth has been 4.1 percent, 
and some have been somewhat higher at 6.2 percent.
  We have debated this time in and time out. The most inclusive studies 
were the Card-Krueger studies and the conclusions they have made. They 
are from Princeton, NJ.

       Contrary to the central prediction of the textbook model of 
     the minimum wage, but consistent with a number of recent 
     studies based on a cross-sectional time series comparison of 
     affected and under-affected communities of unaffected markets 
     or employees, we find no evidence that the rise in New 
     Jersey's minimum wage reduced employment.

  This is pretty well established. It has a dramatic impact in other 
areas.
  I listened with interest to the Senator from Pennsylvania talking 
about the increase in the minimum wage. Better than 60 percent of the 
increase in the minimum wage goes for the lowest 40 percent on the 
economic ladder.
  Let us look at what has been happening in our country in the recent 
times since the last increase in the minimum wage.
  This is in the area of hunger. We have the survey of hunger and 
homelessness by the Conference of Mayors. This is December 2004. This 
is in their summary:
  Officials in the survey estimate that during the past year, requests 
for emergency food assistance increased by an average of 14 percent, 
with 96 percent of the cities registering an increase; requests for 
food assistance by families with children increased by an average of 13 
percent; 56 percent of the people requesting emergency food were 
members of families, children and parents; 34 percent of adults 
requesting food assistance were employed.
  These are people who just can't make it with the $5.15 increase in 
the minimum wage.
  Then I heard about flextime. We are all for flextime. The argument is 
very simple on the issue of flextime. Our Republican friends want 
flextime when the employer can decide it. They have flextime now under 
current minimum wage. They can work that out with regard to flextime, 
up to 40 hours. Then, if it is going to be more than 40 hours, they 
have the overtime. But they negotiated that out. That is permitted 
today under the law.
  But that isn't what the Senator's amendment would say. If the 
employer wants that individual to work 50 hours 1 week, and 30 hours 
the next week, the employer can make up their mind.
  Why is it always the individual employer who makes it up?
  It was nice to hear my friend from Pennsylvania say they work it out 
over in their office, and sometimes they work longer hours.
  I would say, by and large, they work it out--the employees work it 
out.

  I doubt very much for many of us in the Senate, if we just told our 
people what they were going to have to do, if they did not do it in the 
sense of expectation and teamwork, I don't think we are going to be 
very much value to many of our constituents.
  The fact is, under the Santorum amendment one person makes that 
decision on flextime, and that is the employer. If the employee says, 
Look, I have a child who is in a play that I would like to go to, and 
the employer says, No, you can't go--you don't go.
  We tried for many years. I mentioned before the Senator arrived on 
the floor of the Senate, I think he has been against any increase in 
the minimum wage 17 times. It is a little difficult to get much 
encouragement.
  I think the Murray amendment asked that an employee would be able to 
take 24 hours off with sufficient notice because of a child with 
medical appointments, or because a child might be in a play, or a child 
might have some special event. I was here many times when the Senator 
from the State of Washington offered that amendment. It was voted down 
every single time. The only way we get flextime is when the employer 
does it. That is not fair. That is not right. He is correct. That is 
what this bill does. And he will permit the employer to make that 
judgment.
  I want to make another point or two about the U.S. Conference of 
Mayors study.
  Seventeen percent of the homeless people in cities, according to the 
Conference of Mayors, are employed. Ten percent are veterans.
  The demand for emergency shelter is increasing. Seventy percent of 
the cities are reporting an increase in the last year, and the 
percentage of cities reporting an increase with homeless families with 
children is even greater.
  This is what is happening. It isn't just the Senator from 
Massachusetts. This is the Conference of Mayors telling about what is 
happening in urban and rural America. It is also about growth.
  This is the general challenge. We have too many Americans who are now 
living in poverty.
  One in every 10 families, up to 44 million Americans, live poverty--
one out of every six children; one out of every five Hispanics; one out 
of every four Americans. The greatest impact of raising the minimum 
wage is going to be lifting up Hispanics and African American workers. 
That is what the statistics demonstrate.
  I don't know why we have the imperative of constantly saying no, that 
we are just not going to help people who are working and want to work.
  An interesting point--not a major one--is that when we raise the 
minimum wage, it not only affects the 15 million lowest income people; 
some of those people then will not be eligible for some of the other 
programs. So it saves the taxpayer some money. We move them out and 
work with the earned-income tax credit. We have the earned-income tax 
credit that works with families who have children. If there is an 
increase in the earned-income tax credit, if you have two or three 
children, that is the way to go. For a single worker, if we are talking 
about a single mom with one or two children, an increase of the minimum 
wage is the way to go.
  As a society, if you are interested in trying to do something about 
poverty and working families, you are trying to do something about both 
of those.
  My friend from Iowa is here and I want to mention to him, because he 
has been a leader in the Senate regarding overtime compensation, under 
the Santorum amendment, this will take away the overtime rights that 
exist for minimum wage workers because it excludes 10 million workers 
from the Fair Labor Standards Act--6 million last year--and it will 
result in millions losing their overtime coverage.
  The second point I mention to my friend from Iowa, in this 
legislation there is a prohibition for States to enforce their tax 
credit provisions. We have the tip credit for $2.12 or $2.13, and that 
is the Federal credit. Under the Santorum amendment, we are taking away 
any kind of enforcement of that, not just by the Federal Government but 
the State government.
  I brought this up earlier because I want to remind the Senator from 
Iowa the amendment on the increase in the minimum wage happens to be 3 
pages long; his is 85 pages. That includes not only the tip credit, not 
only eliminating from coverage those workers who work even in companies 
that are capitalized at $500,000, if they are in interstate commerce--
That has been part of the minimum wage since the 1930s--but the Senator 
from Pennsylvania wants to take out that kind of coverage. Hundreds of 
thousands of workers will lose their coverage.
  I don't understand why he is targeting those individuals. Quite 
frankly, the most incredible provision in this amendment is to 
eliminate any kind of enforcement.
  The Senator might have difficulty in following all of the points I am 
raising

[[Page S2121]]

on the amendment, but on page 14 of the Santorum amendment it sounds 
very appealing. Small Business Paperwork Reduction; skip over to page 
16 and we find out on the bottom of that, line 22, what it is about.

       Notwithstanding any other provision, no State may impose a 
     civil penalty on a small business concern.

  And it applies that to every kind of unsafe work conditions, 
including air pollution, toxic substances, unsafe food. What in the 
world are we thinking of? Why would we include those? What is the 
reason we are doing that?
  I don't understand it. I can understand the Senator from Pennsylvania 
saying he wants a lower increase in the minimum wage, but then to have 
provisions in his amendment which are so punitive to millions of 
workers--not just on the overtime but in terms of protecting those 
workers that get the tip credit of $2.12 and then depend on tips for 
the rest of it, and to say, no, we are not going to enforce the $2.12.
  Mr. SANTORUM. Will the Senator yield?
  Mr. KENNEDY. Briefly.
  Mr. SANTORUM. Mr. President, I point out to the Senator page 20 of my 
amendment discusses the tip credit. It specifically refers to only 
States that are covered by this provision as States that do not have a 
tip credit. I believe it is seven States that are the only States 
covered by this provision.
  So I don't know where you get ``millions'' of workers.
  Mr. KENNEDY. If you read from page 21, the top line from 2 down to 
line 16, it effectively states: ``may not establish or enforce any laws 
that require employers to tip credit employee.''
  Mr. SANTORUM. I refer the Senator to line 20 through line 25. If the 
Senator would read that, he will find that any State which prohibits 
any portion of employee tips from being considered as wages, so that is 
the operative language that limits this provision--just in the States 
that do not allow a tip credit.
  Mr. KENNEDY. The Senator understands that every State has to have the 
tip credit at the present time. They have to have the $2.12.
  Mr. SANTORUM. My understanding is that is not the case and there are 
seven States that do not.
  Mr. KENNEDY. Under Federal law at the present time, every State has 
to have a minimum of $2.13 and then the States can add on top of that. 
Many of the States do. The State of Pennsylvania has added, I believe, 
60 or 70 cents on top of that.
  So when you talk about not permitting any States to enforce the tip 
credit, you are talking all the States. That is the way we read it.
  Mr. SANTORUM. I say to the Senator from Massachusetts--
  Mr. KENNEDY. If the Senator can clarify that language, we would be 
glad to work with him.
  I see my friend and colleague. We have pointed out the fact that we 
have not increased the minimum wage now in 8 years. It is at the second 
lowest purchasing level in nearly 60 years. A third of all those that 
go into bankruptcy are those below the poverty line. This has a direct 
relevancy to the underlying bill because we are trying to raise up 
people with the minimum wage. We are not going to get them up to the 
poverty line, but we will probably raise up some people as a result of 
the increase.
  Therefore, it is appropriate to this legislation. It is long, long 
overdue. It seems to me at a time we are doing so much for the credit 
card industries, companies that have billions of dollars in profits, 
that we ought to be willing to make work pay.
  I know that bothers some Senators. It bothers the Senator from New 
Hampshire who criticized this and said, Well, we do not want to be like 
the Soviet Union and like communist countries.
  It is interesting that Great Britain just went up to more than $9 for 
the minimum wage last week. They have the most successful economy in 
Europe at the present time. They have taken 1.2 million children out of 
poverty. They have the lowest home mortgages in 50 years. They brought 
unemployment down. And they are trying to do better for the children 
that are living in poverty. They have just raised their minimum wage in 
Great Britain.
  I will include the other countries that are not, allegedly, 
Communist. That includes a good many of the European countries: 
Belgium, Ireland, U.K., Portugal, France, Spain, and Greece.
  I don't think the argument was serious.
  Mr. HARKIN. Will the Senator yield?
  Mr. KENNEDY. I am happy to yield.
  Mr. HARKIN. Did I hear the Senator correctly that someone was 
suggesting the minimum wage is communistic?
  Mr. KENNEDY. I think the argument made by my friend--and I want to be 
careful about how I explain it. He took issue when I said in the Senate 
Chamber what I believed, that this is a value issue. We hear a great 
deal about the importance of values, having work pay, respecting that 
work is a value issue. It is a family issue that affects children. 
However, it is a value issue. It indicates that we believe work should 
pay.
  My good friend, and he is my friend from New Hampshire, said that 
sounded an awful like a government establishing pay like Communist 
economies did. I don't want to go into it a great deal more.
  Mr. HARKIN. If the Senator would yield, it seems we have settled that 
issue in this country. Going back how many years now have we had a 
minimum wage?
  Mr. KENNEDY. More than 60 years.
  Mr. HARKIN. More than 60 years we have had a minimum wage in this 
country.
  I don't have the data with me right now, but I have seen the data 
that indicates when the minimum wage was higher relative to, say, 
corporate salaries and what CEOs were making, that, in fact, our 
country enjoyed a higher standard of living. Is it not true that if 
people are making a more decent minimum wage, it lifts them out of 
poverty; they are better able to provide food and clothing and shelter 
for their kids and their family, better able to pay tuition to go to 
college.
  It seems to this Senator, and I ask my friend from Massachusetts, 
under the underlying bill, the bankruptcy bill, we are providing all 
kinds of support, immunities, coverage, for creditors and especially 
credit card companies; we are providing them all protection, but now 
when it comes to providing minimum protection for the lowest income 
people in this country, we cannot seem to do it.
  It seems incongruous that we would protect the biggest, but for the 
smallest we cannot seem to do that.
  The PRESIDING OFFICER (Mr. Vitter). The Senator from Massachusetts.
  Mr. KENNEDY. The Senator is absolutely right.
  I want to catch my friend from Pennsylvania before he walks out. The 
Senator is quite correct. In a more basic way, this has been something 
Republicans and Democrats have worked on together. President 
Eisenhower, the first President Bush, President Ford--all supported an 
increase. Since the time I have been here we have had bipartisan 
coalitions. But as the Senator remembers, under the Republican 
leadership they have refused to do so.
  I mention one thing to my friend from Pennsylvania. I have a letter, 
which I will include in an appropriate place, from Ohio State 
University, from a professor of law who said the proposed Santorum 
legislation would also reduce existing protections provided to tip 
employees by prohibiting State and local governments from enforcing any 
State or local law that fails to grant a 100 percent tip credit. That 
is, employers would be allowed under State and local law to pay nothing 
to tip employees as long as their tips from customers add up to the 
minimum wage. This provision would even override the laws of States 
that have eliminated the tip credit entirely or that require tip 
employees to be paid minimum wage by their employers.
  That is the reason I mentioned this earlier. If that was not the 
intention of the Senator, hopefully we can correct that.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
  Mr. SANTORUM. Mr. President, I will be brief. I know the Senator from 
Iowa is here. I do not want to stop him from making his remarks. I just 
want to respond to several of the things the Senator from Massachusetts 
said.
  First, I would be happy to look at the letter from the Ohio State 
professor and see how he, in my opinion, misread the provision we had. 
I think I am very

[[Page S2122]]

clear on the intent. If there is some language clarification, I would 
be happy to sit down and work on that. I know Senator Enzi, of course, 
from the HELP Committee worked on this language and would be willing to 
do so also.
  A couple of comments. The Senator from Massachusetts talked at length 
about economists and others who are suggesting that we need--I think I 
am using the Senator's words--a modest increase in the minimum wage. I 
did not see any of the charts that he brought out that supported his 
particular minimum wage increase. And he used the term ``modest'' 
repeatedly. I am not sure there would be too many economists in the 
economy of today who would say a 40-percent increase in the minimum 
wage would be modest. I think a 40-percent increase, by definition, 
probably is outside the bounds of what most people would consider 
modest.
  I would make the argument that a 20-percent increase--this is what we 
are suggesting--a 21-percent increase would probably be extending the 
bounds of modesty, but it would certainly be much more within what most 
people consider to be the traditional definition.
  I would just like to thank the Senator from Massachusetts for 
bringing up support for my amendment because I think, in comparing the 
two, the increase we are putting forth of $1.10 comports very well with 
what the economists are saying would not be damaging to the economy and 
fit in very well with what would not be damaging to employees and 
employers. So the $1.10, fits the modest framework.
  Secondly, the issue of flextime. Again, I would just point the 
Senator to the actual language in the amendment. On page 3 of the 
amendment, it says:

       Except as provided in paragraph (2), no employee may be 
     required to participate in a program described in this 
     section.

  So it is purely voluntary. It says employers may do this. Employees 
may participate. It provides for a written agreement arrived at with 
collective bargaining. Obviously, the collective bargaining unit, the 
labor union, would be responsible for any kind of flextime, which is 
the way it would be under the law.
  Here, with respect to an employee who is not represented by a labor 
organization: No. 1, ``a written agreement arrived at between the 
employer and employee before the performance of the work involved if 
the agreement was entered into knowingly and voluntarily by such 
employee and was not a condition of employment.''
  Now, again, I would ask the Senator from Massachusetts, if there is 
stronger language he would like us to use to make sure this is a 
voluntary agreement and that the employee and employer enter into it 
willingly--there are quadruple damages if the employer violates this.
  Also, the Senator from Massachusetts talks about how onerous this is 
on employees. The Senator from Massachusetts voted for this with 
respect to Federal employees. He voted for this provision, as we see 
here, flextime, for Federal employees on more than one occasion. As you 
know, we now have this provision, this ``onerous'' provision, which, I 
can tell you, my employees do not see as onerous. They see it as 
something that is of a great benefit to them and their families.
  So again, if the Senator from Massachusetts has some tougher language 
he would like--but I think the language I have read from my amendment--
and I am not reading the summary. This is my amendment.


                           Amendment No. 128

  (Purpose: To promote job creation, family time, and small business 
      preservation in the adjustment of the Federal minimum wage)

  In fact, Mr. President, I send the amendment to the desk and ask for 
its consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Santorum] proposes an 
     amendment numbered 128.

  Mr. SANTORUM. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. SANTORUM. So I am reading from the text of the amendment. And 
again, the Senator from Massachusetts may quibble, and certainly has, 
with the voluntariness of this program. I think the language certainly 
expresses my intent and the intent of all those who are supporting this 
amendment, that it is a voluntary program and an employee goes into it 
knowingly and voluntarily with a written agreement. If there is other 
language that the Senator from Massachusetts would like, obviously we 
are not going to do that today, but I would be happy to sit down and 
see if there is a word that is more voluntary than ``voluntary.''

  I think usually when you use the word ``voluntary'' that sums up 
voluntary very well. But if there is a better word for voluntary than 
the word ``voluntary,'' then I am pretty happy to do so. If there is a 
better word--whether it is ``discretionary''--than the word ``may,'' I 
am happy to look at a better word than ``may.'' ``May'' is usually a 
pretty good word when it describes ``you do not have to.'' ``May,'' 
that is what we usually use. But if ``voluntary'' and ``may'' are not 
strong enough words, I will be happy enough to sit down with the 
Senator from Massachusetts and come up with a better one.
  I repeat, the Senator from Massachusetts has voted for this for 
Federal employees, and there are quadruple damages--quadruple damages--
for employers who violate this provision and impose this on their 
workers unknowingly and involuntarily or as a condition of employment. 
So I would just suggest there are pretty high and threatening damages 
to employers who abuse this provision.
  One final point I want to make. The Senator talks about its 
importance, that this is the only way we are going to help people out 
of poverty. I would suggest that is simply not the case. There are lots 
of ways, in fact, I would say very much more complicated ways that 
people get out of poverty than just by the blunt instrument of the 
Government setting minimum wages.
  In fact, looking at this chart, the welfare reform bill we passed in 
1996 shows just how effective other ways are. Requiring work is the 
best way. The Senator put up poverty statistics. What he did not tell 
you is what those numbers looked like before 1996 and the welfare 
reform law, which I stood on the floor and argued passionately for. And 
I was called a whole number of things as to what I was going to do to 
all these poor children.
  What happened as a result of the welfare reform bill was that poverty 
among African-American children, the thing Senator Kennedy referred to, 
was at its lowest rate ever by the year 2000. It has crept up slightly 
during the economic decline of the early part of this decade, but it is 
going back down.
  So the idea that the minimum wage solves these problems is just a 
fallacy. There are lots of things that work. One of them is work. 
Another is marriage. We are going to have an opportunity on the floor 
of the Senate, when the welfare bill comes up, to talk about how we 
shift Government policy away from, at best--I think it is ``at best''--
neutrality toward marriage, how we shift Government policy when it 
comes to interacting with families and being neutral with respect to 
marriage. See what the huge impact is on the poor, the huge impact on 
poor communities and poor children, when moms and dads are helped to 
stay together in marriage and, more importantly, when they are 
introduced to the concept because many women and, unfortunately, men 
choose not to marry when children are born out of wedlock.
  So there will be plenty of time for debate on this issue of other 
things we can do. But I can tell you, if you look at all these other 
things we are studying, the thing that is most powerful is, No. 1, 
jobs. The concern many have--and there are studies we can put into the 
Record about what the impact of a dramatic increase--not a small 
increase, as we are proposing, but a dramatic increase--in the minimum 
wage would have to the employment picture of these very people who came 
off welfare and their ability to find work and get out of poverty. It 
will have a dramatically negative impact on them, a 40-percent increase 
in the minimum wage.
  But again, there are positive things we can do as we look to the 
future.

[[Page S2123]]

This bill, in my opinion, belongs on welfare legislation, requiring 
work, more work, which is what is going to be required in this bill, as 
well as some things to bring fathers back into the home with the Father 
Initiative that Senator Bayh and Senator Domenici and I have been 
pushing for several years, as well as the marriage initiative that the 
President has talked about.
  This is a complex picture and blunt instruments like minimum wages 
are not the answer. Yes, I am proposing an increase. I am doing one 
that I think comports with balancing the interest of low-income workers 
having a better wage with making sure they have a job in the first 
place because that is the most important thing. I think we have done so 
with this $1.10 increase and the provisions I have.
  Yes, it is a long amendment. But there are a lot of things in here 
that I think will add to the quality of life of many workers and 
certainly help small businesses absorb some of the costs of the 
increase in the minimum wage.
  So with that, Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Iowa is recognized.
  Mr. HARKIN. Parliamentary inquiry: Who controls the time?
  The PRESIDING OFFICER. The Senators from Pennsylvania and 
Massachusetts control the time.
  Mr. HARKIN. Mr. President, how much time is left on either side?
  The PRESIDING OFFICER. The Senator from Massachusetts has 32\1/2\ 
minutes and the Senator from Pennsylvania has 48 minutes 17 seconds.
  Mr. HARKIN. I will take 12 minutes. Will the Chair please remind the 
Senator when 10 minutes is used up?
  The PRESIDING OFFICER. The Chair will so notify the Senator.
  Mr. HARKIN. I appreciate that.
  Mr. President, with the increase in the unemployment rate that we 
learned of last Friday, it is clear we are in the midst of a two-tiered 
economic recovery. We have one recovery for high-income Americans, for 
people on Wall Street, and we have a very different recovery for people 
working on Main Street.
  The Neiman Marcus crowd is popping champagne corks, but it is a very 
different story for Wal-Mart and K-mart shoppers and for the Americans 
who work at Wal-Mart and K-mart and in other jobs paying low wages. The 
number of Americans in poverty has increased by more than 4 million 
since President Bush took office. Nearly 36 million people live in 
poverty, 13 million children. Among full-time year-round workers, 
poverty has doubled since the late 1970s, from about 1.3 million then 
to 2.6 million now. Every day that the minimum wage is not increased, 
it continues to lose value and workers fall further and further behind.
  Unfortunately, the Bush administration's priority is not lifting 
working Americans out of poverty; its priority is keeping labor costs 
low for corporate America. But this is not surprising. The President 
has been quite frank and open about taking care of what he calls his 
``base.''
  I strongly support Senator Kennedy's amendment to raise the minimum 
wage to $7.25 in three steps. It is long overdue. It has been 5 years 
since we last had a vote on the minimum wage, and it has been 8 years 
since we last voted to raise the minimum wage. To have the same 
purchasing power it had in 1968, the minimum wage would have to be 
nearly $8.50 today, not $5.15. Since the last increase in 1997, the 
value has eroded by more than 15 percent.
  I noticed that the Senator from Pennsylvania was saying that this 
would increase the minimum wage by 40 percent. Actually, it is 37 
percent that Senator Kennedy's amendment would raise the minimum wage. 
In three stages, it would increase it by 37 percent. The Senator from 
Pennsylvania said this was unprecedented. Under Franklin Roosevelt, it 
went up 53 percent; under Truman, 47 percent. Under Eisenhower, it went 
up 33 percent. Under the first President Bush, it went up 25 percent. 
The point is that since 1997, the last time we raised it, the value has 
eroded by 15 percent. So if we are going to boost it up over the next 3 
years and it increases by 37 percent, you are really only going up by 
22 percent more than what it was in 1997. I don't think that is an 
undue burden on business in America.
  Since 1997, the last time we raised the minimum wage, Members of 
Congress have raised their own pay seven times in the last 8 years by 
$28,500. Think about that. We vote to raise our pay seven times in 8 
years by $28,500, but for minimum wage workers earning $10,700 a year, 
we can't vote to raise their minimum wage--shame on the Senate.
  We have heard in the past that it is mostly teenagers and part-time 
workers who are working for the minimum wage. That is not the case. The 
facts are, 35 percent of those earning the minimum wage are the 
family's sole breadwinners, 61 percent are women, and almost a third of 
those women are raising children.
  The Senate Finance Committee may soon be marking up a welfare 
reauthorization bill. As the Senate contemplates welfare 
reauthorization, as we address the goal of moving people from welfare 
to work, it is especially important we act to raise the minimum wage. 
Since 1996, we reduced the number of welfare cases by half.
  I was intrigued by the chart the Senator from Pennsylvania put up 
because many of the people who moved off of welfare did not move out of 
poverty. Why? Because the minimum wage is not a living wage; it is a 
poverty wage. But an increase to $7.25, such as Senator Kennedy wants 
to do, would make a dramatic difference. For a full-time year-round 
worker, that would add $4,370 in income. That could be a real value to 
a family living in poverty. For a low-income family of three, let's say 
one wage earner, single mother, two children, that would be enough 
money to pay for a year and a half of heat and electricity or a full 
tuition for a family member pursuing a community college degree.
  The Senator from Pennsylvania said what really lifts people out of 
poverty is more work, not raising the minimum wage. I ask: How can a 
single mother of two working a minimum wage job work more? What is she 
supposed to do--work 16 hours a day at the minimum wage? How much more 
can people be expected to work?
  The amendment of the Senator from Pennsylvania changes the 40-hour 
workweek to an 80-hour work period over 2 weeks, with the maximum that 
anyone can work in 1 week of 50 hours. Add it up. It doesn't take a 
mathematician. Eighty hours for 2 weeks; you can work up to 50 hours in 
1 week. So you work 50 hours 1 week, 30 hours the next week. Guess 
what. You just got cheated out of 10 hours of overtime. Before, you 
would work 40 hours. If you worked 50, you would get 10 hours of 
overtime. Now you don't get any overtime. That is what is happening to 
low-income workers in America today.
  First of all, we have a bankruptcy bill that slaps them in the face. 
It makes them pay through the nose. I don't know if anyone read the 
article in the Washington Post yesterday. I will ask consent to print 
this article at the conclusion of my remarks. They mention a Ruth Owens 
in Cleveland who tried for 6 years to pay off a $1,900 balance on her 
Discover card, sending the credit company a total of $3,492 in monthly 
payments from 1997 to 2003. Yet her balance grew to $5,564.28 even 
though she never used the card to buy anything more. So she paid $3,492 
on a $1,900 balance, and she still has yet to pay off her balance.
  They mention another person, a special education teacher, Fatemeh 
Hosseini, who worked a second job to keep up with the monthly payment 
she collectively sent to five banks to try to pay $25,000 in credit 
card debt. Even though she had not used the cards to buy anything more, 
her debt nearly doubled to $40,574 by the time she filed for bankruptcy 
last June.
  That is what is happening to poor people. The credit card companies 
suck them in with a credit card, go out and charge it up, nice and 
easy. They find they have a $1,900 bill to pay. They start paying a 
little bit here and there. They miss a couple of payments. All of a 
sudden they have $5,564 to pay.
  Nearly 7.5 million workers would directly benefit from the Kennedy 
amendment. In Iowa, 87,400 workers would benefit from the increase. 
That is over 6 percent of Iowa's workforce. The minimum wage needs to 
be raised to a level that is not a subsistence wage. The way to do that 
is to raise the

[[Page S2124]]

minimum wage to a level that respects work, honors it, and rewards work 
at a reasonable level.
  Just last week our friends on the other side of the aisle were 
touting what they called their ``Republican poverty alleviation 
agenda.'' I say watch what they do, not what they say. The President 
sent up a budget request replete with cut after cut to antipoverty 
programs. Now the Senator from Pennsylvania has launched a new attack 
on the minimum wage and the 40-hour workweek. Now the Senator from 
Pennsylvania says he wants to increase the minimum wage, albeit only 
$1.10 an hour over the next 2 years, about half of the Kennedy 
amendment. But again, he guts it by ending the 40-hour workweek and 
going to this 50-hour max, 80-hour work period over 2 weeks.
  The PRESIDING OFFICER. The Senator has used 10 minutes to this point.
  Mr. HARKIN. I thank the Chair.
  Last year, the Bush administration's new rule effectively eliminated 
overtime pay protection for some 6 million American workers. The 
Senator from Pennsylvania is opening a second front in the war on the 
minimum wage and the 40-hour workweek. While 1.2 million workers would 
qualify for the minimum wage increase under the Santorum amendment, 
another 6.8 million workers would lose their current minimum wage 
protection.
  As I said, then we get the 80-hour work period for a 40-hour 
workweek. This has only one purpose: to allow more employers to avoid 
paying overtime compensation. In my 30 years in Congress, I don't 
recall such a bold, brazen assault on the compensation of American 
workers than what we see in the Santorum amendment. It ought to be 
called the shock-and-awe amendment. Workers get the shock, and 
corporate America sits back in awe at the latest gift from the party it 
financed in the last election.
  I am proud to stand with Senator Kennedy to raise the minimum wage to 
$7.25. The present one, at $5.15, is a poverty wage. It doesn't respect 
the dignity of their work, including the most humble. As Senator 
Kennedy said, of all the issues we are debating, this is a values 
issue. Think about this compared to all the things we are doing to help 
the credit card companies with the bankruptcy bill. Think about that. 
We are going to stick it to low-income people, hard-working Americans 
like Ruth Owens and Fatemeh Hosseini, and then we are going to stick it 
to them again by not allowing them to even have an increase in the 
minimum wage.
  I would have hoped that the President would have come and asked for 
an increase in the minimum wage and got his party in the Congress to 
work with us to increase it. We have done it under Republican 
Presidents in the past and Democratic Presidents. I don't know why we 
cannot do it again.
  Mr. President, I ask unanimous consent that the Washington Post 
article entitled ``Credit Card Penalties, Fees Bury Debtors'' by 
Kathleen Day and Caroline E. Mayer, which appeared yesterday, be 
printed at this point in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the Washington Post, Mar. 6, 2005]

                Credit Card Penalties, Fees Bury Debtors

                (By Kathleen Day and Caroline E. Mayer)

       For more than two years, special-education teacher Fatemeh 
     Hosseini worked a second job to keep up with the $2,000 in 
     monthly payments she collectively sent to five banks to try 
     to pay $25,000 in credit card debt.
       Even though she had not used the cards to buy anything 
     more, her debt had nearly doubled to $49,574 by the time the 
     Sunnyvale, Calif., resident filed for bankruptcy last June. 
     That is because Hosseini's payments sometimes were tardy, 
     triggering late fees ranging from $25 to $50 and doubling 
     interest rates to nearly 30 percent. When the additional 
     costs pushed her balance over her credit limit, the credit 
     card companies added more penalties.
       ``I was really trying hard to make minimum payments,'' said 
     Hosseini, whose financial problems began in the late 1990s 
     when her husband left her and their three children. ``All of 
     my salary was going to the credit card companies, but there 
     was no change in the balances because of that interest and 
     those penalties.''
       Punitive charges--penalty fees and sharply higher interest 
     rates after a payment is late--compound the problems of many 
     financially strapped consumers, sometimes making it 
     impossible for them to dig their way out of debt and pushing 
     them into bankruptcy.
       The Senate is to vote as soon as this week on a bill that 
     would make it harder for individuals to wipe out debt through 
     bankruptcy. The Senate last week voted down several 
     amendments intended to curb excessive fees and other 
     practices that critics of the industry say are abusive. House 
     leaders say they will act soon after that, and President Bush 
     has said he supports the bill.
       Bankruptcy experts say that too often, by the time an 
     individual has filed for bankruptcy or is hauled into court 
     by creditors, he or she has repaid an amount equal to their 
     original credit card debt plus double-digit interest, but 
     still owes hundreds or thousands of dollars because of 
     penalties.
       ``How is it that the person who wants to do right ends up 
     so worse off?'' Cleveland Municipal Judge Robert J. Triozzi 
     said last fall when he ruled against Discover in the 
     company's breach-of-contract suit against another struggling 
     credit cardholder, Ruth M. Owens.
       Owens tried for six years to payoff a $1,900 balance on her 
     Discover card, sending the credit company a total of $3,492 
     in monthly payments from 1997 to 2003. Yet her balance grew 
     to $5,564.28, even though, like Hosseini, she never used the 
     card to buy anything more. Of that total, over-limit penalty 
     fees alone were $1,158.
       Triozzi denied Discover's claim, calling its attempt to 
     collect more money from Owens ``unconscionable.''
       The bankruptcy measure now being debated in Congress has 
     been sought for nearly eight years by the credit card 
     industry. Twice in that time, versions of it have passed both 
     the House and Senate. Once, President Bill Clinton refused to 
     sign it, saying it was unfair, and once the House reversed 
     its vote after Democrats attached an amendment that would 
     prevent individuals such as anti-abortion protesters from 
     using bankruptcy as a shield against court-imposed fines.
       Credit card companies and most congressional Republicans 
     say current law needs to be changed to prevent abuse and make 
     more people repay at least part of their debt. Consumer-
     advocacy groups and many Democrats say people who seek 
     bankruptcy protection do so mostly because they have fallen 
     on hard times through illness, divorce or job loss. They also 
     argue that current law has strong provisions that judges can 
     use to weed out those who abuse the system.
       Opponents also argue that the legislation is unfair because 
     it ignores loopholes that would allow rich debtors to shield 
     millions of dollars during bankruptcy through expensive homes 
     and complex trusts, while ignoring the need for more 
     disclosure to cardholders about rates and fees and curbs on 
     what they say is irresponsible behavior by the credit card 
     industry. The Republican majority, along with a few 
     Democrats, has voted down dozens of proposed amendments to 
     the bill, including one that would make it easier for the 
     elderly to protect their homes in bankruptcy and another that 
     would require credit card companies to tell customers how 
     much extra interest they would pay over time by making only 
     minimum payments.
       No one knows how many consumers get caught in the spiral of 
     ``negative amortization,'' which is what regulators call it 
     when a consumer makes payments but balances continue to grow 
     because of penalty costs. The problem is widespread enough to 
     worry federal bank regulators, who say nearly all major 
     credit card issuers engage in the practice.
       Two years ago regulators adopted a policy that will require 
     credit card companies to set monthly minimum payments high 
     enough to cover penalties and interest and lower some of the 
     customer's original debt, known as principal, so that if a 
     consumer makes no new charges and makes monthly minimum 
     payments, his or her balance will begin to decline.
       Banks agreed to the new rules after, in the words of one 
     top federal regulator, ``some arm-twisting.'' But bank 
     executives persuaded regulators to allow the higher minimum 
     payments to be phased in over several years, through 2006, 
     arguing that many customers are so much in debt that even 
     slight increases too soon could push many into financial 
     disaster.
       Credit card companies declined to comment on specific cases 
     or customers for this article, but banking industry 
     officials, speaking generally, said there is a good reason 
     for the fees they charge.
       ``It's to encourage people to pay their bills the way they 
     said they would in their contract, to encourage good 
     financial management,'' said Nessa Feddis, senior federal 
     counsel for the American Bankers Association. ``There has to 
     be some onus on the cardholder, some responsibility to manage 
     their finances. ``
       High fees ``may be extreme cases, but they are not the 
     trend, not the norm,'' Feddis said.
       ``Banks are pretty flexible,'' she said. ``If you are a 
     good customer and have an occasional mishap, they'll waive 
     the fees, because there's so much competition and it's too 
     easy to go someplace else.'' Banks are also willing to 
     work out settlements with people in financial difficulty, 
     she said, because ``there are still a lot of options even 
     for people who've been in trouble.''
       Many bankruptcy lawyers disagree. James S.K. ``Ike'' 
     Shulman, Hosseini's lawyer, said credit card companies 
     hounded her and did not live up to several promises to work 
     with her to cut mounting fees.

[[Page S2125]]

       Regulators say it is appropriate for lenders to charge 
     higher-risk debtors a higher interest rate, but that negative 
     amortization and other practices go too far, posing risks to 
     the banking system by threatening borrowers' ability to repay 
     their debts and by being unfair to individuals.
       U.S. Bankruptcy Judge David H. Adams of Norfolk, who is 
     also the president of the National Conference of Bankruptcy 
     Judges, said many debtors who get in over their heads ``are 
     spending money, buying things they shouldn't be buying.'' 
     Even so, he said, ``once you add all these fees on, the 
     amount of principal being paid is negligible. The fees and 
     interest and other charges are so high, they may never be 
     able to pay it off.''
       Judges say there is little they can do by the time cases 
     get to bankruptcy court. Under the law, ``the credit card 
     company is legally entitled to collect every dollar without a 
     distinction'' whether the balance is from fees, interest or 
     principal, said retired U.S. Bankruptcy Judge Ronald 
     Barliant, who presided in Chicago. The only question for the 
     courts is whether the debt is accurate, judges and lawyers 
     say.
       John Rao, staff attorney of the National Consumer Law 
     Center, one of many consumer groups fighting the bankruptcy 
     bill, says the plight consumers face was illustrated last 
     year in a bankruptcy case filed in Northern Virginia.
       Manassas resident Josephine McCarthy's Providian Visa bill 
     increased to $5,357 from $4,888 in two years, even though 
     McCarthy has used the card for only $218.16 in purchases and 
     has made monthly payments totaling $3,058. Those payments, 
     noted U.S. Bankruptcy Judge Stephen S. Mitchell in 
     Alexandria, all went to ``pay finance charges (at a whopping 
     29.99%), late charges, over-limit fees, bad check fees and 
     phone payment fees.'' Mitchell allowed the claim ``because 
     the debtor admitted owing it.'' McCarthy, through her lawyer, 
     declined to be interviewed.
       Alan Elias, a Providian Financial Corp. spokesman, said: 
     ``When consumers sign up for a credit card, they should 
     understand that it's a loan, no different than their mortgage 
     payment or their car payment, and it needs to be repaid. And 
     just like a mortgage payment and a car payment, if you are 
     late you are assessed a fee.'' The 29.99 percent interest 
     rate, he said, is the default rate charged to consumers ``who 
     don't met their obligation to pay their bills on time'' and 
     is clearly disclosed on account applications.
       Feddis, of the banker's association, said the nature of 
     debt means that interest will often end up being more than 
     the original principal. ``Anytime you have a loan that's 
     going to extend for any period of time, the interest is going 
     to accumulate. Look at a 30-year-mortgage. The interest is 
     much, much more than the principal.''
       Samuel J. Gerdano, executive director of the American 
     Bankruptcy Institute, a nonpartisan research group, said that 
     focusing on late fees is ``refusing to look at the elephant 
     in the room, and that's the massive levels of consumer debt 
     which is not being paid. People are living right up to the 
     edge,'' failing to save so when they lose a second job or 
     overtime, face medical expense or their family breaks up, 
     they have no money to cope.
       ``Late fees aren't the cause of debt,'' he said.
       Credit card use continues to grow, with an average of 6.3 
     bank credit cards and 6.3 store credit cards for every 
     household, according to Cardweb.com Inc., which monitors the 
     industry. Fifteen years ago, the averages were 3.4 bank 
     credit cards and 4.1 retail credit cards per household.
       Despite, or perhaps because or, the large increase in 
     cards, there is a ``fee feeding frenzy,'' among credit card 
     issuers, said Robert McKinley, Cardweb's president and chief 
     executive. ``The whole mentality has really changed over the 
     last several years,'' with the industry imposing fees and 
     increasing interest rates if a single payment is late.
       Penalty interest rates usually are about 30 percent, with 
     some as high as 40 percent, while late fees now often are $39 
     a month, and over-limit fees, about $35, McKinley said. ``If 
     you drag that out for a year, it could be very damaging,'' he 
     said. ``Late and over-limit fees alone can easily rack up 
     $900 in fees, and a 30 percent interest rate on a $13,000 
     balance can add another $1,000, so you could go from $2,000 
     to $5,000 in just one year if you fail to make payments.''
       According to R.K. Hammer Investment Bankers, a California 
     credit card consulting firm, banks collected $14.8 billion in 
     penalty fees last year, or 10.9 percent of revenue, up from 
     $10.7 billion, or 9 percent of revenue, in 2002, the first 
     year the firm began to track penalty fees.
       The way the fees are now imposed, ``people would be better 
     off if they stopped paying'' once they get in over their 
     heads, said T. Bentley Leonard, a North Carolina bankruptcy 
     attorney. Once you stop paying, creditors write off the debt 
     and sell it to a debt collector. ``They may harass you, but 
     your balance doesn't keep rising. That's the irony.''

  Mr. HARKIN. Again, I urge my colleagues to disavow the Santorum 
amendment and support the Kennedy amendment. It is the least we can do 
for the least among us--to raise their minimum wage, give value to 
their work. This is a values issue. This is at the heart of it. It is 
an issue of what kind of country we want, what kind of Congress we are, 
and what kind of Senators we are.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. HAGEL. Mr. President, I ask unanimous consent that I be allowed 
to speak as in morning business for the purpose of introducing 
legislation. My time would be charged against Senator Santorum's time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Hagel pertaining to the introduction of S. 540 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  The PRESIDING OFFICER. Who yields time?
  The Senator from Massachusetts.
  Mr. HARKIN. Will the Senator yield for a unanimous consent request?
  Mr. KENNEDY. Yes.
  Mr. HARKIN. I ask that the pending amendments be set aside so I can 
offer a germane filed amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                            Amendment No. 66

  Mr. HARKIN. Mr. President, I call up amendment No. 66.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin], for himself, Mr. 
     Rockefeller, Mr. Leahy, Mr. Dayton, and Mr. Kennedy, proposes 
     an amendment numbered 66.

  Mr. HARKIN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To increase the accrual period for the employee wage 
                        priority in bankruptcy)

       On page 498, strike lines 23 and 24, and insert the 
     following:
       (1) in paragraph (4), by striking ``within 90 days'';
  Mr. HARKIN. I offer this amendment on behalf of myself, Senators 
Rockefeller, Leahy, and Dayton, and I ask unanimous consent that 
Senator Kennedy be added as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN. I ask that the amendment be set aside.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Massachusetts is recognized.


                            Amendment No. 44

  Mr. KENNEDY. Mr. President, there is a point that I would hope our 
colleagues would pay close attention to, and that is that the Santorum 
amendment will eliminate the equal pay provision for women working for 
companies with sales of less than $1 million. This is enormously 
important.
  The Republican amendment gives pennies to minimum wage workers with 
one hand. With the other, it takes thousands of dollars away from 
minimum wage, middle-class, and women workers. As I mentioned earlier, 
it slowed it up with antiworker poison pills, and the pill that is the 
hardest to swallow of the Republican amendments effectively denies over 
10 million more workers minimum wage, overtime pay, and equal pay 
protections by eliminating the Fair Labor Standards Act coverage 
completely.
  Currently, all employees who work for employers that are engaged in 
interstate commerce and have gross annual sales of at least $500,000 
are guaranteed Fair Labor Standard protections. But even in businesses 
that have less than $500,000 in annual sales, the employees still have 
individual Fair Labor Standard coverage if they are engaged in 
interstate commerce.
  The Santorum amendment raises the $500,000 annual sales threshold to 
$1 million, as he mentioned, and virtually eliminates this individual 
Fair Labor Standard coverage, even for workers who are engaged in 
interstate commerce. It makes one exception for workers engaged in 
industrial housework.
  It allows businesses to pay their workers less than the Federal 
minimum wage, requires them to work longer hours without overtime pay, 
and to be able to pay men and women differently.
  The gross annual sales threshold was created as a way to determine 
the employers that are engaged in interstate

[[Page S2126]]

commerce, not as a way to exempt the workers from the Fair Labor 
Standards Act.
  For over 60 years, Congress has amended the Fair Labor Standards Act 
to provide even more workers with the minimum wage. Instead of trying 
to exclude over 10 million workers from the guaranteed minimum wage, we 
should raise it.
  I refer to the paragraph of the Fair Labor Standards Act, paragraph 
206, that says each employer shall pay to each of his employees whose 
work is engaged in commerce, in the production of goods for commerce--
that is those who are being paid who are working for companies earning 
less than $500,000. In the same paragraph it says:

       No employer having employees subject to any provisions of 
     this section shall discriminate.

  Those are eliminated. So we don't have equal pay for equal work in 
the United States. There are only a few areas where we do. It is in 
this particular area that we do and the Santorum amendment eliminates 
it for those individuals. I say to our colleagues here in the Senate 
who care about equal pay for equal work for women, this is a bad deal.
  The PRESIDING OFFICER. Who yields time? The Senator from 
Pennsylvania.
  Mr. SANTORUM. I would say in response to the Senator from 
Massachusetts, my understanding of this legislation, the way it is 
written, there was an error made in the drafting of the statute such 
that the threshold had been basically ignored because of the provision 
to which the Senator from Massachusetts refers. It was a difference 
between an ``and'' and an ``or'' as to how it was written. My 
understanding is that the intent of the Congress was to exempt small 
businesses as we do from a variety of different labor laws. I mentioned 
before the one I am most familiar with, the Family and Medical Leave 
Act, which has an employee threshold. There are others that have 
thresholds in the Federal law, where we chose not to include very small 
businesses in some of the mandates the Federal Government imposes, a 
variety of different labor mandates. We do so because of the nature of 
the small business. A lot of these are mom-and-pop businesses, a 
garage, very small employers, where the burden of complying with a 
variety of Federal statutes having to do with labor laws when it comes 
to a small operation can be an onerous one and costly one. It can be a 
barrier to starting a business.
  So many, including Senator Harkin and Senator Reid, your leader, have 
supported this small business exemption as a clean exemption with no 
``or'' provision, ``as engaged in interstate commerce.''
  Why? Because we understand that Federal law and these kinds of 
provisions can be very costly to very small businesses and can be a 
barrier of entry to businesses and can involve them in a cost which 
they may not be willing to assume.
  So there has always been, to my knowledge, in almost every, if not 
every, Federal labor law a small business exemption, what the Senator 
from Massachusetts has said there should not be in this case. That is a 
very legitimate position. I do not think the Members of this body would 
agree--on either side of the aisle, I might add--that there should be 
no exemption for any business from this provision of the Fair Labor 
Standards Act. That is what we attempt to correct, to make that comport 
with what was broadly agreed was the intent. Unfortunately, it has 
never been remedied.
  If the Senator from Massachusetts wants to make the argument that 
there should be no businesses exempt from the Federal Fair Labor 
Standards Act, fine. Make that argument and we will have that debate 
and we will find out how many votes we have, whether there should be a 
small business exemption or not. But don't suggest what I am doing here 
is some sort of subterfuge other than to clarify that there are 
exemptions for legitimate reasons for very small businesses. The 
threshold was set at half a million dollars back in 1990. If you index 
that to inflation, it would be $1.5 million today. We set it at a 
million, which is lower than the rate of inflation. That is hardly 
overreaching on the part of this amendment.
  If the Senator wants to say there should be no exemption, that all 
businesses should be covered and there should be no small business 
exemption to any labor law, fine, if that is what the Senator from 
Massachusetts wants. Understand the consequences, that Democrats and 
Republicans for years have understood here, which is these mandates on 
very small startup businesses in particular, but any small business, 
can be damaging to the economy in our poorest neighborhoods, in the 
cleaning services, in the landscape businesses, and a whole host of 
other small businesses where people are trying to make ends meet by 
pursuing their entrepreneurial spirit. By putting these kinds of 
requirements and labor laws and regulations on these small businesses, 
we damage and destroy the very small businesses in this country.

  I do not think that is where most on his side of the aisle are. That 
may be where the Senator from Massachusetts is. If that is where he is, 
fine, but I would be very proud to defend that provision that says the 
smallest businesses in America should not have these kinds of mandates 
imposed on them by Federal law.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. SANTORUM. I am happy to yield for a question.
  Mr. DURBIN. I am sorry that I just arrived. I am trying to catch up 
with this debate. Would the amendment reduce the number of workers in 
America eligible for overtime pay and reduce the number of businesses 
in America required to pay the minimum wage?
  Mr. SANTORUM. I think I was pretty clear about that. The answer is 
yes. Because we raise the threshold from a half million, small 
business, to a million. As I said before, the half million threshold 
was set in 1990. It has not been indexed. I hear a lot of comments 
about why we should index things here. We should index the minimum 
wage, we should index a whole host of other things that have the 
benefit of, in this case, increasing workers' pay. If that is the case, 
if we thought $500,000 was a legitimate threshold in 1990, I don't know 
why it should not be indexed to include in real terms that same class 
of small businesses at this time.
  Mr. DURBIN. Will the Senator yield for a further question?
  Mr. SANTORUM. I am happy to.
  Mr. DURBIN. If the Senator is prepared to double the size of the 
business from $500,000 to $1 million because it should keep up with 
inflation, would the Senator be prepared to double the minimum wage of 
1990 to what it should be today?
  Mr. SANTORUM. I say to the Senator from Illinois, we are increasing--
in fact, my amendment does increase the minimum wage by 20 percent.
  Mr. DURBIN. By 100 percent?
  Mr. SANTORUM. I don't recall exactly what the increase was. I will 
check and see what the wage was in 1990 as compared to what it is 
today. We are proposing a modest increase. If the Senator is suggesting 
it should be a smaller increase, I will be happy to negotiate a smaller 
increase if it makes the Senator comfortable.
  The Senator from Massachusetts is not suggesting it should be a 
smaller increase. He is suggesting there should be no exemption at all 
and that there was a provision--and that is what the debate is about--
that if they included anyone in interstate commerce, even one employee, 
that they should be covered. In fact, that is my understanding of how 
the Labor Department has interpreted this provision. In a sense, there 
has not been any threshold.
  Again, if the Senator from Illinois would like to have a threshold 
that indexes with the minimum wage, I would be happy to accept that as 
a reasonable index. But I think to suggest it should not change at all 
over a period of time does, of course, begin to gather and cover more 
and more businesses that are small by nature and then again it would be 
a barrier to entry and a difficulty in sustaining those businesses over 
time.
  I am willing, if there is a legitimate concern about this as to how 
much we are raising the cap, again, we are willing to negotiate that. 
That is not what the Senator from Massachusetts is saying. What the 
Senator from Massachusetts is saying is there should not be any 
threshold at all; we should keep the zero threshold which exists today 
in law.

[[Page S2127]]

  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. The history for interstate workers is that from 1938, 
when the minimum wage was first passed, the minimum wage has applied to 
them. That is being changed by the Senator from Pennsylvania. We 
understand that. That is being changed. It is going to have a profound 
effect on millions of workers.
  It is not only by the provisions, the coverage of the Fair Labor 
Standards Act, it is not only the payment, but it is also the equal 
payment.
  Second, there have been different rules with regard to retail 
workers. There was the overall figure of $1 million that was used on 
retail workers. That was reduced to $500,000 and even down to $250,000. 
So we have been dealing with this for many times.
  The point of the matter is, under the Santorum amendment, the way it 
is constructed, there will be millions and millions and millions who 
will be outside the coverage of the Fair Labor Standards Act. That is 
plain and simple.
  Mr. SANTORUM. Will the Senator yield?
  Mr. KENNEDY. I only have a few minutes left now. The point I was 
making earlier, when I offered our amendment, it is 3 pages long, to 
deal with the increases in the minimum wage for workers. The Senator 
from Pennsylvania has an 85-page law. He has opposed the minimum wage 
17 times in 10 years. Minimum wagers, beware.

  Mr. SANTORUM. Mr. President, does the Senator from Massachusetts 
yield?
  Mr. KENNEDY. I have to withhold my remaining time.
  Mr. SANTORUM. Mr. President, I would like to correct the record. I 
have supported the minimum wage on more than one occasion during my 
time in Congress. When I started in the House, the last minimum wage 
that passed I supported. Under the Clinton administration, I voted for 
an increase. I have voted for an increase in the minimum wage in the 
past. I voted for a similar minimum wage increase in the last session 
of Congress, or the time before. I have not had any ideological 
problems supporting minimum wage. I want to correct the record about 
what the Senator from Massachusetts said.
  I would also say with respect to workers not being covered as a 
result of this provision of raising the threshold, as you know and as 
the Senator from Massachusetts knows, there are operative State laws 
which provide worker protections in addition to Federal law. In fact, 
for the States that do not have operative State laws which provide 
these worker protections, we leave the threshold at 500-fold. We don't 
change the threshold for the States that do not have operative worker 
protections for the things that the Fair Labor Standards Act applies 
to.
  I want to make the record clear. No one is falling through the cracks 
here. The States that only have Federal law covering this area do not 
change. The ones that do have State laws change accordingly. Again, 
many of those State laws will remain in place and cover workers who are 
not covered under the Fair Labor Standards Act under their own State 
labor protection laws.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I ask unanimous consent to speak for 5 
minutes, and I ask the Chair to notify me when I have used 4 minutes.
  The PRESIDING OFFICER. Does this time come out of the time of the 
Senator from Massachusetts?
  Mr. KENNEDY. I yield 5 minutes.
  Mr. DURBIN. Mr. President, Members of the Senate will have a choice 
in just a few minutes about the future of the minimum wage.
  There was a time when we didn't even debate this. There was a time 
when Democrats and Republicans agreed that every once in a while you 
have to raise the minimum wage. The cost of living goes up in America. 
Republican and Democratic Presidents alike said: Can't we come together 
and reasonably increase the minimum wage so that the poorest among us 
have a fighting chance for a decent life?
  We used to do it that way. When we stopped doing it 8 years ago when 
Republicans took control of Congress, they decided this was a partisan 
issue, that good Republicans didn't support an increase in the minimum 
wage; only Democrats supported it. Today, we have a choice. The choice 
is very stark.
  Senator Santorum comes to the Senate floor and says let us raise the 
minimum wage for 1.8 million Americans. That is a pretty good thing. At 
least they are going to get some help. But look at Senator Kennedy's 
alternative. In his alternative, 7.3 million Americans would have an 
increase in the minimum wage.
  The Santorum Republican approach helps 1 out of 4 of the workers who 
Senator Kennedy's approach helps. But it gets worse. In order for 
Senator Santorum to work up the political courage to bring this to the 
floor, he said: I have to turn around and do something on the business 
side. So what I will do is to exempt 10 million workers in America from 
coverage for overtime pay.
  Think about that. You can work 50 hours a week at straight time. That 
is the deal we are going to offer you for a slight increase in the 
minimum wage. Does that make sense?
  He goes further and says we are going to say that fewer businesses in 
America are required to pay the minimum wage. What a deal. After 
waiting 8 years, he helps 1 out of 4 of the workers who Senator Kennedy 
helps, and for the 1.8 million he helps, he pushes 5 times as many 
overboard. He says: You are not going to get overtime. I will vote for 
an increase in minimum wage, but that is just part of the deal.
  It is really appropriate that we have this debate on the bankruptcy 
bill, isn't it, when you think about it? We are going to force some of 
the most marginal workers, so many of the hardest working people in 
America, into a position where they can't pay their bills; then our 
beautiful Bankruptcy Code reform pushed by the credit card industry 
will make sure they are saddled with debt for a lifetime. That is what 
this debate comes down to.
  In order to bring up the courage on the Republican side to offer any 
minimum wage increase, they had to offer to the business community this 
disqualification for overtime pay the incentive that many businesses 
would not pay a minimum wage, not to mention adhere to the equal pay 
provisions. Some of these minimum wage workers across America are 
young, single mothers struggling to raise kids. Sometimes they are 
working one or two minimum wage jobs. They would like to be paid equal 
pay in their workplace. Senator Santorum thinks that goes too far when 
it comes to small businesses. I think this is wrong.
  We need to get back to the bipartisan consensus we had on minimum 
wage. If you stand for moral values--wasn't that the big issue in the 
last campaign?--wouldn't one moral value be as follows: If you get up 
and go to work every day in America, if you follow the rules and show 
up for work, you shouldn't live in poverty in America. That is a fact. 
Some people working every single day at a minimum wage job are living 
below the poverty line.
  Poverty has doubled since the late 1970s. The poverty rolls have 
increased by 4 million people since President Bush has taken office. 
The low minimum wage is a big part of that. Minimum wage employees who 
work 40 hours a week earn $10,750 a year. Think about how you would get 
by on $10,700 a year. In fact, we say officially that this is $5,000 
less than you need to raise a family of three. We acknowledge that. If 
you go to work, work hard, and are paid the minimum wage, you are going 
to live in poverty.
  We believe on the Democratic side of the aisle that America, if it is 
a just nation, should move to the point where hard-working Americans 
get a decent paycheck.
  That is what Senator Kennedy has been fighting for for 8 years. I 
would be happy to be part of that fight.
  I say in conclusion that we talk a lot in the Senate about what our 
priorities should be. The top priority of this Senate now is to make 
the bankruptcy laws more difficult for those swamped by medical bills. 
We have tried to offer amendments to stand up for the activated Guard 
and Reserve people who are forced into bankruptcy. The Republican side 
rejected every single amendment we offered. Now we come with a 
sensible, just amendment to, frankly, raise the minimum wage up to a 
decent level in America, and what we are offered on the other side of 
the aisle is an unacceptable alternative.

[[Page S2128]]

  I yield the floor.
  Mr. HATCH. Mr. President, today the Senate will consider two minimum 
wage amendments to the bankruptcy reform bill, S. 256. Senator Ted 
Kennedy's minimum wage amendment proposes to increase the minimum wage 
by $2.10 per hour in three steps over 26 months, and Senator Rick 
Santorum's amendment would raise the minimum wage by $1.10 an hour over 
18 months.
  I have always believed that increasing the minimum wage is not an 
effective way to improve living standards for the Nation's working 
poor. Simply put, raising the minimum wage is a Federal government 
mandate which creates negative ripples throughout the national economy 
by making goods and services more expensive for families. Raising the 
minimum wage closes the doors of many small businesses, and forces 
companies to move jobs offshore to less costly countries. Such an 
increase makes it more difficult for many lower skilled U.S. workers to 
get started in the job market.
  Small businesses are the engine for economic growth in America and 
represent a powerful vehicle for opportunity. A minimum wage increase 
would negatively affect small businesses across the nation and in my 
home State of Utah.
  For example, Wangsgard's grocery store of Ogden, UT, offers a full 
line of groceries, along with a meat shop, oven-fresh bakery, fresh 
produce, a deli and snack bar, coffee counter, garden center and Ace 
Hardware. Without a doubt, this store really is a one-stop solution.
  Phillip Child, president and owner of Wangsgard's grocery store, 
informs me that a minimum wage increase would force him to reduce jobs. 
In fact, Mr. Child confirms that of his 93 employees, those who are 
earning minimum wage are either in high school or living at home with 
their parents. These employees are not supporting families. With the 
goal to open a second Wangsgard's grocery store in the near future, Mr. 
Child is concerned that an increase in minimum wage would certainly cut 
the number of new jobs available to the community.
  I believe education and job-training programs are the key to raising 
take-home pay. Of course, it's much easier to pose as the champion of 
the poor and worry about the consequences later. Yet if Congress does 
move to increase the minimum wage, it should adopt a small, more 
gradual increase, and offset the negative consequences of a wage hike 
with measures to protect the small businesses that generate a majority 
of all new jobs and employ most Americans. That is why I support the 
Santorum amendment and oppose the Kennedy amendment.
  Mr. CORZINE. Mr. President, I rise today to speak in support of 
Senator Kennedy's amendment that would amend the Fair Labor Standards 
Act of 1938 to provide for gradual increases in the Federal minimum 
wage.
  An increase in the Federal minimum wage is long overdue.
  It has now been over 7 years since Congress last raised the minimum 
wage to its current level of $5.15 per hour. Since that last increase, 
Congress's failure to adjust the wage for inflation has reduced the 
purchasing power of the minimum wage to record low levels. In fact, 
after accounting for the loss of real value due to inflation, the 
purchasing power of the minimum wage has not been this low since the 
wage increase of 1945.
  When Congress last raised the minimum wage in 1996, the wage was 
raised from $4.75 to its current $5.15. At the time, this modest 
increase had real results. The adjustment increased the take home pay 
of nearly 10 million hard working Americans. But with inflation, the 
real dollar value of that increase is long gone.
  So that we are clear, raising the minimum wage is a family issue. So 
often in this body we talk about family issues. This is our chance to 
act.
  No family gets rich from earning the minimum wage. In fact, the 
current minimum wage does not even lift a family out of poverty. A 
person earning the current minimum wage, working 40 hours a week, 52 
weeks a year, earns only $10,700--nearly $4,000 below the poverty line 
for a family of three.
  Seven out of every 10 minimum wage workers are adults, and 40 percent 
of minimum wage workers are the sole breadwinners of their families. 
Moreover, a disproportionate number of minimum wage workers are women. 
Sixty percent of the 11 million minimum wage workers are women, and 
many are single mothers who must put food on the table, make rent 
payments, and provide childcare. Increasing the minimum wage by a mere 
$1.50 per hour would mean an extra $3,000 a year for working families. 
These additional dollars can provide tangible help to these families in 
the form of groceries, rent, and the ability to pay one's utility 
bills.
  The problems posed by our insufficient minimum wage are stark in my 
home State of New Jersey.
  According to New Jersey Department of Labor statistics, there are 
just over 181,000 people making minimum wage in the State. While some 
States have set higher minimum wage levels, New Jersey is like most 
States--its minimum wage mirrors the Federal minimum wage. But New 
Jersey is also different because the cost of living in New Jersey far 
exceeds the national average and working families in the State are 
unable to make ends meet at the current minimum wage. As a result, 
minimum wage workers in New Jersey are worse off than minimum wage 
workers living in other parts of the country.

  Let me quantify the severity of this problem in a high-cost State 
such as New Jersey. Last year, Legal Services of New Jersey released a 
self-sufficiency study that found that--without private or public 
assistance--a New Jersey family of four needs a yearly salary of 
anywhere from $37,516 to $56,670 to make ends meet. Now remember, as I 
mentioned earlier, an individual earning the current minimum wage, 
working 40 hours a week, 52 weeks a year, earns only $10,700. What that 
then means is that in New Jersey, a family of four that has both 
parents working full-time for the minimum wage would still face an 
annual shortfall likely in excess of $20,000 in order to cover basic 
living needs.
  While the Kennedy amendment seeks to provide a real wage increase to 
workers that will help them keep up with the rising cost of living in 
our Nation, the Santorum amendment offered by my Republican colleagues 
is a cruel hoax on hard-working Americans.
  It is politics over policy, and it is just plain wrong.
  The Santorum amendment only provides about half of the minimum wage 
increase of the Kennedy amendment. It also denies minimum wage, 
overtime and equal pay rights from over 10 million workers.
  The Santorum amendment will increase the minimum wage by a mere $1.10 
per hour. This amendment will benefit only 1.8 million workers--5.5 
million fewer than the Kennedy amendment.
  The difference between an increase to $7.25 and an increase to $6.25 
for a minimum wage worker has a real impact on people's lives, 
particularly in a State such as New Jersey. It means on average 15 
fewer months of child care; over a year less of tuition at a community 
college; 10 fewer months of heat and electricity; 6 fewer months of 
groceries; and 5 fewer months of rent.
  The Santorum amendment denies more than 10 million workers minimum 
wage, overtime pay and equal pay rights by ending individual Fair Labor 
Standards coverage and raising the enterprise coverage threshold to $1 
million from $500,000.
  The Santorum amendment would be the death of the 40-hour workweek and 
the American weekend. After the Administration's denial last year of 
overtime protections for 6 million workers, this proposal would further 
undermine overtime protections by allowing employers to refuse to pay 
workers up to 10 hours of earned overtime pay every 2 weeks.
  That means a pay cut of $3,000 a year for a median income earner--
$43,000 per year--and an $800 pay cut for minimum wage workers. 
Employers are already free to offer more flexible schedules under 
current law--the only difference is that now they have to pay workers 
overtime when they work more than 40 hours in a week.
  Finally, the Santorum amendment prohibits states from providing 
stronger wage protections than the Federal standard for tipped 
employees like waiters and waitresses.
  There are some items in the Santorum amendment that can help our 
small businesses. But this amendment has been so bloated down with

[[Page S2129]]

provisions that are harmful to American workers that as a whole it is 
not just bad for workers, it is ultimately bad for business.
  All of our hard working families nationwide need and deserve a 
minimum wage that reflects the increased cost of living in America. It 
is the least we can do for people who work hard and make a positive 
contribution to our great Nation.
  Let's not dishonor them or their efforts. I urge my colleagues to 
support the Kennedy amendment.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I rise today in opposition to the amendment 
offered by Senator Kennedy which would increase the minimum wage by an 
unprecedented 41 percent. Apart from its numerous other problems, this 
proposal is fundamentally flawed because it presumes that Congress, by 
simply imposing an artificial wage increase, will meaningfully address 
the real issues of the lowest paid workers. That is simply not the 
case.
  Regardless of the size of a wage increase Congress might impose, the 
reality is that yesterday's lowest paid worker, assuming he still has a 
job, will continue to be America's lowest paid worker tomorrow. 
Advancement on the job and earned wage growth can simply not be 
legislated. We do a disservice to all concerned--most especially the 
chronic low-wage worker--to suggest that a Federal wage mandate is the 
answer. What we need to focus on is not an artificially imposed number 
but on the acquisition and improvement of jobs and job-related skills. 
In this context, we should recognize that only 68 percent of the 
students entering the ninth grade 4 years ago are expected to graduate 
this year. For minority students, this number hovers around 50 percent. 
In addition, we continue to experience a dropout rate of 11 percent per 
year.
  These noncompletions and dropout rates and the poor earnings capacity 
that comes with them cannot be fixed by a Federal wage policy. We 
always have to keep this in mind. The phrase ``minimum wage worker'' is 
an arbitrary designation. A more accurate description and one that 
should always be at the center of this debate is that we are seeking to 
address those workers who have few if any skills that they can use to 
compete for better jobs and command higher wages. The effect may be low 
wages, but the cause is low skills. In short, the problem is not a 
minimum wage. The problem is minimum skills.
  I had a Workforce Investment Act bill that the Senate 2 years ago 
passed unanimously. We cannot get a conference committee to do upgrades 
in skills for 900,000 people a year. That would have upped the minimum 
wage, and it would have upped it in a true way. If we are to approach 
this debate in a constructive and candid way, we need to know certain 
basic principles of economics. Wages do not cause sales. Sales are 
needed to provide wages. Wages do not cause revenue. Revenue drives 
wages. Wages can cause productivity, but the productivity has to come 
first to be able to afford the wages.
  Skills, however, operate differently than wages. Skills do create 
sales. Sales produce revenue. Skills do create productivity. Skills get 
compensated with higher wages or else the employee simply goes 
elsewhere for true higher wages. Wage increases without increased sales 
or higher productivity have to be paid for by higher prices. Higher 
prices wipe out wage increases. Skills, not artificial wage increases, 
produce the true net gains in income.
  The minimum wage should be for all workers what it is for most: A 
starting point; a starting point in an individual's lifelong working 
career. Viewed as a starting point, it becomes clear that the focus 
needs to be less on where an individual begins his or her working 
career. Instead, more emphasis should be placed on how an individual 
can best progress.
  Real wage growth happens every day and it is not the function of a 
Government mandate. It is the direct result of an individual becoming 
more skilled and therefore more valuable to his or her employer.
  As a former small business owner, I know that these entry level jobs 
are a gateway into the workforce for people without skills or 
experience. These minimum skills jobs can open the door to better jobs 
and better lives for low-skilled workers if we give them the tools they 
need to succeed.
  We have a great example in Cheyenne, WY, of minimum skilled workers 
who were given the tools and the opportunity to reach the American 
dream. Mr. Jack Price, the owner of eight McDonald's restaurants in 
Wyoming--everyone likes to use McDonald's for the example--had three 
employees who started working for McDonald's at minimum wage. Now those 
three employees, those minimum wage employees, own a total of 20 
restaurants. They got the skills.
  This type of wage progression and success should be the norm for 
workers across our country. However, there are some minimum skilled 
workers for whom stagnation at the lower tier wage is a longer term 
proposition. The answer for these workers, however, is not simply to 
raise the lowest wage rung, which raises all the other rungs, which 
drives up the price and takes away their advantage; rather, these 
individuals must acquire the training and skills that result in 
meaningful and lasting wage growth.
  We must equip our workers with skills they need to compete in this 
technology-driven global economy. It is estimated that 60 percent of 
tomorrow's jobs will require skills that only 20 percent of today's 
workers possess. It is also estimated that graduating students will 
likely change careers some 14 times in their life, and 10 of those jobs 
have not even been invented yet.
  To support these needs, we need a system in place that can support a 
lifetime of education, training, and retraining for workers. The end 
result would be the attainment of goals that provide meaningful wage 
growth. As legislators, our efforts should better focus on ensuring 
that the tools and the opportunities for training and enhancing skills 
over a Worker's lifetime are available and are utilized.
  We tried to do that through the Work First Investment Act that got 
blocked in the last Congress; 900,000 people trained to higher skilled 
jobs each year. That would have been a lot of people getting higher 
wages each and every year.
  Since 1998, the Democrats have been pushing a drastic increase in the 
Federal minimum wage except--listen to this--except when they were in 
the majority, when they controlled this body. In the 18 months from 
mid-2001 through all of 2002, while the Democrats held the 
majority they did not bring the minimum wage vote to the floor. The 
question must be asked, who would really be helped? Who would be hurt 
by this amendment we have today to raise the minimum wage by an 
unprecedented 41 percent, to $7.25 an hour.

  First, we must realize that the large increase in minimum wage will 
hurt low-income, low-skilled individuals, the very workers proponents 
claim they want to help. Let us be clear: Mandated hikes in the minimum 
wage do not cure poverty. They clearly do not create jobs.
  The Congressional Budget Office has said most economists would agree 
that an increase in the minimum wage rate would cause firms to employ 
fewer low-wage workers or employ them for fewer hours. That is the CBO 
estimate of October 18, 1999. In 1999, based on a dollar increase, CBO 
found that a plausible range of estimates for the potential job losses 
holds that a 10-percent increase--not a 41-percent increase, a 10-
percent increase--in the minimum wage would result in a half to 2 
percent reduction in the employment level of teenagers and a smaller 
percentage reduction for young adults ages 20 to 24. These estimates 
imply employment losses for an increase in the minimum wage of the 
amount provided in the 1999 proposal of roughly 100,000 to half a 
million jobs. Applying that same analysis today could actually double 
this prediction. Upwards of one million low-wage workers, mostly 
teenagers and young adults, can expect to lose their jobs or lose 
opportunities due to the proposal before the Senate for the $2.10 an 
hour increase.
  What every student who has ever taken an economics course knows, if 
you increase the cost of something--in this case, the minimum wage--you 
decrease the demand for those jobs. Misleading political rhetoric 
cannot change the basic principles of supply

[[Page S2130]]

and demand. The majority of economists continue to affirm the job-
killing nature of mandated wage increases.
  A recent poll concluded that 77 percent--that is nearly 17,000 
economists--believe that a minimum wage hike causes job loss. The 
argument these economists understand is this: By requiring employers to 
pay a higher wage for positions they consider entry level, the mandate 
forces employers to search for higher skilled employees. Moreover, 
mandated higher entry-level wages force employers to redefine the 
nature of the job and the expectations they have for their entry-level 
workers. Unskilled and low-skilled workers without the new 
qualifications will, therefore, be the first to be displaced and the 
last to be employed.
  In short, Congress can mandate how much employers pay entry-level 
employees, but they cannot mandate which workers employers pay.
  Even Dr. Rebecca Blank, a former member of President Clinton's 
Council of Economic Advisers, has admitted that without the earned-
income credit there would be greater pressure to increase the minimum 
wage, which has growing disemployment effects as it rises, since it 
induces employers to substitute away from less-skilled labor toward 
other technologies.
  Let me repeat what President Clinton's Economic Adviser said, because 
this is something proponents on the Senate floor are unwilling to meet. 
Minimum wage increases induce employers to substitute away the less-
skilled labor toward other technologies. Low-skilled workers will be 
displaced and lose jobs or will not be hired in the first place.
  This massive Federal wage proposal is based on a false assumption 
that a business that employs 50 minimum wage workers before this wage 
increase is enacted will still employ 50 minimum wage workers 
afterwards. Whether a business is in Washington or Wyoming, employers 
cannot absorb a 41 percent increase in their costs without a 
corresponding decrease in the number of jobs or of benefits they can 
provide workers.
  So we know there are losers when we raise the minimum wage, but who 
are the individuals who benefit? While minimum wage supporters often 
claim the wage floor must be raised in order to lift employees out of 
poverty, this is simply not the case. Again, the average family income 
of potential beneficiaries from a $7.25-an-hour minimum wage rate is 
over $41,000 a year. Clearly, the minimum wage is not a poverty level 
wage for most employees.
  Minimum wage earners who support a family solely based on the wage 
are actually few and far between. Fully 85 percent--this is very 
important--of the minimum wage earners live with their parents, have a 
working spouse, or are living alone without children. Forty percent 
live with a parent or relative. Twenty-one percent live with another 
wage earner. Twenty-four percent are single or are the sole breadwinner 
in a household with no children. And they lack skills. They have 
minimum skills. They get paid for minimum skills.
  Research shows that the poor targeting and other unintended 
consequences of the minimum wage make it terribly ineffective at 
reducing poverty in America--the intended purpose of the policy. In 
fact, two Stanford University economists concluded that a minimum wage 
increase is paid for by higher prices that hurt poor families the most.
  A 2001 study conducted by Stanford University economists found that 
only one in four of the poorest 20 percent of families would benefit 
from an increase in the minimum wage. Three in four of the poorest 
workers would be hurt by a wage hike because they would shoulder the 
costs of the resulting higher prices.
  Artificial wage hikes drive prices up. They have to. You cannot pay 
the wages without it. Everything but Government spending has to be paid 
for. To pay a higher minimum wage and other wages that have to go up 
because of it means prices have to be raised. We should not trick 
workers into thinking they are earning more when they still cannot pay 
the bills at the end of the month.
  As we discuss the Federal minimum wage, we must keep in mind the 
dangers, also, of a ``Washington knows best'' and a ``one size fits 
all'' mentality. An increase in the Federal minimum wage is a classic 
lesson that Washington does not know best and that one size does not 
fit all. A Federal wage mandate does not account for the cost of living 
that varies across the country. It costs over twice as much to live in 
New York City than it does in Cheyenne, WY. However, a Federal minimum 
wage hike that applies from coast to coast is like saying a bag of 
groceries in New York City must cost the same as a bag of groceries in 
Cheyenne. Local labor market conditions and the cost of living 
determine pay rates, not Federal minimum wage laws dictated from 
Washington.
  Incidentally, that is why Maine has a higher wage rate than the 
Federal Government. That is why a lot of States have a higher rate. It 
fits their State. The States can do it without our help. Isn't that 
amazing.
  Now, proponents of a large, federally mandated increase in the 
minimum wage repeatedly state that the wage floor is too low and that 
minimum wage earners earn below the poverty line. This argument 
neglects to figure in the effects of the earned-income credit.
  Proponents of large minimum wage increases argue that we should 
return the starting wage to its 1968 value, when the minimum wage was 
at its all-time high when adjusted for inflation. However, it is 
important to note, that the real value of the current minimum wage in 
2004 dollars plus the real value of the Earned income credit for a 
full-time minimum wage employee with two children comes close to 
matching the 1968 value Democrats claim they are targeting.
  As my colleagues are no doubt aware, the earned income credit is a 
Federal income tax credit for low-income workers that reduces the 
amount of tax an individual owes, and is frequently returned in the 
form of a refund. This can supplement incomes by as much as $4,290, for 
a single adult with two dependents which works out to a cash credit 
equal to more than $2 per hour paid directly to the worker.
  For every dollar in wages earned by a low-income family with two 
children, the Federal Government provides a tax credit of 40 percent.
  Workers with one child have an effective minimum wage rate of $6.90 
per hour, $5.15 per hour, plus a 34-percent credit of $1.75 per hour.
  Workers with two or more children have an effective minimum wage rate 
of $7.22 per hour, $5.15 plus a 40-percent credit of $2.07 per hour.
  As a household's income rises above around $15,000 per year, the 
earned income credit begins to be phased out.
  It would take a minimum wage increase of around a dollar per hour to 
reach the ``appropriate'' 1968 rate, when the earned income credit is 
applied.
  The earned income credit has retained the value of the minimum wage 
for employed workers with families by supplementing their income while 
avoiding the adverse effects of minimum wage hikes. In fact, using the 
earned income credit allows us to more effectively target assistance to 
those workers raising families on low incomes.
  Contrast this targeted policy with massive increases in the minimum 
wage that inefficiently distribute ``assistance'' to individuals 
without children--mostly teenagers from wealthy families. In summary, 
the earned income credit is ignored by wage-hike proponents because it 
proves the flaws in their arguments. Regardless of whether their 
arguments made sense in 1938, or even in 1968, their rhetoric has been 
overridden by newer policies such as the earned income credit. I prefer 
to promote modern policies that help the poor, and not to dwell on 
stale arguments that no longer ring true.

  My colleagues on the other side of the aisle suggest that the only 
time low-income workers receive wage increases is when Congress 
mandates an increase in the minimum wage. It is preposterous and 
demeaning to argue that only Congress can give low-wage workers a pay 
raise. More often than not, it is the workers' own dedication, hard 
work, and willingness to learn that results in their earning higher 
wages. Workers who were making the minimum wage when it was last hiked 
in 1997 have learned job skills, received valuable experience, and, as 
a result, have earned raises above the minimum wage.

[[Page S2131]]

  Whenever they seek to increase the minimum wage, the Democrats 
announce the number of workers who will ``benefit'' from the mandate. 
Interestingly, however, that number has shrunk dramatically over the 
past 6 years.
  On September 3, 1998, Senator Kennedy issued a press release counting 
the number of minimum-wage-increase beneficiaries at 12 million. That 
was when his wage hike went up to $6.65 per hour instead of today's 
$7.25 per hour increase. Today, however, he puts the number at only 7.5 
million. That is 4.5 million fewer workers affected by a minimum wage 
increase. Where did they go?
  Where did the other 4.5 million individuals go? They earned raises, 
on their own, without Congress imposing a Federal wage hike. In fact, 
statistics show that most minimum-wage workers will earn raises in 
their first year on the job. These minimum-skilled workers will earn 
raises as their skills and experience increase.
  I share the same goal as Senator Kennedy--to help American workers 
find and keep well-paying jobs. Minimum skills--not minimum wages--are 
the problem. Education and training will solve that problem and lead to 
the kind of increased wages and better jobs we all want to create for 
our Nation's workers. Lets get the Workforce Investment Act passed and 
conferenced so the President can sign it and get higher skills training 
accelerated.
  The PRESIDING OFFICER (Mr. Burr). The Senator's time has expired.
  Mr. ENZI. Mr. President, it is a false economy, and if we really 
wanted to raise it, we would have done something with the Workforce 
Investment Act, the job training. We would have raised skills, and then 
employees would have been compensated well.
  I yield the floor.
  The PRESIDING OFFICER. The Democratic leader is recognized.
  Mr. REID. Mr. President, I will use leader time for this 
presentation.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I have not been on the floor all day to 
listen to the debate, but I have listened to part of it. I am stunned 
by some of the remarks by those opposed to raising the minimum wage. To 
indicate that people who are drawing minimum wage live with their 
parents or others--they do because they make so little money. And all 
the denigration of these entry-level jobs--these are jobs that people 
have to have filled. They may be low, entry-level jobs, but they are 
jobs people need. People are not hiring these people out of the 
goodness of their heart, to say: Well, here is somebody. We'll hire a 
few minimum wage employees.
  There are a few people like that, but the reason you have these 
minimum wage jobs is because people need results. The employer needs 
the work done. The employee needs the job.
  I have heard on this floor a number of times today people saying: It 
is pushing a drastic increase in the minimum wage. The minimum wage was 
valid when it was initiated many years ago. It is valid today. We 
should at least keep up with the cost of living. Using the logic of 
those who oppose the increase in the minimum wage with these 
``drastic,'' as they say, minimum wage increases, the longer you wait, 
the less chance there would be to raise it because it would become more 
``drastic,'' in their words, all the time. All we are trying to do, all 
Senator Kennedy is trying to do, is keep up with the cost of living.
  My friend, the distinguished Senator from Wyoming, indicated that 
during the short time we were in control--of course, a lot of the time 
we were in charge there was no legislative business going on, but keep 
in mind that every time we have attempted, no matter who is in the 
majority in the last 8 years, the Republicans have stopped it, either 
through an actual filibuster or through some parliamentary maneuver. 
They have opposed raising the minimum wage.
  I think the logic of so doing, that it is a ``drastic'' increase--I 
repeat--means that the longer you wait until you attempt to raise the 
minimum wage, the less chance it would have to pass because it would 
become, in their minds, more drastic. Think of the poor people who are 
trying to earn a living with this minimum wage. It becomes very drastic 
for them.
  I was heartened last week to see my Republican colleagues express 
their commitment to addressing the issue of poverty. Press conferences 
were held. But I believe the time has come for them to back up their 
words with action and vote to increase the minimum wage to $7.25 an 
hour. It is not going to happen. We understand that the marching orders 
have been given, and they will all walk up here and vote against 
increasing the minimum wage.
  In a country that values work and the opportunity to get ahead, a 
hard day's work should bring a decent day's pay, whether it is an 
entry-level job or a job that is a more skilled job. In America, this 
is not the case as it relates to entry-level work. We have mothers and 
fathers working full time in minimum wage jobs but still living in 
poverty, still struggling to get ahead.
  I met with some of these workers in Nevada last month. When you talk 
with them, you begin to understand that increasing the minimum wage is 
not about helping teenagers earn more from their summer jobs, it is 
about helping families realize the promise of America. This fact was 
driven home during a conversation I had with a woman from Reno named 
Natasha. She is married, has a child, and works as a server in a 
popular restaurant. She works hard. In fact, the restaurant is one of 
my favorites. It is in a little strip mall. The restaurant is called 
Pinocchio's. It is a wonderful restaurant.
  She has served me on a number of occasions. She works hard, as does 
her husband. But with a minimum wage job, she has trouble making ends 
meet and affording basics, such as food, clothing, and housing. She has 
tried to get ahead by taking classes at a community college in the 
area, but she had to cut back because she could not afford to go to 
school and also pay for what she needed to take care of her family. She 
earns the minimum wage, plus her tips.
  Now, I would say to my friend from Wyoming, the employer is not going 
to eliminate her job if the minimum wage is increased. He needs 
somebody to wait those tables, and she is willing to do this because 
she needs the work. And the tips are not that bad. She is trying to 
live the American dream by going to school and getting ahead but unable 
to do it because the minimum wage in this country is not enough money.
  Her story is like many others we have all heard, if we listen--
stories of families caught in the cycle of poverty, a cycle we can 
begin to end today by increasing the minimum wage.
  An increase in the minimum wage will help 7 million Americans. This 
may not sound like a lot of money, but to these people it is a lot of 
money. An increase of this size can help a family heat their home, pay 
for transportation to work, or can help a mother afford childcare so 
she does not have to worry about her kids while she is away.
  The majority is calling to increase the minimum wage to $6.25 and 
further attempting to end the 40-hour workweek with what they call 
flextime. These measures are unacceptable. Raise the minimum wage, not 
play games with making it easier for employers to stagger the work of 
employees. They have already, through the President, eliminated 
overtime in many instances.
  First, a nominal increase in the minimum wage will help millions of 
Americans. This is important. Ending the 40-hour workweek, replacing it 
with flextime, would deny over 10 million minimum wage workers the 
ability to earn overtime pay.
  We can do better. Helping our families live more productive lives 
must be our top priority. Providing workers a wage that is consistent 
with the rising cost of living is both fair and just. I urge my 
colleagues to pass this increase in the minimum wage.
  The distinguished Senator from Massachusetts has spent a lifetime in 
the national legislature helping people who don't have lobbyists. When 
Senators walk up to this door here--sometimes we come in by subway--
many times we are overwhelmed by lobbyists, so many that we can't work 
our way through them. But we will not see lobbyists here representing 
minimum wage workers.
  I send to my friend through the Chair my appreciation for a lifetime 
of work

[[Page S2132]]

helping those who don't have lobbyists, people who are working like 
Natasha trying to make ends meet. The minimum wage should be increased. 
It is a shame that we have to fight for it so hard. Frankly, we have 
not been successful for 8 years. I say to my friend--and I don't like 
to hear myself say this--they have their marching orders over there. We 
are going to lose again.
  The people who are in these entry-level jobs are again going to be 
without an increase. There are people out there who had hope. I am 
sorry. The marching orders have been given, and there will be no 
increase.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator has 8 minutes.
  Mr. KENNEDY. I ask the Chair to let me know when I have used 7 
minutes.
  Mr. President, we have had a good discussion with my friend and 
colleague, the Senator from Pennsylvania. During the course of the 
debate, I did mention that a range of different groups are supporting 
our position. I will include those endorsements in the Record. One I 
would like to mention is from the Catholic Bishops. This is their 
position:

       The Catholic Bishops have been long time supporters of the 
     minimum wage. In Catholic teaching, the principle of a living 
     wage is integral to our understanding of human work. Wages 
     must be adequate for workers to provide for themselves and 
     their families in dignity. Because the minimum wage is not a 
     living wage, the Catholic Bishops have supported increasing 
     the minimum wage over the decades.
       We are aware that some accommodations are being offered to 
     alleviate possible adverse effects on small businesses . . . 
     that might occur with a modest increase in the minimum wage. 
     However, other changes and modification being contemplated 
     that will affect overtime pay or the 40 hour workweek are 
     unwarranted and unwise. Other workers should not lose minimum 
     wage protection or overtime pay as the price of increasing 
     the wages of America's lowest paid workers. At the very 
     least, such changes to the Fair Labor Standards Act should be 
     considered in the formal legislative process, not attached to 
     a popular increase in the minimum wage as a condition of 
     passage.

  They indicate their support for our amendment.
  In just a few moments the Senate will have an opportunity to vote 
either in favor of the Santorum amendment or my amendment. I believe a 
vote for the Santorum amendment is a vote to deny the minimum wage to 
more than 10 million workers. Those workers are looking to us for a 
fair raise to reward their hard work and to help care for their 
families.
  But the Santorum amendment takes away their minimum wage rights 
entirely. A vote for the Santorum amendment is a vote to deny overtime 
pay to more than 10 million workers. These workers rely on overtime pay 
to make ends meet, and overtime pay is compensation for many long hours 
away from their families.
  A vote for the Santorum amendment is a vote for a pay cut for workers 
who rely on tips--waitresses, taxi drivers, and hairdressers. This is 
contrary to our values as Americans. We believe that work should have a 
reward. The Santorum amendment dishonors that. It is an insult to the 
low-wage workers of this country.
  The amendment I offer is about everything that we stand for as a 
nation. It is about opportunity. It ensures that every American at 
least has the opportunity to move up and achieve the American dream. It 
is about fairness. What is fair about working hard 52 weeks of the year 
and still living in poverty? What is fair when Members of Congress 
raise their own salaries seven times, by $28,000, over the last 8 years 
and refuse to vote for an increase in the minimum wage? What is fair 
about that? What is fair about executives who pay themselves millions 
of dollars but can't find a way to pay a decent minimum wage?
  It is about making our economy work for everyone, not just the 
privileged few. There is no doubt that this is one of the central moral 
questions of our time. It is how we treat the least of those among us. 
It is why religious leaders have supported a minimum wage increase. The 
Santorum amendment fails the fundamental obligations of a just and fair 
society. Under the guise of raising the minimum wage, it cuts overtime 
pay and leaves out too many individuals.
  Who are these minimum wage workers? First of all, they are men and 
women of dignity. They assist in the classrooms every day to teach the 
children. They work in nursing homes to help care for the elderly who 
have sacrificed for their children and have made such a difference for 
this country. This issue is about women working in our society, because 
a majority of those who will benefit from this minimum wage increase 
are women. It is a women's issue. It is a children's issue because a 
third of those women have children. It is a children's and a women's 
issue--and a family issue. It is a civil rights issue because so many 
of the men and women who receive the minimum wage are men and women of 
color. And most of all, it is a fairness issue.
  If there is a value which the American people understand, it is 
fairness. The American people believe if you work 40 hours a week, 52 
weeks of the year, you should not have to live in poverty. They are 
living in poverty today with the second lowest minimum wage in nearly 
the last 60 years.
  The amendment I offer will provide a helping hand to men and women of 
dignity to live in a decent and fair respect.
  I hope the Senate will accept it.
  I yield back my time and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to amendment No. 44.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. McCONNELL. The following Senators were necessarily absent.
  The Senator from Nevada (Mr. Ensign) and the Senator from 
Pennsylvania (Mr. Specter).
  Mr. DURBIN. I announce that the Senator from Montana (Mr. Baucus), 
the Senator from North Dakota (Mr. Conrad), and the Senator from 
Maryland (Ms. Mikulski) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 46, nays 49, as follows:

                      [Rollcall Vote No. 26 Leg.]

                                YEAS--46

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Coleman
     Corzine
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Schumer
     Stabenow
     Wyden

                                NAYS--49

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Chambliss
     Coburn
     Cochran
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Enzi
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Stevens
     Sununu
     Talent
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                             NOT VOTING--5

     Baucus
     Conrad
     Ensign
     Mikulski
     Specter
  The PRESIDING OFFICER. Under the previous order, the amendment not 
having garnered 60 votes in the affirmative, the Senate action on this 
amendment is vitiated and the amendment is withdrawn.


                       Vote on Amendment No. 128

  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
128.
  Mr. SANTORUM. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Maryland (Ms. Mikulski) 
is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?

[[Page S2133]]

  The result was announced--yeas 38, nays 61, as follows:

                      [Rollcall Vote No. 27 Leg.]

                                YEAS--38

     Allen
     Bennett
     Brownback
     Bunning
     Burns
     Coleman
     Craig
     Crapo
     DeWine
     Dole
     Domenici
     Ensign
     Enzi
     Frist
     Graham
     Grassley
     Hagel
     Hatch
     Hutchison
     Kyl
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Talent
     Thomas
     Thune
     Voinovich
     Warner

                                NAYS--61

     Akaka
     Alexander
     Allard
     Baucus
     Bayh
     Biden
     Bingaman
     Bond
     Boxer
     Burr
     Byrd
     Cantwell
     Carper
     Chafee
     Chambliss
     Clinton
     Coburn
     Cochran
     Collins
     Conrad
     Cornyn
     Corzine
     Dayton
     DeMint
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gregg
     Harkin
     Inhofe
     Inouye
     Isakson
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Schumer
     Stabenow
     Sununu
     Vitter
     Wyden

                             NOT VOTING--1

       
     Mikulski
       
  The PRESIDING OFFICER. Under the previous order, the amendment not 
having garnered 60 votes in the affirmative, the Senate action on this 
amendment is vitiated and the amendment is withdrawn.
  The Democratic leader.


                       Amendment No. 19 Withdrawn

  Mr. REID. On behalf of Senator Feinstein, I ask unanimous consent 
that amendment No. 19 be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Connecticut.


                            Amendment No. 67

  Mr. DODD. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside and that amendment No. 67 be called up, the 
reading of the amendment be dispensed with, and the amendment laid 
aside so that the next amendment may be called up.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:


                            Amendment No. 67

    (Purpose: To modify the bill to protect families, and for other 
                               purposes)

        At the end of the bill, add the following:

        TITLE XVI--MODIFICATIONS FOR THE PROTECTION OF FAMILIES

     SEC. 1601. MODIFICATIONS FOR THE PROTECTION OF FAMILIES.

       (a) Dismissal or Conversion.--Section 707(b)(2)(A)(ii) of 
     title 11, United States Code, as amended by this Act, is 
     further amended--
       (1) in subclause (IV), by striking ``$1,500'' and inserting 
     ``$5,000''; and
       (2) by adding at the end the following:
       ``(VI) In addition, the debtor's monthly expenses shall 
     include--
       ``(aa) taxes and mandatory withholdings from wages;
       ``(bb) alimony, child, and spousal support payments;
       ``(cc) legal fees necessary for the debtor's case;
       ``(dd) pension payments;
       ``(ee) religious and charitable contributions;
       ``(ff) union dues;
       ``(gg) other expenses necessary for the operation of a 
     business of the debtor or for the debtor's employment;
       ``(hh) ownership costs for 1 motor vehicle (or 2 in the 
     case of a joint filing), determined in accordance with 
     Internal Revenue Service transportation standards, reduced by 
     any payments on debts secured by the motor vehicle or vehicle 
     lease payments made by the debtor;
       ``(ii) expenses for children's toys and recreation for 
     children of the debtor, tax credits for earned income 
     determined under section 32 of the Internal Revenue Code of 
     1986; and
       ``(jj) miscellaneous and emergency expenses.''.
       (b) Definition of Current Monthly Income.--Section 
     101(10A)(B) of title 11, United States Code, as amended by 
     this Act, is further amended by inserting ``payments received 
     as domestic spousal obligations,'' after ``Social Security 
     Act,''.
       (c) Property of the Estate.--Section 541 of title 11, 
     United States Code, as amended by this Act, is further 
     amended--
       (1) in subsection (a)(5)(B) by inserting ``except as 
     provided under subsection (b)(11),'' before ``as a result''; 
     and
       (2) in subsection (b)--
       (A) in paragraph (8), by striking ``or'' after the 
     semicolon;
       (B) in paragraph (9), by striking the period at the end and 
     inserting a semicolon; and
       (C) by inserting after paragraph (9) the following:
       ``(10) any--
       ``(A) refund of tax due to the debtor under subtitle A of 
     the Internal Revenue Code of 1986 for any taxable year to the 
     extent that the refund does not exceed the amount of an 
     applicable earned income tax credit allowed under section 32 
     of such Code for such year and the amount of an applicable 
     child tax credit allowed under section 24 of such Code for 
     such year; and
       ``(B) advance payment for an earned income tax credit 
     described in subparagraph (A); or
       ``(11) the right of the debtor to receive domestic spousal 
     obligations for the debtor or dependent of the debtor.''.
       (d) Protection of Earned Income Tax Credit and Support 
     Payments Under Bankruptcy Repayment Plans in Chapter 12.--
     Section 1225(b) of title 11, United States Code, as amended 
     by this Act, is further amended by adding at the end the 
     following:
       ``(3) In determining disposable income, the court shall not 
     consider amounts the debtor receives or is entitled to 
     receive from--
       ``(A) any refund of tax due to the debtor under subtitle A 
     of the Internal Revenue Code of 1986 for any taxable year to 
     the extent that the refund does not exceed the amount of an 
     applicable earned income tax credit allowed under section 32 
     of the Internal Revenue Code of 1986 for such year and the 
     amount of an applicable child tax credit allowed under 
     section 24 of such Code for such year;
       ``(B) any advance payment for an earned income tax credit 
     described in subparagraph (A); or
       ``(C) child support, foster care, or disability payment for 
     the care of a dependent child in accordance with applicable 
     nonbankruptcy law.''.
       (e) Protection of Earned Income Tax Credit and Support 
     Payments Under Bankruptcy Repayment Plans in Chapter 13.--
     Section 1325(b) of title 11, United States Code, as amended 
     by this Act, is further amended by adding at the end the 
     following:
       ``(5) In determining disposable income, the court shall not 
     consider amounts the debtor receives or is entitled to 
     receive from--
       ``(A) any refund of tax due to the debtor under subtitle A 
     of the Internal Revenue Code of 1986 for any taxable year to 
     the extent that the refund does not exceed the amount of an 
     applicable earned income tax credit allowed by section 32 of 
     the Internal Revenue Code of 1986 for such year and the 
     amount of an applicable child tax credit allowed under 
     section 24 of such Code for such year;
       ``(B) any advance payment for an earned income tax credit 
     described in subparagraph (A); or
       ``(C) child support, foster care, or disability payment for 
     the care of a dependent child in accordance with applicable 
     nonbankruptcy law.''.
       (f) Exemptions.--Section 522(d)(10) of title 11, United 
     States Code, as amended by this Act, is further amended--
       (1) in subparagraph (C), by inserting ``or'' after the 
     semicolon;
       (2) by striking subparagraph (D); and
       (3) by striking ``(E)'' and inserting ``(D)''.
       (g) Personal Property.--
       (1) Section 521.--Section 521(a)(6) of title 11, United 
     States Code, as amended by this Act, is further amended by 
     striking ``of personal property'' and inserting ``of an item 
     of personal property purchased for more than $3,000''.
       (2) Section 362.--Section 362(h)(1) of title 11, United 
     States Code, as amended by this Act, is further amended by 
     striking ``to personal property'' and inserting ``to an item 
     of personal property purchased for more than $3,000''.
       (h) Restoring the Foundation for Secured Credit.--Section 
     1325(a) of title 11, United States Code, as amended by this 
     Act, is further amended in the flush matter at the end by 
     striking ``if the debt was incurred'' and inserting ``to the 
     extent that the debt was incurred to purchase that thing of 
     value''.
       (i) Household Goods.--
       (1) Definition.--Section 101 of title 11, United States 
     Code, as amended by this Act, is further amended--
       (A) by redesignating paragraph (27A) as paragraph (27B); 
     and
       (B) by inserting before paragraph (27B) the following:
       ``(27A) `household goods '--
       ``(A) includes tangible personal property normally found in 
     or around a residence; and
       ``(B) does not include motor vehicles used for 
     transportation purposes;''.
       (2) For purposes of section 522.--Section 522(f) of title 
     11, United States Code, as amended by this Act, is further 
     amended by striking paragraph (4).
       (j) Limitation on Luxury Goods.--Section 523(a)(2)(C)(i) of 
     title 11, United States Code, as amended by this Act, is 
     further amended--
       (1) in subclause (I)--
       (A) by striking ``$500'' and inserting ``$1,000'';
       (B) by striking ``90'' and inserting ``70''; and
       (C) by inserting ``if the creditor proves by a 
     preponderance of the evidence at a hearing that the goods or 
     services were not reasonably necessary for the maintenance or 
     support of the debtor or the dependents of the debtor'' after 
     ``nondischargeable''; and
       (2) in subclause (II)--
       (A) by striking ``$750'' and inserting ``$1,225''; and
       (B) by striking ``70'' and inserting ``60''.
       (k) Exceptions to Discharge.--Section 523 of title 11, 
     United States Code, as amended by this Act, is further 
     amended--

[[Page S2134]]

       (1) in subsection (c), by inserting ``or (14)(A),'' after 
     ``or (6)'' each place it appears; and
       (2) in subsection (d), by striking ``(a)(2)'' and inserting 
     ``(a)(2) or (14A)''.


                 Amendments Nos. 68 through 72, and 119

  Mr. DODD. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside and, on behalf of Senator Kennedy, that 
amendments Nos. 68, 69, 70, 71, 72 and 119 be called up in turn, that 
reading of each amendment be dispensed with, that each amendment be 
laid aside so that the next amendment may be called up.
  The PRESIDING OFFICER. Without objection, it is so ordered.

  The amendments are as follows:


                            amendment no. 68

 (Purpose: To provide a maximum amount for a homestead exemption under 
                               State law)

        On page 191, between lines 11 and 12, insert the 
     following:
       (c) Further Limitation on Homestead Exemption.--Section 
     522(b) of title 11, United States Code, is amended by adding 
     at the end the following:
       ``(5) Notwithstanding any other provision of this section, 
     the maximum amount of a homestead exemption that may be 
     provided under State law shall be $300,000.''.


                            amendment no. 69

      (Purpose: To amend the definition of current monthly income)

        On page 20, line 16, strike ``Act,'' and insert ``Act, 
     income from any job in which the debtor is no longer 
     employed, income from any activity which the debtor can no 
     longer engage in due to disability,''.


                            amendment no. 70

  (Purpose: To exempt debtors whose financial problems were caused by 
   failure to receive alimony or child support, or both, from means 
                                testing)

        On page 19, between lines 13 and 14, insert the following:
       ``(8)(A) No judge, United States trustee (or bankruptcy 
     administrator, if any), trustee, or other party in interest 
     may file a motion under paragraph (2) if the debtor, in any 
     consecutive 12-month period during the 2 years before the 
     date of the filing of the petition, failed to receive alimony 
     or child support income, or both, that such debtor was 
     entitled to receive pursuant to a valid court order, totaling 
     an amount in excess of 35 percent of the debtor's household 
     income for such 12-month period.''.


                            amendment no. 71

(Purpose: To strike the provision relating to the presumption of luxury 
                                 goods)

        Beginning on page 155, strike line 3 and all that follows 
     through page 156, line 5.


                            amendment no. 72

(Purpose: To ensure that families below median income are not subjected 
                      to means test requirements)

        On page 28, between lines 21 and 22, insert the following:

     SEC. 102A. PROTECTION OF FAMILIES BELOW MEDIAN INCOME.

       Section 707(b) of title 11, United States Code, as amended 
     by section 102, is further amended--
       (1) in paragraph (2)(C), by striking ``calculated'' and 
     inserting ``calculated, except that a debtor described in 
     paragraph (7) need only provide the calculations or other 
     information showing that the debtor meets the standards of 
     such paragraph''; and
       (2) in paragraph (7)(A), by striking ``No judge, United 
     States trustee (or bankruptcy administrator, if any), 
     trustee, or other party in interest may file a motion under 
     paragraph (2)'' and inserting ``Paragraph (2) does not apply, 
     and the court may not dismiss a case based on any form of 
     means testing,''.


                           amendment no. 119

 (Purpose: To amend section 502(b) of title 11, United States Code, to 
                  limit usurious claims in bankruptcy)

       On page 45, strike lines 22 through 24, and insert the 
     following:
       (a) Reduction of Claim.--Section 502 of title 11, United 
     States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (8), by striking ``or'' at the end;
       (B) in paragraph (9), by striking the period at the end and 
     inserting ``; or''; and
       (C) by adding at the end the following:
       ``(10) such claim is for a credit transaction involving a 
     consumer (as defined in section 103(h) of the Truth in 
     Lending Act (15 U.S.C. 1602(g))), and the interest included 
     as part of such claim exceeds the maximum amount allowed by 
     the laws of the State, Territory, or District in which the 
     debtor resides.''; and
       (2) by adding at the end the following:


                            Vote Explanation

  Mr. SPECTER. Mr. President, I have sought recognition to comment on 
the last two votes. I had traveled with the President to Pittsburgh, PA 
today so that I was absent during the vote on the Kennedy amendment. 
Had I been present, I would have voted for the Kennedy amendment. I 
arrived 7 minutes into the vote on the Santorum amendment. I would like 
to have made the vote for the first amendment but voted for the 
Santorum amendment. As between the two, my preference would have been 
the Kennedy amendment because it raised the minimum wage more, and 
after a 7\1/2\ year hiatus, it seemed to me that that amendment was in 
order.
  I commend Senator Kennedy for his continuing efforts on the minimum 
wage, and I commend my distinguished colleague for his efforts which 
bridged a considerable gap. I wanted to explain or comment for the 
record why I was absent on the Kennedy amendment but present on the 
Santorum amendment, even though I would have preferred the Kennedy 
amendment to the Santorum amendment. But I would have in any event 
voted for both of them.
  The last time Congress voted to raise the minimum wage was in 1996, 
raising it from $4.25 to $4.75 to eventually $5.15. Since 2000, the 
number of Americans in poverty has increased by 4.3 million for a grand 
total of 36 million people, which includes 13 million children. Among 
full-time, year-round workers, poverty has doubled since the late 1970s 
from about 1.3 million then to more than 2.6 million. Since 1981 on 10 
different occasions, I have voted to increase the minimum wage.
  History clearly demonstrates that raising the minimum wage has no 
adverse impact on jobs, employment, or inflation. In the 4 years after 
the last minimum wage increase passed, the economy experienced its 
strongest growth in over three decades. More than 11 million new jobs 
were added, at the pace of 232,000 per month.
  Nearly 7\1/2\ million workers will directly benefit from this minimum 
wage increase while 8 million more will benefit indirectly. That is a 
total of 15\1/2\ million Americans who would get a raise due to this 
legislation and would enable a working family to afford almost 2 more 
years of childcare, full tuition for a community college degree, and 
many other staples for a healthy standard of living. Unfortunately, the 
current minimum wage fails to meet these standards.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Hawaii.


                           Amendment No. 105

  Mr. AKAKA. Mr. President, I ask unanimous consent that the pending 
amendments be set aside so that I may offer an amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. AKAKA. Mr. President, I call up amendment No. 105.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Hawaii [Mr. Akaka] proposes an amendment 
     numbered 105.

  Mr. AKAKA. I ask unanimous consent that reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:


                           amendment no. 105

(Purpose: To limit claims in bankruptcy by certain unsecured creditors)

       On page 45, strike lines 22 through 24, and insert the 
     following:
       (a) Reduction of Claim.--Section 502 of title 11, United 
     States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (8), by striking ``or'' at the end;
       (B) in paragraph (9), by striking the period at the end and 
     inserting ``; or''; and
       (C) by adding at the end the following:
       ``(10) such consumer debt is an unsecured claim arising 
     from a debt to a creditor that does not have, as of the date 
     of the order for relief, a policy of waiving additional 
     interest for all debtors who participate in a debt management 
     plan administered by a nonprofit budget and credit counseling 
     agency described in section 111(a).''; and
       (2) by adding at the end the following:

  Mr. AKAKA. Mr. President, I ask unanimous consent that my amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Wisconsin.


                     Amendments Nos. 87 through 101

  Mr. FEINGOLD. Mr. President, I have filed a number of amendments to 
this bill, most of which I believe are germane and therefore can be 
offered and debated and voted on even if cloture is invoked tomorrow. I 
wanted to make sure that my amendments have been called up prior to 
cloture so that I am assured of getting a vote on any amendment that is 
germane. It is not my intention to debate these amendments tonight. 
That is what this request is designed to do, merely to allow my germane 
amendments to be voted

[[Page S2135]]

on prior to a vote on final passage of the bill.
  I ask unanimous consent that the pending amendment be laid aside and 
that each of my amendments Nos. 87 through 101 be called up in turn, 
that the reading of each amendment be dispensed with, and each 
amendment in turn be laid aside so that another amendment can become 
the pending business, and that the last amendment in the list then be 
laid aside so that the amendment that is now pending is again the 
pending business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments are as follows: '


                            amendment no. 87

  (Purpose: To amend section 104 of title 11, United States Code, to 
  include certain provisions in the triennial inflation adjustment of 
                            dollar amounts)

       On page 445, strike lines 10 through 13, and insert the 
     following:

     SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

       Section 104(b) of title 11, United States Code, as amended 
     by this Act, is further amended--
       (1) by inserting ``101(19A),'' after ``101(18),'' each 
     place it appears;
       (2) by inserting ``522(f)(3),'' after ``522(d),'' each 
     place it appears;
       (3) by inserting ``541(b), 547(c)(9),'' after 
     ``523(a)(2)(C),'' each place it appears;
       (4) in pagagraph (1), by striking ``and 1325(b)(3)'' and 
     inserting ``1322(d), 1325(b), and 1326(b)(3) of this title 
     and section 1409(b) of title 28''; and
       (5) in paragraph (2), by striking ``and 1325(b)(3) of this 
     title'' and inserting ``1322(d), 1325(b), and 1326(b)(3) of 
     this title and section 1409(b) of title 28''.


                            amendment no. 88

     (Purpose: To amend the plan filing and confirmation deadlines)

       Beginning on page 230, strike line 7 and all that follows 
     through page 231, line 6, and insert the following:
       ``(e) In a small business case--
       ``(1) only the debtor may file a plan until after 180 days 
     after the date of the order for relief, unless that period 
     is--
       ``(A) extended as provided by this subsection, after notice 
     and a hearing; or
       ``(B) the court, for cause, orders otherwise;
       ``(2) the plan and a disclosure statement (if any) shall be 
     filed not later than 300 days after the date of the order for 
     relief, unless that period is--
       ``(A) extended as provided by this subsection, after notice 
     and a hearing; or
       ``(B) the court, for cause, orders otherwise; and
       ``(3) the time periods specified in paragraphs (1) and (2), 
     and the time fixed in section 1129(e) within which the plan 
     shall be confirmed, may be extended only if--
       ``(A) the debtor, after providing notice to parties in 
     interest (including the United States trustee), demonstrates 
     by a preponderance of the evidence that it is more likely 
     than not that the court will confirm a plan within a 
     reasonable period of time;
       ``(B) a new deadline is imposed at the time the extension 
     is granted; and
       ``(C) the order extending time is signed before the 
     existing deadline has expired.''.


                            amendment no. 89

     (Purpose: To strike certain small business related bankruptcy 
                        provisions in the bill)

       Beginning on page 221, strike line 1 and all that follows 
     through page 240, line 4, and insert the following:

            Subtitle B--Small Business Bankruptcy Provisions

     SEC. 431. SCHEDULING CONFERENCES.

       Section 105(d) of title 11, United States Code, is 
     amended--
       (1) in the matter preceding paragraph (1), by striking ``, 
     may''; and
       (2) by striking paragraph (1) and inserting the following:
       ``(1) shall hold such status conferences as are necessary 
     to further the expeditious and economical resolution of the 
     case; and''.

     SEC. 432. SERIAL FILER PROVISIONS.

       Section 362 of title 11, United States Code, as amended by 
     sections 106, 305, and 311, is amended--
       (1) in subsection (k), as so redesignated by section 305--
       (A) by striking ``An'' and inserting ``(1) Except as 
     provided in paragraph (2), an''; and
       (B) by adding at the end the following:
       ``(2) If such violation is based on an action taken by an 
     entity in the good faith belief that subsection (h) applies 
     to the debtor, the recovery under paragraph (1) of this 
     subsection against such entity shall be limited to actual 
     damages.''; and
       (2) by adding at the end the following:
       ``(n)(1) Except as provided in paragraph (2), subsection 
     (a) does not apply in a case in which the debtor--
       ``(A) is a debtor in a small business case pending at the 
     time the petition is filed;
       ``(B) was a debtor in a small business case that was 
     dismissed for any reason by an order that became final in the 
     2-year period ending on the date of the order for relief 
     entered with respect to the petition;
       ``(C) was a debtor in a small business case in which a plan 
     was confirmed in the 2-year period ending on the date of the 
     order for relief entered with respect to the petition; or
       ``(D) is an entity that has acquired substantially all of 
     the assets or business of a small business debtor described 
     in subparagraph (A), (B), or (C), unless such entity 
     establishes by a preponderance of the evidence that such 
     entity acquired substantially all of the assets or business 
     of such small business debtor in good faith and not for the 
     purpose of evading this paragraph.
       ``(2) Paragraph (1) does not apply--
       ``(A) to an involuntary case involving no collusion by the 
     debtor with creditors; or
       ``(B) to the filing of a petition if--
       ``(i) the debtor proves by a preponderance of the evidence 
     that the filing of the petition resulted from circumstances 
     beyond the control of the debtor not foreseeable at the time 
     the case then pending was filed; and
       ``(ii) it is more likely than not that the court will 
     confirm a feasible plan, but not a liquidating plan, within a 
     reasonable period of time.''.


                            amendment no. 90

   (Purpose: To amend the provision relating to fair notice given to 
                               creditors)

       Beginning on page 167, strike line 3 and all that follows 
     through page 169, line 25, and insert the following:
       (a) Notice.--Section 342 of title 11, United States Code, 
     is amended--
       (1) in subsection (c), by adding before the period at the 
     end the following: ``unless the creditor cannot with 
     reasonable effort identify the account to which the notice 
     applies without the information required by this 
     subsection''; and
       (2) by adding at the end the following:
       ``(e) At any time in a case under chapter 7 or 13 
     concerning an individual debtor, a creditor may file with the 
     court and serve on the debtor a notice of the address to be 
     used for service of notice on the creditor in that case. 
     Beginning 10 days after the creditor files and serves the 
     notice, any notice that the court or the debtor is required 
     to give shall be given at the address contained in the 
     creditor's notice of address.
       ``(f)(1) An entity may file with any bankruptcy court a 
     notice of address to be used by all the bankruptcy courts or 
     by particular bankruptcy courts, as so specified by such 
     entity at the time such notice is filed, to provide notice to 
     such entity in all cases under chapters 7 and 13 pending in 
     the courts with respect to which such notice is filed, in 
     which such entity is a creditor.
       ``(2) In any case filed under chapter 7 or 13, any notice 
     required to be provided by a court with respect to which a 
     notice is filed under paragraph (1), to such entity later 
     than 30 days after the filing of such notice under paragraph 
     (1) shall be provided to such address unless with respect to 
     a particular case a different address is specified in a 
     notice filed and served in accordance with subsection (e).
       ``(3) In any case filed under chapter 7 or 13, any notice 
     required to be provided by any party in interest with respect 
     to which a notice is filed under paragraph (1), to such 
     entity later than 120 days after the filing of such notice 
     under paragraph (1) shall be provided to such address unless 
     with respect to a particular case a different address is 
     specified in a notice filed and served in accordance with 
     subsection (e).
       ``(4) A notice filed under paragraph (1) may be withdrawn 
     by such entity.
       ``(g)(1) Notice given to a creditor other than as provided 
     in this section is not effective until that notice has been 
     brought to the attention of the creditor. If the creditor 
     designates a person or department to be responsible for 
     receiving notices concerning bankruptcy cases by a filing in 
     accordance with subsection (d) or (e) and establishes 
     reasonable procedures so that bankruptcy notices received by 
     the creditor are actually delivered to the person or 
     department, notice is not considered to have been brought to 
     the attention of the creditor until that person or department 
     receives the notice.
       ``(2) The court may not impose either a sanction under 
     section 362(h) or a sanction that a court may otherwise 
     impose on account of a violation of the stay under section 
     362(a) or a failure to comply with section 542 or 543 on 
     account of any action of the creditor unless the action 
     occurs after the creditor has received either notice of the 
     commencement of the case effective under this section or 
     other actual notice reasonably calculated to come to the 
     attention of the creditor, the creditor's attorney, the 
     creditor's agent taking the action, or other appropriate 
     person.''.


                            amendment no. 91

 (Purpose: To amend section 303 of title 11, United States Code, with 
  respect to the sealing and expungement of court records relating to 
              fraudulent involuntary bankruptcy petitions)

        On page 205, between lines 16 and 17, insert the 
     following:

     SEC. 332. FRAUDULENT INVOLUNTARY BANKRUPTCY.

       (a) Short Title.--This section may be cited as the 
     ``Involuntary Bankruptcy Improvement Act of 2005''.
       (b) Involuntary Cases.--Section 303 of title 11, United 
     States Code, is amended by adding at the end the following:
       ``(l)(1) If--
       ``(A) the petition under this section is false or contains 
     any materially false, fictitious, or fraudulent statement;
       ``(B) the debtor is an individual; and
       ``(C) the court dismisses such petition,

     the court, upon the motion of the debtor, shall seal all the 
     records of the court relating to such petition, and all 
     references to such petition.

[[Page S2136]]

       ``(2) If the debtor is an individual and the court 
     dismisses a petition under this section, the court may enter 
     an order prohibiting all consumer reporting agencies (as 
     defined in section 603(f) of the Fair Credit Reporting Act 
     (15 U.S.C. 1681a(f))) from making any consumer report (as 
     defined in section 603(d) of that Act) that contains any 
     information relating to such petition or to the case 
     commenced by the filing of such petition.
       ``(3) Upon the expiration of the statute of limitations 
     described in section 3282 of title 18, for a violation of 
     section 152 or 157 of such title, the court, upon the motion 
     of the debtor and for good cause, may expunge any records 
     relating to a petition filed under this section.''.
       (c) Bankruptcy Fraud.--Section 157 of title 18, United 
     States Code, is amended by inserting ``, including a 
     fraudulent involuntary bankruptcy petition under section 303 
     of such title'' after ``title 11''.


                            amendment no. 92

       (The amendment is printed in today's Record under ``Text of 
     Amendments.'')


                            amendment no. 93

    (Purpose: To modify the disclosure requirements for debt relief 
               agencies providing bankruptcy assistance)

       On page 112, strike line 17 and all that follows through 
     page 120, line 24, and insert the following:
       ``(12A) `debt relief agency' means any person, other than 
     an attorney or an employee of an attorney, who provides any 
     bankruptcy assistance to an assisted person in return for the 
     payment of money or other valuable consideration, or who is a 
     bankruptcy petition preparer under section 110, but does not 
     include--
       ``(A) any person who is an officer, director, employee, or 
     agent of a person who provides such assistance or of the 
     bankruptcy petition preparer;
       ``(B) a nonprofit organization that is exempt from taxation 
     under section 501(c)(3) of the Internal Revenue Code of 1986;
       ``(C) a creditor of such assisted person, to the extent 
     that the creditor is assisting such assisted person to 
     restructure any debt owed by such assisted person to the 
     creditor;
       ``(D) a depository institution (as defined in section 3 of 
     the Federal Deposit Insurance Act) or any Federal credit 
     union or State credit union (as those terms are defined in 
     section 101 of the Federal Credit Union Act), or any 
     affiliate or subsidiary of such depository institution or 
     credit union; or
       ``(E) an author, publisher, distributor, or seller of works 
     subject to copyright protection under title 17, when acting 
     in such capacity.''.
       (b) Conforming Amendment.--Section 104(b) of title 11, 
     United States Code, is amended by inserting ``101(3),'' after 
     ``sections'' each place it appears.

     SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

       (a) Enforcement.--Subchapter II of chapter 5 of title 11, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 526. Restrictions on debt relief agencies

       ``(a) A debt relief agency shall not--
       ``(1) fail to perform any service that such agency informed 
     an assisted person or prospective assisted person it would 
     provide in connection with a case or proceeding under this 
     title;
       ``(2) make any statement, or counsel or advise any assisted 
     person or prospective assisted person to make a statement in 
     a document filed in a case or proceeding under this title, 
     that is untrue and misleading, or that upon the exercise of 
     reasonable care, should have been known by such agency to be 
     untrue or misleading;
       ``(3) misrepresent to any assisted person or prospective 
     assisted person, directly or indirectly, affirmatively or by 
     material omission, with respect to--
       ``(A) the services that such agency will provide to such 
     person; or
       ``(B) the benefits and risks that may result if such person 
     becomes a debtor in a case under this title; or
       ``(4) advise an assisted person or prospective assisted 
     person to incur more debt in contemplation of such person 
     filing a case under this title or to pay an attorney or 
     bankruptcy petition preparer fee or charge for services 
     performed as part of preparing for or representing a debtor 
     in a case under this title.
       ``(b) Any waiver by any assisted person of any protection 
     or right provided under this section shall not be enforceable 
     against the debtor by any Federal or State court or any other 
     person, but may be enforced against a debt relief agency.
       ``(c)(1) Any contract for bankruptcy assistance between a 
     debt relief agency and an assisted person that does not 
     comply with the material requirements of this section, 
     section 527, or section 528 shall be void and may not be 
     enforced by any Federal or State court or by any other 
     person, other than such assisted person.
       ``(2) Any debt relief agency shall be liable to an assisted 
     person in the amount of any fees or charges in connection 
     with providing bankruptcy assistance to such person that such 
     debt relief agency has received, for actual damages, and for 
     reasonable attorneys' fees and costs if such agency is found, 
     after notice and a hearing, to have--
       ``(A) intentionally or negligently failed to comply with 
     any provision of this section, section 527, or section 528 
     with respect to a case or proceeding under this title for 
     such assisted person;
       ``(B) provided bankruptcy assistance to an assisted person 
     in a case or proceeding under this title that is dismissed or 
     converted to a case under another chapter of this title 
     because of such agency's intentional or negligent failure to 
     file any required document including those specified in 
     section 521; or
       ``(C) intentionally or negligently disregarded the material 
     requirements of this title or the Federal Rules of Bankruptcy 
     Procedure applicable to such agency.
       ``(3) In addition to such other remedies as are provided 
     under State law, whenever the chief law enforcement officer 
     of a State, or an official or agency designated by a State, 
     has reason to believe that any person has violated or is 
     violating this section, the State--
       ``(A) may bring an action to enjoin such violation;
       ``(B) may bring an action on behalf of its residents to 
     recover the actual damages of assisted persons arising from 
     such violation, including any liability under paragraph (2); 
     and
       ``(C) in the case of any successful action under 
     subparagraph (A) or (B), shall be awarded the costs of the 
     action and reasonable attorneys' fees as determined by the 
     court.
       ``(4) The district courts of the United States for 
     districts located in the State shall have concurrent 
     jurisdiction of any action under subparagraph (A) or (B) of 
     paragraph (3).
       ``(5) Notwithstanding any other provision of Federal law 
     and in addition to any other remedy provided under Federal or 
     State law, if the court, on its own motion or on the motion 
     of the United States trustee or the debtor, finds that a 
     person intentionally violated this section, or engaged in a 
     clear and consistent pattern or practice of violating this 
     section, the court may--
       ``(A) enjoin the violation of such section; or
       ``(B) impose an appropriate civil penalty against such 
     person.
       ``(d) No provision of this section, section 527, or section 
     528 shall--
       ``(1) annul, alter, affect, or exempt any person subject to 
     such sections from complying with any law of any State except 
     to the extent that such law is inconsistent with those 
     sections, and then only to the extent of the inconsistency; 
     or
       ``(2) be deemed to limit or curtail the authority or 
     ability--
       ``(A) of a State or subdivision or instrumentality thereof, 
     to determine and enforce qualifications for the practice of 
     law under the laws of that State; or
       ``(B) of a Federal court to determine and enforce the 
     qualifications for the practice of law before that court.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 5 of title 11, United States Code, is amended by 
     inserting after the item relating to section 525, the 
     following:

``526. Restrictions on debt relief agencies.''.

     SEC. 228. DISCLOSURES.

       (a) Disclosures.--Subchapter II of chapter 5 of title 11, 
     United States Code, as amended by section 227, is amended by 
     adding at the end the following:

     ``Sec. 527. Disclosures

       ``(a) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide--
       ``(1) the written notice required under section 342(b)(1); 
     and
       ``(2) to the extent not covered in the written notice 
     described in paragraph (1), and not later than 3 business 
     days after the first date on which a debt relief agency first 
     offers to provide any bankruptcy assistance services to an 
     assisted person, a clear and conspicuous written notice 
     advising assisted persons that--
       ``(A) all information that the assisted person is required 
     to provide with a petition and thereafter during a case under 
     this title is required to be complete, accurate, and 
     truthful;
       ``(B) all assets and all liabilities are required to be 
     completely and accurately disclosed in the documents filed to 
     commence the case, and the replacement value of each asset as 
     defined in section 506 must be stated in those documents 
     where requested after reasonable inquiry to establish such 
     value;
       ``(C) current monthly income, the amounts specified in 
     section 707(b)(2), and, in a case under chapter 13 of this 
     title, disposable income (determined in accordance with 
     section 707(b)(2)), are required to be stated after 
     reasonable inquiry; and
       ``(D) information that an assisted person provides during 
     their case may be audited pursuant to this title, and that 
     failure to provide such information may result in dismissal 
     of the case under this title or other sanction, including a 
     criminal sanction.
       ``(b) A debt relief agency providing bankruptcy assistance 
     to an assisted person shall provide each assisted person at 
     the same time as the notices required under subsection (a)(1) 
     the following statement, to the extent applicable, or one 
     substantially similar. The statement shall be clear and 
     conspicuous and shall be in a single document separate from 
     other documents or notices provided to the assisted person:
       `` `IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE 
     SERVICES FROM A BANKRUPTCY PETITION PREPARER.
       `` `If you decide to seek bankruptcy relief, you can 
     represent yourself, you can hire an attorney to represent 
     you, or you can get

[[Page S2137]]

     help in some localities from a bankruptcy petition preparer 
     who is not an attorney. THE LAW REQUIRES A BANKRUPTCY 
     PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING 
     WHAT THE BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW 
     MUCH IT WILL COST. Ask to see the contract before you hire 
     anyone.' ''


                            amendment no. 94

  (Purpose: To clarify the application of the term disposable income)

       Beginning on page 24, strike line 9 and all that follows 
     through page 26, line 7, and insert the following:
       (h) Applicability of Means Test to Chapter 13.--Section 
     1325(b) of title 11, United States Code, is amended by 
     striking paragraph (2) and inserting the following:
       ``(2) For purposes of this subsection, the term `disposable 
     income' means current monthly income received by the debtor 
     (other than child support payments, foster care payments, or 
     disability payments for a dependent child made in accordance 
     with applicable nonbankruptcy law to the extent reasonably 
     necessary to be expended for such child) less amounts 
     reasonably necessary to be expended--
       ``(A)(i) for the maintenance or support of the debtor or a 
     dependent of the debtor, or for a domestic support 
     obligation, that first becomes payable after the date the 
     petition is filed; and
       ``(ii) for charitable contributions (that meet the 
     definition of `charitable contribution' under section 
     548(d)(3) to a qualified religious or charitable entity or 
     organization (as defined in section 548(d)(4)) in an amount 
     not to exceed 15 percent of gross income of the debtor for 
     the year in which the contributions are made; and
       ``(B) if the debtor is engaged in business, for the payment 
     of expenditures necessary for the continuation, preservation, 
     and operation of such business.
       ``(3) Amounts reasonably necessary to be expended under 
     paragraph (2)(A)(i), shall be determined in accordance with 
     subparagraphs (A) and (B) of section 707(b)(2), if the debtor 
     has current monthly income, when multiplied by 12, greater 
     than--
       ``(A) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(B) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(C) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.''.


                            amendment no. 95

 (Purpose: To amend the provisions relating to the discharge of taxes 
                           under chapter 13)

       On page 265, between lines 18 and 19, insert the following:

     SEC. 707A. DISCHARGE UNDER CHAPTER 13.

       Section 1328(a) of title 11, United States Code, as amended 
     by this Act, is further amended--
       (1) in paragraph (2), by striking ``(1)(B), (1)(C),'';
       (2) in paragraph (3), by striking ``or'' after the 
     semicolon;
       (3) in paragraph (4), by striking the period at the end and 
     inserting ``; or''; and
       (4) by adding at the end the following:
       ``(5) for taxes with respect to which the debtor filed a 
     fraudulent return.''.


                            amendment no. 96

(Purpose: To amend the provisions relating to chapter 13 plans to have 
   a 5-year duration in certain cases and to amend the definition of 
             disposable income for purposes of chapter 13)

       Beginning on page 24, strike line 16 and all that follows 
     through page 26, line 7, and insert the following:
       ``(2)(A) For purposes of this subsection, the term 
     `disposable income' means current monthly income received by 
     the debtor (other than child support payments, foster care 
     payments, or disability payments for a dependent child made 
     in accordance with applicable nonbankruptcy law to the extent 
     reasonably necessary to be expended for such child) less 
     amounts reasonably necessary to be expended--
       ``(i)(I) for the maintenance or support of the debtor or a 
     dependent of the debtor, or for a domestic support 
     obligation, that first becomes payable after the date the 
     petition is filed; and
       ``(II) for charitable contributions (that meet the 
     definition of `charitable contribution' under section 
     548(d)(3) to a qualified religious or charitable entity or 
     organization (as defined in section 548(d)(4)) in an amount 
     not to exceed 15 percent of gross income of the debtor for 
     the year in which the contributions are made; and
       ``(ii) if the debtor is engaged in business, for the 
     payment of expenditures necessary for the continuation, 
     preservation, and operation of such business.
       ``(B) However, the debtor's disposable income may be 
     adjusted if the debtor demonstrates special circumstances 
     that justify adjustments of current monthly income for which 
     there is no reasonable alternative, as described in section 
     707(b)(2)(B) of this title.
       ``(3)(A) Amounts reasonably necessary to be expended under 
     paragraph (2) shall be determined in accordance with 
     subparagraphs (A) and (B) of section 707(b)(2), if the debtor 
     has current monthly income, when multiplied by 12, greater 
     than--
       ``(i) in the case of a debtor in a household of 1 person, 
     the median family income of the applicable State for 1 
     earner;
       ``(ii) in the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals; or
       ``(iii) in the case of a debtor in a household exceeding 4 
     individuals, the highest median family income of the 
     applicable State for a family of 4 or fewer individuals, plus 
     $525 per month for each individual in excess of 4.
       ``(B) However, this paragraph shall not apply if the debtor 
     demonstrates special circumstances that justify adjustments 
     of current monthly income for which there is no reasonable 
     alternative, as described in section 707(b)(2)(B) of this 
     title, and which bring the debtor's income below the 
     applicable amount set forth in this paragraph.''.
       (i) Reduction of the Term of the Plan For Certain 
     Debtors.--Section 1329 of title 11, United States Code, is 
     amended by adding at the end the following:
       ``(d) Notwithstanding paragraphs (1)(B) and (4) of section 
     1325(b), if the actual income of the debtor, or in a joint 
     case the debtor and the debtor's spouse, has dropped below 
     the applicable amount stated in section 1325(b)(3), either 
     before or after the petition, and is unlikely to increase 
     above such amounts within 1 year, the debtor's plan may be 
     modified to reduce the term of the plan to a time period 
     equal to or greater than the applicable commitment period in 
     section 1325(b)(4)(A)(i) and the debtor shall not be subject 
     to section 1325(b)(3).''.


                            amendment no. 97

(Purpose: To amend the provisions relating to chapter 13 plans to have 
   a 5-year duration in certain cases and to amend the definition of 
             disposable income for purposes of chapter 13)

       On page 182, between lines 3 and 4, insert the following:

     SEC. 318A. APPLICABILITY OF MEANS TEST AND PLANS TO HAVE A 5-
                   YEAR DURATION IN CERTAIN CASES.

       (a) Applicability of Means Test to Chapter 13.--Section 
     1325(b) of title 11, United States Code, as amended by this 
     Act, is further amended--
       (1) in paragraph (2), by inserting ``or, if lower and not 
     likely to increase substantially in the 2 months after the 
     order for relief, the debtor's monthly income on the date of 
     the order for relief under this chapter'' after ``received by 
     the debtor'';
       (2) in paragraph (3), by inserting ``(or, if lower and not 
     likely to increase substantially in the 2 months after the 
     order for relief, the debtor's monthly income on the date of 
     the order for relief under this chapter)'' after ``if the 
     debtor has current monthly income''; and
       (3) in paragraph (4)--
       (A) in subparagraph (A)(ii), by striking ``debtor and the 
     debtor's spouse combined'' and inserting ``debtor, and in a 
     joint case the debtor and the debtor's spouse, or, if lower 
     and not likely to increase substantially in the 2 months 
     after the order for relief, the monthly income on the date of 
     the order for relief under this chapter'';
       (B) in subparagraph (A)(ii)(III), by striking ``and'' after 
     the semicolon;
       (C) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (D) by adding at the end the following:
       ``(C) provided that if the debtor's income decreases during 
     the case to less than the amount set forth in subparagraph 
     (A)(ii), and is not likely again to exceed that amount within 
     1 month, may be reduced to 3 years.''.
       (b) Chapter 13 Plans to Have a 5-year Duration in Certain 
     Cases.--Section 1322(d) of title 11, United States Code, as 
     amended by this Act, is further amended--
       (1) in paragraph (1), by striking ``debtor and the debtor's 
     spouse combined'' and inserting ``debtor, and in a joint case 
     the debtor and the debtor's spouse, or, if lower and not 
     likely to increase substantially in the 2 months after the 
     order for relief, the monthly income on the date of the order 
     for relief under this chapter''; and
       (2) in paragraph (2), by striking ``debtor and the debtor's 
     spouse combined'' and inserting ``debtor, and in a joint case 
     the debtor and the debtor's spouse, or, if lower and not 
     likely to increase substantially in the 2 months after the 
     order for relief, the monthly income on the date of the order 
     for relief under this chapter''.


                            amendment no. 98

    (Purpose: To modify the disclosure requirements for debt relief 
               agencies providing bankruptcy assistance)

        On page 112, line 17, insert ``, other than an attorney or 
     an employee of an attorney'' after ``any person''.
       On page 120, lines 12 and 13, strike ``AN ATTORNEY OR'' and 
     insert ``A''.
       On page 120, line 19, strike ``AN ATTORNEY OR'' and insert 
     ``A''.
       On page 120, lines 21 and 22, strike ``ATTORNEY OR''.


                            amendment no. 99

 (Purpose: To provide no bankruptcy protection for insolvent political 
                              committees)

       On page 205, between lines 16 and 17, insert the following:

[[Page S2138]]

     SEC. 332. NO BANKRUPTCY FOR INSOLVENT POLITICAL COMMITTEES.

       Section 109 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(i) A political committee subject to the jurisdiction of 
     the Federal Election Commission under Federal election laws 
     may not be a debtor under this title.''.


                           amendment no. 100

  (Purpose: To provide authority for a court to order disgorgement or 
    other remedies relating to an agreement that is not enforceable)

       On page 63, between lines 3 and 4, insert the following:
       ``(4) Nothing in this section shall preclude a court from 
     ordering disgorgement of payments accepted, or other remedies 
     under this title or other applicable law, when a creditor has 
     accepted payments under such agreement or in anticipation of 
     such agreement and the agreement is not enforceable.


                           amendment no. 101

      (Purpose: To amend the definition of small business debtor)

       Beginning on page 222, strike line 23 and all that follows 
     through page 223, line 21, and insert the following:
       ``(A) subject to subparagraph (B), means a person engaged 
     in commercial or business activities (including any affiliate 
     of such person that is also a debtor under this title and 
     excluding a person whose primary activity is the business of 
     owning or operating real property or activities incidental 
     thereto) that has aggregate noncontingent liquidated secured 
     and unsecured debts as of the date of the petition or the 
     date of the order for relief in an amount not more than 
     $1,250,000 (excluding debts owed to 1 or more affiliates or 
     insiders) for a case in which the United States trustee has 
     not appointed under section 1102(a)(1) a committee of 
     unsecured creditors or where the court has determined that 
     the committee of unsecured creditors is not sufficiently 
     active and representative to provide effective oversight of 
     the debtor; and
       ``(B) does not include any member of a group of affiliated 
     debtors that has aggregate noncontingent liquidated secured 
     and unsecured debts in an amount greater than $1,250,000 
     (excluding debt owed to 1 or more affiliates or insiders);''.

  Mr. SESSIONS. Mr. President, on the unanimous consent request, 
reserving the right to object, I know the Senator from Wisconsin has 
worked hard on the bankruptcy bill and has a number of relevant, 
germane amendments. I know he cares about the bill. I think he would 
like to see it die, but he wants to make it better. How many amendments 
did he have?
  Mr. FEINGOLD. Fifteen total. This is not a number that I would 
actually offer. I will be able to pare that list down, but I wanted to 
preserve my right to have any germane amendment voted on postcloture.
  Mr. SESSIONS. I have great respect for the Senator from Wisconsin, 
and I will not object if he will use his best judgment and try to avoid 
as many votes as we can.
  Mr. FEINGOLD. Mr. President, I have found the Senator very reasonable 
in working on these amendments. Certainly some will not be offered, 
others are not major amendments, others will require votes, but it will 
be a list significantly smaller than 15.
  Mr. SESSIONS. I will not object.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 121

  Mr. TALENT. Mr. President, I ask unanimous consent that the pending 
amendment be set side and my amendment No. 121 be called up, the 
reading be dispensed with, and it then be set aside.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The amendment (No. 121) is as follows:

(Purpose: To deter corporate fraud and prevent the abuse of State self-
                           settled trust law)

       On page 500, between lines 2 and 3, insert the following:
       (4) by adding at the end the following:
       ``(e)(1) In addition to any transfer that the trustee may 
     otherwise avoid, the trustee may avoid any transfer of an 
     interest of the debtor in property that was made on or within 
     10 years before the date of the filing of the petition, if--
       ``(A) such transfer was made to a self-settled trust or 
     similar device;
       ``(B) such transfer was by the debtor;
       ``(C) the debtor is a beneficiary of such trust or similar 
     device; and
       ``(D) the debtor made such transfer with actual intent to 
     hinder, delay, or defraud any entity to which the debtor was 
     or became, on or after the date that such transfer was made, 
     indebted.
       ``(2) For the purposes of this subsection, a transfer 
     includes a transfer made in anticipation of any money 
     judgment, settlement, civil penalty, equitable order, or 
     criminal fine incurred by, or which the debtor believed would 
     be incurred by--
       ``(A) any violation of the securities laws (as defined in 
     section 3(a)(47) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(47))), any State securities laws, or any 
     regulation or order issued under Federal securities laws or 
     State securities laws; or
       ``(B) fraud, deceit, or manipulation in a fiduciary 
     capacity or in connection with the purchase or sale of any 
     security registered under section 12 or 15(d) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78l and 78o(d)) or 
     under section 6 of the Securities Act of 1933 (15 U.S.C. 
     77f).''.


                 Amendment No. 129 to Amendment No. 121

  Mr. SCHUMER. Mr. President, I offer a second-degree amendment to 
amendment No. 121, proposed by Senator Talent.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from New York [Mr. Schumer] proposes an 
     amendment numbered 129 to amendment No. 121.

  Mr. SCHUMER. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To limit the exemption for asset protection trusts)

       Beginning on page 1 of the amendment, strike all after (4) 
     and insert the following:
       ``(e)(1) In addition to any transfer that the trustee may 
     otherwise avoid, the trustee may avoid any transfer of an 
     interest of the debtor in property that was made on or within 
     10 years before the date of the filing of the petition, if--
       ``(A) such transfer was made to a self-settled trust or 
     similar device;
       ``(B) such transfer was by the debtor; and
       ``(C) the debtor is a beneficiary of such trust or similar 
     device.
       ``(2) Paragraph (1) shall not apply to the trusts specified 
     in section 522(d)(12).''.

  Mr. SCHUMER. Mr. President, I will be very brief. Late last week, 
this body, in its wisdom, defeated our amendment to close the 
millionaire's loophole, an amendment that would allow certain trusts to 
be set up by anybody, but, of course, they are expensive and only those 
very wealthy who have a purpose would do it and shield their assets in 
the trust and then declare bankruptcy and shed their debt.
  It meant that if you were very wealthy, and you could afford some 
fancy lawyers, you were a lot better off than somebody who went 
bankrupt who made $40,000, $45,000, $50,000, or $55,000. I was hoping 
the amendment could have been adopted, but it was not.
  After that point, a number of my colleagues from the other side said, 
let's try to work something out. We tried this morning but did not 
reach agreement. So Senator Talent, my friend from Missouri, just 
offered his amendment, which I regret to say does not close the 
millionaire's loophole at all. It is something of a subterfuge. There 
are two basic problems with it.
  First, you would have to prove that the intent of the filer of the 
trust was to avoid bankruptcy. I do not have to tell anyone here who is 
a lawyer that to prove that intent, especially when the filer would 
want to make sure that intent could not be proven and would leave no 
paper trail, no documents or anything else, would be next to 
impossible. So in a sense, it would not close the loophole at all.
  But there is a broader point. Whether the intent was to do it or not, 
why should someone be able to shield millions of dollars of assets and 
declare bankruptcy? We are trying to close abuses here. Why are the 
abuses of the wealthy any less worthy of being closed than, say, of the 
middle class, someone who might gamble their meager assets away?
  This amendment removes the requirement that you must prove the intent 
of setting up the trust was simply to avoid your assets being taken in 
bankruptcy, as well as doing one other thing. The amendment has another 
problem with it which deals with pensions, and our amendment corrects 
that as well.
  Their amendment on pensions would subject pensions to these rules, 
and we do not want to do that. That is quite different than somebody 
hiding their assets in these trusts. But some of these trusts are used 
by pension plans. We do not bring pension plans into it. In fact, we 
take them out.
  The Talent amendment has kept the pension proposal. I am sure we will 
be debating the Talent amendment and my second-degree amendment to the 
Talent amendment at some point as we

[[Page S2139]]

move forward on the bankruptcy bill, but I wanted to let my colleagues 
know what has happened.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, will the Senator from New York yield for 
a question?
  Mr. SCHUMER. I will be happy to yield for a question.
  Mr. SESSIONS. Mr. President, we went through a debate last time over 
the retirement benefits, the savings plans. I thought we capped those 
at $1 million.
  My question to the Senator from New York, Mr. President, is, how 
confident is he under the bankruptcy bill as written that these trusts 
will be held by bankruptcy judges as not subject to being part of the 
assets of the debtor's estate? Is this something about which the 
Senator from New York is concerned? And we are not sure or do we have 
any law that will give the Senator cause to believe that they would not 
be captured as part of the estate?
  Mr. SCHUMER. The lawyers we have consulted have said it is pretty 
clear-cut that these assets would be held immune from bankruptcy. But 
probably more important than my opinion, there was an article in the 
New York Times written by a Pulitzer Prize-winning author who is an 
expert on the Tax Code who checked this out with many different 
sources, as I read the article, and said it is pretty clear that these 
assets would be held immune from bankruptcy.
  Let me remind my colleague, only five States allow the setting up of 
these trusts, but neither Alabama nor New York. Citizens in our States 
could set up these trusts in Utah. I do not remember all the other 
States. I remember Utah because Senator Hatch came over to me and said: 
that is my State you are picking on. They could set up these trusts, 
use the trusts in those States, and they would be immune from 
bankruptcy, no matter what the jurisdiction.
  Mr. SESSIONS. I thank the Senator from New York. It is a matter that 
could be significant, and I am glad we are discussing it.
  Mr. SCHUMER. If my colleague will yield for a minute, I would prefer 
not to second degree the amendment of my friend from Missouri. I would 
like to come to a compromise that truly closes this loophole. I know my 
friend from Iowa, the leader on this bill, had mentioned in his remarks 
that he was interested in closing this. My colleague from Utah had 
mentioned that he was interested in closing this, and rather than 
having a debate on the amendment of the Senator from Missouri and my 
second degree, if we could come to a compromise that truly closes the 
loophole without going further, I would be happy to do that.
  Mr. SESSIONS. I thank the Senator for that offer and will look 
forward to taking him up on that.
  Mr. SCHUMER. I thank my colleague, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.


                     Amendments Nos. 110, 111, 112

  Mr. DURBIN. Mr. President, I ask unanimous consent that the pending 
amendment be set aside for the purpose of offering en bloc amendments 
Nos. 110, 111, and 112.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The amendments are as follows:


                           amendment no. 110

  (Purpose: To clarify that the means test does not apply to debtors 
                          below median income)

       On page 18, strike line 1 and all that follows through 
     ``(2)'' on line 3, and insert the following:
       (7)(A) Notwithstanding paragraph (2), a debtor described in 
     this paragraph need only provide the calculations or other 
     information showing that the debtor meets the standards of 
     this paragraph. Paragraph (2) shall not apply, and the court 
     may not dismiss a case based on any form of means testing,


                           amendment no. 111

(Purpose: To protect veterans and members of the armed forces on active 
 duty or performing homeland security activities from means testing in 
                              bankruptcy)

       On page 13, between lines 13 and 14, insert the following:
       ``(D) Subparagraphs (A) through (C) shall not apply, and 
     the court may not dismiss or convert a case based on any form 
     of means testing, if--
       ``(i) the debtor or the debtor's spouse is a member of the 
     armed forces--
       ``(I) on active duty (as defined in section 101(d)(1) of 
     title 10); or
       ``(II) performing a homeland defense activity (as defined 
     in section 901(1) of title 32);
       ``(ii) the debtor or the debtor's spouse is a veteran (as 
     defined in section 101(2) of title 38), and the indebtedness 
     occurred primarily during a period of not less than 180 days, 
     during which he or she was--
       ``(I) on active duty (as defined in section 101(d)(1) of 
     title 10); or
       ``(II) performing a homeland defense activity (as defined 
     in section 901(1) of title 32);
       ``(iii) the debtor or the debtor's spouse is a reserve of 
     the armed forces, and the indebtedness occurred primarily 
     during a period of not less than 180 days, during which he or 
     she was--
       ``(I) on active duty (as defined in section 101(d)(1) of 
     title 10); or
       ``(II) performing a homeland defense activity (as defined 
     in section 901(1) of title 32); or
       ``(iv) the debtor's spouse died while serving as a member 
     of the armed forces--
       ``(I) on active duty (as defined in section 101(d)(1) of 
     title 10); or
       ``(II) performing a homeland defense activity (as defined 
     in section 901(1) of title 32).


                           amendment no. 112

(Purpose: To protect disabled veterans from means testing in bankruptcy 
                      under certain circumstances)

       On page 13, between lines 13 and 14, insert the following:
       ``(D) Subparagraphs (A) through (C) shall not apply, and 
     the court may not dismiss or convert a case based on any form 
     of means testing, if the debtor is a disabled veteran (as 
     defined in section 3741(1) of title 38), and the indebtedness 
     occurred primarily during a period during which he or she 
     was--
       ``(i) on active duty (as defined in section 101(d)(1) of 
     title 10); or
       ``(ii) performing a homeland defense activity (as defined 
     in section 901(1) of title 32).


                     Amendment No. 26, as Modified

  Mr. DURBIN. Mr. President, on behalf of Senator Leahy, I send a 
modification of amendment 26 to the desk. This amendment has been 
cleared on both sides.
  The PRESIDING OFFICER. Is there objection to the modification?
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
amendment will be so modified.
  The amendment (No. 26), as modified, is as follows:

    (Purpose: To restrict access to certain personal information in 
                         bankruptcy documents)

       On page 132, between lines 5 and 6, insert the following:

     SEC. 234. PROTECTION OF PERSONAL INFORMATION.

       (a) Restriction of Public Access to Certain Information 
     Contained in Bankruptcy Case Files.--Section 107 of title 11, 
     United States Code, is amended by adding at the end the 
     following:
       ``(c)(1) The bankruptcy court, for cause, may protect an 
     individual, with respect to the following types of 
     information to the extent the court finds that disclosure of 
     such information would create undue risk of identity theft or 
     other unlawful injury to the individual or the individual's 
     property:
       ``(A) Any means of identification (as defined in section 
     1028(d) of title 18) contained in a paper filed, or to be 
     filed, in a case under this title.
       ``(B) Other information contained in a paper described in 
     subparagraph (A).
       ``(2) Upon ex parte application demonstrating cause, the 
     court shall provide access to information protected pursuant 
     to paragraph (1) to an entity acting pursuant to the police 
     or regulatory power of a domestic governmental unit.
       ``(3) The United States trustee, bankruptcy administrator, 
     trustee, and any auditor serving under section 586(f) of 
     title 28--
       ``(A) shall have full access to all information contained 
     in any paper filed or submitted in a case under this title; 
     and
       ``(B) shall not disclose information specifically protected 
     by the court under this title.''.
       (b) Security of Social Security Account Number of Debtor in 
     Notice to Creditor.--Section 342(c) of title 11, United 
     States Code, is amended--
       (1) by inserting ``last 4 digits of the'' before ``taxpayer 
     identification number''; and
       (2) by adding at the end the following: ``If the notice 
     concerns an amendment that adds a creditor to the schedules 
     of assets and liabilities, the debtor shall include the full 
     taxpayer identification number in the notice sent to that 
     creditor, but the debtor shall include only the last 4 digits 
     of the taxpayer identification number in the copy of the 
     notice filed with the court.''.
       (c) Conforming Amendment.--Section 107(a) of title 11, 
     United States Code, is amended by striking ``subsection 
     (b),'' and inserting ``subsections (b) and (c),''.

  Mr. LEAHY. Mr. President, the recent debacles at ChoicePoint and Bank 
of America remind us that we must vigilantly protect our personal 
information at all points of vulnerability. The bankruptcy process, 
which inherently involves the exchange of highly personal information, 
should be no different.
  This is a bipartisan amendment that balances the need to protect 
personal

[[Page S2140]]

information with the needs of creditors, regulators and law enforcement 
to access critical information. The amendment is strongly supported by 
the non-partisan Judicial Conference, and also by the Center for 
Democracy and Technology.
  I am pleased that my colleagues Senator Snowe and Senator Cantwell 
have agreed to cosponsor this amendment, and that Chairman Specter and 
Senator Grassley worked so closely with us to improve the amendment 
even further. They have all been leaders on privacy issues, and I 
appreciate their support.
  Our bipartisan amendment does two things. It enhances court 
discretion to balance the need to know against the need to protect 
personal information, and it requires truncation of social security 
numbers in publicly filed documents. This protection is particularly 
important in an electronic filing environment, where information once 
filed is immediately available to the public via the Internet.
  The amendment allows the court, for cause, to protect personal 
information. For example, the court can seal or redact information, 
such as the home or employment address of a debtor, because of a 
personal security risk, including fear of injury by a former spouse or 
stalker. The amendment would also give the court the leeway to protect 
other information normally considered private, such as personal medical 
records.
  Our bipartisan amendment still protects law enforcement and creditors 
where necessary. A law enforcement provision ensures that police and 
regulators can get needed information directly from the bankruptcy 
court, and a creditor protection provision specifies that creditors, 
including the IRS, receive the full Social Security number of a debtor 
in the initial notice of the case. Finally, we also clarify that these 
protections should not limit the access of the trustees, administrators 
and auditors to necessary information.
  We must be careful that our efforts to require documentation for 
accuracy and accountability do not inadvertently create problems for 
privacy and security. As modified, the amendment properly balances 
these concerns, and protects the needs of those who need to know.
  This has been a cooperative, bi-partisan effort, I extend special 
thanks to Senator Snowe, Chairman Specter, and Senator Grassley for all 
their hard-work in reaching an agreement, and I am pleased to submit 
this modification.
  Ms. SNOWE. Mr. President, I support the amendment offered by my 
colleague Senator Leahy, to ensure that the private, personal 
identification information filed in bankruptcy proceedings does not 
fall into the hands of identity thieves, violent stalkers, and other 
persons with criminal intentions. I, along with my colleague Senator 
Cantwell, join as cosponsors to the Leahy amendment and urge its 
adoption by the Senate. This amendment is endorsed by the Judicial 
Conference of the United States, which is presided over by Chief 
Justice Rehnquist, and to which Congress regularly defers in the 
writing of the rules of our Federal court system.
  Bankruptcy court filings, like most other court proceedings, are 
public record, and most papers filed in these cases are publicly 
available record. This is a good thing, because the administration of 
justice in our country should not be a secret affair. It is the 
public's right to know how its courts are meting out justice. The 
Bankruptcy Code affirmatively adopts this policy.
  At the same time, bankruptcy proceedings are unique in that the 
explicit financial information of the debtor and its creditors are 
filed with the court, and likewise available for public review. Such 
information includes not only a person's name and address, but 
information such as the person's social security number, date of birth, 
driver's license number, and electronic addresses and routing codes. 
This information has long been available for public review at our 
Nation's courthouses. However, in today's information age, more and 
more Federal courts are making all of their public documents available 
on-line as well. While this is an advancement in efficiency in most 
regards, it opens up a great potential for abuse for identity thieves 
and others who access the Internet with the intent to commit fraud, 
physical harm, or other crimes.
  More and more agencies today gain access to such personal information 
through publicly available documents. And as the recent computer 
hacking incident at Choice Point Corporation demonstrates, such 
personal information can be obtained even from companies in the 
businesses of collecting and securely storing such information. 
Moreover, access to such personal, sensitive information could pose 
serious risks to victims of domestic abuse, stalking, and other violent 
crime. Because any person with a computer can obtain these court 
documents, a person's safety and the safety of her property could be 
seriously put at risk.
  Senator Leahy, Senator Cantwell, and I have devised this amendment to 
help prevent these harmful invasions of privacy from ever occurring. 
Currently the Bankruptcy Code allows courts to issue protective orders 
to prevent public disclosure of trade secrets and confidential research 
and commercial information. Our amendment would expand the court's 
authority to provide for similar protection of the personally 
identifiable information that I just described, as well as give the 
court the ability to shield other information if its release would 
create an undue risk of either identity theft or of injury to an 
individual's person or property. It further provides that when publicly 
available notices are filed with the court, only the last four digits 
of a person's social security number are required to be included in the 
documents. A separate filing with the full social security number will 
be sent privately to each party in interest in the bankruptcy 
proceeding. This amendment also creates an exception to ensure that law 
enforcement can gain access, and it has the support of the Department 
of Justice.
  Furthermore, I have worked closely with the sponsors of the 
underlying bill, which I support, to ensure that this amendment does 
nothing to harm the efficient functioning of the credit and banking 
industries. Credit reporting agencies often rely on taxpayer 
identification numbers--most often social security numbers--to 
determine a person's creditworthiness. To ensure accuracy in such 
credit reports, we have modified the original language of this 
amendment to address the industry's concerns without in any way 
weakening the protections that we seek to enact. The new language 
strikes the appropriate balance for all concerned, and I understand 
that the industry finds the modification acceptable.
  Giving the sensitive nature of bankruptcy filings and the increased 
threat of identity theft in today's society, this is a common sense 
measure to the underlying bankruptcy reform bill, which I support. I am 
pleased that all sides have come to agreement, and that this amendment 
will be adopted.
  Ms. CANTWELL. Mr. President, I want to thank my colleagues on the 
Senate Judiciary Committee and others who have worked together for many 
years, despite considerable differences in the area of bankruptcy 
reform, to produce a bill that has passed the Senate a number of times. 
All that said, the bill is far from perfect, and the Senate should take 
full advantage of this opportunity to take a number of steps to amend 
this bill and improve it. I have supported amendments that improve the 
bill in areas where it affects particularly vulnerable consumers and 
retirees, and I believe we should also address incidents of corporate 
abuse. There are also ways to bring the bill up to date with modern 
technology and crime.
  For example, I proudly join my colleague from Vermont, Mr. Leahy, in 
recommending to all my colleagues the pending Leahy-Cantwell-Snowe 
privacy amendment, Amendment No. 26. This amendment is an appropriate 
response to the recent erosion of informational privacy in our society, 
demonstrated by the ChoicePoint and Bank of America personal 
informational security breaches, where the personal information of 
thousands of people was misappropriated by identity thieves.
  Consumers should not have to surrender their privacy rights, just to 
gain access to our Nation's bankruptcy system. There are a number of 
reasons why it is simply sound practice for bankruptcy courts to join 
other Federal courts that already have a viable

[[Page S2141]]

mechanism to file personal information of debtors and others under 
seal. Identity theft is a predictable outcome when criminals have 
virtually unfettered access to an obvious public database of people who 
are already vulnerable in public bankruptcy court files. In some 
instances, a debtor might be a battered woman, a victim of a stalker or 
another victim of domestic violence, and the disclosure of that 
person's private information may subject her to further abuse. Congress 
has recognized the need to render private such personal information in 
court filings in much of the Federal court system, and this body should 
now add the bankruptcy courts to the list of properly protected public 
entities. Although I recognize that bankruptcy courts have some 
discretion to protect ``scandalous or defamatory matter,'' the point or 
preserving privacy of this information should also be to protect 
information that could be used to injure the consumer, either 
financially or even physically. It is also clear that such courts do 
not have the same ability to do protect information for cause as do 
other Federal courts. It is time to fix this unjustifiable distinction 
between the privacy rights of litigants in one kind of Federal court 
and another. I ask my colleagues to support Leahy-Cantwell-Snowe, 
because people's economic and even their physical security may be in 
jeopardy otherwise. Let's not wait for the inevitable abuse of this 
loophole, which could lead to stolen identities, or physical harm, 
before we act.
  I urge my colleagues to vote for the Leahy-Cantwell-Snowe amendment.
  Mr. DURBIN. Mr. President, I rise to speak very briefly about the 
amendments I have offered this evening to the pending bankruptcy bill. 
I have found as I traveled back in Illinois and around the country that 
some people follow the C-SPAN floor debate very closely. Just over this 
weekend, having traveled to Arizona and Nevada, I am amazed to find 
people who heard my speech on the bankruptcy bill, which always 
intrigues me that so many people suffer from insomnia that they watch 
C-SPAN gavel to gavel, but in all honesty I admire them for their 
interest in our Government, and I hope that they follow this debate. 
But if one is a newcomer to this bankruptcy bill debate, I will say a 
few words about the bill and the amendments which I have offered.
  When it comes to the bill itself, which is 510 pages, it will amend 
the bankruptcy law of America. It is a bill which has been considered 
for years. We have had versions of this bill over the last 9 or 10 
years. I know because years ago I worked with Senator Grassley on one 
of the first modifications to the Bankruptcy Code. Some of these 
changes passed the Senate and failed in the House. Some have passed the 
House and Senate and been vetoed by President Clinton. The bill has had 
its ups and downs. It never did become law in that period of time.
  Now for the second bill of the session, one of the highest priorities 
on the Republican side of the aisle--they are pushing for the 
bankruptcy reform bill. When one thinks of all the challenges in 
America, the obvious question is, why are we considering bankruptcy 
reform before we would even consider health care in America or doing 
something about the economy creating jobs or addressing the budget 
deficit in America or even addressing Social Security? Why is this 
bankruptcy bill such a high priority? Well, the reason is this bill 
makes fundamental changes in the law as to which Americans will qualify 
for bankruptcy.
  Bankruptcy, of course, was created in the law of many civilized 
nations such as the United States because in the old days if one went 
deeply into debt they could be put in prison. People decided that was 
barbaric. They said there should reach a point, if one cannot pay their 
debts, they can be exonerated or have those debts wiped clean from 
their record and start new, start fresh. That is what bankruptcy is all 
about.
  Chapter 7 of the Bankruptcy Code is that situation. One walks into 
the court and they say, here are all of my debts, here are all of my 
assets, and the court should basically liquidate whatever they have, 
pay off as much of the debt as possible, and at the end of the day they 
walk out of the court without much left on this Earth but without any 
debts, wipe the slate clean. That is bankruptcy.
  There are other provisions in the Bankruptcy Code, notably chapter 
13. Under chapter 13, one walks into court and says: I have more debts 
than I can pay, but I can pay something. The court then says: We will 
work out a schedule for what you will pay over a period of time. That 
is chapter 13. So one does not walk out with their debts relieved, but 
they may walk out with fewer debts to pay and a schedule to pay them. 
The court monitors their progress under chapter 13. So in chapter 7, 
one walks out with the slate clean. Chapter 13, they walk out still 
paying off their debts.
  In came the credit card companies and the major banks to Congress 
about 10 years ago and said, we believe that too many people are having 
the slate wiped clean and that they should continue to pay off their 
debts, even if they think they should be relieved of all liability. The 
purpose of this bill is to say that people walking into bankruptcy 
court are now going to have a much more difficult time wiping the slate 
clean to start over. More likely than not, particularly if they are 
making more than the median income in America, which is not a huge, 
princely sum, the credit card industry comes in and says, we want to 
make sure that if someone comes into court and wants to file 
bankruptcy, when it is all said and done, they will still have credit 
card bills to pay, and not just credit card bills. They could be 
medical bills. They could be any number of different bills. So they 
pushed hard for 10 years to get this bill passed by the Senate in the 
hopes that fewer Americans will have an opportunity to start fresh and 
to start new. So we have been debating for over a week changes in this 
bill, changes that were designed to take into consideration special 
circumstances.
  I give credit to my friends on the Republican side of the aisle. They 
have rejected every single change. Let me say what they have rejected 
so far. I offered an amendment that said if one served in the Guard or 
Reserve, if they are in the military and they are serving their country 
overseas and as a result of their service their family or their 
business goes into bankruptcy, we are not going to be so harsh on them. 
We are going to give them an easier time of it in bankruptcy because 
their circumstances serving our country, risking their lives for 
America, warrant better consideration than some other circumstances. I 
thought that was a reasonable amendment. I hear all my fellow 
Senators praising our men and women in uniform, how they are standing 
behind them. Well, I had veterans groups and military family groups all 
supporting my amendment. They said this is a reasonable thing to do. A 
lot of people who are activated end up losing their businesses, and 
they should be given some consideration in bankruptcy court.

  I lost that amendment 58 to 38. Every Republican Senator voted 
against it. I cannot quite understand why, but that was their position.
  Then came Senator Kennedy. Senator Kennedy said we just did a survey, 
and the No. 1 reason people file bankruptcy now is because of medical 
bills. Senator Kennedy said if someone has gone through a medical 
crisis in their life and they have medical bills they cannot pay, we 
will at least say that when they go into bankruptcy court because of 
those bills, they can protect a small home, $150,000 home, which in 
some communities in America would be a very small home. It says that 
even though one has been through an illness, they had all of these 
medical bills, they have been forced into bankruptcy, they will have a 
roof over their head. That amendment was rejected, too. The thought 
that we would give people and their families facing medical 
catastrophes a break to be able to keep a home was rejected.
  I then offered an amendment that said, what if the creditor is what 
we call a predatory lender, somebody who breaks the rules, breaks the 
law--for example, offers a second mortgage on a home at an unreasonable 
interest rate, hidden charges, balloon payments that prey upon people 
like senior citizens--what are we going to do when they come to 
bankruptcy court? Why should we allow them to take away the home of a 
person if they have broken the law in giving the loan?
  I thought that was pretty obvious. A person coming into bankruptcy 
court

[[Page S2142]]

as a creditor doesn't have clean hands if they have broken the law with 
the loan they are trying to enforce. I thought at least we would stand 
for the law, that we would only enforce legal loans, not illegal loans.
  Rejected. It was rejected largely on a party-line vote. Every 
Republican Senator but one voted against it.
  As you can see, as we have gone through these amendments, whether we 
are talking about men and women in the military, whether we are talking 
about people with medical bills, whether we are talking about victims 
of predatory loans, even if we are talking about people who are victims 
of identity theft--we are all following the news accounts of 
ChoicePoint where a lot of personal information has been disclosed 
about individuals. It scares a lot of folks that someone will grab 
their Social Security number and their identity and run up some bills. 
It happens. Unfortunately it happens a lot.
  Senator Bill Nelson of Florida said if you are a victim of identity 
theft, you should be given a break in bankruptcy court. They weren't 
debts you incurred; they were debts incurred by someone who stole your 
identity. I thought that was a reasonable amendment, too.
  Rejected. Every Republican voted against it. They don't want to take 
into consideration the real-life tragedies and misfortunes that bring 
someone into bankruptcy court. They want to make sure that at the end 
of the day the credit card companies and the major financial 
institutions will get more money from people walking into bankruptcy 
court.
  Senator Akaka offered an amendment and said, shouldn't these credit 
card companies disclose more in their monthly statements, these 
companies that just inundate us with applications for credit cards? 
Shouldn't their monthly statements at least say: If you make the 
minimum monthly payment, this is how long it will take to pay off the 
loan and here is how much you will pay in interest? Is that 
unreasonable? I don't think it is.

  These companies are making huge amounts of money. In 2003 the credit 
card companies made $30 billion in profit.
  So Senator Akaka offered an amendment that said at least these credit 
card monthly statements should tell the consumer more so they make the 
right choices for themselves and their families.
  Rejected, again, on a party-line vote, with only one Senator from the 
Republican side of the aisle voting for it.
  You think to yourself, if you can't hold the credit card companies to 
even that minimum standard, what is this debate all about? We are not 
creating exceptions for real-life situations. We are not giving 
consumers more tools to decide what is a reasonable amount of credit. 
All we are doing is saying, at the end of the day, the credit card 
companies are going to get their bill and they are going to get more 
money out of people filing in bankruptcy court.
  Time and again in this debate, many of my colleagues, whom I respect 
much, have said: Senator Durbin, you have it all wrong. If people make 
less than the median income in America, they will not be affected by 
this bill. They are going to be off the hook. You have to be making 
over the median income to possibly get into a situation where you are 
going to have to pay off more of your debts.
  I have listened to that over and over. My staff and I, over the 
weekend, read the bill. It turns out that is not the case. In order to 
prove that you are below median income, you have to go through an 
expensive and extensive process under this bill. So I felt that it was 
only reasonable to say to my colleagues: Why don't we give those below 
median income a better chance to prove that they should not be covered 
by the provisions in this bill?
  We make clear in amendment No. 110 that debtors in bankruptcy falling 
below median income need only provide calculations or other information 
showing the debtor's situation satisfies the below-median-income 
standard.
  In other words, you don't have to hire a lawyer. You don't have to 
incur thousands of dollars of legal debt if you are below median 
income. You establish that to the court and then you move forward.
  Second, the amendment says that a court may not dismiss a case based 
on any forms of means testing if the current monthly income of the 
debtor falls at or below the median family income of the applicable 
State. What the language in my amendment does is reinforce every 
argument we have heard from the other side of the aisle. Time and again 
they have said: If you make low income in America, you will not be 
affected by this bill.
  We say: Fine, then let's change the bill and clarify that so a person 
filing for bankruptcy doesn't have to go through all of the pain and 
all of the expense of filing all the documents required under this 
bill.
  We had a program under President Clinton not that long ago called the 
COPS Program--you may remember it--bringing more police back to the 
communities of America. It was a wildly successful program. It brought 
thousands of policemen to the State of Illinois and many other States. 
We ended up having a one-page application for that program. We prided 
ourselves on the fact that we were not absolutely swamping people in 
communities with all kinds of Federal paperwork and applications. With 
one page you could qualify for a COPS grant in your community.
  What we are saying here is, shouldn't a person in bankruptcy court, 
already probably embarrassed by the process, already worried about 
paying the legal bills, if they are below median income, shouldn't we 
simplify the process for them?
  I am going to give my colleagues a chance to vote on that.
  The second thing we do is to return to the issue of veterans and 
members of the Armed Forces on active duty, and whether they are going 
to be treated the same in bankruptcy as other people. I will go back to 
the argument. I think if someone is serving our country, risking their 
lives for America, to protect me and my home, that we should do 
everything we can to help them. So we say, in this case, if your 
indebtedness as a veteran or a member of the military is primarily 
incurred while you are on active duty, that you can go into the 
bankruptcy court and escape the worst parts of the means test. It is a 
way to consolidate some of the arguments made earlier and to try to 
appeal to my friends on the Republican side of the aisle, for one last 
time, to be sensitive to some of the real hardships that have been 
created for families of Guardsmen and Reserves who have been activated.
  The last point is one I almost offer in desperation, amendment No. 
112. I cannot believe my colleagues have rejected all of these 
amendments when they relate to men and women in the armed services, but 
the last amendment relates to disabled veterans, men and women who 
become disabled as a result of their service in America and face 
bankruptcy. It is a final appeal to my friends on both sides of the 
aisle: If you cannot work up sympathy for men and women in uniform 
serving our country, at least have some concern for those who are 
disabled and come back and face bankruptcy. Don't put them through 
these unreasonable tests and standards in this bill. I would think all 
of us could agree that disabled veterans should be given some sort of a 
helping hand in this bankruptcy process.

  So we will try again with the amendments that we offer. I know some 
of them will be debated at length. I just sincerely hope this week the 
supporters of this bill will at least take a little time and consider 
the possibility of amending this bill.
  To my knowledge, the only perfect law that was ever written were the 
Ten Commandments, and they were not written by Senators. They were 
written by somebody in higher office.
  This bill, as good as it may be, can be better. It should be better. 
It should be more sensitive to some of the real-world challenges that 
we face. I hope we will consider these amendments favorably, enact them 
soon, and make them part of this legislation. It will make a bill which 
I think is unfair in many respects a lot fairer.


                     Amendment No. 26, As Modified

  One last thing. I ask unanimous consent the Leahy-Snowe privacy 
amendment No. 26, as modified, be accepted.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The amendment (No. 26), as modified, was agreed to.
  The PRESIDING OFFICER. The Senator from Alabama.

[[Page S2143]]

  Mr. SESSIONS. Mr. President, I would just say Senator Durbin is an 
excellent advocate, but this is the fourth time that this bill in 
substantially this form has been before this body. It has been marked 
up in the Judiciary Committee four times. We have had weeks on it each 
time it has come up for debate here. After several weeks of debate, the 
last time it came up it passed 83 to 15.
  The issues that he raises are really covered by the bill. If someone, 
anyone is disabled and they have a continuing extra medical expense, 
that would be considered in whether or not they would ever have to pay 
any of their debts back. If their income is below median income, they 
would never be required to pay their debts back. All they would have to 
do is introduce some evidence from their pay stubs or their income tax, 
what their income is. Certainly we have a right to ask that before we 
discharge, wipe out, eliminate all debts, as people do when they come 
into bankruptcy.
  I really would just say that we have given great consideration to 
these issues. We could disagree, but these amendments, for the most 
part, have been up before. I do not believe that most are going to be 
accepted. But there is every right of my colleague's side to offer 
them.

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