Posted on 03/09/2005 1:45:09 PM PST by DannyTN
FRIST COMMENTS ON BANKRUPTCY DEBATE Floor Statement -- Remarks As Prepared For Delivery
Senator Bill Frist, M.D. March 8th, 2005 - Mr. President, we have made tremendous progress on the bankruptcy bill. Republicans and Democrats have stood together to support a bankruptcy reform package that the House will pass and the President will sign into law. The Senate has resisted attempts to renegotiate hard-fought compromises and legislate on unrelated issues. I commend my colleagues for staying focused.
There have been many attempts to sidetrack the Senate on this bill. Let me begin by reiterating why we need bankruptcy reform and what this bill really does.
The bill before us establishes a means test based on a simple, fair principle: those who have the means should repay their debts. Personal bankruptcies are skyrocketing and wealthy debtors are walking away from debts they have the ability to repay. Opportunistic debtors who have the means to repay use the law to evade personal responsibility.
This abuse doesn’t just hurt the creditor they owe, it hurts all of us who pay higher fees and prices as a result.
Every bill you and I pay includes a hidden “bankruptcy tax” of $400 a year per household. That tax is figured into in every phone bill, electrical bill, mortgage payment, furniture purchase, or car loan we pay.
Interest rates are higher, down payment requirements are larger, grace periods are shorter, and late payment penalties are astronomical – all because some people are shirking their debt obligations.
This legislation is targeted to ensure that wealthy debtors who can pay their debts do so.
It specifically exempts anyone who earns less than the median income in their state. And it also allows every consumer to show “special circumstances” if they cannot handle a repayment plan.
We know that one reason people file for bankruptcy is because of an unexpected medical emergency. Consequently, this legislation allows every filer to deduct 100% of their medical costs.
We also know that education is a big outlay for many families. Under bankruptcy reform, parents can deduct private school tuition to protect their children’s educational opportunities.
In addition:
The bankruptcy bill strengthens protections for child support and alimony payments.
It protects patient privacy and care during bankruptcy proceedings that involve health care facilities.
It protects consumers from deceptive credit practices that can lead to financial distress.
And it protects the system that allows America to be one of the most generous countries when it comes to bankruptcy.
There remain, however, some misconceptions about this bill that should be dispelled. The first regards our protections for active duty military personnel and veterans.
Some opponents of the bill charge that we do not adequately address the needs of our men and women in combat who may suffer financially.
Mr. President, it should go without saying that the United States Senate and the American people deeply honor our men and women in uniform. Everyday, these young soldiers sacrifice to protect us and defend our freedom. We are indebted to them for the dangers they face on the field and the families they leave in order to fight.
That is why last Tuesday, we passed the Sessions amendment to help clarify protections for our military and others under a safe harbor in the bill. This provision, which passed with 63 votes, makes explicitly clear that active duty military and low income veterans are protected by the safe harbor. In addition, it also protects debtors with serious medical conditions.
On this issue, the other side has created a red herring designed to score political points and shift the debate away from bankruptcy abuse.
Another red herring is the charge that the bankruptcy bill sacrifices consumers to benefit credit card companies. The truth is that the bill before us includes several carefully negotiated amendments that expressly protect credit card holders.
Among its beefed up consumer protections are:
Increased disclosure requirements for credit card statements and mandates that credit card companies assist borrowers in determining how long it will take to pay off their credit card balances;
Additional disclosures to borrowers buying and refinancing their homes;
And additional disclosures regarding credit card “introductory rates” and new disclosures related to credit card late fees.
These protections are the result of lengthy and careful negotiation. Additional measures should be properly addressed in the Banking Committee. As Senator Sessions has pointed out, we are debating a bankruptcy bill designed to create a fair and common sense process in the federal courts.
Moreover, the bill before us has passed this body three times with overwhelming bipartisan support. In the 105th Congress, it passed by a vote of 97 to 1. Again in the 106th 83 to 14. And again in the 107th by a vote of 82 to 16.
It is time to take action on a much needed reform that is supported by both sides of the aisle.
I am confident that by working together we can get this done in this Congress, this week, and see bankruptcy reform signed into law.
It is long past time to stop abuses of the bankruptcy code. The legislation before us is thoughtful and well considered. It offers the opportunity to give the system, and the people it is designed to help, a fresh start. In short, it promises to deliver meaningful solutions that keep America moving forward.
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I work in the area, read significant portions of the bill, and tried to keep up with the amendments, and I have to tell you that I cannot tell you what planet Frist is coming from on these comments because they are almost all complete bs. About 5% of the cases I see could be considered abusive. The balance are caused by divorce, illness, injury, job layoff and entrepreneurial failure in that order. The bill will have the practical net effect of causing substantial numbers of insolvent Americans to not obtain debt discharges and these Americans will no longer be able to function effectively in the economy. I am already figuring out how to make a lot of more money off the new law changes than I am under the current law. MBNA et al will make more short terms profits. We are the winners. However, it will be awful for the macroeconomy of the country.
credit unions are most often a better deal. and they'll
take damn near anyone.
That's where I had him put his money - much better than banks !!
This bill is an unmitigated disaster. Credit card companies have lent an obscene amount of people money under one set of rules, now they don't like what's going on, so they decide to change the rules half way into the game. This is putting the powerful over the people.
you need look no farther than the sosh security talk at my
college night classes to see kids are not educated in school
about everyday economics so the parents must do it (as you did)
Unless you're a credit card company, that is. In which case, you get to re-write the law to take all risk out of your business.
Oh wait--even that's not quite a free lunch. You still have to line the pockets of quite a few Senators...
Yes! And when we conservatives start saying these things, the Republicans would be wise to listen.
The point you mention is critical and has been ignored by Frist/Biden et al. The last 11 years of debt contracts (the last major code overhaul) have been entered incorporating the terms of the existing Bankruptcy Code, pro and con for both parties. Now the CC lenders effectively rewrite those terms dramatically in their favor on these prior debt contracts ex post facto. To wrap up this after fact change in terms in the cloak purported abuse corrections is just bs.
Why has this bill received little to no attention from us until it is almost ready to become law? It is probably too late to start a protest.
Why has this bill received little to no attention from us until it is almost ready to become law? It is probably too late to start a protest.
you are right...the Dems can do a whole lot of damage among red-state voters of modest income if they play their cards right on this one!
However, even I (Miss read EVERYTHING before signing and save EVERYTHING) never thought to read the fine print of a silly little interest bearing savings account for a 17 year old kid to deposit his part time paycheck.
Live and learn - and start teaching econ 101 in high school!!!
I know a guy who works for a west-coast firm that makes large servers for the major credit-card issuers. A#1 priority among all of the specs that they are given by these companies that buy the servers is...MAKE THEM BOMB-PROOF! (what does that tell you?)
"Every bill you and I pay includes a hidden “bankruptcy tax” of $400 a year per household. That tax is figured into in every phone bill, electrical bill, mortgage payment, furniture purchase, or car loan we pay."
This is hilarious, but even if palpably "true" the idea that any savings of the related companies would be returned to us is naive.
I have a son and a nephew that both fell into the college credit card thing and sadly are still trying to find the light of day.....
believe it or not, I let my son have OUR credit card throught out his college years...he never abused it....but once he was near graduation and out of school....it was just to much of a temptation....
I would agree except for one thing. Several studies in the last decade have demonstrated that people are likely to spend more with plastic than cash. ATM and Check Cards included. One of the best ways to get spending under control is to use cash, where you can not only have to count out what you spend, but you're forced to look at the ever diminishing pile of money with every purchase.
to a large extent, I can see where people have gotten away with murder when it comes to bankruptcy.....I know people that declared it when they were in one small house, kept that house, bought another and now have a huge RV to boot,as well as take the very nice Disneyland vacations with all the trimmmings.....
so, how could they do all that...have two houses now, rv and money to burn, yet just about 4 yrs ago, had to declare bankruptcy?
The "naive" comment is dead on. I think the "bankruptcy tax" comment by Frist is BS as well. Missed payments and periodic defaults are profit opportunities for CC lenders and not something they want to avoid. The real issue is why is Congress changing the terms of the marketplace that have been in place the past 11 years (last code overhaul), upon which all these debt contracts have already been written, in favor of the CC lenders. And to date I have heard no good reason why other than it will make me and MBNA et al more money.
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