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Senate Floor: BANKRUPTCY AMENDMENTS ACT OF 1993

  • Judd Gregg
    Person
  • Bob Dole
    Person
  • Howard Metzenbaum
    Person
  • Don Nickles
    Person
  • Paul Wellstone
    Person
  • Arlen Specter
    Person
  • Joe Biden
    Person
  • Carol Moseley Braun
    Person
  • The Presiding Officer
    Person
  • Dennis DeConcini
    Person
  • Howell Heflin
    Person
  • Alan Simpson
    Person
  • Larry Pressler
    Person
  • Dirk Kempthorne
    Person
  • Kay Bailey Hutchison
    Person
  • Paul Simon
    Person
  • J. Bennett Johnston
    Person
  • Strom Thurmond
    Person
  • Pete Domenici
    Person
  • Dianne Feinstein
    Person
  • Chuck Grassley
    Person
  • Al D'Amato
    Person
  • Daniel Patrick Moynihan
    Person
  • Orrin G. Hatch
    Person
  • Bill Roth
    Person
  • Mark Hatfield
    Person
  • John F. Kerry
    Person
  • Jesse Helms
    Person
  • George J. Mitchell
    Person
  • Wendell Ford
    Person
Unknown

Arlen Specter

Unknown
Madam President, I have sought recognition to support the pending amendment which calls for the United States to unilaterally remove the arms embargo preventing the sale of weapons to the Government of Bosnia and Herzegovina, because I think that this amendment, this resolution, is reasonably calculated to help the situation in Bosnia and Herzegovina. 6

Arlen Specter

Unknown
There is no doubt about the atrocities of Serbian aggression against those countries, about their inability to defend themselves, and about the failure of Serbia and the Serbs to honor the wishes and sanctions of the United Nations and declared world public opinion against the atrocities which are being conducted there. 7

Arlen Specter

Unknown
This resolution is different in two respects from a resolution which was considered by the Senate on January 27, 1994. 8

Arlen Specter

Unknown
First, that resolution was only a sense-of-the-Senate resolution. This provision calls for forcible legislative enactment which will have the force and effect of law, contrasted with the sense of the Senate, which was the matter pending on January 27, 1994. 9

Arlen Specter

Unknown
When the reports came forward about the vote on the January 27 resolution, I received many objections to opposing the lifting of the arms embargo and explained to those who inquired that I was not opposed to lifting the arms embargo, but that I was opposed to the supplemental provision which would authorize the President, really with a blank check, to provide whatever military assistance he might deem appropriate. That is the language which was covered. 11

Arlen Specter

Unknown
One of the things which is frequently misunderstood is, when there are news reports about the votes, they do not reflect many paragraphs or many complications or many subtitles that may be comprehended. If the thrust of the amendment is to lift the arms embargo and that is all that is reported by the news media, the public does not understand that there are other provisions which are potentially very troublesome. 12

Arlen Specter

Unknown
So I take some time now to specify why I was against the January 27 resolution but feel that today's resolution is appropriate. I believe that the atrocities which are being committed today in Bosnia and Herzegovina are extraordinary in the annals of warfare, even considering the atrocities with which we are familiar from World War II and from other wars. It is a matter of great anguish that the civilized world stands by and observes these atrocities in progress. It is a matter that cannot be dealt with in any definitive way without ground forces. 13

Arlen Specter

Unknown
I believe that the U.S. policy is correct in not committing American fighting personnel on the ground, which would be debilitating and a quagmire and something which is just not what U.S. policy ought to be. Deciding we are not going to be engaged in a ground war over there -- and that is the view of NATO as well and the United Nations as well -- there is no way, really, to take sufficient definitive steps in a forceful way to stop the fighting there. We are then left with the option of the air strikes, which I do support, realizing that the air strikes in and of themselves are not going to be sufficient. The example of the war against Iraq certainly demonstrates the fact that no matter how forceful or how pounding and repetitive the airstrikes, the air strikes in and of themselves are not going to be sufficient. The air strikes also pose the problem of endangering the United Nations peacekeeping forces which are on the ground there. 14

Arlen Specter

Unknown
It is anomalous that we have peacekeeping forces there when there is really no peace to keep. Questions have been directed to me: Would I favor having U.S. personnel on the ground as part of the peacekeeping force? I say categorically, no, I would not do that. I would not want to jeopardize U.S. personnel as part of peacekeeping forces because there is no peace to keep. Yet, if there are air strikes or there is other action, even the elimination of the embargo, the U.N. peacekeeping forces may be hostage there. So their safety and security has to be taken into account. 15

Arlen Specter

Unknown
It is a very complex matter. Some have suggested with some forcefulness -- and I am not sure but that it may be most appropriate -- to withdraw the peacekeeping forces so they are not at risk and to intensify the air strikes as part of an action to remove the arms embargo. This resolution does not go that far. We do not have to make a decision on that at this time. 16

Arlen Specter

Unknown
I am aware of the problem of the United States moving unilaterally. I am aware of the administration's concern in not wanting to act unilaterally when the sanctions were imposed through the United Nations and that the United States relies upon joint international action in maintaining other sanctions such as sanctions against Iraq, sanctions which may not be working very well. So we are concerned about taking unilateral action, the administration is, which may weaken our request to other nations where we ask them to support international sanctions. 17

Arlen Specter

Unknown
Notwithstanding that consideration, it is my view that the United States ought to act unilaterally as the proposal is pending today, even though it is contrary to a very important general principle of supporting joint action with the United Nations. In supporting this amendment, which has the force of law, it is then still subject to a veto by the President and the necessity for a veto override. Judging from the fact that the last resolution was agreed to by a vote of 87 to 9, there would be sufficient votes to override a veto. I would be joining, so there would be no more than eight, and I am joining because this amendment does not contain the blank check for the President to use whatever force he may deem appropriate. 18

Arlen Specter

Unknown
Madam President, it is my thought that when the international community, including the Serbs, see this amendment having the force of law and it moves forward in the legislative process and may come to the President's desk for signature and may be signed and may be subject to being enacted into law on an override, they will see that the United States means business. At least the Senate means business. The House will have an opportunity to pass upon all this. 19

Arlen Specter

Unknown
Even though it is unilateral, perhaps it will have the effect of expediting the United Nations or NATO to move with the United States in eliminating the arms embargo. Certainly what is going on at the present time is totally intolerable. This at least offers some hope to improve that desperate situation. 20

Arlen Specter

Unknown
For these reasons, I will be voting in support of this amendment. 21

Arlen Specter

Unknown
I yield the floor. 22

Arlen Specter

Unknown
Several Senators addressed the Chair. 23

The Presiding Officer

Unknown
The PRESIDING OFFICER. 25

Judd Gregg

Unknown
Is the Senator from Massachusetts seeking recognition, also? 27

John F. Kerry

Unknown
Madam President, I had just wanted to ask a question of the Senator from Pennsylvania. I will be happy to wait. 29

Judd Gregg

Unknown
I yield to the Senator from Massachusetts. I noticed he was here earlier. 31

The Presiding Officer

Unknown
The PRESIDING OFFICER. 33

John F. Kerry

Unknown
Madam President, I listened to the Senator from Pennsylvania. I am very sympathetic to much of what he said. I do not think any of us here are arguing about the level of atrocity or what the civilized world ought to do. But the Senator has raised the issue of unilateralness and sort of pushed it aside. He said: Notwithstanding the unilateral issue, I think we ought to vote this way. 35

John F. Kerry

Unknown
I wonder if the Senator really feels that is good policy on its face. Or, perhaps, if there were an alternative way to approach this so, if the resolution embraced an exhortation to the President to first move multilaterally with some room for the President to be able to try to do that immediately and then, in the event of the failure of the President doing that, the embargo would be lifted notwithstanding a Russian veto or any other excuses why it failed -- but first to give the opportunity to keep faith with the multilateral effort -- does the Senator from Pennsylvania not think that perhaps might be a way of accommodating a lot of concerns of Senators and at the same time keeping faith with our international responsibilities? 36

Arlen Specter

Unknown
If I may respond, I think the Senator from Massachusetts raises a very valid point. If we can achieve the elimination of the arms embargo in a multilateral way, that would be preferable, instead of the United States going its own way unilaterally. That matter is not now before the Senate. I think the practical effect of this amendment will be what the Senator from Massachusetts seeks to accomplish. 38

Arlen Specter

Unknown
Right now, as I understand it, the administration is trying to persuade our NATO allies and others in the United Nations that there ought to be a multilateral elimination of the arms embargo. I think if there is a strong vote out of the Senate, that will arm President Clinton and the administration in their negotiating efforts. 39

Arlen Specter

Unknown
One might ask why that was not accomplished with the 87-to-9 vote before. I do not know the answer to that. Maybe they said it is only a sense-of-the-Senate resolution, those are passed all the time and they do not mean anything. I do not know that was the result. I have seen some reactions to a sense-of-the-Senate resolution taken very seriously. But whatever happened in the past we do not know. Now it will have the force of law and it will move forward as part of this bill as an attachment to the bankruptcy bill. It may be passed by the House. 40

Arlen Specter

Unknown
Then, if the President is unsuccessful in getting other nations to join in a multilateral way, he may be forced to veto the bill. But we are ratcheting it up. We are raising the stakes and, I think, strengthening the President's hand in a very real sense, saying to our allies: Go along because I am facing a legislative body which can make law over my veto if you do not. 41

John F. Kerry

Unknown
I thank the Senator. I take it then if we were able to come together, the Senator obviously would support it. I appreciate that and appreciate his sensitivity to try to make that happen. I thank the Senator from New Hampshire. 43

Arlen Specter

Unknown
Madam President, if I might be recognized for another second or two, and I do not want to impede on the Senator from New Hampshire. There have been negotiations to try to modify the language of this amendment. If it cannot be modified to take the multilateral step initially -- I think that will be a step in the right direction -- but absent that, I am prepared to vote in favor of this amendment. 45

Arlen Specter

Unknown
I yield the floor. 46

The Presiding Officer

Unknown
The PRESIDING OFFICER. 48

Judd Gregg

Unknown
Madam President, I rise to address this amendment. I believe it is reflective of some very significant problems which we have in our foreign policy issues as a government, as a country. We appear to be stumbling in our approach to foreign policy, something like a bear coming out of hibernation, hitting this tree and that tree and not having a distinct direction on the issue of how we handle ourselves in the post-cold war period. 50

Judd Gregg

Unknown
Unfortunately, this amendment which has been brought forth is just an expression of that stumbling activity. It is more appropriate that we should have a very specific framework that we should be acting on rather than taking this piecemeal drip-drip-drip approach to foreign policy. It is equally appropriate that the leadership for a coherent and pervasive policy should be coming not from the Senate but from the administration. 51

Judd Gregg

Unknown
The fact that this type of amendment is being brought forward by this body and that this body feels the compulsion to address this issue in this way, I think, reflects the very serious problem which this administration is having in the area of foreign policy in general, Bosnia specifically, but more important, in defining for the American people what the role of our country is in the post-cold war era. 52

Judd Gregg

Unknown
This amendment represents a road to intervention, and I do not think we should see it as anything other than that. It represents a step -- and a fairly significant one -- down the path that will lead to or could lead to involvement of American military personnel in Bosnia and in the former Yugoslavia. 53

Judd Gregg

Unknown
Before we step onto that path, we should know why we are on that path, and we have not heard an explanation of that from this administration. I think it is absolutely essential that we get such an explanation before we pass this type of a resolution. 54

Judd Gregg

Unknown
I would like to suggest that there are three basic standards that we should be looking at in the post-cold war period as to when we use American force and when we will put at risk American prestige in issues that involve conflict. 55

Judd Gregg

Unknown
Those three tests should involve: First, a question of defining the conflict and whether it is a resolvable conflict; second, defining our national interest; and third, defining a strategy for not only entering the conflict but for getting out of the conflict. That should be done in each instance where this administration or this body decides to go forward and put at risk American lives. 56

Judd Gregg

Unknown
In defining the conflict, we must first establish what is the nature of the conflict. Is it an ethnic conflict? Is it a religious conflict? Is it a conflict that has strong historical roots, or is it a conflict that involves individuals desiring aggrandizement, either through expansion of political base or expansion of land or expansion of control over other individuals? 57

Judd Gregg

Unknown
We have examples in very recent history of these different types of conflicts. We have the situation that occurred in Iraq where you had an individual who was attempting to expand his own personal role in the world by using military force. A dictatorial action, a totalitarian state taking action that was of a military nature, and we addressed that. 58

Judd Gregg

Unknown
We also have examples -- and I think Bosnia is one of them -- of conflicts which go much deeper which are ethnic and religious and which do not have a clear, defined good guy or bad guy, do not have a clearly defined winner-loser scenario, that involve generations of hatred and intense feelings within a community. 59

Judd Gregg

Unknown
In the issue of Bosnia, it transcends towns and streets. It goes throughout the former nation of Yugoslavia. 60

Judd Gregg

Unknown
Another instance of that type of conflict is what happened in Lebanon only a few years ago, where you had the various ethnic and religious factions fighting each other in a conflict that was not easily resolvable. 61

Judd Gregg

Unknown
The second test is the issue of national interest. What is the national interest? Is there a national interest? On that test, we, once again, could look at the Iraqi situation where there was clearly a national interest: Oil supply for the world was threatened. Or we can look at North Korea where there is a national interest, because we are talking about a renegade nation that contains or possesses, or soon will possess, it appears, a capacity to deliver nuclear weapons, with the vehicles to deliver those weapons and which will threaten, therefore, a broad spectrum of the world. 62

Judd Gregg

Unknown
The use of nuclear weapons is something we should be concerned about and have a national interest in and contain it. But in Bosnia, we do not have a national interest. In Bosnia, we have a conflict which is regional in a part of the world where the United States has no immediate national interest. If we are going to go into Bosnia, does that mean we are also going to go into Rwanda? Are we going to go into Azerbaijan? Are we going to go into the Kashmir? Are we going to go into any number of hot spots around the world where there is conflict going on and where the horror of that conflict equals or exceeds, as in the case of Rwanda, what is happening in Bosnia? 63

Judd Gregg

Unknown
So on the first two tests: Is the conflict resolvable? No, it probably is not. This is an ethnic and religious conflict in which today's events are a page in a long history, and it is just going to continue. So that test is not met. 64

Judd Gregg

Unknown
The second test is: Is there a national interest for the United States if we get involved? No, I do not believe you can insert a clear national interest for our Nation. If the national interest is defined as stopping a horrific event -- which this clearly is -- then we cannot limit ourselves to Bosnia. 65

Judd Gregg

Unknown
Clearly, we must be in Rwanda, also. I do not think America wishes to assert its strength across the globe in that manner. Rather, we must pick those areas where we do have a national interest and where the conflict is resolvable. 66

Judd Gregg

Unknown
The third test is: If you get into the conflict, how do you get out? Do we have an exit strategy? This proposal which is on the table today, this amendment, is the first entry step into the conflict. Is there a discussion of how we get out? What happens next? There has been a great deal of that on this floor. But is there a clear definition of it coming from the administration? No, there is not. Without that definition, we make a very serious error to step into this arena. 67

Judd Gregg

Unknown
So why are we at this point? Well, we are at this point because we have not heard from the administration a clear defining of the national role in conflicts like Bosnia, and because the administration and our people and the Western World generally are being inexorably pulled into the Bosnian morass by the fact that it is on television as a nightly occurrence. 68

Judd Gregg

Unknown
I would suspect that if we were getting the same type of video we are getting from Bosnia, from Rwanda, or from Azerbaijan, we would be equally outraged as a people and equally concerned. But we are not. Why are we not? I think we have to be honest about it. We are not getting it because Rwanda and Azerbaijan are not Western countries, they are not part of the European Continent and, therefore, they are not readily accessible to the international media, and also, they do not have a certain similarity to the Western media that is demanded in order to have the coverage. 69

Judd Gregg

Unknown
But were the coverage there, it would be equal to or worse in showing and displaying human suffering. 70

Judd Gregg

Unknown
So we find ourselves being drawn by television into a conflict on which there has been no clear, defined national policy set out for why we should be in there other than the fact that it does appear on television every night and that people are concerned about it. 71

Judd Gregg

Unknown
That is not a legitimate reason to go into Bosnia. It is not a legitimate reason to go into any part of the world where conflict is going on and put at risk American lives. The last count I had, there are today 42 conflicts going on in 39 different countries around this world, and we cannot police them all. We should not choose the ones we decide to police by the pressure which comes to us from the electronic media. We should choose the ones that we decide to police by the tests that I have laid out. First, is the conflict resolvable? Second, is there a national interest? And third, is there a strategy for not only entering the conflict but also exiting the conflict? 72

Judd Gregg

Unknown
There is also a whole subset of issues which are raised by the Bosnia situation which I think need to be fully aired before we go down this road any further, and a major element in that subset, independent of the question of having a national policy as to why we are choosing this arena, a major element of that has to be the question of our relationship to the United Nations and the U.N. command and control over American troops. 73

Judd Gregg

Unknown
It is a serious error for us to put American lives at risk because of a decision made by a political leader serving at the behest not of the President but of the United Nations. When American lives are put at risk, it should be because an American commander has received a directive from an American President or an authoritarian figure below the Presidency in the American chain of command. We should never abrogate that authority to another institution, another political institution, as has already occurred in the Bosnian situation. We have already heard reports of American military action being initiated as a result of directives coming from political figures who are outside the American chain of command and who are responsible to the United Nations. And that is wrong. 74

Judd Gregg

Unknown
Why is it wrong? People will say, well, the United Nations is a world body, it is a police organization, and there are a lot of different military forces attached to it from different countries. That is true. But the United States is unique as a military force in the world today. We are not like many of our allies or many of the other nations in this world that maintain military force. We are the only superpower. We are the only nation that has the capacity to project power around the globe with devastating authority. 75

Judd Gregg

Unknown
When American troops are put at risk, it draws that power into any action that occurs. And to use that power arbitrarily or without a thoughtful national policy, as was the first point I was making, or to put that power at the disposal of a nonelected American official is a serious error of public policy, because it draws much more weight to it and much higher ramifications to it than when an agency of the United Nations directs into action another nation's military forces. 76

Judd Gregg

Unknown
And, also, as we learned regrettably, in Somalia Americans become targets, not because they are with the United Nations but because they are Americans. When you put American forces into a conflict situation and you put them under the command of the United Nations, they become the targets of activists in the nation where they are, regrettably, because they are Americans. 77

Judd Gregg

Unknown
So when you are putting them at that risk, you must be very careful that they are under American command because the bottom line is you have to explain this. You have to explain it to the mothers and the fathers and the wives and the husbands and the children of the people who lose their lives because they put themselves in harm's way as American soldiers. That is a very difficult explanation to give unless you, first, have a national policy, and, second, make it absolutely clear that what they risk their lives for and, in some instances, regrettably, gave their lives for, is American policy under American command. 78

Judd Gregg

Unknown
Right now we have neither in this instance. I have heard innumerable talks on this floor from a variety of different, very eloquent speakers, but one consistent theme appears to be for those who support the resolution and those who oppose it, for those who support this administration and those who feel the administration may vary on this issue, that we as a nation have no national policy yet on how to handle the situation. And until that national policy is elicited and defined by this Presidency, it will not have such a policy because it is the focus of the President from which that comes, not from the focus -- as important as we are in the process -- of the Senate. 79

Judd Gregg

Unknown
That brings up a broader issue, which is the whole question of how this administration has approached the post-cold-war period, and I think it has been obviously an administration finding its way. That has been fairly clear to anyone who has watched and counseled or attempted to view these activities. 80

Judd Gregg

Unknown
But in the post-cold-war period we need more than that. We need a very defined purpose of what America's role is in the world. That defined purpose, in my opinion, must acknowledge that the new threat to the world comes from renegade nations which have nuclear arms and may use those arms. And when you want to rate what American national interest is relative to other nations, you must put at the top of the list to assure that renegade nations do not get nuclear arms and, if they do get nuclear arms, they are put in a position where they will not use them. 81

Judd Gregg

Unknown
That, of course, moves to the top of the list the North Korean issue, on which, again, we seem to have no policy as a country. But, clearly, if we are to function in this post-cold-war period, we are not going to be confronting ideological components. We may confront people who view us in religious terms as opponents, but we are not going to be confronting the Soviet concept of communism versus capitalism and a world struggle over that issue. 82

Judd Gregg

Unknown
What we are most likely going to confront is the renegade leader of a nation who has had the capacity to develop a nuclear weapon and is threatening to use that weapon or who is in the process of developing a nuclear weapon. We must -- unfortunately, the time has come -- in North Korea, make a very clear and definitive policy as to how we are going to handle that situation the first instance it occurs. And the first instance it is occurring is in North Korea. 83

Judd Gregg

Unknown
So as we look at this proposal, I think we need to watch the whole ball game. We need to look at the entire forest and not just look at this tree, which it is. We cannot allow ourselves to sort of dribble into this issue. We need, first, to have a clear definition of what the American role is in Bosnia, what our national interest is, how we see the conflict being resolved, and how American troops -- if they are going to be put in -- get out. We need to understand that we cannot be drawn into every conflict which becomes a national or international media occurrence or dominant event. 84

Judd Gregg

Unknown
We need to choose very intelligently and thoughtfully when and where we are going to put American lives at risk. We need to understand that putting American soldiers under the command of political figures within the United Nations is something that should never occur. We need to have an intelligent and thoughtful approach to what is the real threat in the post-cold-war period, which is those nations which are obtaining nuclear weapons or may be obtaining nuclear weapons and do not have responsible leadership for the management of those weapons. 85

Judd Gregg

Unknown
Those are the concerns that should be addressed, and that is the priority that we should put in moving forward on the Bosnia issue. 86

Judd Gregg

Unknown
For that reason, I do not support this resolution. I recognize I am in a minority probably on that. But I see it as a step to the road to American intervention, which has not been thought out; and as part of a process in which we, if we proceed on, will end up losing American lives without any way of explaining to American parents, wives, husbands, and children the reason for the loss of that life. 87

Judd Gregg

Unknown
I yield the remainder of my time. 88

Judd Gregg

Unknown
Mr. ROTH addressed the Chair. 89

The Presiding Officer

Unknown
The PRESIDING OFFICER. 91

Bill Roth

Unknown
Madam President, I support and cosponsor this amendment to terminate the United States' arms embargo of the Government of Bosnia. I believe this measure is necessary to provide much needed assistance to the men, women and children of that nation -- people who are fighting for their property, their lives and future. 93

Bill Roth

Unknown
I believe this amendment follows the successful Reagan doctrine -- that the United States can, under proper circumstances, help people help themselves. We all saw how well this doctrine worked in Afghanistan where, with the assistance of United States arms, the Afghan people turned back the world's single largest military, that of the former Soviet Union. In that conflict, because of America's willingness to help the freedom fighters, we did not -- over the course of the conflict -- have to commit U.S. forces. 94

Bill Roth

Unknown
Rather, then, as now, our purpose was to help a valiant people defend themselves. With the right policies, we were able to do just that. 95

Bill Roth

Unknown
Madam President, I do not believe there are any among us, who would say that the people of Bosnia do not have the right to protect their lives, their families and their property. Even today we hear the heart- wrenching report of the Serb attack on the hospital in Gorazde. How long do we suffer these atrocities to continue before we give the people of Bosnia the wherewithal to defend themselves. Frankly, it makes no sense for U.S. airmen to risk their lives to defend people who we simultaneously deny the ability to defend themselves. 96

Bill Roth

Unknown
None of us wants to see this war escalated. Frankly, I hope that by lifting this embargo we send a clear message that America wants to see a speedy and equitable negotiated settlement. But I am afraid that unless this embargo is lifted what we will see, instead, is continued wholesale slaughter -- as President Clinton said yesterday, the slaughter of innocents. 97

Bill Roth

Unknown
Let me be clear, madam President, this measure in no way authorizes or indicates a commitment of American men and women into this conflict. I believe our troops must stay out of Bosnia. But it does allow our Nation to assist men, women and children who are suffering needlessly and with little opportunity for recourse. 98

Daniel Patrick Moynihan

Unknown
Mr. President, I have chosen to cosponsor the amendment of the distinguished minority leader concerning lifting the arms embargo on Bosnia because I have become convinced that the embargo violates article 51 of the U.N. Charter. Like the U.S. Constitution, the Charter is not a suicide pact. The inviolability of article 51 is fundamental to the bargain entered into by nations when they ratify the Charter. They agree to be bound by the decisions of the Security Council, but on the basis that "Nothing in the present charter shall impair the inherent right of individual and collective self-defense * * *." Such is the importance of the principle that the phrase is redundant in its protections: "Nothing" in the charter shall impair the right and the right is "inherent". 100

Daniel Patrick Moynihan

Unknown
Hence I have cosponsored this amendment mandating that the United States cease its support for the embargo. 101

Daniel Patrick Moynihan

Unknown
That is not to say that I do not have concerns about whether this is precisely the right approach or whether the wording of the amendment could not be further refined in conference. If this were an easy issue the blood would not now be flowing in the streets of Gorazde. The President has just announced a new initiative; negotiations are about to begin. I hope -- and believe -- that the Senate's vote on this resolution will strengthen his hand, not weaken it. He has said that he supports lifting the embargo. This amendment will demonstrate that the Senate strongly supports this view. 102

Daniel Patrick Moynihan

Unknown
There is another important issue -- a constitutional issue -- about which I have some concerns regarding the precise language of the amendment. Namely, I think that it might be desirable to clarify the meaning of subsection (a) which states that the President shall not interfere with the transfer of arms to the Government of Bosnia. I interpret this prohibition narrowly to reach those areas in which the Congress has the constitutional power to restrict the President. I do not believe, for instance, the amendment should be read to imply that the President could not say that he opposes lifting the embargo or even argue that other states should continue to enforce the embargo. The constitutional power of the President to articulate his own views or to communicate with other nations cannot be controlled by Congress. I know that this is not the intention of the minority leader and the amendment should not be read to attempt to control the President's speech. 103

Daniel Patrick Moynihan

Unknown
Nor does the amendment affirmatively mandate that the United States provide arms to Bosnia. It prohibits interference with Bosnia receiving arms. There is a difference. 104

Daniel Patrick Moynihan

Unknown
Mr. President, there is a long history of congressional involvement on questions of arms embargoes and neutrality acts. It is appropriate -- indeed, essential -- that the Senate speak on this issue and I commend the minority leader and also the distinguished Senator from Connecticut on their leadership on this issue. 105

Dirk Kempthorne

Unknown
Mr. President, like every American, I am appalled and shocked by the killings, rape, ethnic cleansing, and other atrocities currently taking place in Bosnia. 107

Dirk Kempthorne

Unknown
Last year, in response to these outrages, I cosponsored a resolution, Senate Resolution 79, offered by Senator Feingold to lift the arms embargo on Bosnia. Today, I will join the distinguished Republican Leader, Senator Dole, and Senator Lieberman, in cosponsoring the amendment currently before the Senate. I will cosponsor this amendment to once again signal my support for lifting the U.N. arms embargo on Bosnia. 108

Dirk Kempthorne

Unknown
Americans and people everywhere understand the right of self-defense. After the breakup of the former nation of Yugoslavia, the Serbs took possession of the bulk of weapons from the Yugoslavian military. As the three-way civil war erupted, the United Nations enacted an arms embargo on Bosnia, Serbia, and Croatia. In effect, however, this arms embargo denied the Bosnian Moslems the right to acquire arms to defend themselves against Serbian aggression. As a result of the arms embargo, Serbia and Bosnian Serbs had a monopoly on the heavy weapons they needed to conquer and carve up Bosnia. The ebb and flow of violence and atrocities we have seen are the tragic result of this policy. 109

Dirk Kempthorne

Unknown
For some time, the U.S. Senate has called on the President to lift the arms embargo on Bosnia so that the Bosnian Moslems can defend themselves. Unfortunately, because of opposition from our allies with troops on the ground, the President failed to convince our NATO partners to lift the arms embargo. Given the current siege of Gorazde and my opposition to increased United States military involvement in Bosnia, I believe it is time for American to show its leadership and lift the arms embargo against Bosnia. 110

Dirk Kempthorne

Unknown
While I want to allow the Bosnian Moslem to acquire the weapons they need to defend themselves, I strongly oppose any effort to increase the U.S. military involvement in this quagmire. Likewise, I continue to strongly oppose the Clinton administration policy of giving the U.N. commanders on the ground the authority to call for NATO and U.S. airstrikes. I fear we are seeing mission creep like we saw in Somalia, where U.S. military involvement escalates in support of United Nations' policies. 111

Dirk Kempthorne

Unknown
I strongly oppose any increased United States military involvement in Bosnia because, to begin with, the President has not given the American people a clearly defined objective for our military involvement. As far as I can tell, no one in this Government can tell us how our air attacks are supposed to bring about peace in Bosnia. Indeed, as recently as 2 weeks ago, the Chairman of the Joint Chiefs of Staff, General Shalikashvili, warned that air attacks won't stop the Serbian attacks on Gorazde because, unlike Sarajevo, where the Serbes used tanks and heavy artillery, the Serbs are now using small arms to take Gorazde. 112

Dirk Kempthorne

Unknown
I oppose increased United States military involvement in Bosnia because its a bad idea that will not end the suffering -- but may prolong it. I oppose United States military involvement in Bosnia because it will not lead to negotiations between the parties -- but may even delay them. I oppose military involvement because it leads us to the slippery slope of intervention -- and none of us can see an end to it. 113

Dirk Kempthorne

Unknown
Mr. President, I rise in strong support of the Dole-Lieberman amendment to lift the arms embargo against Bosnia. I do so with the hope and belief that by giving the Bosnia Moslems the ability to defend themselves, this terrible ethnic civil war can be brought to an end. I support this amendment with the recognition that my support for this action in no way authorizes or encourages a greater United States military involvement in Bosnia. I support this amendment to forestall the looming danger of allowing the United Nations to drag the Armed Forces of the United States and NATO more deeply into this centuries old conflict. 114

Dirk Kempthorne

Unknown
Madam President, I suggest the absence of a quorum. 115

The Presiding Officer

Unknown
The PRESIDING OFFICER. 117

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. 121

Unknown
The PRESIDING OFFICER (Mr. Harkin). Without objection, it is so ordered. 123

Howell Heflin

Unknown
Mr. President, we have been working all day long to reach accommodating language for various Senators that have had differences on amendments that were before us. We have reached accommodation on a number of amendments, and so we will go forward at this time. 125

Howell Heflin

Unknown
On behalf of Senator Johnston and Senator Breaux, I send an amendment to the desk and ask for its immediate consideration. 128

The Presiding Officer

Unknown
The PRESIDING OFFICER. 130

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 135

The Presiding Officer

Unknown
The PRESIDING OFFICER. 137

J. Bennett Johnston

Unknown
Mr. President, today we are considering legislation which streamlines one of the most litigated sections of the United States Code. The amendment that I am offering will expand this legislation to clarify a section of the Bankruptcy Code which has had a chilling effect on the extension of credit to agriculture producers and caused great concern among agriculture lenders who have been impacted by section 522(d) of title 11 of the United States Code. 149

J. Bennett Johnston

Unknown
As a result of various exemptions set forth in the Federal Bankruptcy Code, some States, including Louisiana, have chosen to opt out of the Federal exemption format under section 522(d) and create their own list of exemptions from seizure in bankruptcy cases. Thus, when a debtor files for bankruptcy he or she can avoid certain liens if they affect property that is exempt under State statutes. The purpose of these exemptions is to protect the debtor and his family from being reduced by financial misfortune to absolute want and becoming a public charge. 150

J. Bennett Johnston

Unknown
The exemptions provided by States like Louisiana have not been a problem until recent rulings on a new line of bankruptcy cases which have allowed debtors in bankruptcy to avoid liens and security interest affecting property which is exempt from seizure, generally including collateral consisting of the tools of the trade by which the debtor earns his or her living. For example, in Owen v. Owen, 111 S.Ct. 1833 (1991), the court held that since Federal law determines the availability of lien avoidance, the State may not "opt out" of the lien avoidance provision of section 522(f) regardless of a State exemption, giving the debtor the opportunity to avoid the security interest irrespective of a possible waiver within the security document itself of the exemption. More recently, a Texas bankruptcy court held that a farmer's statutorily exempt tools of the trade included two John Deere tractors valued at over $47,350 and that the farmer could therefore avoid security interests in them. 151

J. Bennett Johnston

Unknown
Because of this situation, many bankers in rural areas and especially agricultural lenders are restricting credit to farmers who voluntarily want to secure such a loan with farm equipment or other assets construed as tools of the trade. Consequently, this has impacted the availability of needed credit to farmers and raised concerns from the agricultural community in affected States about the overriding weight of possible protection provided under the tools of the trade statutes in the event of a chapter 7 or 12 bankruptcy proceeding. 152

J. Bennett Johnston

Unknown
My amendment would make it clear that in States similar to Louisiana that have opted out of the Federal exemption format under section 522(d) debtors could not avoid the fixing of a lien if the lien is a nonpossessory, non-purchase-money security interest in tools of the trade and the State law prohibits the debtor from avoiding the fixing of the lien. 153

J. Bennett Johnston

Unknown
Mr. President, the Owen decision, in particular, is having a serious impact on the extension of credit to agricultural producers, particularly in those cases where tractors, combines, and other big ticket items form a substantial, if not a majority, portion of a farmer's assets available for collateral purposes. On the other hand, banks are being denied a good loan opportunity based on the financial risks associated with current interpretation of the Federal exemption format under section 522(d). I hope my colleagues will join me in support of this amendment. I ask unanimous consent that the texts of letters from the Louisiana Farm Bureau and Louisiana Bankers Association be printed in the Record. 154

Chuck Grassley

Unknown
Mr. President, in regard to this amendment, I am agreeing to take this amendment. I had concerns about how the original amendment would affect farmers in my State of Iowa. I have discussed with the Senator from Louisiana my concerns without fully knowing the impact of this amendment on that. And he knows I am reserving my right to work on this language further in conference to clarify its intent. 177

Chuck Grassley

Unknown
I appreciate Senator Johnston's efforts that he has already taken to narrow his original amendment. So I do accept the amendment at this point in time. 178

Howell Heflin

Unknown
I urge the amendment be agreed to. 180

The Presiding Officer

Unknown
The PRESIDING OFFICER. 182

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 186

Chuck Grassley

Unknown
I move to lay that motion on the table. 188

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 189

Howell Heflin

Unknown
Mr. President, I send an amendment to the desk by Senator Bryan, dealing with matters pertaining to money, property, services obtained by false pretenses, false representation or fraud, and ask for its immediate consideration. 192

The Presiding Officer

Unknown
The PRESIDING OFFICER. 194

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 199

The Presiding Officer

Unknown
The PRESIDING OFFICER. 201

Howell Heflin

Unknown
I urge adoption of the amendment. 213

The Presiding Officer

Unknown
The PRESIDING OFFICER. 215

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 219

Howell Heflin

Unknown
Mr. GRASSLEY I move to lay that motion on the table. 220

Howell Heflin

Unknown
The motion to lay on the table was agreed to. 221

Howell Heflin

Unknown
Mr. President, I send to the desk an amendment by Senator Feinstein dealing with the matter of recommendations by the judicial conference for the appointment of bankruptcy judges and ask for its immediate consideration. 224

The Presiding Officer

Unknown
The PRESIDING OFFICER. 226

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 231

The Presiding Officer

Unknown
The PRESIDING OFFICER. 233

Dianne Feinstein

Unknown
Mr. President, I want to first thank the managers of this complex and comprehensive legislation for their courtesy and cooperation in accepting my amendment, which will assist Congress in accurately determining how and where to meet the judgeship needs of the Nation's bankruptcy courts. 245

Dianne Feinstein

Unknown
Under current law, Mr. President, the Judicial Conference of the United States is required to conduct what is called a biennial survey every 2 years to determine the continuing need for bankruptcy judges in every judicial district in America. The data collected forms the basis of recommendations that the statute requires the Conference to make to Congress as to how many judges are needed, and where they should preside. 246

Dianne Feinstein

Unknown
Congress is not bound to follow the Conference's advice. The Conference's suggestions are intended, however, to keep judicial caseloads -- and, therefore, bankruptcy processing times -- at or near an acceptable level set by the Conference. 247

Dianne Feinstein

Unknown
This is no easy task, Mr. President, and I commend the Conference for the efforts that it has made in the past to expedite bankruptcy cases for both debtors and creditors. Such speed serves all who come into contact with the court system and is a stabilizing force in our economy at large. 248

Dianne Feinstein

Unknown
In recent years, however, the Judicial Conference's recommendations have left several judicial districts across the country -- including California's four districts -- short of the number of judges needed to achieve the caseload targets established by the Conference itself. 249

Dianne Feinstein

Unknown
My amendment is intended, Mr. President, to strike a balance between the deference owed by Congress to the Judiciary in operating the Nation's courts and the pressing need in California and many other States to obtain adequate judicial resources. To that end, it would modify title 28 of the United States Code at section 152(b)(3) to: First, require that, if the Judicial Conference recommends that Congress create fewer judgeships in a given district than its biennial survey finds to be actually needed to establish normal caseloads, the Conference must disclose that fact and its calculation methods to Congress and quantify the degree to which the district is being understaffed; and second, require the Conference to recommend to Congress an adequate number of judges to meet the needs of any district whose needs were not satisfied by the conference's previous recommendations. 250

Dianne Feinstein

Unknown
My amendment does not -- I hasten to add -- create new judgeships, modify any existing judgeships, affect the Conference's discretion to conduct its biennial survey in the manner it thinks best, or change the target caseload used by the Conference to make its recommendations. Accordingly, Mr. President, I believe that it is both budget- and deficit-neutral. 251

Dianne Feinstein

Unknown
In conclusion, Mr. President, I want to again thank the managers of the bill and the Judicial Conference for its hard work in the past. As a member of the Appropriations Committee, I look forward to working with all three in the future to provide America's bankruptcy courts with the resources that they -- and the public -- so seriously need. 252

Howell Heflin

Unknown
I urge passage of the amendment. 254

The Presiding Officer

Unknown
The PRESIDING OFFICER. 256

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 260

Chuck Grassley

Unknown
I move to lay that motion on the table. 262

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 263

Howell Heflin

Unknown
Mr. President, I send an amendment to the desk by Senator Metzenbaum, dealing with professional fees in regard to bankruptcies, and ask for its immediate consideration. 266

The Presiding Officer

Unknown
The PRESIDING OFFICER. 268

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 273

The Presiding Officer

Unknown
The PRESIDING OFFICER. 275

Howell Heflin

Unknown
I urge adoption of the amendment. 290

The Presiding Officer

Unknown
The PRESIDING OFFICER. 292

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 296

Chuck Grassley

Unknown
I move to lay that motion on the table. 298

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 299

Howell Heflin

Unknown
Mr. President, I send an amendment to the desk by Senator Metzenbaum dealing with clarifying the effect of conversion of a case under chapter 13 to another chapter and I ask for its immediate consideration. 302

The Presiding Officer

Unknown
The PRESIDING OFFICER. 304

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 309

The Presiding Officer

Unknown
The PRESIDING OFFICER. 311

Howell Heflin

Unknown
I urge adoption of the amendment. 320

The Presiding Officer

Unknown
The PRESIDING OFFICER. 322

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 326

Chuck Grassley

Unknown
I move to lay that motion on the table. 328

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 329

Howell Heflin

Unknown
Mr. President, I send an amendment by Senator Metzenbaum to the desk which amends section 525 of title 11 to prohibit denial of a student grant or loan on the grounds that the loan applicant has been a debtor in a bankruptcy proceeding and ask for its immediate consideration. 332

The Presiding Officer

Unknown
The PRESIDING OFFICER. 334

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 339

The Presiding Officer

Unknown
The PRESIDING OFFICER. 341

Howard Metzenbaum

Unknown
Mr. President, the Bankruptcy Code, section 525, prohibits governmental units from discriminating against a person because of a prior bankruptcy or discharge of a debt. Specifically, the code provides that a governmental unit may not discriminate in cases of a "license, permit, charter, franchise, or other similar grant" because of a prior bankruptcy. Some courts have construed this provision very narrowly. For example, if a person has filed for bankruptcy and later applies for a Government-sponsored student loan, some courts have upheld the denial of the loan because the Bankruptcy Code does not specifically mention student loans as a category in which the Government may not discriminate. This interpretation seriously undermines the fresh start that section 525 was meant to ensure. It also may prevent a person from going back to school. 355

Howard Metzenbaum

Unknown
The Metzenbaum amendment would specifically list student grants and/ or loans as an area in which the Government may not discriminate. Under current law, most student loans cannot be discharged in bankruptcy. This amendment will not change that law. 356

Howell Heflin

Unknown
I urge adoption of the amendment. 358

The Presiding Officer

Unknown
The PRESIDING OFFICER. 360

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 364

Chuck Grassley

Unknown
I move to lay that motion on the table. 366

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 367

Howell Heflin

Unknown
Mr. President, I send an amendment to the desk by Senator Simpson, for himself, Mr. Wallop, Mr. Brown, Mr. Breaux, Mrs. Hutchison, and Mr. Johnston, and ask for its immediate consideration. 370

The Presiding Officer

Unknown
The PRESIDING OFFICER. 372

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 377

The Presiding Officer

Unknown
The PRESIDING OFFICER. 379

Alan Simpson

Unknown
Mr. President, this is an amendment to the Bankruptcy Code which is similar to another amendment that I offered last year to the energy bill and which was enacted into law during the 102d Congress. 388

Alan Simpson

Unknown
This amendment will exclude interests owned in oil and gas production from bankruptcy proceedings. It is important to note, however, that the interest in production that is excluded from bankruptcy is not owned by the debtor. Any debtor-owned production is still available to the court to satisfy claims of creditors. The interest being protected by my amendment is referred to in the industry as a "production payment". 389

Alan Simpson

Unknown
I would take just a moment to describe what a production payment is and how it comes into existence, so my colleagues will understand how necessary and fair this amendment is. 390

Alan Simpson

Unknown
There are instances when owners of a right to drill for and to produce oil or gas cannot afford to drill the well themselves. Drilling an oil or gas well often costs millions of dollars. It is a high risk venture, and there is no guarantee that production will be established after undertaking that phenomenal expense. 391

Alan Simpson

Unknown
Companies that purchase the product, of course, have an interest in seeing oil and gas wells being drilled. The production is the "life blood" of their business and they often are willing to share in the expense of drilling in return for a share in production. When the companies involved enter into an agreement to share in the risk of exploration in the hope of obtaining a share in production, a contract is signed where, in return for providing capital -- money -- for drilling a well, the funds are repaid not in cash, but in the form of oil or gas produced from the well. That share of production is a "production payment". Simply stated, it is a payment of oil or gas in lieu of cash. 392

Alan Simpson

Unknown
The production payment extends for a limited term -- and likely for a term shorter than the life of production from the specific well. The term of payment in production is a part of the contract the parties enter into at the beginning of the venture. 393

Alan Simpson

Unknown
In some cases, Mr. President, one of the parties subsequently must declare bankruptcy. In these days of declining oil prices and increased imports, that is becoming more of a concern. If the entity that drilled the well and established production is later forced into bankruptcy, the payments owed to the partner in the venture -- the production payments -- could be taken over to satisfy the claims of other creditors. 394

Alan Simpson

Unknown
Such a result would be grossly unfair. The owner of a production payment is a blameless party in the bankruptcy. The production payment owner shared in the risk of drilling the well and is entitled to have that debt repaid. Therefore, my amendment would allow for this by excluding these interests from bankruptcy proceedings. 395

Alan Simpson

Unknown
Other creditors also stand to benefit from the passage of this amendment. If production is maintained to satisfy the obligation due the owner of the production payment, excess production will continue to be sold as well. The proceeds from those sales will be available to satisfy other creditors' claims. Even though the other creditors likely had no part in drilling a particular well, there will be an additional cash stream maintained into the debtor's estate to satisfy their claims, too. 396

Alan Simpson

Unknown
I have been working closely with my distinguished colleagues on the Judiciary Committee, Senators Heflin and Grassley, on this amendment since they first reintroduced their legislation in the 103d Congress. Through their able assistance, we have refined and simplified this amendment to accomplish its narrow purpose: to protect innocent non- debtor owners of oil and gas production and to do so at no loss to other creditors. We have accomplished that goal and I am most appreciative of their hard work and that of their fine staff. 397

Alan Simpson

Unknown
I would mention one modification that is particularly relevant. Senator Grassley had suggested that without clarification, some would believe that this exclusion of production payments, also known as an "overriding royalty", would cause some to believe all royalties are being excluded. So we made that distinction in the definitional section: A production payment is not a gross royalty. The term "gross royalty" is not commonly used in the oil and gas industry, but is rather a general term in property law. We made that change to be absolutely clear that we are addressing a specific and unique class of "royalties". 398

Alan Simpson

Unknown
Mr. President, I am informed that the managers of the legislation now pending are prepared to accept this amendment and I would yield the floor. 399

Howell Heflin

Unknown
I urge adoption of the amendment. 401

The Presiding Officer

Unknown
The PRESIDING OFFICER. 403

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 407

Chuck Grassley

Unknown
I move to lay that motion on the table. 409

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 410

Howell Heflin

Unknown
Mr. President, I send an amendment to the desk by Senator Metzenbaum dealing with tax assessments, and ask for its immediate consideration. 413

The Presiding Officer

Unknown
The PRESIDING OFFICER. 415

Howell Heflin

Unknown
Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. 420

The Presiding Officer

Unknown
The PRESIDING OFFICER. 422

Howard Metzenbaum

Unknown
Mr. President, in current S. 540, there is a provision -- tax administration, section 115, tax assessment -- that would allow the assessment of uncontested or agreed upon prepetition tax liabilities. While of some assistance to the Internal Revenue Service, the provision does not cover taxes that may not require a return or those that do not involve the deficiency procedures of the Internal Revenue Code such as excise taxes and employment taxes. The amendment proposed would extend the ability of the Service to make assessments with regard to all taxes that it administers. 428

Howard Metzenbaum

Unknown
Under the proposal, the Service would still be prohibited from taking steps to collect the tax. It would simply be allowed to make an assessment and send the first bill notifying the taxpayers of the liability. 429

Howard Metzenbaum

Unknown
In addition, the restrictions on assessment contained in the Internal Revenue Code will continue in full force and effect. The proposal would not allow the Service to assess a deficiency in income taxes while the stay is in effect until either the automatic stay is lifted, the Bankruptcy Court determines the liability, or the Bankruptcy Court allows the Tax Court to continue the proceeding. The proposal is consistent with a recommendation made by the General Accounting Office. (See GGD 83-47, June 20, 1983.) Because there has been concern expressed that somehow the Service might get an advantage because of its lien under Internal Revenue Code if it is allowed to assess during bankruptcy, the provision provides that any lien arising by operation of the Internal Revenue Code does not take effect until after property is no longer part of the bankruptcy estate. This is consistent with the Internal Revenue Service's position that it seeks no advantage over other creditors by being allowed to assess taxes during the pendency of a bankruptcy. 430

Howell Heflin

Unknown
I urge adoption of the amendment. 432

The Presiding Officer

Unknown
The PRESIDING OFFICER. 434

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote. 438

Chuck Grassley

Unknown
I move to lay that motion on the table. 440

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 441

Howell Heflin

Unknown
Mr. President, I send to the desk an amendment on behalf of Senator Metzenbaum dealing with the consumer rent-to-own contracts as being treated as secured purchase contracts. 444

The Presiding Officer

Unknown
The PRESIDING OFFICER. 446

Howard Metzenbaum

Unknown
Mr. President, this amendment resolves the debate over how rent-to-own contracts should be treated in bankruptcy cases. 467

Howard Metzenbaum

Unknown
Rent-to-own agreements are consumer transactions in which consumers agree to make weekly payments for appliances or furniture with the promise of owning them after a period of time. The rent-to-own companies attempt to avoid credit sales and usury laws by writing the agreements as leases, terminable by the consumer at any time. Typically the consumers pay many times the true value of the property under these agreements, amounts which the Pennsylvania attorney general has found to be the equivalent of 100-200 percent in interest. 468

Howard Metzenbaum

Unknown
Consumers have argued that these agreements should be treated as credit sales in bankruptcy and many courts have agreed that this is correct. If the transaction is treated as a sale for purposes of bankruptcy, the consumer is treated like any other purchaser of goods on credit, and may keep possession of the goods by paying to the creditor the lesser of the balance of the contract or the property's current value, the same amount the creditor would realize if the goods were repossessed. In a chapter 7 case, this payment is normally in a lump sum. In a chapter 13 case it is made under the chapter 13 plan, with interest -- at a fair rate -- added. 469

Howard Metzenbaum

Unknown
However, other courts have ruled that to keep their appliances, consumers must pay the entire remaining balance of the rent-to-own contract, which is usually many times what the property is worth, and a burden that makes it more difficult for the debtor to pay basic living expenses and pay other creditors. 470

Howard Metzenbaum

Unknown
A clear treatment of these transactions in the bankruptcy code would promote uniformity and end litigation on these issues. It would also serve the goals of consumer protection by limiting the effects of these unfair and overreaching contracts. 471

Howard Metzenbaum

Unknown
This amendment would clarify the law in a way that treats debtors with rent-to-own contracts in the same way the bankruptcy code treats those with installment sale contracts. It preserves for the rent-to-own dealer the right to receive either a return of the property in question or its fair market value and at the same time ensures that the debtor gets the fresh start bankruptcy is intended to provide. 472

Chuck Grassley

Unknown
Mr. President, even though we are going to move forward with this amendment, I want to make the point that I believe that this amendment is not the right amendment. I am opposed to it at this point. 474

Chuck Grassley

Unknown
I am going to take the amendment now in the interest of moving this bill forward. I will work with Senator Metzenbaum on this issue, but I reserve my right to oppose this amendment in conference. 475

Chuck Grassley

Unknown
I also note that the Banking Committee will hold hearings on the rent-to-own subject next month which may lead to a more acceptable resolution of this issue. 476

Howell Heflin

Unknown
I send to the desk at this time a statement on behalf of Senator Metzenbaum and ask that it appear in the Record as if read in full. 478

The Presiding Officer

Unknown
The PRESIDING OFFICER. 480

Howell Heflin

Unknown
Mr. President, I have some reservation on this rent-to- own matter, too. We will work in conference to try to improve this with the House relative to this matter. 482

Howell Heflin

Unknown
I urge the adoption of the amendment. 483

The Presiding Officer

Unknown
The PRESIDING OFFICER. 485

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote by which the amendment was agreed to. 489

Chuck Grassley

Unknown
I move to lay that motion on the table. 491

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 492

Howell Heflin

Unknown
Mr. President, I send to the desk an amendment on behalf of Senator Metzenbaum dealing with lein avoidance, which we have considered and several changes have been made pertaining to it. But I think it is now agreeable to the Senators who are interested in it. 495

The Presiding Officer

Unknown
The PRESIDING OFFICER. 497

Howell Heflin

Unknown
Mr. President, I urge the adoption of the amendment. 515

The Presiding Officer

Unknown
The PRESIDING OFFICER. 517

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote by which the amendment was agreed to. 521

Chuck Grassley

Unknown
I move to lay that motion on the table. 523

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 524

Howell Heflin

Unknown
Mr. President, I send to the desk an amendment on behalf of Senator Metzenbaum dealing with fraud in bankruptcy proceedings and to add provisions to combat bankruptcy fraud. 527

The Presiding Officer

Unknown
The PRESIDING OFFICER. 529

Chuck Grassley

Unknown
Mr. President, this amendment is also in the crime bill. I just want to point that out to Members of the body. This will be passing the Senate twice in a recent period of time. 558

Howell Heflin

Unknown
Mr. President, I urge the adoption of the amendment. 560

The Presiding Officer

Unknown
The PRESIDING OFFICER. 562

Howell Heflin

Unknown
Mr. President, I move to reconsider the vote by which the amendment was agreed to. 566

Chuck Grassley

Unknown
I move to lay that motion on the table. 568

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 569

Chuck Grassley

Unknown
Mr. HATCH addressed the Chair. 570

The Presiding Officer

Unknown
The PRESIDING OFFICER. 572

Orrin G. Hatch

Unknown
Mr. President, I send an amendment to the desk and ask for its immediate consideration. 575

The Presiding Officer

Unknown
The PRESIDING OFFICER. 577

Orrin G. Hatch

Unknown
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with. 582

The Presiding Officer

Unknown
The PRESIDING OFFICER. 584

Orrin G. Hatch

Unknown
Mr. President, I understand my colleagues will accept this amendment. I want to thank them for accepting this technical amendment, and I also appreciate Senator Kohl's efforts to work this out. So as far as I know, it will be accepted. 590

Howell Heflin

Unknown
Mr. President, this is the amendment dealing with shopping centers. I do not think there was ever any disagreement on this. I think this is one everybody agrees with. 592

The Presiding Officer

Unknown
The PRESIDING OFFICER. 594

Orrin G. Hatch

Unknown
Mr. President, I move to reconsider the vote by which the amendment was agreed to. 598

Chuck Grassley

Unknown
I move to lay that motion on the table. 600

Chuck Grassley

Unknown
The motion to lay on the table was agreed to. 601

Orrin G. Hatch

Unknown
Mr. President, I send an amendment to the desk and ask for its immediate consideration. 604

The Presiding Officer

Unknown
The PRESIDING OFFICER. 606

Orrin G. Hatch

Unknown
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with. 611

The Presiding Officer

Unknown
The PRESIDING OFFICER. 613

Orrin G. Hatch

Unknown
Mr. President, I understand the managers have agreed to accept my amendment to strike section 220. I really wish to extend my thanks to the managers, Senator Heflin and Senator Grassley, for their cooperation and assistance. 618

Orrin G. Hatch

Unknown
I would also like to thank Senator Metzenbaum for his efforts and cooperation to resolve this matter, because I believe that this amendment -- the motion to strike -- is in the best interest of retirees and employees. 619

Orrin G. Hatch

Unknown
I also would like to thank Senator Helms for his assistance and also, in particular, I would like to take just a second and thank the distinguished Senator from Alabama [Mr. Heflin], and the distinguished Senator from Iowa [Mr. Grassley], for the marvelous way in which they have handled this bill from beginning to end. They have done a tremendous job in committee and on the floor. I have tremendous respect for both of them. So I just want them both to know that. 620

Orrin G. Hatch

Unknown
This whole S. 540, the bankruptcy bill, is long overdue and these two Senators have really worked hard to do it. 621

Orrin G. Hatch

Unknown
Having thanked all of those people, I urge the adoption of the amendment. 622

Orrin G. Hatch

Unknown
Mr. METZENBAUM addressed the Chair. 623

The Presiding Officer

Unknown
The PRESIDING OFFICER. 625

Howard Metzenbaum

Unknown
Mr. President, I rise not in opposition to the amendment of the Senator from Utah, but rather to address myself to this particular subject and the conduct of some lobbyists who have been working the halls of the Senate. 627

Howard Metzenbaum

Unknown
It has nothing at all to do with my colleague from Utah. It does have to do with the Bankers Association. 628

Howard Metzenbaum

Unknown
This is an amendment that has to do with the question of whether or not retirees will be protected when a company is in bankruptcy and when a bank is making a loan to that particular company that is in bankruptcy. It is a subject that has been one of some travail, some concern. And this Senator, in cooperation with the Senator from South Carolina [Mr. Thurmond], some years ago was able to protect the interests of the retirees in connection with the LTV Steel Co. 629

Howard Metzenbaum

Unknown