Floor Statement of Senator Barack Obama on S.256, the Bankruptcy Abuse and Prevention Act of 2005

February 28, 2005

Mr. President, I have come to the floor today to address this pending legislation.

This issue should force us to face a fundamental question about who we are as a country, how we progress as a society, and where our values lie as a people:

How do we treat our fellow Americans who have fallen on hard times, and what is our responsibility to cushion those falls when they occur?

Proponents claim this bill is designed to curb the worst abuses of our bankruptcy system. That's a worthy goal, and we can all agree that bankruptcy was never meant to serve as a Get Out of Jail Free Card, for use when you've foolishly gambled away all your savings and don't feel like taking responsibility for your actions. Business owners and creditors deserve the money they're owed, and anyone who tries to scam the system just because they can should be stopped and forced to pay their debt.

But to accomplish that, this bill would take us from a system where judges weed out the abusers from the honest to a system where all the honest are presumed to be abusers. Where declaring Chapter 7 bankruptcy is made prohibitively expensive for people who already have suffered financial devastation. With this bill, it doesn't matter if you ran up your debt on a trip to Vegas or a trip to the Emergency Room, you're still treated the same under the law and you still face the possibility that you'll never get the chance to start over.

Now, it would be one thing if most people were abusing the system and falling into bankruptcy because they were irresponsible with their finances. But we know that's not the case. We know that most people fall into bankruptcy as a result of bad luck. And we know that a recent Harvard study showed that nearly half of all bankruptcies occur because of an illness that ends up sticking families with medical bills they just can't keep up with.

Take the case of Suzanne Gibbons. A few years back, Suzanne had a good job as a nurse and a home on Chicago's Northwest Side. Then she suffered a stroke that left her hospitalized for five-days. And even though she had health insurance through her job, it only covered $4,000 of her $53,000 hospital bill.

Because of her illness, she was soon forced to leave her full-time nursing job and take a temp job that paid less and didn't offer health insurance. Then the collection agencies started coming after her for hospital bills that she just couldn't keep up with. She lost her retirement savings, she lost her house, and eventually, she was forced to declare bankruptcy.

If this bill passes as written, Suzanne would be treated by the law the same as any scam artist who cheats the system. The decision about whether or not she can file for Chapter 7 bankruptcy would never take into account the fact that she fell into financial despair because of her illness. With all that debt, she would have had to hire a lawyer and pay hundreds of dollars more in increased paperwork. And after all that, she still may have been told that she was ineligible for Chapter 7 bankruptcy.

And so, as much as we'd like to believe that the face of this bankruptcy crisis is credit card addicts who spend their way into debt, the truth is that it's the face of people like Suzanne Gibbons. It's the face of middle-class America. Over the last thirty years bankruptcies have gone up 400% -- and we've had more than 2,100 in Illinois just last year. We also know what else has gone up: the cost of child care and the cost of college, the cost home ownership and the cost of health care - which is now at a record high. People are working harder and longer for less, and they're falling further and further behind.

And we're not talking about the poor or even just the working poor here. As bankruptcy professor Elizabeth Warren has noted, these are middle-class families with two parents who both work at good-paying jobs that put a roof over their heads. They're saving every extra penny they have so that their children can someday do better than they did. But with just one illness, emergency, or divorce, those dreams can be wiped out. This bill does a great job helping the credit card industry recover the profits they're losing, but what are we doing to help middle-class families recover the dreams they're losing?

This bill does a great job protecting credit card companies from the few bad apples who try to escape their debt, but what does it do to protect the American public from the credit card companies who try to take advantage of them?

Mr. President, the bankruptcy crisis this bill should address is not just the one facing credit card companies who are enjoying record profits. We should be addressing middle-class families who are dealing with record hardships.

As Senator Dodd, Senator Feinstein, and others have pointed out, this bill also fails to deal with the aggressive marketing practices and hidden fees credit card companies have used to raise their profits and our debt. Charging a penalty to consumers who make a late payment on a completely unrelated credit card is just one example of these tactics. We need to end these practices so that we're making life easier not just for the credit card companies, but for honest, hardworking middle-class families.

And if we're going to crack down on bankruptcy abuse, we should make it clear that we intend to hold the wealthy and the powerful accountable too. As it is now, this bill makes it easier for a company like Enron who just bilked their employees out of their life savings to declare bankruptcy than for the employees themselves. In my own state, we even had a mining company by the name of Horizon declare bankruptcy and then refuse to pay its employees the health benefits it owed them.

The Mine Workers involved had provided a total of 100,000 years of service and dedication and sacrifice to this company. They spent their lives working hard. They did their part. But Horizon didn't do its part, and it was allowed to hide behind bankruptcy laws to leave these workers without the care they had earned.

This is wrong. It's wrong that this bill would make it harder for these unemployed workers to declare bankruptcy, while doing nothing to prevent the bankrupt company that put them there from shirking its responsibility entirely.

What kind of a message does it send when we tell hardworking, middle-class Americans, "You have to be more responsible with your finances, but the corporations you work for can be as irresponsible as they want with theirs"?

We must reform our bankruptcy code so that corporations keep their promises and meet their obligations to their workers. And while I remain hopeful that our companies want to do the right thing for their workers, doing so should not be a choice - it should be a mandate.

Senator Rockefeller has two amendments to do this that I have co-sponsored and urge my colleagues to support. One would increase the required payments of wages and employee benefit plans to $15,000 per individual from the current level of $4,925. And it would also require companies that emerge from bankruptcy to immediately pay each retiree who lost health benefits an amount of cash equal to what a retiree would be expected to have to pay for COBRA coverage for 18 months. The second amendment would prevent bankruptcy courts from dismissing companies' coal act obligations to pay their workers the benefits they promised them. These companies made a deal to their mine workers, and they should be forced to honor that deal.

Mr. President, this bill gives us a rare chance to ask ourselves who we're here to protect - who we're here to stand up and speak out for. We should curb bankruptcy abuse and to demand a measure of personal responsibility from people. We all want that.

But there are also millions of middle-class families out there who are struggling to get by. They work hard, they love their children, and they're willing to do anything to give them the best possible shot in life. And in the ten minutes since I've been talking, about thirty of them have filed for bankruptcy.

We live in a rapidly changing world with an economy that's moving just as fast. We can't always control this and we can't promise that the changes will always leave everyone better off.

But we can do better than one bankruptcy every nineteen seconds. We can do better than forcing people to choose between the cost of health care and the cost of college. We can do better than big corporations using bankruptcy laws to deny health care and benefits to their employees. And we can give people the basic tools and protections they need to believe that in America, your circumstance is no limit to the success you may achieve and the dreams you may fulfill.

And so, while I cannot support this bill the way it is written, I do look forward to working with my colleagues in amending this bill so that we can still keep that promise alive. Thank you.

John Lewis's 65th Birthday Gala Speech by Senator Barack Obama

February 21, 2005

Thank you. It's an honor to be here tonight to celebrate one of the most courageous and compassionate Americans of our time. Happy Birthday John.

When I was first asked to speak here, I thought to myself, never in a million years would I have guessed that I'd be serving in Congress with John Lewis.

And then I thought, you know, there was once a time when John Lewis might never have guessed that he'd be serving in Congress. And there was a time not long before that when people might never have guessed that someday, African-Americans would be able to go to the polls, pick up a ballot, make their voice heard, and elect that Congress.

But we can, and I'm here, because people like John Lewis believed. Because people like John Lewis feared nothing and risked everything for those beliefs. Because they were willing to spend sleepless nights in lonely jail cells, endure the searing pain of billy clubs cracked against their bones, and face down death simply so that all of us could share equally in the joys of life.

How far we've come because of your courage, John.

How far we've come from the days when the son of sharecroppers would huddle by the radio as the crackle of Dr. King's dreams filled his heart with hope. He was often forced to leave school to work in the fields and the public library was off-limits to his kind, and yet young John Lewis sought knowledge. His parents were never the type to complain or try to stir up any trouble, and yet their son sought justice.

And so he organized, even when so many tried to stop his efforts. He spoke truths, even when they tried to silence his words. And he marched, even when they tried to knock him down again and again and again.

The road John chose for himself was not easy. But the road to change never is.

I think it's simple for us to look back forty years and think that it was all so clear then. That while there may be room for moral ambiguity in the issues we debate today, civil rights was different. That people generally knew what was right and what was wrong, who the good guys and the bad guys were. But the moral certainties we now take for granted - that separate can never be equal, that the blessings of liberty enshrined in our Constitution belong to all of us, that our children should be able to go to school together and play together and grow up together - were anything but certain when John Lewis was a boy.

And so there was struggle and sacrifice, discipline and tremendous courage. And there was the culmination of it all one Sunday afternoon on a bridge in Alabama.

I've often thought about the people on the Edmund Pettus Bridge that day. Not only John and Hosea Williams leading the march, but the hundreds of everyday Americans who left their homes and their churches to join it. Blacks and whites, teenagers and children, teachers and bankers and shopkeepers - a beloved community of God's children ready to stand for freedom.

And I wonder, where did they find that kind of courage? When you're facing row after row of state troopers on horseback armed with billy clubs and tear gas...when they're coming toward you spewing hatred and violence, how do you simply stop, kneel down, and pray to the Lord for salvation? Truly, this is the audacity of hope.

But the most amazing thing of all is that after that day - after John Lewis was beaten within an inch of his life, after people's heads were gashed open and their eyes were burned and they watched their children's innocence literally beaten out of them...after all that, they went back to march again.

They marched again. They crossed the bridge. They awakened a nation's conscience, and not five months later, the Voting Rights Act of 1965 was signed into law.

And so it was, in a story as old as our beginnings and as timeless as our hopes, that change came about because the good people of a great nation willed it so.

Thank you, John, for going back. Thank you for marching again.

Thank you for reminding us that in America, ordinary citizens can somehow find in their hearts the courage to do extraordinary things. That in the face of the fiercest resistance and the most crushing oppression, one voice can be willing to stand up and say that's wrong and this is right and here's why. And say it again. And say it louder. And keep saying it until other voices join the chorus to sing the songs that set us free.

Today, I'm sure you'll all agree that we have songs left to sing and bridges left to cross. And if there's anything we can learn from this living saint sitting beside me, it is that change is never easy, but always possible. That it comes not from violence or militancy or the kind of politics that pits us against each other and plays on our worst fears; but from great discipline and organization, from a strong message of hope, and from the courage to turn against the tide so that the tide eventually may be turned.

Today, we need that courage. We need the courage to say that it's wrong that one out of every five children is born into poverty in the richest country on Earth. And it's right to do whatever necessary to provide our children the care and the education they need to live up to their God-given potential.

It's wrong to tell hardworking families who are earning less and paying more in taxes that we can't do anything to help them buy their own home or send their kids to college or care for them when they're sick. And it's right to expect that if you're willing to work hard in this country of American Dreamers, the sky is the limit on what you can achieve.

It's wrong to tell those brave men and women who are willing to fight and die for this country that when they come home, we may not have room for them at the VA hospitals or the benefits we promised them. And it's right to always provide the very best care for the very best of America.

My friends, we have not come this far as a people and a nation because we believe that we're better off simply fending for ourselves. We are here because we believe that all men are created equal, and that we are all connected to each other as one people. And we need to say that more. And say it again. And keep saying it.

And where will our courage come from to speak these truths? When we stand on our own Edmund Pettus Bridge, what hope will sustain us?

I believe it is the hope of knowing that people like John Lewis have stood on that same bridge and lived to cross it.

For me, this kind of hope often comes from a memory of a trip I took during the campaign. About a week after the primary, Dick Durbin and I embarked on a nineteen city tour of Southern Illinois. And one of the towns we went to was a place called Cairo, which, as many of you might know, achieved a certain notoriety during the late 60s and early 70s as having one of the worst racial climates in the country. You had an active white citizen's council there, you had cross burnings, Jewish families were being harassed, you had segregated schools, race riots, you name it - it was going on in Cairo.

And we're riding down to Cairo and Dick Durbin turns to me and says, "Let me tell you about the first time I went to Cairo. It was about 30 years ago. I was 23 years old and Paul Simon, who was Lieutenant Governor at the time, sent me down there to investigate what could be done to improve the racial climate in Cairo."

And Dick tells me how he diligently goes down there and gets picked up by a local resident who takes him to his motel. And as Dick's getting out of the car, the driver says "excuse me, let me just give you a piece of advice. Don't use the phone in your motel room because the switchboard operator is a member of the white citizen's council, and they'll report on anything you do."

Well, this obviously makes Dick Durbin upset, but he's a brave young man, so he checks in to his room, unpacks his bags and a few minutes later he hears a knock on the door. He opens up the door and there's a guy standing there who just stares at Dick for a second, and then says, "What the hell are you doing here?" and walks away.

Well, now Dick is really feeling concerned and so am I because as he's telling me this story, we're pulling in to Cairo. So I'm wondering what kind of reception we're going to get. And we wind our way through the town and we go past the old courthouse, take a turn and suddenly we're in a big parking lot and about 300 people are standing there. About a fourth of them are black and three fourths are white and they all are about the age where they would have been active participants in the epic struggle that had taken place thirty years earlier.

And as we pull closer, I see something. All of these people are wearing these little buttons that say "Obama for U.S. Senate." And they start smiling. And they start waving. And Dick and I looked at each other and didn't have to say a thing. Because if you told Dick thirty years ago that he - the son of Lithuania immigrants born into very modest means in east St. Louis - would be returning to Cairo as a sitting United States Senator, and that he would have in tow a black guy born in Hawaii with a father from Kenya and a mother from Kansas named Barack Obama, no one would have believed it.

But it happened. And it happened because John Lewis and scores of brave Americans stood on that bridge and lived to cross it.

You know, two weeks after Bloody Sunday, when the march finally reached Montgomery, Martin Luther King Jr. spoke to the crowd of thousands and said "The arc of the moral universe is long, but it bends towards justice." He's right, but you know what? It doesn't bend on its own. It bends because we help it bend that way. Because people like John Lewis and Hosea Williams and Martin Luther King and Coretta Scott King and Rosa Parks and thousands of ordinary Americans with extraordinary courage have helped bend it that way. And as their examples call out to us from across the generations, we continue to progress as a people because they inspire us to take our own two hands and bend that arc. Thank you John. May God Bless you, and may God Bless these United States of America.