National Guard and Reservists Debt Relief Act of 2008

Floor Speech

NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008 -- (House of Representatives - October 02, 2008)

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Ms. SCHAKOWSKY. I thank the gentleman for yielding to me and for his support on this legislation.

I rise to proudly support S. 3197, the National Guard and Reservists Debt Relief Act. This legislation is the Senate companion to H.R. 4044, legislation that I authored, along with my friend and colleague, Congressman DANA ROHRABACHER, which passed the House unanimously on June 23. S. 3197 was introduced by my very good friend and colleague from Illinois, Senator DICK DURBIN.

Since 9/11, more than 460,000 Reservists and Guardsmen have been called to active duty in Iraq and Afghanistan. These men and women have left their families and their jobs to selflessly serve their country, often with little or no notice to get their finances in order. Many servicemembers are small business owners who have to put their businesses on hold while they serve their country, and some are forced to sacrifice those businesses altogether. And, of course, some may face losing their homes when they return because of their financial distress.

Many servicemembers face unexpected extended tours of 15 months or longer, leaving them with almost no way to prepare financially.

S. 3197 would simply allow National Guard and Reservists to file for bankruptcy without the burden of the means test that assesses their eligibility for bankruptcy protection. H.R. 4044 allows members of the National Guard and Reservists to file for chapter

7 bankruptcy without the added paperwork burden and obstacles of the means test.

This is why: when veterans face the means test, it has a particularly adverse impact on them. That is because the combat pay of soldiers in Iraq or Afghanistan is often higher than their salaries at home, and they have fewer expenses overseas, if any. The problem is when they return home, these individuals return to face lower incomes and higher expenses, and because the means test factors in a person's income and expenses for the 6-month period preceding the bankruptcy filing, a veteran's income is artificially inflated and their expenses seem disproportionately low. As a result, they risk failing the means test and facing chapter 11 or 13.

This bill is narrowly drafted to apply to servicemembers who have served in the Armed Forces for more than 90 days since 9/11 and would grant them an exemption from the test for up to a year and a half after they return home. The legislation also requires a GAO report that will help us quantify the hardships our veterans face when they return home by tracking how many apply for bankruptcy protection.

With unemployment at the highest levels in 7 years and the credit crisis and recession squeezing the budgets of families across the country, we must give these returning heroes any relief we can. Eighteen percent of veterans recently back from tours of duty are unemployed. Twenty-five percent of those who have been able to find work earn less than $22,000 a year. There are currently 1,500 veterans of the wars in Iraq and Afghanistan who are homeless. And thousands of veterans return from the war with physical and mental injuries which make returning to work difficult or impossible. We should all be outraged at those statistics.

Simply put, the men and women who have risked their lives to protect us deserve protection from us in return. These selfless individuals should not face harsh bankruptcy procedure if they are in financial distress when they return home. When the changes to the bankruptcy law were made in 2005, Congress exempted disabled veterans from the means test. It is time to include the Guard and Reserves as well.

The legislation that we're considering once again today is virtually identical to the one we passed unanimously, with minor, five-word, technical, clarifying corrections added during consideration in the Senate Judiciary Committee; and like H.R. 4044, the bill passed the Senate with unanimous support. I urge its support in the House once again today so we can send it to the President for his signature.

I'd like to thank Chairman Conyers, again, for working with me to pass this legislation, as well as Subcommittee Chairwoman LINDA SÁNCHEZ for her commitment to this bill. And I want to thank the staff on both sides of the aisle who helped, particularly my legislative director, Daniel Penchina. And, again, I thank my colleague, Congressman Rohrabacher, who has been a formidable and effective partner in moving this legislation through the House this year.

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