Mr. President, we have averted a crisis in the bankruptcy court system. It may have been a quiet crisis – one few Americans talked about – but it was real nonetheless. Although it is all too rare in Washington these days, on this issue, we found a way to work together and deliver a solution. I am proud to say that on May 25, President Obama signed into law legislation I authored to extend 29 expiring temporary bankruptcy judgeships in nineteen judicial districts.
With this new law, some of our nation’s busiest bankruptcy courts, those in Nevada and Delaware and New York and Michigan and Florida and so many other states, will finally be able to replace a sitting bankruptcy judge if he or she resigns or dies in office.
Especially in times of economic recovery and uncertain growth, our bankruptcy courts perform a vital restorative role for our nation’s economy. Bankruptcy courts can give individuals, many of whom are victims of our Great Recession, a clean slate to start fresh. They give corporations that can’t pay their bills an opportunity to restructure their debts and continue in operation, rather than shuttering their offices and factories, multiplying the pain by putting Americans out of work.
Bankruptcy offers relief for creditors, as well, by providing an orderly distribution of the debtor’s estate. Without bankruptcy, the debts of past mistakes, miscalculations, and misfortune will remain on the balance sheets, unpaid and yet unpayable.
Over the past 20 years, Congress has created dozens of temporary bankruptcy judgeships to meet the needs of our growing population and occasional economic downturns. Perhaps these judgeships were created on a temporary, rather than permanent, basis out of some sense of enduring optimism, optimism that we one day will have a significantly smaller need for our bankruptcy courts that we had when they were created. In fact, the caseloads in several of the districts authorized in the past have declined and those judgeships have been allowed to expire. This new law however, is about districts where the caseloads remain high and which cannot afford to lose even a single authorized judgeship.
According to the judges I hear from, as well as from the nonpartisan Judicial Conference of the United States, which is headed by Chief Justice Roberts, these judgeships simply must be reauthorized – and now that the Temporary Bankruptcy Judgeships Extension Act is law, they have been.
This legislation passed the House and Senate unanimously because it is good policy. It is pro-growth, pro-opportunity, and pro-justice. The CBO has scored it to be paid for and it is so bipartisan that it is nonpartisan.
I am grateful for the willingness of my colleagues to compromise and help find a mutually acceptable solution to head off a looming crisis in our bankruptcy courts. The amendment that permitted passage of this legislation is a one-time accommodation that provides additional fee revenue to the Judiciary so that this bill will not lead to increased demands on appropriators. It also reaffirms that Congress, in legislating on these temporary judgeships in the future, ought to do so only after carefully examining their continued need and our ability to pay for them.
I know my colleagues on both sides of the aisle did not get everything that they wanted in this legislation, but my confidence in this institution has been buoyed by the ability of both sides to recognize the greater good at stake and find their way to this deal.
I want to thank Leader Reid, Senator Durbin, Senator Grassley, Senator Coburn, the group of 12 bipartisan cosponsors, and all those who have worked constructively to help enact this very simple and very important law.
In particular, I thank President Obama, for with his signature; we have taken an important step toward delivering to the American people the fair, speedy and accessible bankruptcy court system they deserve.
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