US AND CANADA: Democrats free way for bankruptcy law US LEGISLATION DASCHLE ALLOWS TOUGHER LINE ON DEBTS: By DEBORAH MCGREGOR
In a move sure to please the banking and credit card industries, Senate Democrats are preparing to break the logjam on a sweeping overhaul of bankruptcy law.
For months the bankruptcy overhaul has been stuck in a procedural swamp, after passing both the House and Senate earlier this year. The legislation, the most ambitious reform in 20 years, would make it harder for people to wipe out their debts in bankruptcy court.
But now, in a move closely watched by business lobbyists, Tom Daschle, the Democratic leader of the Senate, is signalling his determination to see the legislation proceed. The Senate procedures that will allow that to happen are expected to play out over the next few days, setting up a long-delayed House-Senate conference where a compromise version of the bill will be hammered out.
President George W. Bush said long ago he would sign the legislation once it reached his desk.
The legislation has been stalled by bickering between the parties over the rules of engagement for conference committees when the Senate was evenly split between Democrats and Republicans. But with Democrats now in charge, the dynamic has changed. Ironically the legislation was more popular with Republicans, but it is now the Democratic leader in the Senate who is greasing the legislative wheels to allow it to move forward.
Mr Daschle's decision provides important clues both about the new majority leader's style of operating and his willingness to confront the liberal wing of the Democratic party, which had sought to block progress on the bankruptcy bill on the grounds that it was unduly harsh on people trying to rid themselves of debt.
Mr Daschle has essentially sided with the banking, credit card and retail credit companies that have lobbied hard for the legislation.
Notwithstanding the fact that most Senate Democrats voted for the legislation in March, there remained strong opposition to it in party circles. Former president Bill Clinton had blocked the legislation when he was in office, saying it made it too hard on people struggling to rearrange their finances.
When Democrats gained control of the Senate last month it gave many opponents of the bill new hope that they might be able to kill it. Leading the way was liberal Democratic Senator Paul Wellstone of Minnesota, who redoubled his efforts to block the bill's advancement.
But this week Mr Daschle tipped the scales against the Wellstone forces by quietly selecting Joseph Biden, a Delaware Democrat who strongly supports the legislation, to sit on the House-Senate conference committee.
In so doing Mr Daschle sent a reassuring signal to the pro-business elements in his own party and to the business community in general. The bankruptcy legislation had been supported by the Democratic Leadership Council, the centrist conscience of the party.
Citigroup, a leading backer of the legislation, is a big employer in Mr Daschle's home state of South Dakota.
Of course, the bankruptcy conferees must still iron out their differences and come up with a final version acceptable to all. Indeed, the main lesson for those struggling to understand the new political dynamic in Washington may be that things could wind up less changed than one might have thought.
As one business lobbyist put it: "When you get right down to it, the agenda has changed with the Senate Democrats in power. But the end result could turn out to be much the same - a lot of good old gridlock