House Passes Bankruptcy Bill- Majority of Dems vote No

Nathan Newman nathan at newman.org
Thu Mar 1 15:53:40 PST 2001


House passed bankruptcy bill 306-108 Thursday with all Republicans voting Yes.

93 Dems voted yes and 107 Dems plus Sanders voted No.

Too bad Clinton is not there to veto it any more.

AP WASHINGTON (AP) -- Legislation making it harder for people to use bankruptcy to get out of credit-card debts began a speeded-up journey back to the White House on Thursday.

Vetoed late last year by then-President Clinton, bankruptcy overhaul was the first major bill to come to a vote in the new Congress. The House voted 306-108 for it Thursday, with majority Republicans solidly in support and Democrats split.

An expectation that President Bush will sign the measure has boosted momentum for passage of the most sweeping overhaul of bankruptcy laws in 20 years. It zoomed through the House drafting process despite new government data that shows personal bankruptcies have declined in recent years.

The legislation's progress has been only slightly slower in the Senate, where the two parties have a 50-50 split, and Democrats recently blocked a GOP effort to rush it through. The Senate Judiciary Committee voted Wednesday, 10-8, to approve a parallel bill and send it to the full Senate, which may vote next week.

Some Democratic opponents criticized the House's priorities, saying campaign finance reform, prescription drug coverage for seniors or minimum wage increases should be more pressing.

The legislation has been pushed by the banking and retail credit industries, with donations to federal candidates and the political parties from finance and credit card companies totaling $9.2 million during the 2000 election cycle. Consumer groups, unions and groups representing women and children oppose the measure.

Bush's biggest donor during his campaign was MBNA Corp., one of the world's largest credit card companies. MBNA gave $237,675 to Bush's presidential campaign, making it his largest individual contributor, according to the Center for Responsive Politics, a nonpartisan research group that studies campaign finance.

Ed Mierzwinski, consumer program director for Public Interest Research Group, called the bankruptcy legislation ``a poster child for campaign finance reform.''

``The House gave the extremely profitable credit card industry a strong victory today,'' he said.

The bankruptcy bill was passed overwhelmingly last year, then was vetoed in December by Clinton on grounds it would hurt ordinary people and working families who fall on hard times.

Supporters of the legislation contend it is needed to stem a tide of bankruptcy filings and abuse of the court system. They say bankruptcy abuse creates a hidden tax of about $400 a year on every American family through higher interest rates passed on by consumer credit businesses and other charges.

The legislation ``strikes the proper balance'' between debtors and creditors, Rep. Dave Weldon, R-Fla., said in debate before the vote. ``It is a good bill and it protects consumers,'' Weldon said.

Said Rep. James Sensenbrenner, R-Wis., chairman of the House Judiciary Committee: ``Bankruptcy should never be an item of financial planning.''

Democratic opponents maintained it would hurt families hit by job losses, catastrophic medical expenses or other unforeseeable hardships that push them over the edge financially, especially amid the economic slowdown that has made layoffs frequent.

Some Democrats also said the measure would make thousands of mothers and children owed support by bankrupt fathers take a back seat to credit card companies in collecting the money.

``The American people should know that a debtor can live in a mansion in Florida worth millions ... and not worry,'' said Rep. William Delahunt, D-Mass. But, he added, ``If you are barely making it, ... woe is you: Those credit card companies will be able to chase you forever.''

``Every fair-minded American should find this offensive and unconscionable,'' Delahunt declared.

New data by the Administrative Office of the U.S. Courts show that personal bankruptcy filings fell from a peak of about 1.4 million in 1998 to 1.3 million in 1999 and to 1.2 million last year.

Opponents of the legislation have cited the decline in filings as lessening the need for a bill.

Foes also criticize what they say are aggressive credit card solicitations through the mail, which reached 2.51 billion by the end of last year's third quarter, according to industry figures. Total credit extended on card accounts jumped 13 percent to $2.9 trillion in the third quarter of 2000 from a year earlier.

In a related move Wednesday, the House overwhelmingly passed a bill to allow farmers filing for bankruptcy to continue to receive special protection so they would not have to sell their equipment.

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The bills are H.R. 333 and S. 220.

On the Net: Legislation texts: http://thomas.loc.gov



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