Effort to Change Chapter 7 Is Blocked by Vote in House Bankruptcy Bill Surprisingly Fails Over Obscure Abortion Provision
By TOM HAMBURGER and SHAILAGH MURRAY Staff Reporters of THE WALL STREET JOURNAL
WASHINGTON -- Angered by language targeting antiabortion protesters, Christian conservatives engineered a surprise defeat of legislation making it harder to declare bankruptcy -- a bill that has been a prime goal of business lobbyists for six years.
The House refused to allow the bill, a compromise that resulted from arduous negotiations with the Senate, to come to a final vote. Instead it was halted by a procedural vote of 243 to 172, with 87 Republicans and 155 Democrats opposing the measure. Labor unions and liberals also fought against the bill, calling it too tough on debtors.
Congressional leaders had expected the bill to pass the House easily Thursday and the Senate as early as Friday. Some supporters refused to give up Thursday night, unsuccessfully urging GOP leaders to strip out the abortion provision and bring the bill back to the floor. There also was talk of reviving the bill next year, when the Republicans will control both chambers, but advocates of the abortion provision made clear that any bill that doesn't include it would be a tough sell in the Senate.
Debate over the bill, which had been a classic confrontation between business interests and consumer and labor advocates, was hijacked late by a most unlikely issue. New York Democratic Sen. Charles Schumer -- a longtime advocate of both bankruptcy reform and abortion rights -- decided to use the bill to further the latter agenda. He wanted increasingly combative abortion-clinic protesters to be barred from using bankruptcy to avoid court-approved financial penalties.
The provision had sparked opposition from the Christian Coalition and likeminded groups when it was added last spring. But proponents of the underlying bill thought they had nullified the conservative opposition. The measure's top House negotiator, antiabortion stalwart Henry Hyde of Illinois, had struck the compromise with Sen. Schumer to allow the provision in.
But two factors complicated matters: Republicans made significant gains in the midterm elections, thanks in large part to Christian conservatives, who felt justified in demanding payback. And this week, their side gained considerable strength when the United States Conference of Catholic Bishops issued a formal letter opposing the bill over the abortion issue.
Despite rumblings of growing opposition, House GOP leaders went ahead with Thursday's vote at the insistence of business lobbyists who had contributed substantially to their campaigns. Backers of the legislation tried to mute the opposition with a letter signed by one of leading conservative legal minds, former independent prosecutor Ken Starr, who asserted that the language would have little impact on abortion protests.
The decision to press ahead with the vote prompted a furious last-minute grassroots campaign by the Family Research Council and other groups, who urged followers to flood Capitol Hill with phone calls. "Instead of rewarding pro-life Americans for giving their votes overwhelmingly to Republican candidates, the GOP leadership is jabbing a thumb in their eye barely a week after the election at the behest of the well-heeled business wing of the party," said Council President Ken Connor on a radio broadcast Thursday.
"We are absolutely astonished by this," said National Retail Federation President Tracy Mullin, a leading proponent of the bill. She noted that versions of the bill had previously passed both houses overwhelmingly. "We will have to let time pass," she said of the bill's prospects next year. "We may not have the stomach for this in the future."
Aides to Judiciary Committee Chairman James Sensenbrenner Jr., the Wisconsin Republican who was one of the bill's House sponsors, said they were uncertain, too. "This bill seems to be cursed; it's like the Boston Red Sox," said Jeff Lungren, the chairman's spokesman.
The bill would have clamped down on filings by individuals under Chapter 7 of the federal bankruptcy code, which wipes out all debts once filers liquidate their assets. The bill would have barred such filings for anyone with enough income to repay $10,000 or 25% of their debts, whichever is less, within five years. Recently bought cars and other consumer goods would have to be paid for in full. The bill limited to $125,000 the amount of equity in recently acquired homes that could be shielded from creditors.
At the beginning of Thursday's debate, backers brimmed with confidence. Longtime opponents, including New York Democratic Rep. Jerrold Nadler, offered familiar arguments about what they deemed its harsh impact on consumers and the bottom-line boost it would give banks and credit-card companies. Opponents repeatedly invoked the name of the late Sen. Paul Wellstone, a liberal standard-bearer who had repeatedly tried to filibuster the bill to death during its long legislative incubation.
But this time conservatives angered by the abortion-clinic provision, which wasn't in the version that previously passed the House, joined the fight. "I support bankruptcy legislation, but not with these words in it," said Republican Rep. Joseph Pitts of Pennsylvania, a former supporter. Passage could cause "those who want to save the life of the unborn a life of financial ruin."
Rep. Hyde's decision to accept the provision puzzled some of his antiabortion allies. "I voted in favor of the bankruptcy reform bill because I gave my word" during talks with the Senate, he said. "That said, I respect the opinion of those pro-life House members who could not vote for this bill. I urged them to vote their conscience."
After voting for the bill, Financial Services Committee Chairman Michael Oxley was so confident of victory he left the Capitol to meet with White House Chief of Staff Andrew Card. The two men began congratulating each other -- even as the bill was going down. It was "the perfect storm as far as the opposition was concerned," Rep. Oxley said.
The GOP leaders appeared conflicted by cross-currents that pitted their two most faithful allies -- Christian conservatives and big business -- against each other. On the floor, the usual strong-arm tactics of GOP leaders, including House Republican Whip Tom DeLay of Texas, fell short. "People weren't talking about all the phone calls they got from the banks -- they were talking about the phone calls they were getting from irate conservatives," said one senior GOP leadership aide.
At one point, the tally was 203-204. Speaker Dennis Hastert of Illinois, who usually doesn't cast floor ballots, voted for the measure, producing a tie. But within seconds, Democrats who had voted in favor of the bill started switching sides to oppose it, urged on by incoming Minority Leader Nancy Pelosi. Once a dozen or so Democrats had jumped ship, assuring defeat, Rep. DeLay released Republicans to vote as they pleased, and more than a score also reversed course.
The bill's liberal opponents were elated by their reversal of fortunes. "The one-sided approach to bankruptcy reform, pushed by the powerful banks and credit-card companies and supported by their enormous [campaign] contributions, has now failed for the third straight Congress," said Democratic Sen. Russ Feingold of Wisconsin, hours after Democratic Leader Tom Daschle of South Dakota confidently predicted passage. "Next time, I sincerely hope we will ... work together to design legislation that will address abuses of the system while still protecting the most vulnerable in our society."