Melodrama On The Hill: Bankruptcy Reform

CNSNews.com ^ | July 01, 2002 | Connie Marshner

[Stand Watch Listen]

There is a formula for a certain type of novel: a little sex, a little violence, and some kind of inheritance, along with, of course, a handsome protagonist and beautiful heroine. There seems to be a certain formula for a Capitol Hill melodrama these days: take an issue involving money, add a little abortion debate, throw in election fever, and voila! You get bankruptcy reform.

Or, to be literal about it, you don't get bankruptcy reform.

The nation needs it. But the fanatical malice of pro-abortion ideologues is keeping the nation from getting bankruptcy reform.

But first, a foreword to the melodrama. Bankruptcy -- what was a capital crime in England until 1820 and treated as the equivalent of theft in the early days of our own nation-has become something like a consumer entitlement.

For example, during the year ending September 30, 1997, no fewer than 1,366,887 people had filed for bankruptcy. Those were times of considerable economic expansion, remember: if one out of six Americans found it desirable to declare bankruptcy, something was wrong with bankruptcy laws.

In June 1998, the House passed the first bankruptcy reform in twenty years. The final legislation passed Congress just before the 2000 elections, only to be vetoed by Bill Clinton, who claimed that it would be unfair to some folks whose luck turned sour. (If the logic of that tenderhearted rhetoric seems farfetched, remember the "election fever" part of the formula).

The current Congress promptly set about working to meet this need. Both House and Senate actually passed bills by March 2001, by comfortable margins. The versions were quite diverse, and it took a while to appoint a conference committee, but by the fall that was in place, too.

Then Fate intervened. The first meeting of the conference committee was set for...September 12, 2001.

Observers figured that bankruptcy reform was history. But along came Enron, and as the scandal grew, demand for Bankruptcy Reform did too. The conferees met on April 23, and worked out most differences between the House and Senate versions: How to handle homestead exemptions, for instance.

Final passage of the bill would be in sight were it not for one Senator's zeal to persecute pro-lifers. There is only one issue remaining in the Bankruptcy Reform conference committee, and it has nothing to do with bankruptcy.

Senator Chuck Schumer (D-NY) has decided to use this legislation as the vehicle to pursue his particular personal vendetta against the pro-life movement. He attached a rider to the bill stipulating that people who obstruct abortion clinics cannot declare bankruptcy, even as a result of fines and penalties for exercising their First-Amendment rights.

Does that mean there's a problem with pro-life demonstrators declaring bankruptcy to avoid fines? Not a bit. The very raising of the issue would seem to be designed to create an unsavory image for pro-life activists, however.

First of all, Schumer's targeted victims are men and women of such conscience that they probably wouldn't even think of trying to escape their fines. Not that they could in any case, as such debts are not dischargeable under current bankruptcy law.

So the Schumer Amendment is unnecessary to begin with. It is merely designed to harass citizens who express viewpoint contrary to his.

Congressman Henry Hyde (R-Ill.) is concerned that the Schumer rider would undermine the First Amendment: Not only pro-life activists would be caught in its nets, but also PETA, labor unions, and civil rights protesters of many stripes.

The actual resolution of the issue seems at this point to be beyond the level of staff negotiation any more. Henry Hyde and Chuck Schumer are going to have to duke it out between themselves.

Maybe Congressman Hyde could agree to drop his reservation about Schumer's language if Schumer agreed to impose the same consequence upon medical personnel involved in the injury or death of a patient in a legal abortion procedure... how about it, Senator Schumer?

Let the melodrama begin.

(Connie Marshner is Director of the Center for Conservative Governance at the Free Congress Foundation.)

Free Congress Foundation

[Tourist Guy]

I'm speechless.

Schumer has no shame.

[BILL FROM TROUT CREEK PASS]

Typical stupid reaction, treat the symptoms and not the cause, credit card companies are the cause and they continue their unscrupulous methods of trapping innocent people into their web of high interest rates and late charges. This country needs 'bankruptcy reform' like it needs another terrorist attack!

[parsifal]

If one out of six Americans found it desirable to declare bankruptcy, something was wrong with bankruptcy laws.

Or maybe something is wrong with the interest rate, or the economy? BTW how do they get 1 in 6????? I'm having problem with the math here. parsy

[general_re]

You and me both. If there were 270 million Americans, then 1.3 million bankruptcies is closer to 1 in 200 Americans, not 1 in 6...

[Greeklawyer]

The Schumer ammendment is designed to garner campaign contributions. This is about the golden rule:
"He with the gold makes the rules."

Bankruptcy was design to give a financial death. It is the solution to the unconcionability of the debtor's prison, indentured servitude, and slavery. The idea is for people to be able to start fresh. If you exclude the very few celebrity type bankruptcies, a chapter 7 liquidation is no walk in the park. Items which you are allowed to keep are enumerated, and while socially less damaging your credit continues to be damaged for 10 years. Even more if asked "have you ever..."

What has driven the credit card companies panic about bankruptcy is the ensuing lack of predictibility that has developed in the 90's. People who are up to date and paid up will suddenly without warning file bankruptcy. The companies use the paper losses and interest and late fees to remove their tax libilities.

For example, If hypothetical person has a $1000.00 debt and you tack on late fees, collection fees, interest, etc., that $1000.00 lent out becomes $1500.00 to $2000.00. Over the course of a year as a consumer falls and falls to bankruptcy the credit card company is able to add aditional paper claims to its balance sheet.

Now in the 90's the consumer who just lost his/her job files immediatly. The added write-off is gone and that impacts the bottom line. Take that to your Anderson Accounting and Dow Jones.

Causes of Bankruptcy, Lay Offs, Divorce (both men and women), Medical debts. I have yet to encounter anyone who "planned" to file for bankruptcy.

Things you can not escape with bankruptcy, Child support, Student Loans. Taxes. (with some limited exceptions), Debts on collateral you want to keep.

[A. Pole]

The nation needs it.

And number of bankrupcies is rising. Time to stop it. And next let us bring debt prisons. To many people are going into the debt.