WASHINGTON - Senate and House opponents of stalled bankruptcy reform legislation circled wagons with the like-minded critics from labor, women's, and religious groups May 2 to blast the legislation in general and to pepper in particular an obscure provision of the Senate bill that could have resulted in debtors' pension plans becoming vulnerable to creditor attachment. The provision, Section 303 of the Senate Bankruptcy Reform bill (S. 625), was inserted into the 200-plus-page as an undebated manager's amendment during Senate passage of the bill February 2. It was supposed to prevent consumer bankruptcy filers from sheltering attachable assets in their exempt pension plans by providing for a waiver of bankruptcy's pension plan sanctuary. The problem was, however, there was no provision for protecting a minimum amount of pension benefits, and the abuse-prone addition-dubbed the "pension grab provision" by opponents-was seized as illustrative of all that was wrong both with the reform movement's pepped-up parliamentary process and with the details of the legislation itself. But the pension amendment was only one lightening rod in a gathering storm of Democratic objection to recent and unorthodox Republican efforts to speed reconciliation of House (H.R. 833) and Senate versions of the reform bill through an "informal" conference committee, at press time composed of only Republicans considering a Senate "compromise" bill. And, as 2000 is a presidential election year, the dust-up's implications for campaign finance reform did not go unnoted. "This bill has the potential of becoming one of the great injustices of the 106th Congress...," railed Senate opposition point man, Paul Wellstone (D-Minn.). "People in the country didn't know; people in the Senate didn't know that one egregious provision...put into this bankruptcy bill would basically have enabled these credit card companies (and the) financial services industry to pretty much put consumers in the position of no longer having even protection for their pensions. This is outrageous...." "We are not going to let this process go forward as suggested," Wellstone continued. "And if this gets tucked into a conference committee and (we have) nothing to do with that conference committee, we'll do everything we know how to hold (it) back...." "The more (that) people understand `pension grab' legislation in the dark of night tucked into legislation, the more people are going to come to hate this legislation, and the more people are going to come to view this bankruptcy legislation as representing all the ways big money dominates the United States Senate and the United States House of Representatives." Recent disclosures that not only were bankruptcy filings down (by 8.34%) in 1999 from 1998's 1.4 million cases but also that credit card issuers, banking companies, and credit unions-who are pushing for bankruptcy reform-had contributed $23.4 million in campaign donations to Congress over the past three years only stoked the critics' indignation. "Congress has been struggling to reform the bankruptcy laws," fumed Massachusetts' Democratic Senator Ted Kennedy, claiming that half of all bankruptcies are medical bills-related, "and, from the beginning, the debate has been unfairly slanted towards the credit card companies and banks at the expense of vulnerable Americans....We can't allow high-price lobbyists from the credit card and banking industry to call the shots in a closed door process." Kennedy, a longtime proponent of nationalized health care, called for health care reform instead of bankruptcy reform and even opposed any Republican effort to fix the bill's pension provision by adding qualifying language. "This legislation is the poster child for the need for campaign finance reform," clamored Rep. Jerry Nadler (D-N.Y.), a House opposition leader. "It is probably the worst special interest bill I have seen in my life." "Every special interest has managed to get something into this bill. And the Republican leadership has decided that, if they cannot deliver it legitimately by following the rules and having an open process, then they will simply ignore the rules. I object. No where in the House rules is there any mention of a `shadow conference' or `shadow conferees.'" "The proposal to simply stick the work of the shadow conference into a wholly unrelated bill (the e-signature bill, presently in conference) is simply a bad way to write legislation." "Only when it comes to delivering a bill to the financial interests," Nadler continued, "who have paid literally tens of millions of dollars for that bill does the Republican leadership feel the need to cast aside the rules and mount a sneak attack on the American family." "The American people should know what's going on....I call on the Republican leadership of the House to call a proper conference and to follow the rules. We are here to represent all the people. Democracy should matter more than a few tens of millions of dollars in campaign contributions form a few wealthy special interests." In a sobering moment of candor, Nadler told one reporter that lawmakers often do not know many of the details of bills as large as the bankruptcy reform bill, and that a process as exclusive as the one being used to reconcile S. 625 and H.R. 833 is ripe for abuse by the special interests. He predicted that President Clinton would veto the bill and that the Congress would sustain the veto. "I agree with everything that's been said about the `conference in the dark,'" insisted another Senate opposition leader, Russell Feingold (D-Wis.). "We have no idea what other provisions written for the benefit of the credit card companies are lurking in this bill or will still sneak into it in the dark in the `non-conference conference committee.'" Former Ohio Democratic Senator Howard Metzenbaum (and chair of the Consumer Federation of America) also was in attendance, and, underscoring record profits of the credit card industry, he said that there was no reason "under the sun" to pass a bankruptcy reform bill at this time. "The whole damn bill ought to be taken out," Metzenbaun blazed. "This is a bad bill." Opponents from the National Organization of Women, the National Women's Law Center, the AFL-CIO, and the United Food and Commercial Workers were also in attendance at the event, as was the rabbi-director of the Religious Action Center for Reform Judaism. Once the formal statements were concluded Wellstone took questions from the floor. Asked by one reporter how he squared pro-consumer credit union support for the reform effort with his anti-consumer charges, Wellstone suggested that the CU movement may also have been duped by the covert reform process, but he also admitted to being "disappointed" by the CU stance. Contacted for his reaction to the anti-reform rally, CUNA Vice President, Legislative Affairs John McKechnie took a philosophic tack, saying that the event's participants have long been in opposition to bankruptcy reform and that their saber-rattling would actually serve to keep the reform bills on the front-burner of the legislative process. Two advocates of bankruptcy reform-the House manager of H.R. 833, Rep. George Gekas (R-Pa.) and the National Consumer Bankruptcy Coalition-circulated statements at the press conference presenting the pro-reform side of the story. They noted that, among other things, the effort "is strongly supported by both Democrats and Republicans," that the "means-tested" measure is intended to correct cynical debt-evasion practices in a still-exploding number of bankruptcy filings by exacting payment only from those who can repay their debts, and that the day's lax bankruptcy laws have cost American consumers $132 billion since 1997. -
gmcorrigan@mindspring.com
