Abortion derails ... bankruptcy reform?

Sunday, February 20, 2005

WASHINGTON POLITICS: Bart Jansen

Bankruptcy reform is back in the congressional spotlight, but after a decade of intermittent debate its prospects once again could dim on the Senate floor - this time because of an unlikely, unrelated issue: abortion.

The reform effort is important to Maine because the state has one of the highest rates of personal bankruptcy in the country. In addition, credit-card giant MBNA is one of the state's largest employers.

The company also is one of the top campaign contributors to federal candidates nationwide, including President Bush and Sens. Olympia Snowe and Susan Collins.

Bankruptcy returned to the agenda after a more than two-year hiatus, coinciding with Republicans gaining larger majorities in Congress. During years of earlier consideration, the bill has always received overwhelming majorities of support to make it harder for debtors to avoid their bills.

The current legislation aims to make it harder for debtors to walk away from those bills. It would review an individual's income and assets before allowing that person to file under Chapter 7, which erases debts after forfeiture of some assets. Instead, individuals would be herded through Chapter 13, where judges set up partial repayment plans.

The Senate Judiciary Committee approved the bill Thursday. Sen. Orrin Hatch, R-Utah, recited the importance of passing the legislation to prevent cheats from running up debts and walking away from them, which drives up the cost of debt and consumer products for everyone.

But the abortion argument blocked a compromise over bankruptcy reform in July 2002 and it threatens to do so again.

The debate focuses on a 1994 law called the Freedom of Access to Clinic Entrances, which opened the door to lawsuits against abortion protesters who blocked clinics. But then abortion protesters avoided the monetary judgments against them by declaring bankruptcy.

AMENDMENT BECOMES ROADBLOCK

Sen. Charles Schumer, D-N.Y., won approval of an amendment in 2002 that prohibited abortion protesters from wiping out their court judgments through bankrtuptcy. But influential House leaders refused to accept the provision, which killed the bill.

Schumer's amendment has been stripped from the bill again this year. Hatch said the amendment was rejected by Republicans because it would result in the bankruptcy-reform measure being denied by Congress.

Indeed, House Judiciary Chairman James Sensenbrenner, R-Wis., said Wednesday that the Schumer amendment is the only thing standing in the way of Congress sending the bill to Bush.

"There's been one hurdle and it's been called the Schumer amendment," Sensenbrenner said. "I think that a vote for the Schumer amendment ends up being a poison pill, so a vote for the Schumer amendment is a vote against bankruptcy reform on principle."

But at a Senate Judiciary Committee voting session Thursday on the bill, Schumer vowed to revive his proposal on the Senate floor.

"I will do whatever I can to hold this bill up in any way until this amendment is in the bill," Schumer said.

Several other Democrats who supported the bankruptcy bill in the past said they would oppose it unless the provision were included. Sen. Dianne Feinstein, D-Calif., cited 4,200 acts of reported violence against abortion clinics and providers since 1997, including bombings, assaults and murder.

"I think it's a big enough issue on our side to stop this bill," Feinstein said.

MBNA, which has 3,700 workers at nine locations across Maine, has a great interest in the legislation. The company is politically influential, with workers and their relatives contributing $354,350 to Bush's re-election effort, according to the nonpartisan Center for Responsive Politics.

IN THE RED

The subject also is important to Mainers because the state has a high rate of bankruptcies. Some 4,497 Mainers declared bankruptcy during the fiscal year that ended June 30, 2004, according to the Administrative Office of U.S. Courts. About 90 percent filed under Chapter 7, with all but one of the rest under Chapter 13.

Total bankruptcies, including those involving businesses, hit 4,647 last year, up from 4,597 the year before and 4,352 the year before that.

Sen. Dick Durbin, D-Ill., criticized the credit-card companies for inviting customers to rack up debt - including the 3-year-old son of one of his staffers.

He slammed the credit-card and banking industries behind the legislation for refusing to testify at a hearing Feb. 10. But he said they attended, lurking in the back of the hearing room, wearing three-piece suits, Gucci loafers and Hermes ties.

"They didn't want to come up and sit in front of the microphones to answer questions," Durbin said.

Hatch, former chairman of the judiciary committee, bristled at Durbin's presentation, saying he'd heard it before. Durbin responded that perhaps this time he would be more persuasive.

"You're always persuasive, you're just wrong," Hatch said. "You're a bright guy. You have a lot on the ball. But eight years of this is almost more than I can stand. I'm starting to lose my sanity."

Staff Writer Bart Jansen can be contacted at 202-488-1119 or at:

bjansen@pressherald.com

To top of page