The Return of Penury in America.

Defeat Bush's Social-Darwinist Agenda NOW:
Regressive Bankruptcy Bill Will Hit Poorest Americans Hardest

By

Evan Augustine Peterson, III, J.D.

Executive Director, American Center for International Law

(ACIL)

In an HONEST world, this bill would have been called what really it is -- "The Debt Slavery Act." But its sponsoring Senators deceptively named it the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" (S. 256/H.R. 685). [1]

In a BETTER world, this bill never would have passed. But on 3-10-05, the U.S. Senate passed the Republicans' phony bankruptcy "reform" bill by a 74-25 vote, in part because 18 turncoat Democrats crossed over to The Dark Side. [2]


Is all of this a moot point, now that the Senate has passed the bill? NO!


Fortunately, the U.S. Constitution created a BICAMERAL legislature, which requires controversial bills like this one to be passed by BOTH the Senate AND the House of Representatives. Hence, the House is scheduled to take up the same bankruptcy bill -- H.R. 685 -- in April, when it returns from its two-week vacation.


Whether it WILL pass, and whether it SHOULD pass, in the House are two very different questions. The argument that it WILL pass is based on the amoral assum ption that the credit industry drafted this sleazy bill; thus, they'll be paying their "K" Street lobbyists overtime to full-court press those Representatives to whom they've contributed millions in "campaign donations" (formerly known as bribes). Hence, the Washingtonian cognoscenti conclude that it WILL pass by a wide margin.


Consider that Democratic Senator Joseph Biden of Delaware -- "Say it ain't so, Joe!" --voted FOR the Republicans' bankruptcy bill. But then, credit-industry leviathan MBNA has its corporate headquarters in Delaware and, as Joe's actions tell us, "Money talks!" [3]


The argument that it SHOULD NOT pass is based on moral and prudential public-policy grounds. Consider that the Senate's draconian bill is unpopular among federal bankruptcy judges, who should know best what it will do! More than a dozen judges have said that it will unjustly overburden our society's most vulnerable people: the sick; the elderly; the poor; minorities; middle-class and military families; recent divorcées; and single parents. [4]


Further consider the negative consequences of this bill, as articulated by UCLA Law Professor Kenneth Klee, who co-authored the 1978 bankruptcy-reform bill when he was a Republican congressional staffer. Professor Klee says this new bankruptcy bill will leave our nation's most economically-desperate people buried beneath a mountain of debt, with no hope of getting out from under it, so it's predictable that they'll either go UNDERGROUND or into a life of CRIME.
[5]


That illustrates the difference between the "compassionate" conservative rhetoric about an "ownership society" and the reality. One wonders what's next on the Religious Right's "compassion-for-the-poor" agenda -- the revival of debtors' prisons?


Now consider that the Senate passed but one amendment, among the many proposals for a less draconian bill, and that it creates an UNJUST exception for disabled veterans! How so? The amendment's harsh language stipulates that 50% of a disabled veteran's total indebtedness must have accrued AFTER his/her disabling injury. Otherwise, s/he CANNOT qualify for a debt-discharging personal bankruptcy under Chapter 7, and instead MUST enter into a five-year, court-supervised repayment plan under Chapter 13.


Therefore, if a married National Guardsman with a homemaker wife and five small children is deployed to Iraq for an indeterminate time, and he takes out a $50,000.00 loan before he leaves to keep his family afloat financially, because he knows he'll be losing his higher-paying civilian job while receiving military pay, but then he quickly returns home after an Improvised Explosive Device transforms him into a wheelchair-bound quadraplegic, this asinine amendment says: "That's just your tough luck, buddy -- pay up on that loan NOW!" That vet accrued his debt BEFORE he was blown apart, so he can't qualify for a debt-liquidating personal bankruptcy under Chapter 7. And yet he can't pull himself up by his wheelchair straps, either. Hopefully, this family outright owns a very large station wagon in which they can sleep!


Furthermore, this UNJUST bill does absolutely nothing to rein in the credit industry's predatory lending practices (e.g., outrageous $50.00 late fees and usurious 30% interest rates are common), or to eliminate the special trust havens in certain states where wealthy Americans -- like Enron's CEO, Ken Lay -- have been hiding their assets during personal bankruptcies. Hence, we can conclude that this bill is a lopsided sham that SHOULD be overwhelmingly defeated in the House of Representatives.


Remember: "There -- But For The Grace Of God -- Go I!"


People like to THINK that they'll never need to avail themselves of the bankruptcy laws. However, the vast majority of the people who end up filing for personal laws. However, the vast majority of the people who end up filing for personal bankruptcy were reasonably-prudent individuals who never thought they'd see that day come. And yet it did. Indeed, recent studies that Harvard Law School Professor Elizabeth Warren cites prove that we're only one catastrophic illness, or one job loss, or one divorce, away from joining them in bankruptcy court, regardless of our social class or income level. [6]


What will YOU do if this bill passes, and there's NO WAY OUT of mounting indebtedness? DON'T let that happen -- regardless of whether you're a Democrat, a Republican, or an Independent!


The Bottom Line: Defeat Mr. Bush's Social Darwinist Agenda NOW!


This is the American peoples' LAST CHANCE to defeat one of the most destructive measures on our Reverse-Robin Hood president's regressive agenda. If we're wise enough to resist NOW, then this will become our first stand in a TWO-WAY pitched battle. Otherwise, Mr. Bush will continue to wage vicious ONE-WAY, top-down class warfare on behalf of his filthy-rich "HAVE-MORES," against the beleaguered "HAVES" who are just barely hanging on, and the downtrodden "HAVE-NOTS" who are drowning in debt! [7]


Finally, please know that YOU -- dear reader -- CAN do something that matters TODAY! The immoral credit industry continues to UNJUSTLY dominate us only because we, the people, do nothing to stop them from buying our Congresspersons, lock, stock, and barrel.

Instead, contact your U.S. Representative by telephone, fax, e-mail, or postal mail, and urge him or her to VIGOROUSLY OPPOSE H.R. 685, the credit industry's phony bankruptcy "reform" bill: http://www.house.gov/writerep/

ENDNOTES

[1] The bankruptcy "reform" bill is 450 pages long, but it is summarized at:
http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR00685:@@@L&summ2=m&
[2] To hold the 18 turncoat Democrats and 57 Republicans who voted FOR this terrible bill ACCOUNTABLE, find out which Senators voted "yea," and which "voted nay," by reading the sidebar chart in THIS essay:
http://www.commondreams.org/headlines05/0312-03.htm
[3] See OpenSecrets.org's revealing profile of MBNA's political donations:
http://www.opensecrets.org/orgs/summary.asp?ID=D000000114&Name=MBNA+Corp
[4] AmericanProgressAction.org's 3-29-05 column, "The Progress Report,"
explains: "BANKRUPTCY -- JUDGES SPEAK OUT AGAINST BILL: The goal of the bankruptcy bill steamrolling through Congress isn't to reform the bankruptcy system, it's to destroy it. Bankruptcy judges around the country are speaking out against the legislation. Keith Lundin, a federal bankruptcy judge in the eastern district of Tennessee in Nashville said, '[t]he advocates [of the bill] aren't trying to fix the bankruptcy law; they're trying to mess it up so much that nobody can use it.' Under the new law, repayment plans would be so expensive that many debtors would be unable to keep up, 'forcing debtors out of bankruptcy court protection.' Creditors could then 'try to force debtors to pay the full amount owed -- not the reduced amount a judge had ordered -- by moving to repossess their belongings or bringing legal actions.' As a result, 'many people would have to pay creditors far into the future ... and thus be unable to restart their economic lives, a long-held aim of bankruptcy.'"
[5] See the fourth-to-last paragraph in Peter Gosselin's 3-29-05 CD/LAT article, "Judges Say Overhaul Would Weaken Bankruptcy System" :
http://www.commondreams.org/headlines05/0329-02.htm
[6] HLS Professor Elizabeth Warren's 2-12-05 CD/MH essay, "Sick And Broke":
http://www.commondreams.org/views05/0212-10.htm
[7] Please read these excellent essays for more specific facts about this
UNJUST bill:
A. The Nation's 3-25-05 CD/TN editorial, "Democrats: MIA":
http://www.commondreams.org/views05/0325-28.htm
B. Alan Maass' 3-19-05 CP essay, "Making Bankruptcy A Life Sentence:
Washington's Bipartisan Gift To The Bankers":
http://www.counterpunch.org/maass03192005.html
C. Robert Scheer's 3-15-05 CD/LAT essay,"The Bankruptcy Bill: A Tutorial
In Greed": http://www.commondreams.org/views05/0315-27.htm
D. Cynthia Tucker's 3-13-05 CD/AJC essay, "Bush Cheats Those He Owes":
http://www.commondreams.org/views05/0313-25.htm
E. David Broder's 3-13-05 CD/ST essay, "A Bankrupt Senate Vote":
http://www.commondreams.org/views05/0313-30.htm
F. Matthew Rothschild's 3-13-05 CD/TP essay, "Democrats Cave On Bankruptcy Bill": http://www.commondreams.org/views05/0313-31.htm
G. RedState's confessional 3-11-05 TP essay, "An Embarrassed Republican"
[A red-state Republican blogger laments his party's harsh bankruptcy bill by stating, among other things, that "This is on us, folks, and it's going to hurt a lot ofpeople."]:
http://www.tompaine.com/articles/an_embarrassed_republican.php
H. Arianna Huffington's 3-10-05 CD/AO essay, "The Senate Opens Fire on U.S.
Consumers": http://www.commondreams.org/views05/0310-22.htm
I. Paul Krugman's 3-9-05 TO essay "The Debt-Peonage Society":
http://www.truthout.org/docs_2005/030905G.shtml
J. Evan Augustine Peterson III's 3-9-05 TPV essay, "On Attempting To Justify The Unjustifiable With Scripture: Debt Slavery": http://tinyurl.com/4auhq
K. Molly Ivins' 3-3-05 CD/WFC essay, "Bad To Worse: Republicans Vote Down Military Exemption To Bankruptcy Bill, Add Loopholes For Rich":
http://www.commondreams.org/views05/0303-29.htm

About The Author:
Evan Augustine Peterson III, J.D.,
is the Executive Director of the
American Center for International Law ("ACIL").
© 2005 EAPIII. It is published here by permission.