[From the diaries -- Hunter]
While Sen. Reid and Chairman Dean have helped stiffen the Democrats' collective spine and start acting like an opposition party, and the tenor of the Social Security debate thus far has been somewhat encouraging, we are continuing to give ground on key issues and conduct politics on terms and terrain all too favorable to the Republicans.
Exhibit A: the atrocious bankruptcy bill apparently set for Congressional passage. As with the recently enacted tort reform measure--but worse, for reasons I'll explain below--this is nothing more than a gift to the Republican donor class. Its likely effect will be accelerate some of the most dispiriting economic trends in the country, and worse, it's looking like a major missed opportunity for Democrats to make a stand on an issue that could energize the public.
Thomas Frank's book "What's the Matter With Kansas?" might have been the best political read of 2004. If you haven't picked it up, you should go get it, but here's the gist: since Democrats are essentially indistinguishable from Republicans on economic issues, political campaigns are increasingly fought and determined on "social issues"--abortion, gay marriage, religion in public life. Democrats' general lack of political skill has meant that this shift has put them at a major disadvantage, despite the fact that Republicans largely conduct a massive "bait and switch"--campaigning as social conservatives, then governing as corporate helpmeets.
For what it's worth, I ddiagree that one, there's no difference between the parties on economic issues (I think the differences are real, but they're not emphasized enough), and two, that cultural issues are necessarily a loser for Democrats (it would help if we stood up for abortion rights and gay marriage on principle, rather than transparently wanting to change the subject). But I think his diagnosis of the problem is mostly accurate.
Which brings us to the bankruptcy bill. The New Republic, of all outlets, harshly condemns the measure as well as its Democratic enablers:
Bankruptcy laws are supposed to balance the interests of creditors with debtors as well as balance society's interest in encouraging people to take risks (such as taking out a loan to start a business) with its interest in ensuring that the risks they take are not foolish ones (such as borrowing money to play the ponies). U.S. bankruptcy laws have generally done a good job of striking this balance and have thus contributed to an economy that is among the most entrepreneurial in the world. What's more, they have codified a progressive and long-standing American value: the belief in second chances.
By these measures, the bankruptcy bill is a catastrophe. Under the current system, bankruptcy courts have broad discretion to decide who can file for Chapter 7, which allows debtors to erase their obligations after forfeiting a state-determined percentage of their remaining assets, and Chapter 13, which requires strict repayment according to court-ordered schedules. Judges base their decisions as much on why the debt was accrued as on income; this way people who come into debt through no fault of their own can get a fresh start, while a judge can decide that a careless gambler must pay what he owes. But the new bill would replace judicial discretion with a means test on household income--those above a certain level would be forced to file for Chapter 13 bankruptcy--dismantling the system's ability to discriminate among worthy and unworthy debtors.
Credit card companies insist that most filers are merely credit addicts who have spent beyond their means and want to stiff the industry with the bill. (Given the credit card industry's marketing strategies--including documented campaigns targeting minors--this complaint is akin to drug dealers whining about their buyers entering rehab.) But a recent Harvard study shows that roughly half of all filers for Chapter 7 do so in the wake of major medical expenses. Moreover, Chapter 7 bankruptcy is hardly a get-out-of-jail-free card--it leaves a prolonged stain on one's credit rating and imposes tough financial sanctions. The credit card companies, by contrast, don't seem to be hurt by the filings much at all. According to Harvard Law School bankruptcy expert Elizabeth Warren, since 1997, "Bankruptcy filings have increased 17 percent, while credit card profits have increased 163 percent."
...
...it's frustrating to see so many Democrats willing to accept its passage. To be sure, there are a few, such as Chuck Schumer and Ted Kennedy, who have promised to fight the bill on the Senate floor. But three Democrats--Joe Biden, Dianne Feinstein, and Herb Kohl--helped vote the bill out of committee last week, and the upcoming floor debate is looking more and more like a pro forma engagement, with Democrats conceding the battle in order to save their strength for later fights.
This is the wrong strategy. If anything, Democrats should oppose--even filibuster--the bankruptcy bill. Since November, Democrats have been casting about for new ideas to reinvigorate their party, with a growing number agreeing that support for working Americans should be a central tenet in the party's strategy. Meanwhile, Republicans have taken the election as a carte blanche to help their friends in big business, largely at the expense of working Americans. Rather than a fight not worth having, the bankruptcy bill is just the sort of fight the Democrats should relish.
And the Center for American Progress points out how, in addition to granting the fondest wishes of the credit card companies, the Republicans have preserved the sweeteners for another group of corporate enablers who risk seeing the business end of bankruptcy:
The bill on the Senate floor right now doesn't stop some of the worst abuses of our bankruptcy system. In several states - including the president's home in Texas - a multimillionaire can declare bankruptcy, avoid his debts, and still keep his palatial estate. We've seen it happen time and again: for example, "Marvin Warner, a former ambassador to Switzerland and the owner of a failed Ohio Savings & Loan, who paid off only a fraction of $300 million in bankruptcy claims while keeping his multi-million-dollar horse ranch near Ocala, Florida." Another example: "Dallas developer, Talmadge Wayne Tinsley, who filed under chapter 7 after incurring $60 million in debts. Tinsley objected to the Texas law that permitted him to keep only one acre of his $3.5 million, 3.1-acre magnolia-lined estate. But that acre included a five-bedroom, six-and-a-half-bath mansion with two studies, a pool and a guest house." The 2001 bankruptcy bill at least stopped these abuses by capping the so-called "homestead exemption" at $125,000. This bill has a complicated exemption that will allow "wealthy debtors who are sophisticated enough to plan ahead - and those are, after all, the people we are talking about - can purchase a homestead to shelter their non-exempt assets and simply wait [49 months] before filing their petition."
To summarize: here we have a bill that helps predatory credit card companies--a group that gives about two-thirds of its political donations to Republicans and favored Bush over Kerry by more than three to one in donation dollars--at the expense of working people, while substantially protecting Enron and Worldcom types from really paying for their mistakes and misdeeds. This is a clear example of an issue where Democrats have a chance to stand up for voters against a well-heeled special interest--and shift the conversation from social issues to more favorable political terrain. Unlike with the tort reform bill, where a strong pushback would have played into the Rovian tactic of linking Democrats with the "trial lawyers," there's little political risk--after all, it's not like the Republicans could seriously grandstand about condoning fiscal responsibility!
Unfortunately it looks like some leading Senate Dems, more concerned about catering to their donors (check out the second opensecrets.org link above), are about to miss the big picture once again.