Sigh. That siren word "reform" - whoever grabs it first can make himself sound like a champion, and his opponents become obstructionist reactionaries. When Howard Dean grabs the mantle of reform, most of us can agree that it's a good thing. But when the GOP starts jawing about reform, you know it's time to deploy into battle mode.
So it is with the latest bankruptcy "reform" bill that is percolating through Congress. This Thursday, the Senate Judiciary Committee will begin debate on the so-called "Bankruptcy Abuse Prevention and Consumer Protection Act." (No clever acronyms here for the BAPCAPA.) Why is this bill so bad?
- It creates an arbitrary "means" test, which says that those who earn above the median income cannot discharge their debts through bankruptcy, while those below can. This is an outrage - if we want to discourage bankruptcy abuse, what matters is why you went bankrupt, not how much you earn. This bill would thus badly hurt families earning over $43,818 who have crushing medical expenses, while letting people who are genuinely wasteful spendthrifts but happen to earn less than the median off the hook. This makes no sense. (By the way, onerous medical bills are the cause of half of all bankruptcies, and most who go bankrupt for this reason have health insurance.)
- It offers a safe-haven for violent anti-abortion protestors by allowing them to avoid monetary liability in civil litigation by declaring bankruptcy. (Hey, Frameshop, can we use this to portray the GOP as enablers of violent criminals?)
- Harvard professor (and bill opponent) Elizabeth Warren points out that this bill hasn't been updated since it was first written almost a decade ago, and thus it does nothing to curb the abuses wrought by the Enrons and WorldComs of the world. What a shock.
Dianne Feinstein is trying to propose an amendment to combat problem #1, while Chuck Schumer is doing the same with #2. In fact, the only thing that's prevented passage of this bill in the past is the abortion issue, and Schumer concedes that may not be possible to get his amendment passed this time. Number 3, of course, won't get fixed with this Congress and president in power.
We'll need to follow this bill closely. We actually have a chance to stop this one (the Schumer amendment may derail it yet again), or if not, at least ameliorate its worst features. Stay alert and be ready to contact your senators.
Update [2005-2-13 20:39:52 by DavidNYC]: Here's yet another unsavory feature of this bill: It does nothing to reform the oft-abused "homestead exemption," which allows wealthy debtors to protect their assets through home ownership - and by homes, we're talking about mansions in Florida.