Debate of the Day- new Bankruptcy Law- Good or Bad?
This is from the NYTimes... to me this is just further proof of the current administration being on the side of big business and not the middle class... The most telling proof is where the $$$ came to initiate this bill.... see below:
Supporters of the new law point to the rise of bankruptcy filings, from 200,000 in 1978 to 1.6 million last year, as evidence of abuses.
But critics of the measure say that the rise in such filings is not evidence of unfair filings. Rather, they say, it is symptomatic of broader economic problems - the growing distress in families plagued by high health care and education costs. A recent study by bankruptcy and medical experts at Harvard University found that more than half of the 1,771 personal bankruptcy filers in five federal courts cited medical bills as a primary reason they filed.
The critics - including consumer groups, Democrats and more than 100 bankruptcy law professors - say that the legislation's supporters have significantly exaggerated the problem with the current bankruptcy laws. They say the legislation will do far more damage than good by hitting middle-income families, women and the elderly who have used bankruptcy protection in growing numbers to protect themselves.
'This bankruptcy bill is mean-spirited and unfair,' said Senator Edward M. Kennedy, Democrat of Massachusetts. 'In anything like its present form, it should and will be an embarrassment to anyone who votes for it. It's a bonanza for the credit card companies, which made $30 billion in profits last year, and a nightmare for the poorest of the poor and the weakest of the weak.'
In a letter to Congress two weeks ago, 104 bankruptcy law professors predicted that 'the deepest hardship' would 'be felt in the heartland,' where the filing rates are highest - Utah, Tennessee, Georgia, Nevada, Indiana, Alabama, Arkansas, Ohio, Mississippi and Idaho.
Critics also said the measure fails to do anything to curb abusive bankruptcy practices by wealthy families, who can create special trusts to shelter their assets, and by corrupt companies like Enron and WorldCom, which were able to find favorable bankruptcy courts and deprive many of their employees and retired employees of benefits. The Senate defeated a series of amendments proposed by Democrats that sought to address those issues.
'The bill has a real bias,' said Senator Charles E. Schumer, Democrat of New York, whose proposal to close a loophole that permits wealthy people to shelter assets through a special trust was defeated last week. 'It deals with abuses in bankruptcy by one group but not with another group.'
The lobbying money for the legislation, which has come close to passage several times in the eight years since it was introduced, has been lopsided.
The main lobbying forces for the bill - a coalition that included Visa, MasterCard, the American Bankers Association, MBNA America, Capital One, Citicorp, the Ford Motor Credit Company and the General Motors Acceptance Corporation - spent more than $40 million in political fund-raising efforts and many millions more on lobbying efforts since 1989, according to the Center for Responsive Politics, a nonpartisan organization that studies the role of money in the political process. By definition, the critics of the legislation had limited lobbying resources.
Supporters of the new law point to the rise of bankruptcy filings, from 200,000 in 1978 to 1.6 million last year, as evidence of abuses.
But critics of the measure say that the rise in such filings is not evidence of unfair filings. Rather, they say, it is symptomatic of broader economic problems - the growing distress in families plagued by high health care and education costs. A recent study by bankruptcy and medical experts at Harvard University found that more than half of the 1,771 personal bankruptcy filers in five federal courts cited medical bills as a primary reason they filed.
The critics - including consumer groups, Democrats and more than 100 bankruptcy law professors - say that the legislation's supporters have significantly exaggerated the problem with the current bankruptcy laws. They say the legislation will do far more damage than good by hitting middle-income families, women and the elderly who have used bankruptcy protection in growing numbers to protect themselves.
'This bankruptcy bill is mean-spirited and unfair,' said Senator Edward M. Kennedy, Democrat of Massachusetts. 'In anything like its present form, it should and will be an embarrassment to anyone who votes for it. It's a bonanza for the credit card companies, which made $30 billion in profits last year, and a nightmare for the poorest of the poor and the weakest of the weak.'
In a letter to Congress two weeks ago, 104 bankruptcy law professors predicted that 'the deepest hardship' would 'be felt in the heartland,' where the filing rates are highest - Utah, Tennessee, Georgia, Nevada, Indiana, Alabama, Arkansas, Ohio, Mississippi and Idaho.
Critics also said the measure fails to do anything to curb abusive bankruptcy practices by wealthy families, who can create special trusts to shelter their assets, and by corrupt companies like Enron and WorldCom, which were able to find favorable bankruptcy courts and deprive many of their employees and retired employees of benefits. The Senate defeated a series of amendments proposed by Democrats that sought to address those issues.
'The bill has a real bias,' said Senator Charles E. Schumer, Democrat of New York, whose proposal to close a loophole that permits wealthy people to shelter assets through a special trust was defeated last week. 'It deals with abuses in bankruptcy by one group but not with another group.'
The lobbying money for the legislation, which has come close to passage several times in the eight years since it was introduced, has been lopsided.
The main lobbying forces for the bill - a coalition that included Visa, MasterCard, the American Bankers Association, MBNA America, Capital One, Citicorp, the Ford Motor Credit Company and the General Motors Acceptance Corporation - spent more than $40 million in political fund-raising efforts and many millions more on lobbying efforts since 1989, according to the Center for Responsive Politics, a nonpartisan organization that studies the role of money in the political process. By definition, the critics of the legislation had limited lobbying resources.
