Bankruptcy Blog: April 15, 2005

The House passed the bankruptcy bill, and now we’re down to the last minutes before President Bush signs it into law.

I should be depressed, but I’m not.

Eight years ago the proponents said it was a speeding train that could not be stopped. It was written by a lobbyist and shopped to a friendly Congressman. The financial services industry was giving big money, and there was no one in the way to stop it. We slowed it down. In the meantime, more than 12 million families got some relief when they were overwhelmed with debts following job losses, illnesses, or family break ups. With all the money on just one side in the debate, that’s pretty amazing. Even now, the bill that came from the Senate to the House had a few small adjustments that will help keep the door open for more families in desperate trouble. Not bad.

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But the part that makes me feel better is that this time around we finally got the message out. Even after the horse race was over and it was clear the bill would pass, the press continued to write about the bankruptcy bill — and the stories weren’t pretty. The politicians who thought this would be a free vote discovered they were wrong. The middle class is beginning to rumble, and those rumbles will change things.

I’m also glad to see the old conservative-liberal dichotomy break down over bankruptcy. Both conservative and liberal bloggers exposed the rotten foundations of this bill, particularly the imperfect credit markets and the influence of money on politics. Could alliances shift over economic issues aimed at middle class families?

Finally, it ain’t over. The rumors are already all over Washington that a “technical amendments” bill will be passed during the 180 days before the bankruptcy law becomes effective. Several new stand-alone bankruptcy amendments are already in the hopper in the Senate and House, including a bill to sew up the millionaires’ loophole and a bill to stop corporate forum shopping in bankruptcy.

And it ain’t over in a bigger sense either. The point of this whole conversation is that bankruptcy isn’t an isolated issue. Bankruptcy is about job losses and health care finance; it is about credit card practices and predatory lending. Bankruptcy is just one way to measure the financial health of the middle class.

Josh has asked us to hang around, and particularly to continue talking about the shifting economic scene for the middle class. We think maybe there will be something to blog about even after the President has signed the bill.

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