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July 28, 2002
WASHINGTON -- House Republican leaders finally had a deal with Senate Democrats on long-stalled bankruptcy legislation and congressional passage seemed primed.
Hours later, by early Saturday, the agreement had fallen apart because of an abortion dispute, jeopardizing a bill President Bush indicated he would sign.
A group of antiabortion lawmakers opposed a part of the bill that would prevent abortion protesters from using bankruptcy to avoid court fines.
The late-night revolt gives opponents until September to solidify their forces against legislation that would have made it harder for Americans to escape overwhelming debt in bankruptcy court.
For five years, the legislation has gotten close to passing. "This is as close as it's ever gotten," said Travis Plunkett of the Consumer Federation of America.
GOP leaders insist they will push the bill through when they return in September from their summer break.
Credit card companies and banks have pushed for the legislation for years, saying current law forces them to absorb billions of dollars in losses each year from bankrupt consumers.
House Judiciary Chairman James Sensenbrenner and Rep. Henry Hyde, the chief bankruptcy negotiators, cornered lawmakers in the House chamber and argued with antiabortion GOP members in closed-door meetings all night -- to no avail.
Sensenbrenner, R-Wis., and Hyde, R-Ill., had worked all year to come to an agreement with Senate Democrats, and had finally gotten a deal Thursday night.
The sticking point was a provision that would prohibit people who attack or block access to abortion clinics from declaring bankruptcy to avoid paying court-ordered fines.
Hyde, a leading antiabortion lawmaker, fought all year to curb or kill that provision. He relented only after Senate Democrats agreed to limit the measure to people who intentionally or knowingly violate the law.
But other antiabortion Republicans, led by GOP Rep. Chris Smith of New Jersey, objected to Hyde's deal. They are two of the staunchest antiabortion lawmakers in Congress.
Rep. Mike Pence, R-Ind., joined Smith.
"We are going to expose many peaceful prolife protesters to financial ruin by making these fines nondischargeable," said Pence, although he admitted that bucking Hyde and the overall bill was painful.
"It's giving us great heartburn," he said. "All of us certainly support the sponsors of the bill."
House Republicans, who control the chamber by only seven votes, need every GOP vote to pass the legislation, with several Democrats lined up in opposition.
Consumer groups say the legislation is no help to financially strapped Americans who have lost their retirement savings and jobs as a result of recent business scandals involving Enron, WorldCom and other companies.
But banking and business groups said the legislation will affect only about 10 percent of bankruptcy filings.
"The bankruptcy system is still going to continue to be there for most Americans. Nothing is going to change," American Bankers Association spokeswoman Catherine Pulley said.
There were 1.5-million bankruptcy filings in the U.S. Bankruptcy Courts in the 12 months that ended March 31. Personal bankruptcy accounts for about 97 percent of that, officials said.
Chapter 7 of the U.S. Bankruptcy Code allows people to escape paying any of their credit-card and other debts. Filings under Chapter 13 force people to repay debts over time in accordance with a court-approved plan.
The legislation applies a new standard in which, if a debtor has sufficient income to repay at least 25 percent of the debt over five years or earns at least the median income for his state, he or she is automatically be forced into a Chapter 13 repayment plan.
Now, a bankruptcy judge or a private attorney appointed by the Justice Department usually decides whether someone qualifies for dissolution of debts or should be forced to repay.