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The most remarkable thing about the bankruptcy bill (which has now been postponed in the House until next week) is something that the corporate media is incapable of reporting on and probably in some cases incapable of even recognizing. Namely, this bill offers an ideal test for the Democrats.
Most bills contain some redeeming features, some elements that are good for people, not just good for corporate profits. With most bills, a case can be made, however contorted and unconvincing, that it’s actually worth voting for, or that it’s better than some even worse alternative. Those arguments are almost impossible here, because several dozen amendments aimed at making the bill into something less than an outright atrocity have been voted down. In addition, the Democrats on the House Judiciary have laid out for their colleagues the case against this bill in a 54-page dissent that was leaked to Raw Story.
This bill allows us to answer the question: “What if there were a bill that served purely and clearly corporate greed while damaging millions of non-wealthy Americans, would the Democratic Party stand against it? Would the Democratic leadership fight it? Would all members of this purportedly distinct political party vote for people over profits?”
In the Senate, the answer is clearly no. In the House, things are uncertain. The vote is scheduled for next week.
The corporate media is incapable of asking the question, because it is hampered by something called “balance.” Balance means that for every proposal, there are two opposing claims, never one and never three, and that the two claims are equally meritorious, although the claim from the corporate side is a little more equal than the other one. So, a reporter who is willing to report as fact, as actual reporting with the reporter’s name behind it, that the number of bankruptcy filings has increased, is unwilling to report on why those filings have increased. Instead, a reporter presents us with two views.
The first, which is generally treated more respectfully, is that there is massive fraud underway, that people are using bankruptcy to get out of paying for their reckless shopping sprees, for their personal failures to practice the sort of noble restraint in their lives exhibited by Bill Bennett or Rush Limbaugh.
The second, which is generally characterized as a “claim” or a “contention” in opposition to so-called “reform,” is that the vast majority of bankruptcies are caused by medical expenses, job loss, divorce, or death in the family, and that bankruptcy is clearly a last resort for almost all who enter it, many of whom have prior to filing bankruptcy gone without medicine, utilities, or food. For links to studies on these matters, go to www.debtslavery.org and click on “Links.”
The reason that the media should not present these two viewpoints in a fair and balanced manner is that the first one has no evidence to support it, whereas the second does. The most extreme claim for fraud that I’ve seen is 10 percent. But apparently there are no records from the FBI or the IRS to back that up. The American Bankruptcy Institute claims that at most 3 percent of filers get out of paying any debts that they actually could have paid. But let’s assume for the sake of argument that 10 percent of bankruptcies are complete scams. In fact, let’s double it. Let’s say 20 percent. And let’s ignore the glaring fact that the most blatant scams, involving loopholes for millionaires and corporations are maintained in this bill. Let’s pay no attention to the asset protection trusts and unlimited homestead exemptions and cross-country corporate judge shopping and ability to deprive employees of their investments and retirement, and other unpleasantries behind the curtain. Let’s set all of that aside.
Who in their right mind writes a bill that drastically reshapes a legal system for everyone involved and designs it around 20 percent of the cases? And who in their right mind writes an article about that and doesn’t question it?
This bill does not, as media consumers might be forgiven for imagining, create a means test that will catch the 3 percent who cheat and present no problems for the other 97 percent. Currently there is a means test in the form of decisions by judges who look at all the information, including actual income and expenses. This bill would put in place a means test that does not look at actual numbers. It would calculate expenses based on standard government figures even if your rent is much more than what the government says rent should cost. It would base income on the past six months even if your income has dropped off. This bill would impose heavy legal costs and would require people to purchase counseling and if necessary travel great distances to get to it.
No longer will cars be paid back at actual value, but rather at the full value of the loan. And judges will be able to make no distinctions between someone whose child has developed diabetes and someone who has gone on a shopping spree.
Many people will be unable to file under Chapter 7 and make a difficult new start. They will be placed on long-term payment plans under Chapter 13. They will more often lose their homes. Some of the money from their child support payments will go first to creditors.
But perhaps the best measure of this bill is what it does not do. It does not do any of the things that were proposed in amendments rejected in the Senate or in the House Judiciary Committee. These include amendments to, among many other thing:
close loopholes for millionaires,
create a minimum homestead exemption to save the homes of the elderly,
protect service members and veterans from means testing in bankruptcy,
protect employees’ and retirees’ earnings and retirement savings when a business files for bankruptcy,
discourage predatory lending practices,
exempt debtors from means testing if their financial problems were caused by identity theft,
limit the amount of interest that can be charged on any extension of credit to 30 percent,
preserve existing bankruptcy protections for individuals experiencing economic distress as caregivers to ill or disabled family members,
exempt debtors whose financial problems were caused by serious medical problems from means testing.
The media has done a better job on this issue than on most. As usual, it’s been most straight-forward in opinion columns and less so in most news articles. Even so, there have been some articles on studies of medical bankruptcies and even of the funding of congressional campaigns by credit card companies, auto loan companies, etc. I get the impression that some editors and reporters have too much decency to go where 18 Democrats and one Independent in the Senate were willing to.
But the media has, as always, given us too much horse race and not enough facilitation of citizen involvement, predicting a near certain passage of the bill in the House, and praising the Republicans for being winners, even when acknowledging that their bill will hurt millions of people. Here’s how Newsweek summed things up:
New bankruptcy bill is latest victory for No Big Business Left Behind. Bonus: Deadbeat millionaires keep their loot.
The “party of the people” can’t even protect cancer victims overwhelmed by bills. Talk about bankrupt.”
DebtSlavery.org is working to change this way of thinking. We’ve assembled a coalition during the past week to work, against all odds, to defeat the bill. The groups lobbying against it include Democrats.com, Progressive Democrats of America (pdamerica.org), AFL-CIO (aflcio.org), People’s Email Network (usalone.com), National Community Reinvestment Coalition (ncrc.org), Democracy Week (democracyweek.org), Politology (politology.us), National Organization for Women (now.org), The Nation (nation.org), Black Commentator (blackcommentator.com), Public Citizen (citizen.org), Center for American Progress (americanprogress.org), Billionaires for Bush (billionairesforbush.com), and more. See the list at www.debtslavery.org
These organizations have been encouraging their members to Email, phone, and fax Congress. Already, over 10,000 Emails have been sent through the Democrats.com and People’s Email Network alone, plus thousands more from PDA. With lots more coming from coalition partners, at least 100,000 Emails are expected to be sent today and tomorrow.
Targeting Democrats who have expressed support for the bill, members of the DebtSlavery.org coalition plan to hold rallies in protest at district congressional offices. Rallies, most of them led by Progressive Democrats of America, are planned for Wednesday in several states. For an up-to-date expanding list of these events, see www.debtslavery.org
DAVID SWANSON is a board member of Progressive Democrats of America.