BANKRUPTCY REFORM GETS ANOTHER CHANCE
Byline: Joanna Ramey
WASHINGTON — Maybe the third time will be the charm for bankruptcy reform legislation, which on Monday the Senate Banking Committee chairman said he’ll introduce.
Legislation that would make it more difficult for people to wipe out all their debts under bankruptcy laws died two years ago in Congress and last year was vetoed by President Clinton. Such a measure requiring a means test to determine if a debtor can repay part of their debt is a priority of retailers.
Sen. Phil Gramm (R., Texas), told reporters at a news conference his measure “will be a better bill” than the one Clinton vetoed, but he did not elaborate. Gramm is a longtime critic of bankruptcy laws he considers to be too lenient and encourages people to take advantage of the system.
President Bush has said he would sign a bankruptcy overhaul bill.
Last year’s bill from from Congress was the result of compromises reached between Republican and Democrat lawmakers and the White House. Despite several changes to make the bill more consumer friendly, the former president considered the bill to be bad for working people.
Mallory Duncan, vice president and general counsel at the National Retail Federation, said having Bush in office “probably does change the dynamic” of having a President willing to sign a bill.
“But I do think it’s still a little early on Capitol Hill to see how this is going to shake out” in terms of what kind of bill might be crafted.
Duncan said retailers hope another pass at bankruptcy reform will produce legislation with a stronger means test targeting debtors with sizeable incomes.
“There were a number of provisions of [bankruptcy reform] that have been watered down over the last four years,” he said.