Biden and Obama Clash on The Bankruptcy Bill: BAPCPA
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Running Mate Biden's Support for BAPCPA Could Tarnish Obama's Promises to Reform Bankruptcy

Democratic presidential candidate Barack Obama has spoken out aggressively in the past against the notorious Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).

In a stump speech in Atlanta, Georgia on July 8, 2008, Obama turned his words to address how he would protect Americans from "predatory lenders" by making changes to certain provisions of BAPCPA, an act he opposed on the Senate floor in 2005.

Obama has proposed now that, as president, he would recommend changes to the bankruptcy law in order to make bankruptcy easier for certain subgroups who might otherwise have a hard time applying, given the requirements for the means test that came from the BAPCPA provisions.

Specifically, he would exempt military families, senior citizens and those whose debt is due to medical bills from the means test requirements-all three of which whom are among the top-growing categories of debtors filing for bankruptcy protection.

However, Obama's recent much-heralded selection of Joseph Biden, the senior Democratic senator from Delaware, has raised a few eyebrows among those who followed the course of BAPCPA as it passed through Congress in 2005.

As many remember, not only did Senator Biden vote for the bankruptcy bill, but he was one of the bill's leading proponents when it came up for vote in a previous version in 2001. Biden ended up voting for all four versions of the bankruptcy bill, which finally passed as BAPCPA in 2005.

Furthermore, some have questioned a potential conflict of interest behind Biden's votes in favor of legislation that many have seen as one-sided in favor of credit card companies and lenders.

Biden's son, Hunter Biden, was a financial consultant for the MBNA corporation, which was the world's largest independent credit card issuer before Bank of America bought them in 2005. Biden's largest campaign contributor has been MBNA, as is also the case for Biden's fellow Delaware senator, Tom Carper.

While GOP strategists are said to be planning ways to drive a wedge between the two new running mates on their differing perspectives on the congressional resolution to give the president power in 2003 to declare war in Iraq, many see this divergence to be perhaps more important, given Obama's stake in economic issues and the fact that he is leading GOP candidate John McCain in this issue in the latest polls.

Obama drew clear distinctions between himself and other Democratic candidates in the primaries, including Hillary Clinton and Biden, for their support for the bill. Obama has furthermore spoken critically of Senator McCain's support of the bill during general election campaigning, using it to push at a theme of McCain's alleged unconcern for the cares of working-class and middle-class families.

While it seems likely that Biden's power to sway opinion on the bankruptcy issue will be trumped by Obama's insistence on reforming filing bankruptcy requirements for medical patients, senior citizens and military families, Biden's past siding with the credit card companies over this critical economic issue affecting the lives of millions of Americans may certainly come back to haunt the campaign, both now during election season and potentially while striving to implement an economic agenda if they make it to the White House.


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