Bankruptcy Reform and the Democratic Candidates: Total Bankruptcy
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Democratic Candidates Start Taking Each Other to Task on Bankruptcy Reform


Bankruptcy reform has become a major source of contention for Democratic presidential candidates Hillary Clinton, Barack Obama and John Edwards in recent debates in Nevada and South Carolina.

During a January 15th debate in Las Vegas, Nevada-a state which A.A.C.E.R. records detailed had the highest-year-over increase in bankruptcy filings in 2007-MSNBC moderator Tim Russert called out the voting records of Edwards and Clinton.

While Edwards was a U.S. Senator from North Carolina, he voted in favor of the 2001 bankruptcy bill, which never became law but did set the stage for the ill-conceived Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

After he noted how the current bankruptcy law makes it tougher for people, especially women, to file bankruptcy, Russert asked Edwards if he regretted the vote.

Edwards responded that he did and shouldn't have voted for the bill; however, he failed to explain why he did vote for the bill and rather used the uncomfortable question to further establish his ideology as a champion of the working man.

After noting a recent study which stated that half of all bankruptcies are the result of medical costs, Edwards quickly explained how he would help families in the country with their economic problems through various initiatives, including:

  • establishing universal health care;
  • raising the minimum wage;
  • creating more jobs via a greener energy policy; and
  • making college more affordable.

Once Edwards finished his question, Russert turned to Clinton, asking her if she regretted voting in favor of the 2001 bankruptcy bill. Clinton stated that she did but then emphasized how that bill never became law; a strange response to say the least as Clinton still voted in favor of the bill!

Clinton quickly moved on by noting how she opposed the 2005 bankruptcy law and explaining her own plans of action, including:

  • instituting a 90-day mortgage foreclosure moratorium;
  • freezing interest rates for five years;
  • making the actions of mortgage lenders more transparent in the wake of the foreclosure crisis; and
  • closing a current loophole in BAPCPA that does not protect people from subprime loans and predatory lending.

So while Clinton's vote on the 2001 bankruptcy bill was not challenged by opposing candidates during the Nevada debate- her voting record was certainly taken to task in South Carolina.

Obama and Clinton Engage in Battle of He-Said, She-Said in South Carolina Bankruptcy Debate

What the Nevada bankruptcy debate may have lacked in contentiousness was certainly made up for in South Carolina! As Obama was addressing problems with the economy during the January 21st CNN debate in South Carolina, he called out Clinton's response to Russert's question from the previous debate.

Obama expressed his confusion over Clinton's statement that she voted for the 2001 bankruptcy bill with the hope that it wouldn't pass. He also noted how that the 2001 and 2005 bankruptcy bills were the works of special interest groups like credit card companies and banks, and then hit on a message that he made quite clear in Nevada: how he would stand up to special interest groups in Washington, D.C.

While CNN moderator Wolf Blitzer tried to go to a question from correspondent Suzanne Malveaux, Clinton demanded that she be able to respond to Obama's statements. When given the opportunity to, Clinton reiterated her regret for voting in favor of the 2001 bankruptcy bill but then once again noted how she opposed the 2005 bankruptcy bill that became the law.

Turning the tables on her opponent, Clinton talked about Obama's lack of a vote on one issue in the 2005 bankruptcy bill that she believed is telling of his alleged tendency to not be accountable for his voting record (at least in Clinton's words).

Clinton specifically stated that she voted to limit to 30 percent what credit card companies could charge on interest-an idea that was vehemently opposed by such interest groups at the time of the 2005 bankruptcy bill. Clinton then attacked Obama for not voting this way.

Obama noted that he did not vote for this limit because he thought a 30 percent limit was too high of a ceiling. Edwards, who did not get much chance to speak during this portion of the debate as it became a Hillary and Barack show, then took a dig at Obama's words, asking him if he just said that he voted against it because the limit was too high.

When Obama said that this was absolutely correct, Edwards turned his words around, indicating that Obama thinks there should be no limit at all on what credit cards could charge on interest rates.

Seeing what Edwards was doing, Obama told his opponent to "hold on" and then stated it didn't make sense to cap interest rates at the time because there was no discussion about how they were going to structure this.

Clinton then interrupted up by pressing that Obama voted for the credit card companies, which Obama took offense to and told the former first lady point-blank that he opposed the 2005 bankruptcy bill and she knows that.

Clinton then tried to use this whole situation as a springboard to attack Obama's voting on other things (to the dismay of some in the audience who began to boo) and his alleged relationship with a Chicago slumlord before Obama countered and Blitzer finally let Malveaux ask her question for Edwards.

Phew! As you can see, Clinton and Obama didn't spare any punches when it came to bankruptcy in the last debate. Now if only Edwards was allowed to be a part of the discussion.

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