It took eight years, but it looks like the credit card industry finally gets its bill establishing bankruptcy peonage. In two days' work, March 7-8, the Senate rejected Democrats' amendments to S. 256, the Bankruptcy Peonage Act. The bill would make it harder for middle-class families to discharge overwhelming debts through bankruptcy. Rejected amendments would have closed loopholes for the rich as well as violent abortion protesters, cracked down on predatory lending practices, protected the homes of those who were facing bankruptcy from medical bills and given the working poor an increase in the minimum wage.
When the Senate on March 8 voted 69-31 to limit debate, that likely was the last serious hurdle to passage of the bill. That clears the way for a relatively "clean" bill to go on to the House, whose leaders will not disturb its punitive provisions for middle-class families that have bad luck with business ventures or suffer catastrophic health care costs.
The Center for American Progress noted that the credit card industry put together a bipartisan coalition to protect the $30 billion in profits the industry took in last year under the old bankruptcy rules. Not a single Republican voted against cloture and 14 Democrats sided with the bankers and the GOP. They should be ashamed.
It's hard enough to try to convince working people that the Democratic Party represents their interests, in the face of propaganda put out by the faux-populist Republicans. It doesn't help when Democrats join the GOP on bad bills such as this.
A similar bill was stymied in 2000 by Bill Clinton's veto and again in 2002 when Senate Democrats were able to insert a "poison pill" that House Republicans were unable to come to terms with &emdash; namely the abortion provision. This year, the addition of four more Senate Republicans gave the GOP the cushion they needed to keep the bill inviolate.
Under the bill, the very wealthy would still be able to shield millions in assets after declaring bankruptcy by setting up "asset protection trusts." Sen. Chuck Schumer (D-N.Y.)'s amendment to limit the use of trusts to shield assets only up to $125,000 failed by a 39-56 vote.
Sen. Russ Feingold (D-Wis.)'s amendment to shield the homes of elderly persons (up to a modest $75,000) from seizure in bankruptcy failed 40-59.
Sen. Ted Kennedy (D-Mass.)'s amendment to exempt those who became bankrupt because of illness failed 39-58.
Sen. Dick Durbin (D-Ill.)'s amendment to exempt military service members and veterans failed 38-58. Republicans substituted their own amendment that would protect only active-duty troops and very low-income veterans.
The last hope for Democrats was Schumer's amendment to bar violent protesters from using bankruptcy to avoid payment of court judgments. Senate Republicans rejected it 46-53.
Credit card companies already make money off consumers who fall behind on their payments, through penalties, higher interest rates and late fees, but the peonage bill gives the credit card companies access to the one pool of cash that was previously off-limits &endash; the future income of people who have already declared bankruptcy.
Max Sawicky at maxspeak.org suggested that the private accounts and annuities under George Bush's Social Security privatization plan would be vulnerable to attachment by creditors, "thereby opening up a new source of equity to the credit card industry, after they have sucked out all your blood."
Financial services lobbyists have been pushing the bankruptcy bill since 1997. Harvard law professor Elizabeth Warren noted at TalkingPointsMemo.com's Bankruptcy Page that the bill has been introduced and re-introduced since then. "Despite the very public bankruptcies of Enron, Worldcom, Adelphia, Polaroid, United Airlines, US Airways and TWA, there are no new provisions to rein in corporations that are paying millions to insiders while they cancel employee health benefits and wipe out retirement plans," she wrote. "Instead, this bill focuses on families, clamping down on people who have been driven to bankruptcy by job losses, by medical problems and by family break ups."
Democrats who had been voting with the Republicans on this bill include Sens. Tom Carper and Joe Biden, both of Delaware, Sen. Ben Nelson (Neb.) and Sen. Tim Johnson (S.D.). Other Democrats who voted for cloture included Robert Byrd (W.V.), Kent Conrad (N.D.), Herb Kohl (Wis.), Mary Landrieu (La.), Joe Lieberman (Conn.), Blanche Lincoln (Ark.), Bill Nelson (Fla.), Mark Pryor (Ark.), Ken Salazar (Colo.) and Debbie Stabenow (Mich.). They sold out their working-class constituents for credit-card cash. Courtney Mabeus reportes on page 13 that during the 2004 election cycle the finance, insurance and real estate interests donated $306 million to federal candidates, with 59% going to Republicans. At least 14 Dems couldn't say no to Big Money. Let them know you care.
Chicken or Egg for Labor
AFL-CIO President John Sweeney on March 2 won a showdown with dissident union leaders who wanted to divert more of the labor federation's money to organizing. Andrew Stern of the Service Employees International Union and James Hoffa of the Teamsters wanted to return $35 million of labor federation dues to unions for organizing efforts. They also had the support of the UNITE HERE (textile, apparel, hotel, restaurant and retail workers), United Food and Commercial Workers, Laborers and Auto Workers, representing 40% of the AFL-CIO's members. But the AFL-CIO's executive committee rejected the organizing emphasis on a 15-7 vote. Instead on a 14-8 vote the committee approved Sweeney's plan to rebate $15 million for organizing, but to increase spending on political and legislative activity by one-third, to $45 million a year.
Sweeney plans a campaign to defend Social Security, reform labor law, defeat of the Central American Free Trade Agreement and support state-based initiatives aimed at raising the minimum wage.
Stern warned that Sweeney's approach would fail to revive organized labor, which must be the federation's top priority. He declined after the meeting to say if he would follow through on his threat to pull the SEIU out of the labor federation. "I don't think there is a plan for organizing," Stern said, according to the Washington Post. He criticized the boost in political spending: "I do not put much faith in elected officials of either party."
Unions represent 12.5% of the nation's workforce, the lowest level in a century. Private-sector unionization rates have fallen from 10.8% in 1994 to 7.9% last year.
Sweeney's supporters argued that political action is crucial to create a climate where it is possible to organize successfully.
But politics won't save labor. "While there's no doubt federal labor law changes would assist organizing, that's just not going to happen any time soon in the face of GOP filibusters," Nathan Newman wrote at NathanNewman.org. "There is a chicken-and-egg problem for labor: Labor's numbers have decreased, so their political power has declined, which means they can't change the law without expanding their membership numbers. Dramatic labor law changes will be the result of an upsurge in new worker organizing, not the cause of it."
Working people must organize politically and at the workplace. They no longer can afford the illusion that politics is not a vital part of their lives. A corporate president, a corporate Congress and a corporate judiciary can cause problems for working people for a generation or longer. -- JMC