Ron Kind and the New Democrats are happy to let the credit card companies write their own bankruptcy bill.
Senseless acts of Kind-ness
By
Jesse Russell
As the U.S. House of Representatives moves closer to holding a vote on a bankruptcy bill that will make it harder for people in dire straits to pick themselves up, Wisconsin’s third congressional district is starting to look like a nice place for the new debtor's prison.
Congressman Ron Kind is one of 20 House Democrats who have signed a letter pledging support for a bill that was essentially written by the credit card companies for the credit card companies. It is the most significant change to bankruptcy law in more than 25 years and would make it more difficult for consumers at the end of their financial rope to get a fresh start by wiping out debt.
If Kind does end up voting for this bill when it comes up next week (it was put on hold due to the death of the Pope) not all of the blame is on him. It was Senator Herb Kohl who sided with 19 other Democrats in the Senate to pass the bill onto the House free of any substantial amendments.
Nationally, more than 50 percent of all bankruptcies filed each year are from individuals or families unable to cope with medical costs. A study conducted by Harvard University shows that there has been a 2,200 percent increase in medical bankruptcies since 1981. A third of those who end up in bankruptcy were insured when they first became sick, but as their condition became terminal they were dropped from healthcare roles.
Obviously those numbers highlight a larger question - if we are to seriously tackle bankruptcy, shouldn't healthcare be addressed first?
According to the Harvard paper, in 2004 the state of Wisconsin saw 26,720 individuals file for bankruptcy. Of those, 13,454 were considered medical bankruptcies. The number of Wisconsinites in medically bankrupt families is 37,360.
An attempt by Senator Edward Kennedy to add an amendment that would protect those filing for medical bankruptcies was struck down.
The bankruptcy bill also fails to protect our sons and daughters fighting in and returning from the war in Iraq. An additional amendment proposed by Senator Richard Durbin that would have eased interest rates and protected the property of service members was also struck down.
In addition, amendments that would have capped interest rates at 30 percent and one proposed by Senator Russ Feingold that would have given protection for the homes of the elderly – rejected.
In an email sent out by the New House Democrat Coalition, Kind calls the bill "a common-sense measure," and says it "strikes an equitable balance between essential protections and responsible reform necessary to curb abuses of the current code by people with the financial means to pay their debt."
The statement is insensitive to say the least. It ignores the repercussions and impact to the majority of middle class and low-income people who file for bankruptcy because of the death of a breadwinner, job loss or medical illness. It also fails to address the ability of rich debtors to hide their wealth through homeownership. Most importantly it does nothing to level the playing field by addressing the aggressive marketing of the credit card companies and – much like the tobacco industry – the credit card companies’ complete lack of conscience when it comes to educating consumers on the negative impacts of abusing their products.
As the New Republic magazine points out, "There is no plausible political rationale for supporting it other than to appease credit card companies."
If the bill sounds familiar, that is because it is essentially the same bill vetoed in 2000 by President Bill Clinton. The current sitting president probably will not follow in Clinton’s footsteps; MBNA was the fifth-largest contributor to both of George W. Bush's election campaigns. MBNA has also been one of the top contributors to House Majority Leader Tom DeLay for more than a decade.
With the successful bid to distract the population with talk of Social Security reform, the bankruptcy battle has slipped below the radar. Organizations like DebtSlavery.org, the AFL-CIO and the National Organization of Women are trying to pick up the slack by holding rallies at the offices of those Democrats who have pledged support.
Let’s hope that when they visit Kind on April 13 they ask him which District 3 county is best suited for the debtor's prison.
April 10, 2005
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Jesse Russell lives in Madison and is the editor-at-large of the Dane101 Web site.
