Amendment Again Becomes Bankruptcy Sticking Point

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The newest version of bankruptcy reform bill was poised for its first big step last week with the Senate Judiciary Committee expected to pass the bill, but once again the bill will be dragged into the heated controversy over abortion rights-the same debate that forced its demise in each of the last two congresses.

New York Sen. Charles Schumer and several of his Democratic colleagues on the committee insisted they will fight the bill tooth and nail unless Senate leaders reinsert language that would prevent abortion clinic protestors from shielding their financial assets under the bankruptcy statute.

The language, known as the Schumer amendment, caused an uproar among the anti-abortion lobby last year, even as the Senate and the House passed the bill overwhelmingly with the language in it. But the uproar among the opponents of abortion, a key Republican constituency, forced Republican leaders to kill the bill during the process of reconciling the separate versions passed by the Senate and House.

Sen. Schumer told members of the judiciary panel he was dismayed the abortion-clinic language was kept out of this year's version of the bill and he will take his fight to get the language included to the floor of the Senate when the full body votes the measure. Noting the main aim of the bill is to close loopholes used by individuals to shield their debts from creditors, Schumer said the abortion clinic language is aimed at doing just that.

"Nobody ever intended bankruptcy laws as a shield for people who use violence and threaten violence," said Schumer. "This is not a pro-choice or pro-life or anti-life amendment. It's very simply, a pro-rule-of-law amendment. I will do whatever I can to hold this bill up in every way until that amendment is in this bill."

Several Democratic senators, including Diane Feinstein of California and Pat Leahy of Vermont, joined Schumer and pledged to hold up the bill unless the abortion clinic amendment is put back in. Feinstein recounted how abortion rights opponent Randall Terry, founder of "Operation Rescue," filed for bankruptcy in 1998 to shield his savings in a civil suit brought by a clinic at which he had shot and killed the doctor. She said there have been 4,200 acts of violence against abortion clinics and doctors since 1977. "I think it's a big enough issue on our side to frankly stop the bill," said Feinstein.

While the Democrats have an uphill battle in their efforts-they are out-numbered 55-to-45 in the Senate-the likelihood is they will launch a filibuster to stop the bill if they don't get their way on the Schumer amendment. A filibuster will require 60 votes by the Republican majority to end, which means they will need five Democrats to join them. If the Republicans can't get the 60 votes they will either have to add the Schumer amendment back to the bill-inviting another major fight with the anti-abortion lobby-or let the bill die again.

Still, the tenor of the Judiciary Committee last week made it clear that the CU-backed bill continues to have broad support in both parties, especially the credit union priorities for a means-test to determine eligibility to file chapter 7 to erase all debts; mandatory financial education for bankruptcy filers; and the continued ability of creditors and debtors to enter into reaffirmation, or voluntary repayment, agreements on selected debts.

The bill would also set a uniform homestead exemption, the amount of home equity a bankruptcy cold shield under bankruptcy, of $125,000 for all 50 states.

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