Congressional and White House aides agreed Friday that bankruptcy reform is needed-and politically popular.
"There is a large contingent who hold the view, which the President strongly shares, which is that there is a need for meaningful bankruptcy reform," Sarah Rosen, senior White House adviser for financial and regulatory affairs, said at an American Bankruptcy Institute conference here.
"The support among the senators for bankruptcy reform is very strong, and I think this reflects public sentiment," said John McMickle, counsel to Sen. Charles E. Grassley, R-Iowa.
But, as David Lachmann, a House Judiciary Committee aide pointed out, "the devil really is in the details."
For instance, the Senate bill contains a so-called means test, which would force debtors who could afford to repay either $15,000 or 25% of unsecured credit over five years to file under Chapter 13 of the bankruptcy code. (That is the tougher bankruptcy route because, unlike under Chapter 7, Chapter 13 filers must repay some of their debts.)
The means test in the House bill would require a Chapter 13 filing if the debtor could repay at least $5,000 of debt.
So could both sides agree to $10,000?
Mr. McMickle said that "$10,000 in Sen. Grassley's view is not an unreasonable figure." But Joe Rubin, legislative director for Rep. George W. Gekas, R-Pa., defended the $5,000 figure and said the issue would have to be resolved during the House/Senate conference committee.
Ms. Rosen also said the legislation must take a harder line on credit card companies. Democrats in both chambers have been clamoring for added disclosures on credit card statements, such as how long it would take a consumer to pay off his balance if he only paid the minimum due each month.
Bankruptcy reform legislation made it through the House and Senate last year, and even through the conference committee. But time ran out before the Senate could vote on the reconciled version.
Though off to a quick start this year, progress has slowed. Opposition from Democrats forced the Senate Judiciary Committee to postpone until Thursday a vote that had been set for last week.
A House Judiciary subcommittee narrowly approved legislation last month, and the full committee is set to take up the matter tomorrow.