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The twenty-year argument between Joe Biden and Elizabeth Warren over bankruptcy, explained

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  1. skybrian
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    From the article: [...] [...] [...]

    From the article:

    Warren’s quarrel with Biden isn’t personal. It’s about a 2005 bankruptcy bill he supported as a senator. Warren opposed the bill so vehemently that its passage inspired her transition from a Harvard bankruptcy law professor, who studied middle-class economics, to a senator and now a presidential hopeful.

    “I got in that fight because [families] just didn’t have anyone and Joe Biden was on the side of the credit card companies,” Warren said after an April rally in Iowa. “It’s all a matter of public record.”

    [...]

    Legislation aiming at the basic purpose of the bill was first introduced in 1998, passed the House in 1999, passed the Senate in slightly different form in 2000, and then a conference committee produced a compromise bill later that year. But then Bill Clinton somewhat unexpectedly vetoed the bill in December in one of his last acts in office.

    Hillary Clinton claimed credit for turning the administration’s mind on this around in one of her memoirs and she discussed the issue at the time with Warren, after reading one of Warren’s op-eds opposing the legislation.

    [...]

    The bill came back the next year with some new provisions, including the boost to divorced women’s priority in the bankruptcy line, and Hillary Clinton — now a senator — became a supporter. But the legislation got derailed by some fairly tangential controversies related to abortion.

    By 2004-2005, however, the abortion issues were ironed out. Warren, still a professor rather than a politician, but an increasingly visible public critic of the proposed changes, memorably lacerated Clinton’s change of heart. She attributed the reversal entirely to Clinton’s status as a New York senator who counted Wall Street as her constituents.

    [...]

    Biden’s core argument, along with other proponents of the bill, was that overuse of bankruptcy made credit more expensive for everyone.

    “Unnecessary and abusive bankruptcy hurts everyone,” Biden said in March 2001 after helping to scuttle some liberal amendments that might have derailed the bill. “This costs every single American consumer.’’

    Biden’s campaign currently tempers its praise of the bill with a discussion of legislative strategy — arguing that a bankruptcy crackdown was inevitable in GOP-controlled Washington and that Biden’s work on the legislation made the bill better.

    “Because it was a certainty that the Republican-controlled Congress and White House would turn the bankruptcy bill into law,” Biden spokesperson Andrew Bates said in a statement, “then-Senator Biden fought for and won important concessions for middle class families in it, including protecting access to Chapter 7 forgiveness for working people, making child support and alimony the number one priority for debt payments — in front of big banks and credit card companies — and forcing credit card companies to warn borrowers about their interest rates.”

    The alimony change is also what Clinton cited as motivating her turnaround. And, indeed, the legislation attracted the strong support of the National Child Support Enforcement Association on precisely these grounds. Bumping the priority of child support and alimony payments ahead of other creditors would have been extremely difficult to achieve as a head-to-head battle of divorced moms versus bank lobbyists. But as a concession won by Democrats, it went through easily as part of a larger package.

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