House Passes Bankruptcy Reform Bill, for 7th Time

The Republican-led House, launching another push for a bankruptcy reform bill that refuses to die, easily approved legislation Wednesday that would crack down on individual debtors and help credit card companies.

The 315-113 vote marked the seventh time since 1997 that the House has passed a version of the bill. Previous bills have either failed to clear Congress amid partisan deadlocks or been killed by presidential veto.

This time, with President Bush ready to sign a bankruptcy bill if one reaches his desk, proponents hope to push the legislation into law with fresh help from the Republican takeover of the Senate in January.

If enacted, it would become the first major bankruptcy reform in a quarter-century. The legislation would make it harder for debtors to erase their debts by declaring personal bankruptcy and forfeiting assets. It would establish rules that would force many to repay at least some of their obligations on a court-approved schedule.

The House bill omits a provision negotiated last fall by senior House and Senate members to limit attempts by certain social activists to wipe out their debts. That provision killed an attempt at compromise before Congress adjourned in November.

The provision, championed by Sen. Charles E. Schumer (D-N.Y.), was meant to force antiabortion activists to pay fines, damages and other fees incurred through protests at women’s health clinics. Some of those activists have in recent years sought bankruptcy protection.

Schumer is expected to push again for the provision when the debate reaches the Senate. In February 2000, the Senate passed a similar proposal from the New York Democrat by an overwhelming majority.

But House Republican leaders view the provision as a poison pill. Last year, similar legislation that included the Schumer provision was defeated by a coalition of Democrats -- who opposed the bill as bad for consumers -- and antiabortion Republicans. The House did approve a version of the bill without the provision, but the Senate -- then controlled by the Democrats -- refused to consider it unless the language was restored.

This year, antiabortion activists have another factor working in their favor: The Supreme Court ruled in February that antiabortion protesters could not be prosecuted under a federal antiracketeering law. That decision removed the threat of certain types of fines the protesters would otherwise face. Still, other legal sanctions remain in force.

On Wednesday, 90 Democrats joined with 225 Republicans to pass the bill. Opposed were 112 Democrats and independent Rep. Bernard Sanders of Vermont. No Republicans broke ranks.

California Democrats who voted for the bill were Reps. Joe Baca of San Bernardino, Dennis A. Cardoza of Atwater, Calvin Dooley of Visalia, Jane Harman of Rolling Hills, Juanita Millender-McDonald of Carson, Ellen O. Tauscher of Pleasanton and Mike Thompson of St. Helena.

Republicans, delivering a solid though predictable victory for banks, credit card companies and other financial interests that have long sought bankruptcy reform, relished the outcome and expressed hope that the bill’s long march may soon end.

“The time for these reforms is long overdue,” said House Judiciary Chairman F. James Sensenbrenner Jr. (R-Wis.), who shepherded the bill. “This body has on six previous occasions passed similar bankruptcy reform bills.... Perhaps this seventh attempt will prove to be a charm.”

Advocates said the bill struck a balance between helping responsible debtors ease their financial burdens while forcing irresponsible debtors to stop using the bankruptcy code as a “financial planning tool.”

“It is not shameful to file for bankruptcy if you fall on hard times,” said Rep. John Linder (R-Ga.). “It is, however, shameful if you use bankruptcy as a means to avoid paying your obligations.”

But opponents reiterated -- as they often have in years past -- that the measure would unfairly punish middle-class families that get hit by a sudden medical bill as well as hurt women saddled with the debts of their divorced husbands.

“The big winner here is the credit card industry,” said Rep. William D. Delahunt (D-Mass.). “Passage is going to mean billions of dollars to their bottom line.”