Democratic Candidates on the Bankruptcy Bill

Brian of the CA-11 blog wants to make more information available about the policy positions of the Democratic candidates running against Richard Pombo. To that end, Brian asked Steve Filson a series of questions about the Bankruptcy Bill and posted Filson’s answers on his site. Since then I have asked the other Democratic candidates to answer the questions, and have now received responses from Jerry McNerney and Steve Thomas. I am posting their responses, along with Steve Filson’s responses (with Brian’s blessing) so that their answers can be compared side-by-side. I am posting this without commentary, and I have not edited or altered the responses in any way. Consider this a Public Service Announcement from your friends in the anti-Pombo blogosphere. And keep an eye out for more of these types of posts. Brian and I have discussed doing this again.


1. Some see the Bankruptcy Bill as a prime example of how Congress has completely turned its back on working families. Do you think that's true?

Steve Filson: Yes. I believe the vote to pass The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) is a perfect example of lobbyists with big checks getting exactly what they wanted while working families and small business owners were ignored.

Jerry McNerney: Yes, I agree. The Bankruptcy Law is a sellout to credit card companies, just as the Energy Law of 2005 was a sellout to the oil and gas companies, and the Medicare Part D was a sellout to the pharmaceutical companies. Unfortunately, the Congress often operates as a tool for corporations. This has to do with how federal election campaigns are financed. It takes purchased media to win elections and purchased media is getting explosively more expensive as the competition for that media grows. In order to afford this purchased media, politicians are forced to raise more and more money, and the groups that can afford to give the largest donations have sway with the federal government. Since corporations are strictly about profits, they are naturally the ones that can afford to purchase federal laws. Until we move toward public financing of federal election campaigns, this trend will continue to grow.

Steve Thomas: Absolutely! This is a bill written by the credit card lobby and shopped around until they found a Republican sponsor. Once you understand that corporations are let off the hook in a bankruptcy, while citizen's are made to pay every dime back, no matter the reason for the bankruptcy, this bill can only be viewed as obscene. Corporations can shred their pension obligations, break their contracts and still give their executives gold plated bonuses, pensions and parachutes while screwing the workers. They get a pretty sweet fresh start. Fully half of non-corporate bankruptcies are people who have medical insurance, but not enough for something catastrophic. My step father had colorectal cancer and ended up putting somewhere between $30,000 to $50,000 on his credit cards to save his life. My mother is refinancing their house to pay this, while she survives on social security. Another 25% of bankruptcies are women head of households, going through a divorce or job loss. The people who go crazy with the cards buying things they can't afford are a much smaller percentage than is generally perceived. Individuals will spend years or decades paying it all back. No fresh start there. Don't forget that the credit card companies send out huge volumes of low interest rate offers. After you're a customer, due to something called universal default, if you're late paying almost any bill, your interest rate goes to the maximum. Need I say the rates are usery? The ability to charge unlimited interest rates was a gift to them from Ronald Reagan. Think about that, the next time you see one of his "hero" movies. It's no wonder Americans have a negative savings rate, how do you put money away when you're an indentured servant to a credit card company, paying them 30% interest?

2. The Bankruptcy Bill garnered bi-partisan support, including vigorous support from Ellen Tauscher (D-Alamo). Do you think it was a mistake for some Democrats to support this Bill?

Steve Filson: I think it was a mistake for Democrats and Republicans to support the bill. While I have the utmost respect for Congresswoman Tauscher and the work she does for the 10th Congressional district, I disagree with her on this issue.

Jerry McNerney: If the Democratic Party wishes to represent the interests of the people of this country, then this it was a tragic mistake. It is often heard that there is no real difference between the two major political parties of this country, and this is an illustration of that claim.

Steve Thomas: In my view, it was a huge mistake for any Democrat to support this bill. When we win back the House, I sincerely hope they redeem themselves when a more consumer friendly do-over of this bill gets written. If I'm elected, I'll sponsor it. A question that should be asked about Tauscher is how much did their lobbyists give her, or did she do it for free?

3. How do you view the Bankruptcy Bill's relationship to other issues like Health Care Reform or Campaign Finance Reform?

Steve Filson: I believe these issues are related because they demonstrate how Congress can be held hostage on issues important to the American people by very small groups of powerful special interests.

There should be an honest and open debate in this country about how we get health care for all Americans. But that debate can’t happen when the only ones in the room benefit from obscene administrative costs at the expense of coverage.

There should be an honest and open debate in this country on campaign finance reform and free speech. But the debate is being stifled by powerful media interests benefiting from the outrageous prices charged to candidates so they can get their message to voters.

Money can narrow the conversation about how best to address the issues we all face and can suppress the best ideas that can move American forward.

Jerry McNerney: There is a strong relationship between the Bankruptcy Law and the inability to address Health Care as discussed in the answer to the first question. Elected representatives are not able to represent the interests of their districts because they are forced to take large sums of money from groups that no not have the interests of the districts in mind. Our nation needs public financing of federal election campaigns if we are to be able to address the many difficult and challenging problems that face our nation today.

Steve Thomas: It's one more example of how corporate lobbying money purchases the legislative agenda. If I recall correctly, lobbyists spend $200 million a month and they outnumber legislators something like 43 to 1. Lobby reform won't solve this, we need full public financing of campaigns. That is the only way to get the corporate check writers out of the process. You need to send someone like me to Washington, because I really don't care about ever being rich. I can't be bought. My spiritual values far out weigh filthy lucre.

4. What impacts do you think the Bankruptcy Bill will have right here in the CA-11 District?

Steve Filson: The impacts will be widely felt.Small business will be punished by the complicated rules surrounding business formations that need to co-mingle personal and business assets.

Consumers and new students will suffer because the law does not address the aggressive marketing of high interest, high fee credit cards to new graduates and low-income workers. The majority of bankruptcies are not caused by one’s “moral failings” but have their origin in catastrophic events and medical emergencies. The law strips away the financial second chance Americans deserve.

Perhaps most depressing is the effect this law will have on active duty troops and Reserve and National Guard members. In 1999, a General Accounting Office study analyzed bankruptcy filings and determined that 16,000 active-duty service members had filed for bankruptcy during the course of the last year. In addition, a 2002 Pentagon study found that 1/3 of military families experience a significant drop in income when a member was deployed, and for Reserve and National Guard members this figure rose to 40%. The men and woman who defend this country must have better.

Since the bankruptcy law became effective, the Republican majority in Congress continues to block any exceptions to the bankruptcy law for service men and woman as well as victims of last season’s terrible hurricanes. These are times when Congress should side with working families and the men and women who defend our nation.

Jerry McNerney: The impact will be on individuals and small businesses of the district, mostly on people who do not have the ability to be heard. CD11 already contains one of the most economically depressed regions of the country, worse even than Appalachia. The impact will be to widen the gap between the poor and the wealthy.

The top two categories of people that file for bankruptcy are divorced females and people who suffer catastrophic medical costs due to injury or illness. These groups are certainly represented in our nation and our district.

More specifically though, San Joaquin County has over 12,000 families on waiting lists for affordable housing, and the population will double over the next 20 to 30 years. California has over 7 million uninsured, and these people are at great risk of financial ruin. And, we must also mention that large numbers of families of National Guard members called to the tragic and unnecessary war in Iraq also face bankruptcy. In fact Tracy has the highest KIA rate per capita in California and one of the highest enlistment rates per capita. Pombo’s support of this bill puts these families that give our country so much in great financial risk. It’s time to start building a new economy in the region not tearing away at the safety net that helps so many people in our district and our nation.

Steve Thomas: This is earthquake country. If we have a big one in the wrong place, just for starters we can lose the delta levees. That will wreck the water supply in that we'll have salt water at least half way to Stockton. This could cause a major disruption in the economy in the district for months and probably push a lot of people and small businesses into bankruptcy. It gets worse if we have a bridge fall down or lose the Sacramento levees. Now you have to remember, the Democrats added two amendments to this bill before Hurricane Katrina. One was to exempt victims of natural disasters, the other was to exempt vets returning from Iraq and Afghanistan for just one lousy, stinking year. The Republicans, including Richard Pombo, voted those down on a party line vote.

Tags: CA-11, Richard Pombo, Steve Filson, Jerry McNerney, Steve Thomas, Bankruptcy Bill, CA-11 Blog