Clinton, Edwards, and Obama on 2005 Bankruptcy Law

Adam Levitin's post and Katie Porter's comment on about last night's Democratic debate and the candidates' discussion of the 2005 bankruptcy prompted me to start writing a comment about the Democratic candidates' stand on the 2005 bankruptcy law. It started getting too lengthy, and the comment turned into this post. Adam is right that we have stayed away from electoral politics. Actually, there is not really a "we" as we don't coordinate our posts or viewpoints. As I have said, we can't even agree on where to go for dinner when we're all together. So, this is just my view on the 2005 bankruptcy law and the Democratic candidates.

The only Democratic candidate who has a clean record on the 2005 bankruptcy law is Senator Obama. He opposed the bill in his public statements and voted against it when it came to a vote.

Former Senator Edwards had supported an earlier version of the 2005 law, and he was no longer in the Senate (as Katie Porter noted in her comment) when the 2005 law came to a vote. We don't know how he would have voted, but his support for the prior version suggests he would have supported the 2005 law. I will give Senator Edwards credit for admitting his support for the law in 2001 was a mistake rather than taking the cop-out that the 2005 law was substantially different than what became law in 2005 -- it wasn't.

Senator Clinton initially opposed changes to the bankruptcy law when she was first lady but later came to support the law when she was elected senator. (Details in Elizabeth Warren & Amelia Warren Tyagi, The Two-Income Trap (Basic Books 2003), at pp. 123-26.) Senator Clinton did not vote on the 2005 bill because of her understandable absence due to President Clinton's heart surgery. In last night's debate, she repeated her statement that she opposed the 2005 bankruptcy law despite her support for an earlier version. There were differences between the 2005 version that became law and the 2001 version, but the differences are not as dramatic as Senator Clinton might like casual observers to believe. It is hard not to see Senator Clinton's changing positions as largely influenced by her need for political and financial support first as a senator and then as a potential presidential candidate. Katharine Seelye of the New York Times political blog, The Caucus, has a good post from last August with a more extensive analysis of Senator Clinton's changing positions on bankruptcy reform.

In last night's debate, both Senator Clinton and former Senator Edwards expressed regret over their earlier support for the bankruptcy law (transcript here), and they should regret these positions. It always was apparent that the 2005 bankruptcy law would hurt the middle class, which Senator Clinton and former Senator Edwards profess to care about so much. Senator Clinton and former Senator Edwards hardly stood alone from their fellow Democrats. The 2005 bankruptcy law passed the Senate 74-25, with eighteen Democrats voting in favor (full roll call vote here). The story of the 2005 bankruptcy law is about industry campaign contributions overcoming the better instincts of our nation's leaders. Senator Obama deserves some recognition for standing up to the consumer credit industry.

None of this is meant to endorse Senator Obama or to suggest that one should not support Senator Clinton or former Senator Edwards. On the issue of the 2005 bankruptcy law, it is only Senator Obama who can claim he did the right thing.

Comments

[Ken Houghton]

"On the issue of the 2005 bankruptcy law, it is only Senator Obama who can claim he did the right thing."

Uh. Edwards wasn't in the Senate in 2005. So unless you want to argue that he should have (1) run for re-election at the same time he ran for VP, (2) won, and (3) then voted against the 2005 bill, the sentence quoted above is demonstrated false.

[explorer]

I appreciate the attempt at even-handedness, but it failed on on point:

It is also false to assume that Edwards would have voted for the same bill four years later, had he been in the Senate. It is like assuming that Obama would have not have voted for the intial authorization for the Iraq war, when he in fact voted THREE times to re-authorize it sans timetables.

Edwards considers new data and evidence before he makes decisions, is willing to publically admit his mistakes, and not make them again. I don't get the same sense from Obama, as he has too little experience to go on for any kind of track record of predictablity.

[Patricia Hammel]

I believe some members of Congress "got educated" by pro-debtor and pro-consumer forces during the year this legislation was rotating through the Capitol. Exhibit A-Sen. Russ Feingold, who initially (back in 2001) told me he supported this "necessary" legislation, but later attempted to add a number of mitigating amendments (some I believe were specifically dedicated to the memory of Paul Wellstone) and in the end, voted NAY.

[Charles Coulter]

Senator Clinton issued a press release highly critical of the 2005 bill. She voted for the consumer friendly amendments to the bill prior to passage. Those amendments, of course, lost. She also voted against cloture. This was from her press release on the 2005 bill :
"The bankruptcy bill fundametally fails to accord with the traditional purposes of bankruptcy which recognize we are all better off when hard working people who have suffered financial catastrophe get a fresh start and a second chance..." Nothing in that statement indicates any support for the bill at all. First came the disinformation that she voted for the 2005 bill. Shame on Elizabeth Warren for that. Then came the slur that she deliberately avoided the vote. Shame on Jackson Williams for that one. We would all benefit if untruths are not repeated as fact.