While the Party has heralded
unity on Social Security the bankruptcy debate has festered.
Today, the glint of discord between those who support
the bill and those who oppose it has coursed beyond
the bill itself, fueling an increasingly public debate
over the very principles of the party.
“There is a lot of concern that Democrats are
not finding defining issues and defining principles
on basic economic issues,” said one House aide,
whose frankness came on the condition of anonymity.
“There’s no Democratic voice. If we’re
not willing to stand up for middle class interests against
big money, then what is the difference between the Democratic
Party and the Republicans?”
The fissure in the party on the bankruptcy bill is
palpable, and it is real. To some, the split in the
Democratic caucus—and the decision by the Democratic
congressional leadership not to intervene—reflects
a lack of vision and coherent party principles. To others,
the idea of a burgeoning party divide is a product of
misinformation and thought something of a construction;
Democrats have always been split on the issue since
it came to the floor some eight years ago.
But there is new heat in the tenor of the Democrats’
disagreement, and it is readily apparent that it isn’t
merely about bankruptcy. When asked whether he thought
more liberal members of the party were wrong about how
the bill would affect those who experience medical catastrophes,
its Democratic author said he “would go further.”
“I think the opponents of this bill are in some
cases deliberately trying to mislead people,”
Rep. Richard Boucher (D-VA), told RAW
STORY, “and to lead them to think that someone
who is affected by a financial catastrophe is going
to be hindered by this bill. That simply isn’t
true.”
Boucher, who believes the bill has great value for
consumers, says that Democrats who believe the bill’s
passage depended on lobbying efforts from “big
money” financial service firms are out of line.
“The insensitivity of lobbying with bankruptcy
reform has been no greater than any other,” he
remarked. “People who don’t like a measure
as sort of a last refuge will say that supporters are
pandering to a special interest.”
That interest though, opponents point out, is real.
David Sirota, a fellow at the progressive thinktank
Center for American Progress, recently noted that a
group of centrist Democrats who called for a vote on
the bill accepted $750,000 from financial services firms
in the 2004 House election cycle alone. Those criticized
offered Sirota stern rebukes. Boucher was not among
the group.
Money has salted the bankruptcy debate for years. MBNA,
one of the banks that has championed the measure, was
among the largest contributors to President George W.
Bush’s reelection campaign, and Bush has made
bankruptcy reform a priority. Business lobbyists of
all stripes have pushed hard to round up support for
the bill. But there is no comparable lobby against the
bill as there is in the AARP with Social Security privatization.
“These are public interest groups that have maybe
one or two representatives to go door to door around
400-some congressional offices, and they’re up
against literally hundreds of representatives of lending
interests,” one aide remarked. “Not just
the banks, but the people who run furniture stores that
let you buy things on layaway, the check-cashing industry—they’re
up against hundreds of lobbyists.”
Some Democratic offices privately admit that the contributions
of financial services firms are a factor, among many,
that are considered when deciding whether or not to
support the bill. One office said they had weighed the
prospect of the industry backing a primary challenger
from within their own party in response to opposing
the measure.
“A member only has two reasons for voting for
this bill,” a more cynical aide asserted. “The
first is that they’re in the pocket of the financial
services industry, and the second is if they believe
the financial services industry will so heavily line
up behind an opponent” that is dangerous to their
reelection.
“I’ve heard members articulate that the
financial services industry will heavily fund a primary
opponent or a general election candidate” if they
oppose the bill, the aide added.
A longtime Democratic Senate aide disagreed. The staffer
said the issue wasn’t about money, but rather
party inertia.
“It’s party lethargy, not big money,”
the aide stated. “Once Democrats get to Washington,
they’re rewired to leap at compromise. This has
been a year in, year out example of the party’s
lack of effective leadership.
“Democrats are only now relearning what it takes
to be the outside Washington party,” the aide
continued. “Tom Daschle supported the bankruptcy
bill, for God’s sake, giving a cue to Democratic
senators to do their own thing and triangulate.”
Only now, the aide added, is “the Party slowly
but surely becoming an insurgent party, and at last
you see Joe Lieberman getting his act together and voting
against this bill."
In an article published Monday, the chief political
correspondent for the Los Angeles Times, Ron
Brownstein, put
it this way, “The best Democrats can do is
hold down the Republican score; the Democrats have found
virtually no opportunities to advance their own ideas
or to steer the discussion onto their strongest terrain.”
Brownstein added, “The Democrats’ biggest
problem is that they don't have a viable means to spotlight
or forge a party consensus.” Veteran Democratic
strategist James Carville also wrote in a controversial
memo last month about “voters’ deeper
feelings about the Democrats who appear to lack direction,
conviction, values, advocacy or a larger public purpose.”
Emblematic of the divide on the bankruptcy bill is
a split within the House and Senate Democratic leadership.
In the Senate, the Democratic leader Harry Reid (D-NV)
supported the bill; the Democratic whip, Dick Durbin
(D-IL) did not. In the House, the split is in reverse;
leader Rep. Nancy Pelosi (D-CA) opposes the bill, while
her whip, Rep. Steny Hoyer (D-MD) does not. Neither
chamber has chosen to “whip” the bill, meaning
an attempt to steer the caucus towards voting along
party lines.
Hoyer’s office notes the bill has always enjoyed
significant Democratic support.
“It’s a bill that had bipartisan support
for several years,” said Stacey Farnen-Bernard,
Hoyer’s press secretary.
Pelosi’s office, while noting that the congresswoman
personally opposes the bill, said the leadership doesn’t
whip votes without broad caucus agreement.
This style has drawn fire from more liberal members,
who say consensus-style party governance has not advanced
the Democratic agenda. These staffers take pains to
distinguish between Pelosi and a style of leadership
she has inherited.
“I think there’s a big mistake if anyone
tries to pin this on any one person, or to say that
if one person has changed, this will all of a sudden
become better,” an aide said. “It’s
a problem that was inherited from Gephardt, and prior
to Gephardt from Foley, and from Jim Wright, and from
Daschle on the Senate side. There isn’t that ideology
branded in fire that the Republicans got from Goldwater
in 1964.”
But change, the aide believes, is in the air. Many
saw former Vermont Governor Howard Dean’s selection
as a significant shift to marry grassroots aspects of
the party with more traditional Democrats. The aide
stressed his belief that by embracing a clearer set
of principles, Democrats in more conservative areas—such
as Sen. Bill Nelson of Florida—would also feel
less pressure over every vote.
“There is beginning to be a real thirst and hunger
from at the very least, many people on the grassroots,
and amongst some staff,” the aide said. “We
need to start making our principles clear enough and
strong enough that people who represent traditionally
more Republican areas don’t have to justify every
single Democratic vote—that there’s a level
of understanding that Democrats are fighting for mainstream
middle-class American principles.”
Boucher, who authored the bankruptcy bill on the Democratic
side, says he’s convinced the bankruptcy bill
is just that—a measure which enhances competition,
lessens regulation and protects the consumer.
“I am a moderate Democrat, I am business oriented,
I believe in competition...so I’m naturally inclined
to look with an open mind to enhance competition, and
lessen regulation...but I had to be convinced,”
Boucher said. “We have considered that issue thoroughly
and we have written provisions into the bill to completely
protect people who are victims of high medical costs
and who have to declare bankruptcy.”
“This is not a measure that’s been hurried
up or been pushed through the process without considerable
thought,” he added. “It has been the subject
of dozens of hours of hearings in both the House and
the Senate. It’s probably one of the most thoroughly
considered financial matters that the Congress has taken
up in recent history.”
To others this is simply balderdash. The Democratic
staff of the House Judiciary Committee prepared a 54-page
dissent copied to RAW
STORY that details what they see as a deeply flawed
piece of legislation. The report notes that this Congress
has not held any hearings on the most recent introduction
of the bill.
“The House Judiciary Committee has held no hearings
on this legislation in this Congress,” they assert.
“The Subcommittee on Commercial and Administrative
Law has not considered the bill.”
“Proponents of the legislation say that the bill
will put pressure only on the families that have the
ability to repay,” the report continues. “
In fact, the weight of the evidence demonstrates that
the legislation will increase the cost of bankruptcy
for every family, and it will decrease the protection
of bankruptcy for every family, regardless of income
or the cause of financial crisis.”
In conclusion, Judiciary Democrats—many of whom
rank among the more liberal members of the House caucus—called
the existing bankruptcy code a “model of pragmatism
and equity.”
“It may well be that, in the years to come, many
of the same interest groups now clamoring for this legislation
will come to regret the inefficiencies, uncertainties,
and distortions it will inflict on the bankruptcy system,”
the report reads. “While the Bankruptcy Code could
clearly benefit from reforms and modernization, indeed
this legislation contains many provisions that are both
beneficial and uncontroversial, much if it is unnecessary
and harmful to debtors, creditors, and the economy.”
But if there is one thing both sides of the party agree
on, it’s a lack of unity surrounding the bankruptcy
measure.
“One cannot assign a clear position to the caucus
one way or another,” Rep. Boucher said.
Originally
published Apr. 5, 2005.
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