Wednesday, March 02, 2005

Bankruptcy bill in the Senate; DeLay poised to aid donors (again)

There's a bad bankruptcy bill being debated in the Senate this week. Tell your Senators you oppose it.

Today's New York Times has a new twist on it -- there is a big, gaping loophole for wealthy Americans in the bill:

The loophole involves the use of so-called asset protection trusts. For years, wealthy people looking to keep their money out of the reach of domestic creditors have set up these trusts offshore. But since 1997, lawmakers in five states - Alaska, Delaware, Nevada, Rhode Island and Utah - have passed legislation exempting assets held domestically in such trusts from the federal bankruptcy code. People who want to establish trusts do not have to reside the five states; they need only set their trust up through an institution in one of them.

No surprise here. The credit card companies and big banks wrote it. The bill makes it needlessly difficult for low- and moderate-income people to get out of debt. Too often, people find themselves over their heads in credit card debt and therefore need to file for bankruptcy because of things beyond their control, like medical bills and job loss. In fact, a recent Harvard study reported that half of all bankruptcies were due to soaring costs.

Politicians have treated the credit card companies and big banks like their personal ATMs available for cash advances during election season. The industry gave $101 million to federal candidates and political parties in the last six years and is collecting on that debt this week in the Senate.

We launched a campaign yesterday to tell Senators to oppose the big money payoff to the credit card companies. Lobby your Senators here.

How does this involve Tom DeLay? Read further down in the NYT piece to find this nugget:

Yesterday in Washington, Republicans in the Senate beat back the first in a series of Democratic amendments aimed at softening the effects of the bankruptcy bill on military personnel, and the majority leader of the House vowed to get quick approval of the bill if the Senate did not significantly alter it.

"We will grab hold of it just like we did class action if it is a good and clean bankruptcy reform bill," said Representative Tom DeLay, a Texas Republican, referring to the quick action the House took last month on a measure limiting class-action lawsuits.

DeLay has received $337,150 from big banks and credit card/finance companies over his career in Congress. And I haven't looked at ARMPAC or TRMPAC yet.

This is such a clear cut example of why we need serious comprehensive campaign finance reform like the public financing laws in Maine, Arizona, North Carolina, New Mexico and Vermont.


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