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[ABI Logo] [Legislative Highlights]
Reprinted from December/January 2002 ABI Journal December 1, 2001

Web posted and Copyright © December 1, 2001, American Bankruptcy Institute.

Sharp Differences Remain and Future in Doubt

House Judiciary Committee Chairman James Sensenbrenner directed staffers to the conference committee to work up a "joint" product resolving as many differences as possible, in the wake of the Nov. 14 first meeting of conferees. The two-hour meeting provided a forum for both proponents and opponents of the legislation to offer their analysis of whether the bill is still viable after the events of Sept. 11.

Proponents of the bill, such as Sen. Orrin Hatch (R-Utah), Sen. Charles Grassley (R-Iowa), Sen. Joe Biden (D-Del.) and Rep. George Gekas (R-Pa.) are still supporters, despite the weakening economy and rising unemployment. "This isn't just a bill for good times or bad times but for all times," said Gekas.

The bill's opponents, such as Reps. John Conyers (D-Mich.) and Jerrold Nadler (D-N.Y.), seized on the changed economic landscape as a new reason to scrap the measure. "The economy is shrinking. Half a million people lost their jobs last month and more are losing them each day," argued Conyers. "Let us not do anything that might set back the nation's chances for economic recovery," added Nadler. Other members, such as Sens. Patrick Leahy (D-Vt.) and Charles Schumer (D-N.Y.) conditioned support only upon inclusion of certain new and/or controversial provisions.

Chairman Sensenbrenner has identified about "three dozen" areas of disagreement between the House- and Senate-passed versions. While most are minor and can be resolved by staff representing the conferees, several more problematic member issues remain. The chairman said he hoped to reconvene the group after Thanksgiving but before adjournment of the first session of the 107th Congress. "If we make it, we make it; if we don't, we don't," said Sensenbrenner, reflecting the reality of the limited time left in the session and the long, tortured history of this legislation. Bankruptcy reform will likely be deferred to the second session, beginning in January 2002. Its future is very much in doubt.

Left hanging is an extension of chapter 12, which has again expired. Separate bills are pending in both the House and Senate to retroactively re-enact the law, as has been done before. Also left for another day is whether to separate and pass the financial services title of the bill. This is strongly supported by the bond market and other financial interests.


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