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Reprinted from December/January 2001 ABI Journal December 1, 2000

Web posted and Copyright © December 1, 2000, American Bankruptcy Institute.

"Lame Duck" Session Deferred to December
Bankruptcy Legislation Chances Reportedly "Slim to None"

Confronted by the ongoing turmoil of the disputed results in the presidential election and a number of congressional seats, Capitol Hill leaders pulled the plug on the "lame duck" session until Dec. 4-5.

Among the legislative items deferred is a vote to invoke cloture on the bankruptcy bill, an extension of chapter 12 of the Code, financial contract netting in bankruptcy cases and authorization for some 23 additional bankruptcy judgeships. The House has already approved all of these measures, including the conference report on H.R. 2415, but the Senate has balked. Majority Leader Trent Lott (R-Miss.) previously signaled that a vote on the bankruptcy bill would be among the last items of business for the 106th Congress. Republicans, joined by 14 Democrats, voted to cut off a Senate filibuster on Nov. 1, but fell seven votes short of the required 60 votes. Some 16 members were campaigning or otherwise absent for the vote. This was, however, before an Election Day whose results remained unclear through mid-November.

Partisans in the fight over the bankruptcy bill are speculating over whether President Clinton might sign this version of the bill, notwithstanding a longstanding veto threat, out of fear that a more muscular bill might emerge from a new Congress. But this outcome assumes both a successful invoking of cloture and opponents of the bill relenting on their right to use an additional 30 hours of Senate floor time for debate. President Clinton would still have the ability to pocket veto the bill after the Congress finally adjourned.

While the chances of moving the bankruptcy bill through the Senate and down to the White House for an expected veto are virtually nil, some Hill staff remain hopeful that a smaller package of non-controversial items can be moved. Sen. Charles Grassley (R-Iowa), chief sponsor of the bankruptcy bill in the Senate, cast doubt on including judgeships in any package, stating through a spokesperson that the positions are unnecessary. The most likely scenario is for all of the bankruptcy-related bills to carry over to the 107th Congress, beginning in January.

At that time, Republicans will have only the slimmest of majorities in the new Congress, especially in the Senate. Pending the outcome of the close race in Washington state, Republicans may lead 51-49 or may be left with a 50-50 split, with ties broken by the new vice president. Should there be an even split, Minority Leader Tom Daschle (D-S.D.) has already stated that Democrats will demand "power sharing" among committees, with co-chairs from each party. It would be difficult to move any controversial legislation in such an arrangement.

In December, the makeup of the committee leadership will take shape. Sen. Grassley is set to become chair of the Senate Finance Committee and may not remain as chair of the bankruptcy subcommittee on the Judiciary Committee. The sponsor of the House bill, George Gekas (R-Pa.), may also change subcommittees on the House Judiciary Committee. The House has term limits for its chairs, meaning that Henry Hyde (R-Ill.) must step aside as chair of the full committee, creating a possible chain reaction among subcommittee chairs.

Bankruptcy filings, which declined during both 1999 and 2000 from a record high in 1998, are projected to begin to edge back up during 2001, according to some private forecasts. A new rise in filings could revive both the bankruptcy bill and the interest in additional bankruptcy judgeship resources.

 

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