President Bush: Veto Bankruptcy “Reform”

UPDATE April 20, 3PM ET: Caught the end of the President’s speech before he signed B-”R”. Harped on “serial filers” and “bankruptcy mills.” Don’t know whether he made better arguments earlier; those two were weak. So, assuming the pen wasn’t out of ink, it’s law.
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UPDATE: Welcome, Instapundit readers!
Insta says “(a veto) won’t happen. Alas.”
My head agrees. But there is prayer……
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President Bush:

The “Bankruptcy Reform and Consumer Protection Act of 2005″ that has reached your desk is an unacceptable imposition of many of the lending industry’s greediest wishes on financially troubled American families.

You should veto this bill for these reasons:

• The large majorities that passed the legislation did so mostly because of lending industry campaign contributions, not because of the legislation’s alleged “merits” or any groundswell from the public at large.
• There is significant grass-roots, conservative opposition to Bankruptcy Reform from those who understand it, and overwhelming, passionate, and principled grass-roots opposition in the other party.
• The bill’s effects will be much, much rougher on financially troubled individuals and families than the bill’s supporters claim. It will force hundreds of thousands of filers into partial-payment plans that, due to the inflexible and insensitive standards it mandates, will usually be pre-ordained to fail. It will also force many filers to sell household items that reasonable people would expect to be able to keep at fire-sale prices to satisfy the same creditors whose predatory or unethical actions often led to or accelerated the downward financial spiral into bankruptcy.
• As a political calculation, the bill is a disaster that has the potential to jeopardize much of the rest of the GOP agenda during the rest of your presidency, cause the GOP to lose the White House in 2008, and leave the party of Lincoln in the political wilderness for years to come.
• Signing this bill into law will make it easier for your opponents to paint your most important domestic objectives of Social Security reform and death tax repeal as sops to the rich and takeaways from the poor, because that is in fact what Bankruptcy “Reform,” despite its surface reasonableness, really is.
• A veto, on the other hand, will be a political masterstroke. It will energize the rest of the Bush agenda, and convincingly refute the hollow Social Security and death tax scare tactics of the opposition.
• The term “compassionate conservatism,” which seems to have already fallen into disuse, may as well quietly disappear. It surely will no longer ring true.
• Religious and Christian people of all political persuasions have not paid appropriate attention to the substance of this bill. To the extent that there has been interest at all on the part of religious people, it has been to express relief that the Schumer abortion amendments were excluded. But most religious people will not be pleased when they see the actual effects of this law play out, and many will be righteously indignant that this was allowed to happen. The fact that Dave Ramsey (talk show host and Christian financial planner and counselor) and a few others like him are so opposed to this bill should be a clear warning that your signing it will mean trouble, for both you and your party, with people of faith (as an aside, have you asked your minister and religious counselors their opinion of this bill?).
• You and your advisers apparently need to be reminded that the only Senator not to cast a vote on Bankruptcy “Reform” was Hillary Clinton. This was no scheduling accident. If you sign this bill into law, Mrs. Clinton can raise campaign money from the money-center banks that were behind this bill, and let her designated mouthpieces denounce it for her–a very effective 2008 strategy.
• Any horror stories that occur will come straight back to haunt the GOP, and will give the opposition mountains of ammunition, most likely in time for the 2008 campaign, but perhaps even in time for 2006. For the next 6 months, we may see stories about people by the hundreds of thousands rushing to beat the bill’s October effective date to get in ahead of this harsh, lender-underwritten, GOP-backed legislation. Groups that either inexplicably did not oppose Bankruptcy “Reform,” or expressed only token opposition to it, will be out in force to denounce it when the casualties mount. It is not inconceivable that this bill will kill the presidential hopes of every single GOP senator and Washington insider dreaming of a run in 2008.
• You may not be aware that the Comptroller of the Currency has incredibly decided that the onset of tougher bankruptcy legislation is the perfect time to require that credit-card issuers double their minimum payment requirements on cardholders, jeopardizing the financial well-being of a large percentage of the 19 million households that currently make only minimum payments on their card balances each month. Bankruptcy “Reform,” combined with the Comptroller’s action, will ripple through to the housing market, since fewer borrowers will qualify to buy or refinance a home. This chain of events could very well sew the seeds of a recession in 2006 and beyond.
• Unlike welfare reform, which led to genuine improvement in people’s lives and successfully broke the cycle of dependency for so many people, there will be real horror stories and casualties of Bankruptcy “Reform.” The only question is how much visibility victims will get.

The Senate’s 74-25 margin of passage may appear to be veto-proof, but support for the bill will collapse once you veto it. In fact, you can expect that the Senate won’t even try to bring the bill up for an override vote. It is a virtual certainty that nine Democratic Senators will switch their votes and reduce the bill’s support below the two-thirds override requirement. You can be sure, if the Senate Majority leader is foolish enough to attempt an override vote, that Mrs. Clinton will be there this time under pressure from her strongest supporters to vote against it.

In your veto message, you should tell Congress and the American people that while this legislation is unacceptable, lawmakers should pass, and you will sign, meaningful and compassionate Bankruptcy Reform that will:

— Go after chronic credit abusers and those whose financial circumstances were not caused by personal setbacks like divorce and illness.
— Authorize more money for the IRS, FBI, and the courts themselves to investigate and root out fraud that may be occurring in the current system.
— Focus on preventive credit-counseling and financial education to replace the current crisis-oriented framework. Credit bureaus should be required to notify individuals whose credit scores have fallen below 600 that their financial situation has deteriorated, and suggest that they visit a qualified and pre-screened credit-counseling agency to educate themselves about money management if that knowledge is lacking, put their financial house in order, and, if necessary, restructure their finances before matters get serious beyond repair.
— Require that creditors negotiate with counselors in good faith to establish reasonable payback plans that debtors will be able to successfully adhere to. This step, when combined with the previous requirements for notification, will likely prevent hundreds of thousands of bankruptcies and their attendant family and social disruption every year.
— Place commensurate and meaningful restrictions on the punitive and predatory rate, fee, and universal default practices of the lending industry.

In sum, a veto would send an resounding message to the country as to what the GOP and your presidency are supposed to be all about, and prove that “compassionate conservatism” isn’t merely a clever phrase. Signing this bill into law, on the other hand, may set the economy, your noble causes, and your party back for years.

Please do the right thing, Mr. President. Veto Bankruptcy “Reform.”

Tom Blumer
Mason, OH
www.bizzyblog.com