The Debt-Peonage Society
Today the Senate is expected to vote to limit debate on a bill that toughens the existing bankruptcy law, probably ensuring the bill’s passage. A solid bloc of Republican senators, assisted by some Democrats, has already voted down a series of amendments that would either have closed loopholes for the rich or provided protection for some poor and middle-class families.
The bankruptcy bill was written by and for credit card companies, and the industry’s political muscle is the reason it seems unstoppable. But the bill also fits into the broader context of what Jacob Hacker, a political scientist at Yale, calls “risk privatization“: a steady erosion of the protection the government provides against personal misfortune, even as ordinary families face ever-growing economic insecurity.
The bill would make it much harder for families in distress to write off their debts and make a fresh start. Instead, many debtors would find themselves on an endless treadmill of payments.
The credit card companies say this is needed because people have been abusing the bankruptcy law, borrowing irresponsibly and walking away from debts. The facts say otherwise.
A vast majority of personal bankruptcies in the United States are the result of severe misfortune. One recent study found that more than half of bankruptcies are the result of medical emergencies. The rest are overwhelmingly the result either of job loss or of divorce.
To the extent that there is significant abuse of the system, it’s concentrated among the wealthy — including corporate executives found guilty of misleading investors — who can exploit loopholes in the law to protect their wealth, no matter how ill-gotten.
One increasingly popular loophole is the creation of an “asset protection trust,” which is worth doing only for the wealthy. Senator Charles Schumer introduced an amendment that would have limited the exemption on such trusts, but apparently it’s O.K. to game the system if you’re rich: 54 Republicans and 2 Democrats voted against the Schumer amendment.
Other amendments were aimed at protecting families and individuals who have clearly been forced into bankruptcy by events, or who would face extreme hardship in repaying debts. Ted Kennedy introduced an exemption for cases of medical bankruptcy. Russ Feingold introduced an amendment protecting the homes of the elderly. Dick Durbin asked for protection for armed services members and veterans. All were rejected.
None of this should come as a surprise: it’s all part of the pattern.
As Mr. Hacker and others have documented, over the past three decades the lives of ordinary Americans have become steadily less secure, and their chances of plunging from the middle class into acute poverty ever larger. Job stability has declined; spells of unemployment, when they happen, last longer; fewer workers receive health insurance from their employers; fewer workers have guaranteed pensions.
Some of these changes are the result of a changing economy. But the underlying economic trends have been reinforced by an ideologically driven effort to strip away the protections the government used to provide. For example, long-term unemployment has become much more common, but unemployment benefits expire sooner. Health insurance coverage is declining, but new initiatives like health savings accounts (introduced in the 2003 Medicare bill), rather than discouraging that trend, further undermine the incentives of employers to provide coverage.
Above all, of course, at a time when ever-fewer workers can count on pensions from their employers, the current administration wants to phase out Social Security.
The bankruptcy bill fits right into this picture. When everything else goes wrong, Americans can still get a measure of relief by filing for bankruptcy — and rising insecurity means that they are forced to do this more often than in the past. But Congress is now poised to make the bankruptcy law harsher, too.
Warren Buffett recently made headlines by saying America is more likely to turn into a “sharecroppers’ society” than an “ownership society.” But I think the right term is a “debt peonage” society — after the system, prevalent in the post-Civil War South, in which debtors were forced to work for their creditors. The bankruptcy bill won’t get us back to those bad old days all by itself, but it’s a significant step in that direction.
And any senator who votes for the bill should be ashamed.
Ezra Klein: Oval Office Circus Proves Donald Trump ‘Doesn’t Want The Wall’ | The Last Word | MSNBC
Trump’s argument with Nancy Pelosi and Chuck Schumer over the wall shows he has no interest in policy, he just wants to “have fights with Democrats … on camera,” says Ezra Klein. John Heilemann and Kimberly Atkins join Lawrence.
Comment:
If Trump wanted the wall, he wouldn’t have televised the meeting. The difference in funding is relatively small, but Trump offered nothing to trade. If he really wanted the wall, he would have offered citizenship for the Dreamers, which could have been popular for both sides.
In the closed door session, Trump said Mexico will pay for the wall one way or the other. He said the new Nafta will allow the government to collect money.
A reconsideration of tactics is in order.
- They could create a proposal on 1 piece of paper, deliver it and walk out
Trump Threatens Shutdown in Combative Appearance With Democrats
President Trump on Tuesday vowed to block full funding for the government if Democrats refuse his demand for a border wall, saying he was “proud to shut down the government for border security” — an extraordinary statement that came during a televised altercation with Democratic congressional leaders.
“If we don’t have border security, we’ll shut down the government — this country needs border security,” Mr. Trump declared in the Oval Office, engaging in a testy back-and forth with Senator Chuck Schumer of New York and Representative Nancy Pelosi of California.
“I will take the mantle. I will be the one to shut it down. I’m not going to blame you for it,” Mr. Trump added, insisting on a public airing of hostilities even as the Democrats repeatedly asked him to keep their negotiating disputes private.
“It’s not bad, Nancy; it’s called transparency,” Mr. Trump snapped after one such interjection by Ms. Pelosi, who appeared to trigger the president’s temper when she raised the prospect of a “Trump shutdown” over what she characterized as an ineffective and wasteful wall.
.. “The American people recognize that we must keep the government open, that a shutdown is not worth anything, and that we should not have a Trump shutdown,” Ms. Pelosi said.
“A what?” Mr. Trump shot back.
.. It also showcased the interplay of two politicians playing to very different bases: Mr. Trump appealing to his core anti-immigration supporters and Ms. Pelosi to the young liberal lawmakers she needs to keep in her camp ahead of next month’s speaker election.
Outside the West Wing after the meeting Mr. Schumer said Mr. Trump had thrown a “temper tantrum” over the wall, saying: “The president made clear that he wants a shutdown.”
.. Mr. Schumer and Ms. Pelosi said it was up to Mr. Trump to avert the disaster he had promised, by embracing their proposals to essentially postpone the dispute for another year, either by passing the six noncontroversial budget measures that are outstanding and extending Homeland Security funding for one year at current levels, or passing one-year extensions for all seven remaining spending bills.
“We gave the president two options that would keep the government open,” they said in a statement. “It’s his choice to accept one of those options or shut the government down.”
Mr. Trump had begun the day appearing to soften his stance somewhat on the wall. In a series of morning tweets, he falsely stated that substantial sections of the “Great Wall” on the southwestern border that he has long championed have already been completed, and he suggested that his administration could continue construction whether Democrats fund it or not.
That would be illegal, but it suggested that he was looking for a way to keep the government funded past Dec. 21, even if Democrats balk at wall funding.
It quickly grew personal for Mr. Trump, who aides say respects what he sees as Ms. Pelosi’s strength as a negotiator and toughness in the political trenches, but who sought on Tuesday to publicly undercut her position by raising questions about her job security.
.. Mr. Trump’s approach to Mr. Schumer was initially friendly, but it soon turned sour...
“It is called funding the government, Mr. President,” a stern-faced Mr. Schumer said, going on to point out that Mr. Trump had made false statements about the effectiveness of the wall and how much of it had been built.
.. a brief shutdown in January when Democrats insisted that protections for undocumented immigrants brought to the United States as children must be part of any funding measure. “The last time that you did, you got killed.”
.. The president has suggested, repeatedly, that a shutdown might be necessary to compel Democrats to swallow $5 billion in wall funding. But on Tuesday morning before the meeting, he had appeared to be softening his stance.
.. the administration has yet to spend much of the $1.3 billion Congress approved for border security last year.
.. Under restrictions put in place by Congress, none of that money could be used to construct a new, concrete wall of the sort the president has said is vital.
The president does not have the legal authority to spend money appropriated for one purpose on another task, such as wall-building.
.. The president’s conservative allies in Congress have urged Mr. Trump to hold firm to his insistence on wall money, and use all means necessary to include additional immigration restrictions in the year-end package.
.. “Securing the border isn’t going to happen in a Pelosi-run Congress,” Representative Jim Jordan of Ohio and Representative Mark Meadows of North Carolina, the co-founder and chairman of the House Freedom Caucus, said in an op-ed Tuesday on the Fox News website. “We still have three weeks. That’s more than enough time to do what we said.”