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Abortion Debate Still Tangled in Bankruptcy Bill

The proposed law, which would make it harder for people to have their debts erased, may again have a provision aimed at clinic protesters.

February 28, 2005|Maura Reynolds | Times Staff Writer

WASHINGTON — When Randall Terry filed for bankruptcy in 1998, he probably had little idea he was setting in motion a series of events that years later would entangle a congressional push to rewrite bankruptcy laws with a seemingly unrelated issue: abortion.

Terry, the founder of the antiabortion group Operation Rescue who led high-profile protests against abortion clinics in the 1980s and '90s, said he was filing for bankruptcy to avoid paying court damages resulting from his confrontational tactics.

"I will never let a cent of my money be seized to support the killing of the unborn," he was quoted as saying in news reports and court documents.

Six years later, in a legacy of those sometimes violent clashes over abortion clinic access, the fate of a much-debated bankruptcy bill may depend on whether Congress considers it appropriate for antiabortion protesters to file for bankruptcy to avoid paying fines.

Overhauling the bankruptcy code is the top item on the Senate's agenda as Congress reconvenes Monday after a week's recess. It is one of the changes to the legal system that Republicans are eager to pass before plunging into thornier debates over Social Security and spending bills.

Senate Majority Leader Bill Frist (R-Tenn.) has set aside this week to debate the bill. "I would like to ... move to bankruptcy if at all possible. We got very, very close last year," Frist said this month.

The proposed law would make it more difficult for Americans, especially wealthy ones, to have their debts erased by filing for bankruptcy. The bill has been a priority for banks and credit card companies since 1998, when it started to wend its way through Capitol Hill.

"It's not unusual for bills to get logjammed, but this bill has been the most unlucky," said Ed Yingling, executive vice president of the American Bankers Assn., the major lobbying group for banks and credit card companies. "It has always seemed to have gotten caught up in some other fight."

Congress responded to concerns about a surge in the number of people filing for bankruptcy in the 1990s -- and thereby escaping their debts -- by passing a bill in 2000 designed to stem the trend. But President Clinton refused to sign it, agreeing with critics who said the measure would create hardships for lower-income consumers while doing little to slow the proliferation of credit cards that they said enticed people to assume more debt than they should.

The financial sector geared up again, and shortly after President Bush took office in 2001 the House and Senate passed competing versions of the bill.

One difference was that the Senate's measure included an amendment targeting abortion protesters. That came about partly because of Terry's outspokenness, but also because of reports that other antiabortion activists were deliberately divesting themselves of assets before taking part in illegal protests.

The reports riled abortion rights supporters, notably Sen. Charles E. Schumer (D-N.Y.). He drafted the amendment to the Senate's bankruptcy bill that specifically would prevent abortion opponents from using the bankruptcy code to escape paying court fines.

"This is an abuse of bankruptcy law, just as somebody who gambles and wants to go into [bankruptcy] and doesn't pay his or her debts is an abuse of the bankruptcy law," Schumer said. "It's not pro-choice or pro-life or anti-choice or anti-life. It's very simply pro-rule of law."

In the summer and early fall of 2002, senators and House members spent weeks in tense negotiations and produced a compromise version of the bill that did not specifically mention antiabortion protesters, but would have blocked those facing fines for obstructing access to "lawful goods or services" from using a bankruptcy filing to duck such penalties.

Much to the delight of a bevy of high-powered lobbyists, the bankruptcy measure seemed destined to pass as Congress wrapped up its session in mid-November 2002.

But the compromise didn't hold. Some labor unions and civil rights groups that traditionally supported Democrats complained that the language was too broad. More significantly, a core of House Republicans balked, arguing that the protest provision was aimed at abortion opponents.

The impasse killed the bill, and efforts to revive it in 2003 got nowhere, stymied again by the abortion issue.

Under the proposed law, anyone making more than the median annual income in his or her state would automatically have to file under Chapter 13 of the bankruptcy code, which requires debtors to come up with a repayment plan. Only those with fewer assets could file under the more lenient Chapter 7, which permits debtors to escape all debts and start over with a clean slate.

In California, the median household income is about $50,000.

To qualify for Chapter 7, debtors would have to pass a "means test" to determine whether they had enough assets to pay back at least some of what they owed.

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