Bankrupt

E.J. Dionne calls attention to the grave injustice of the bankruptcy bill soon to come up in the Senate. The bill proposes sweeping changes in bankruptcy law, namely to make more difficult the whole process. It has been long sought by the credit card industry.

In his opinion piece today, Dionne nails what is fundamentally wrong about the bill:

Listen to Elizabeth Warren, a Harvard law professor and one of the most learned and powerful critics of the bill. Testifying before the Senate Judiciary Committee in early February, Warren argued that the proposal "assumes that everyone is in bankruptcy for the same reason -- too much unnecessary spending."

What does that mean in practice? "A family driven to bankruptcy by the increased costs of caring for an elderly parent with Alzheimer's disease is treated the same as someone who maxed out his credit cards at a casino," Warren said. "A person who had a heart attack is treated the same as someone who had a spending spree at the shopping mall. A mother who works two jobs and who cannot manage the prescription drugs needed for a child with diabetes is treated the same as someone who charged a bunch of credit cards with only a vague intent to repay."

Warren and her colleagues surveyed Americans in bankruptcy courts and found that half said illness or medical bills drove them to bankruptcy. The "bigger surprise," as Warren has said, is that three-quarters of the medically bankrupt had health insurance. Which is to say that even those who have insurance are often not sufficiently covered to protect them from financial disaster.

On a side note, Dionne's final paragraph need to be procaimed from the rooftops. He steps away fro mthe details and seemingly addresses a deep nag. It is vastly important and should be repeated often:

There is a great misunderstanding that the key fight in our politics is between friends and foes of capitalism. In fact, the battle is among supporters of capitalism who disagree over what rules should govern the market. Should the rules favor the wealthy and the connected, or should they give some protection to those who fall into distress and would like nothing more than a chance to rejoin the ownership society? If Democrats sell out on the bankruptcy bill, they will, alas, show which side they're on.