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Biden’s Bankruptcy Bill Could Complicate a Presidential Run

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Biden’s Bankruptcy Bill Could Complicate a Presidential Run


As Vice President Joe Biden reportedly mulls a bid for the U.S. presidency, his champions portray him as a credible alternative to Democratic Party frontrunner Hillary Clinton, who faces accusations that she is beholden to the financial industry. But a Biden campaign risks confronting the scorn of one of the party’s most influential progressives, Sen. Elizabeth Warren. Though Biden has reportedly sought her favor, Warren has historically disdained, charging him with acting as a tool of the credit card industry by limiting debt relief for people grappling with financial troubles.

As a Harvard law professor in 2002, Warren published a journal article excoriating Biden for playing a leading role in delivering legislation that made it more difficult for Americans to reduce debts through bankruptcy filings. As the senator from Delaware, Biden’s repeated push for the bill — signed into law by President George W. Bush in 2005 — amounted to “vigorous support of legislation that hurts women,” Warren declared. She said “the group that will be most affected by the changes in the bankruptcy legislation Senator Biden so forcefully supports will be women, particularly women heads of household who are supporting children.”

In a separate 2003 book she co-authored with her daughter, Warren said, “Senators like Joe Biden should not be allowed to sell out women in the morning and be heralded as their friend in the evening.”

Biden’s spokesman, Stephen Spector, said: “Throughout his career, the vice president has been a champion for middle-class families and has fought against powerful interests.”

Biden earlier this month met with Warren, a Wall Street critic who is well known among Democratic voters. The meeting was widely seen as an effort by Biden to try to convince the Massachusetts lawmaker to support his prospective White House bid.

Warren’s 2002 writings, however, may stymie that effort both because her criticism was specifically targeted at Biden and because the criticism revolved around an issue that cuts to the heart of Democratic voters’ concerns over the growing political power of the financial sector.

In Warren’s 2002 review of Biden, she said the senator of 36 years played a “crucial” role in passing the bankruptcy legislation over the objections of unions, consumer groups and women’s organizations. The bill was backed by major credit card companies, including MBNA, which is headquartered in Delaware and whose employees collectively became Biden’s top campaign contributor. The firm also hired Biden’s son, Hunter, as a consultant.

Spector, the vice president’s spokesperson, asserted that Biden shaped the bankruptcy bill to specifically help women, working “to make child support and alimony a priority in the bill by ensuring continuity of child care payments.”

In her 2002 article, though, Warren accused Biden of playing an especially pernicious role in pressing the legislation, harnessing his reputation as an advocate for the interests of working women to curry the support of interest groups that would otherwise have opposed the bill. His support for the bankruptcy legislation, she said, provided crucial political cover that enabled other lawmakers to support the measure and avoid criticism from women’s groups.

“He has shielded his colleagues on both sides of the aisle from being branded as anti-women for their support of this legislation,” Warren wrote. “Senator Biden can publicly support one very visible piece of legislation on behalf of women, satisfying his duty and assuring the loyal support of millions of women. He is then free to be a zealous advocate on behalf of one of his biggest contributors, the financial services industry, and still position himself as a champion for women.”

While some Democratic activists are pining for a Biden-Warren ticket, Warren’s writing suggests such a political marriage would be more than a bit complicated.

David Sirota is a senior writer at the International Business Times and the best-selling author of the books Hostile Takeover, The Uprising, and Back to Our Future. Email him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

Photo: Vice President Joe Biden talks about rooting out corruption as he addresses a civil society forum during the U.S.-Africa Leaders Summit in Washington, August 4, 2014. REUTERS/Jonathan Ernst

David Sirota

David Sirota is International Business Times' senior editor for investigations. He is also a nationally syndicated newspaper columnist and a bestselling author. He lives in Denver, Colorado and covers the intersection of money, politics and finance. He appears periodically on national television shows and is a "real guy represented by the character on ABC's The Goldbergs," according to Twitter.

In 2014, he was the winner of the Society of American Business Editors and Writers' investigative journalism award, and the winner of the Izzy Award for Journalism from Ithaca College's Park Center for Independent Media.

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  1. rosetta.pend September 4, 2015

    I will share excellent internet freelancing opportunity… three to five hours of work /day… Payment each week… Performance depending bonuses…Payscale of $6k to $9k a month… Only few hrs of spare time, desktop or laptop, elementary understanding of internet and dependable web-connection needed…Have a visit to my disqus_profile for more( info

  2. Dominick Vila September 4, 2015

    There is no question that both Biden and Hillary are far to the center when compared to Sanders and Warren, and that is precisely why so many mainstream Americans support the former. The obvious response to Elizabeth Warren’s claim that Biden’s involvement in credit card bankruptcy legislation affects mostly women Heads of Household, is to clarify her statement as it implies that, in her opinion, women are more inclined to mismanage their finances than men are. BTW, it would only take me a nanosecond to decide to vote for Elizabeth Warren if she decided to run for the nomination.

    1. John S. September 4, 2015

      Elizabeth Warren is center-left whereas Joe Biden and Hillary Clinton are right-center on the political spectrum. The “center” occupied by Biden and Clinton is really the former Republican right. Contemporary, conservative Republicans — especially the GOP presidential candidates — are now the extreme/uber right a la a certain Kentucky county clerk.

  3. 13factfinder September 4, 2015

    Sanders/Warren would be a more compatible ticket. You get two communists for one vote! All the Illegal aliens and people whom contribute little or nothing would TRY to vote for them anyway. Everybody loves “free stuff”. Like Greece you know!

    1. johninPCFL September 4, 2015

      You forget about the six billion Chinese that would sign up to vote.

      Vote early, and often!

      Paranoid much?

      1. 13factfinder September 4, 2015

        No, because voter I.D. laws will be in place!

  4. exdemo55 September 4, 2015

    Political junkies are focused on Donald Trump, but Hillary Clinton’s weakness remains a huge story. Her support among Iowa’s likely Democratic caucusgoers has dropped to 37%, down 20 points since May, according to an Aug. 26 Des Moines Register/Bloomberg Politics poll. Meanwhile, Vermont Sen. Bernie Sanders is up 16 points to 30%, and Vice President Joe Biden, who isn’t even running, is up six points to 14%.

    The poll caused great consternation among Mrs. Clinton’s supporters, as it should have. Some of her advocates tried to claim that the survey contained good news, in that the former secretary of state’s favorable rating among Democratic caucusgoers remained at 77%.

    But if Mrs. Clinton’s favorables remained high while she hemorrhaged support, then Iowa Democrats are moving to Mr. Sanders not because they dislike her but because she doesn’t excite them, and they like him more. That too was polled. Only 2% of Mr. Sanders’s backers said that their decision to support him was because they don’t support Mrs. Clinton.

    But is there a Democrat who—absent something extraordinary, say, Mrs. Clinton’s indictment over mishandling classified information on her private email account—can beat her for the nomination?

    If this is the field, the answer is probably no. Former Maryland Gov. Martin O’Malley, former Virginia Sen. Jim Webb and former Rhode Island Gov. Lincoln Chafee are vying to avoid being asterisks in the polls.

    Things will probably get worse for Mrs. Clinton in the short term. It’s possible, even likely, that she will lose both the Feb. 1 Iowa caucus and the New Hampshire primary eight days later. Mr. Sanders will appeal in a state like Iowa, where there is a strong left-wing sentiment, and the caucus format is dominated by more ideologically committed activists. He could carry New Hampshire in a multicandidate field.

    But then the calendar becomes Mrs. Clinton’s friend. South Carolina and Nevada are next. Neither is fertile ground for Mr. Sanders, the self-proclaimed democratic socialist. On March 1 come primaries in Arkansas, Massachusetts, Oklahoma, Tennessee and Texas, all states Mrs. Clinton carried in 2008. She will probably fare well on super Tuesday again, except perhaps in Massachusetts, a next-door neighbor to Mr. Sanders’s home state.

    There also will be primaries that day in Alabama, Georgia, North Carolina, Vermont and Virginia, states that then-Sen. Barack Obama carried in 2008. Vermont will go for its favorite son, but Mrs. Clinton stands a better chance than Mr. Sanders in the others if she has the backing of black Democratic leaders who voted for Mr. Obama seven years ago.

    Competing in these primaries will be expensive. A reasonable flight of three or four weeks of television ads in those states will cost north of $30 million, even at the low rates candidates are guaranteed by the FCC, and more if the ads are bought by a super PAC. Mrs. Clinton is likely to have the cash; Mr. Sanders is not, even if his fundraising gets a boost from early victories.

    The contests between March 5 and March 15 appear inhospitable for Mr. Sanders as well. Mrs. Clinton carried Florida, Michigan and Ohio in 2008 and virtually tied in Missouri, even with Sen. Claire McCaskill helping out Mr. Obama. This time she will be helping Hillary. Mr. Obama carried his home state of Illinois, Kansas (where he claimed family ties), Louisiana and Mississippi. All four, especially the Southern states, seem better turf for Mrs. Clinton this time.

    There are also March caucuses in Colorado, Minnesota and Nebraska. Unprepared for most caucuses in 2008, Mrs. Clinton got walloped. Even if she’s learned a lesson, Mr. Sanders could be competitive in parts of Colorado and Minnesota.

    Mr. Sanders’s problem is simply that there aren’t enough left-wing enclaves like Portland and Berkeley, Madison and Ann Arbor, Burlington and Boulder for him to beat her for the nomination.

    Could Vice President Joe Biden, though? Mr. Biden would do better in the blue-collar parts of Missouri and Michigan than Mr. Sanders—and maybe even Mrs. Clinton. But once the contest runs through the South, he would have to pick up a substantial part of the black vote. It’s one thing to vacation in South Carolina, as Mr. Biden does. It’s another thing to generate the level of support that Mr. Obama enjoyed there in 2008.

    Still, the more candidates in the Democratic race, the more Mrs. Clinton’s numbers will drop, and the more unconventional the nominating process will become. And in this election, unconventional is doing better than expected.

  5. Robert Cruder September 4, 2015

    Google for his “RAVE” act. There is no right so dear that it cannot be eliminated under the pretense of “protecting children”.

    When that is raised, there is no need for balance, cost-justification or rational argument. There is only the fear of how those with children at home will vote. Now a minority of adults, they do not vote by a single measure and pressured by time they may not vote at all.

    Having lost a child, Biden was especially emotional on the subject. It was one more area where focused concern for an already-favored group ignored everyone else.

  6. alphaa10000 September 4, 2015

    Sirota is absolutely on-target, and the wonder is no one else seems to have noticed the discrepancy between what “good old Joe” Biden did against consumers back in 2005, when the credit card industry called in its IOUs on him, and what Biden claims to represent, today.

    In every interview, Biden claims to be of working-class origin, with his inner compass pointed toward the good people in his district. But his past shows all the marks of being the lapdog of the rich and powerful.

    In 2005, there were dark days, indeed– after hijacking Howard Dean’s campaign, John Kerry crashed and burned, despite his claim he could campaign better than Dean. Meanwhile, corporate Democrats were so eager to say, “Me, too!”, even Chris Dodd and Hillary Clinton voted for the cynically-titled “Bankruptcy Abuse Prevention and Consumer Protection Act” legislation.

    Today, most of Washington’s inner circle lobbyists admit the bill was written by the credit card industry, eager for more consumer blood. We also should recall this period was the fever peak of heinous greed in the financial sector, just months before GOP-sponsored Wall Street deregulation erupted in scandal, cratering our economy.

    What should irritate us about Joe Biden is not his habit of “speaking his mind”, but of pretending he does not have a conscience.

    Hillary Clinton, Chris Dodd and Joe Biden owe the American people an apology.

    The Bankruptcy Abuse Prevention and Consumer Protection Act

    1. Otto Greif September 4, 2015

      Banks weren’t deregulated.


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