Newly minted Democratic vice presidential candidate Joe Biden’s support for the now widely derided 2005 bankruptcy bill is emerging already as an issue. The New York Times weighedin today with a story noting Biden’s support for the bill and raising questions over a consulting agreement between his son and MBNA, the huge Delaware financial services company that has close ties to Biden. On the blogosphere, Biden is taking the heat for his support; At Huffington Post, Jackson Williamsnotesthat Biden didn’t just vote for the bill, “he helped carry water on it.”
Consumer advocates previously had praised Democratic Sen. Barack Obama for being one of the few lawmakers to stand up to the credit industry and oppose the bill, which made it harder for consumers to discharge their debts. The bill was strongly supported by the lending industry at a time when criticizing irresponsible borrowers played a lot better with the public. Now, in the midst of this credit crunch, the financial services industry is taking the heat for its practices.
Progressives and consumer advocates who have long opposed this bill will want some assurances from Obama that he hasn’t changed his position here. But that argument won’t come from most Republicans, who supported tightening bankruptcy laws and continue to do so. They’re not likely to start a debate on bankruptcy, and appear sympathetic to lenders, when so many consumers are having financial troubles.
Instead, the bankruptcy question has been reduced to a political talking point, with the folks at The Cornerhitting Obama for criticizing his primary opponent, Sen. Hillary Clinton, over her support for the bill, then turning around and choosing Biden. That’s the kind of bankruptcy debate that we’ll have this time around, instead of one that might actually center on the problem itself.