Passing Bankruptcy Reform In The Stimulus

Earlier today, David discussed an attempt in Congress to "include a provision to allow judicial modification of mortgages on primary residences," as part of the stimulus package. His post included a "Dear Colleague" letter to members of the U.S. House on the matter. This legislation is key because it would serve as a partial reversal of the 2005 Bankruptcy Act, which remains one of the most odious pieces of legislation passed during the Bush era. Now, I can provide you with some more details on this development.

The current legislation is H.R. 225, the Emergency HOME Protection Act, introduced by Brad Miller. You can read the text of the legislation here.  Its corresponding Senate bill is S 61, introduced by Senator Durbin. Importantly, back in October when he was whipping votes to pass the bailout, then candidate Obama promised to help pass legislation of this nature in order to secure more progressive votes. For example, consider the statement Donna Edwards made on her "yes" vote for the bailout (emphasis mine):

"After speaking with Senator Barack Obama yesterday and with many of our retirees, workers, homeowners and small business owners, I am convinced today that even left with this imperfect product, the choice is this or nothing. For me, doing nothing was never an option. I appreciate the personal commitment that Senator Obama made to me that we will work to provide direct relief to homeowners facing foreclosure by enabling home mortgages to be dealt with in the context of personal bankruptcy and looking at a program such as one that existed in the 1930's to 1950's to work directly with homeowners to mitigate foreclosure.

The bill might already be in the stimulus. Here is a statement from Miller's office that I just received:

We are optimistic that 225 is in stimulus package- we have heard Obama has included, but haven't seen it.

The Citigroup endorsement of the language in the bill is a big boost, optimistic that other major financial institutions will endorse as well.

In the short term, I will now attempt o verify if 225 has already been included in the stimulus. If so, it makes the stimulus significantly more attractive.

If H.R .225 has not already been included in the stimulus, I will look into the strategy to make sure it is included. Once I have it, I think we should develop a strategy to start applying pressure for it. This is a piece of legislation that can make a positive difference in the lives of hundreds of thousands, even millions, of Americans over the next two years. As such, along with the proposed commission to investigate Bush era crimes by John Conyers, this bill makes for a perfect addition to the first edition of the legislative monitoring project we have been discussing on Open Left.

If, like me, you are tired of just opposing legislation in Congress, and you would like to start acting on behalf of good, progressive legislation, then this should be an excellent first opening. It is possible that we won't need to do anything, as it might already be included in the stimulus package, but it strikes me as a nice opening. I am interested to hear your thoughts on the matter.


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