What: All Issues : Fair Taxation : S. 256. Bankruptcy/Vote on Amendment to Prohibit Very Wealthy Individuals from Sheltering Their Assets in Trusts and Declaring Bankruptcy to be Relieved of Debts (2005 senate Roll Call 23)
 Who: All Members
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S. 256. Bankruptcy/Vote on Amendment to Prohibit Very Wealthy Individuals from Sheltering Their Assets in Trusts and Declaring Bankruptcy to be Relieved of Debts
senate Roll Call 23     Mar 03, 2005
Progressive Position:
Yea
Progressive Result:
Loss

In this vote, the Senate defeated an amendment by Charles Schumer (D-NY) to S. 256, a Republican-sponsored bill to alter federal bankruptcy rules, that would prohibit very wealthy individuals trying to escape debts by declaring bankruptcy from sheltering their assets in a trust to protect them from creditors. On behalf of Progressives and other Democrats, Schumer argued, "[i]t is outrageous that someone worth millions or billions of dollars can declare bankruptcy and then shield their assets in this trust so they do not come before the bankruptcy court. . . . [W]e are talking about people who make $45,000 and we are going after them [in this bankruptcy bill], yet we are allowing millionaires and billionaires to use this loophole. . . . It would be hypocritical to say we have to close abuses on middle-income people and not close abuses on the very wealthy." Republicans countered that more time was needed to determine how often this type of abuse really occurs. Schumer's amendment was one of many offered by Progressives to lessen what they viewed as S. 256's bias in favor of wealthy people and large corporations at the expense of middle and lower-class Americans. They maintained that S. 256 would actually require individuals who deserve full protection in bankruptcy to overcome additional barriers to getting out of debt, like higher attorneys' fees and more paperwork. Republicans countered that the bill would curb abuses of the bankruptcy system by making it harder for those who could pay their debts to escape them. In addition, Republicans were anxious to keep the bill "clean," meaning free from most amendments, because the House had already indicated it would not accept a bankruptcy bill laden with amendment language. Progressives' loss in this amendment by a vote of 39-56 was one of numerous losses in their attempts to tilt the balance of S. 256 more toward average consumers and away from credit card companies and other creditors.

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