Warren proposes repeal of 2005 bankruptcy law backed by Biden

Warren proposes repeal of 2005 bankruptcy law backed by Biden
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Sen. Elizabeth WarrenElizabeth WarrenFederal Reserve officials' stock trading sparks ethics review Manchin keeps Washington guessing on what he wants Warren, Daines introduce bill honoring 13 killed in Kabul attack MORE (D-Mass.) rolled out a plan Tuesday to repeal parts of a 2005 bankruptcy law, rekindling a feud with former Vice President Joe BidenJoe BidenSunday shows preview: Coronavirus dominates as country struggles with delta variant Did President Biden institute a vaccine mandate for only half the nation's teachers? Democrats lean into vaccine mandates ahead of midterms MORE as they battle for the 2020 Democratic presidential nomination.

Warren backed scrapping provisions from the law, which was championed by Biden when he served as a Delaware senator, that made it harder for families to file for bankruptcy protection.

Warren, who was then a bankruptcy law professor at Harvard, was one of the chief academic critics of the 2005 bill. She testified against it in the Senate, sparring with Biden during a contentious committee hearing.


But the bill cleared the House and Senate with bipartisan support and was signed by former President George W. Bush.

“I lost that fight in 2005, and working families paid the price,” Warren wrote in a post on Medium.

Warren’s proposal would scrap several aspects of the law, including means testing, separate bankruptcy processes for consumers based on wealth, credit counseling and other requirements she called “onerous and complicated.”

She also proposed allowing student loans to be discharged during bankruptcy and provisions to help bankrupt families keep their homes and cars.

The bankruptcy reform proposal reflects a key element of Warren’s primary pitch to voters. She has long cited her bankruptcy research as the driving force behind her shift to the left flank of the Democratic Party and election to the Senate.

“When I started my career as a young law professor, I thought — like a lot of people at the time — that most families went broke because they were irresponsible or wasteful,” Warren wrote.


“But when I started to teach bankruptcy, I found that no one — not even the supposed ‘experts’ — had actually dug into the data to figure out what drove families into bankruptcy.”

But the proposal also reignites a battle with Biden less than a month before the Iowa caucuses, the first contest of the 2020 Democratic primary. 

Warren’s complicated relationship with the Obama administration has been a focal point of her squabbles with Biden, who is considered the front-runner for the Democratic nomination.

Warren rose to progressive stardom while serving on the congressional panel overseeing the Treasury Department’s administration of the 2008 bank bailout. Her criticism of Timothy Geithner, Obama’s first Treasury secretary, rankled the White House, but Warren would later serve as a special adviser to Obama during the crafting of the 2010 Dodd-Frank Wall Street reform law.

As an Obama adviser, Warren helped create the Consumer Financial Protection Bureau (CFPB), a financial sector watchdog she first proposed in a 2007 paper she wrote while at Harvard.

Warren and Biden clashed during an October primary debate over who should claim credit for the CFPB after the former vice president claimed he was the only candidate who knows how to “get things done.”

When Warren cited her creation of the CFPB, Biden shot back that he “went on the [Senate] floor and got you votes” for the passage of Dodd-Frank.

“I am deeply grateful to President Obama, who fought so hard to make sure that agency was passed into law, and I am deeply grateful to every single person who fought for it and who helped pass it into law,” Warren responded.