Bankruptcy Bill a Cliffhanger as Session Nears End

At press time (Oct. 25), the Senate had not yet completed action on the bankruptcy bill (H.R. 2415). Senate GOP leaders planned to vote on the conference report as one of the final items in the 107th Congress. The House passed the bill on Oct. 12. Senate leaders are hoping to fight off a promised filibuster. Because the bill has bipartisan support, it is expected to reach the 60 votes necessary to cut off extended debate. Should the conference report pass the Senate, it would be sent to the president, who has vowed to veto the bill. It is not clear if the time remaining in the session would permit a possible veto override vote (requiring 67 Senate votes) or if the president could simply pocket-veto the measure after Congress finally adjourns. Congress stayed in session well beyond the Oct. 6 target for adjournment.

Also hanging in the balance are chapter 12 (which expired on July 1) and new bankruptcy judgeships. Both are included in the reform bill package, though they could be broken out and passed separately.

With both the White House and Congress up for grabs on Nov. 7, the outcome of the election could dictate the pace of bankruptcy reform in the 108th Congress. Should Republicans retain control while also capturing the presidency, the bankruptcy bill would be a likely candidate for early action in 2001.

In other bankruptcy legislation, the Federal Courts Improvement Act (S. 2915) was cleared for final approval in late October. The judicial housekeeping bill includes a handful of bankruptcy provisions, including a permanent extension of the Bankruptcy Administrator program in North Carolina and Alabama, as well as filing fee increases in chapter 9 and for cases converted to chapter 11, among other minor changes.

The House also passed a bill (H.R. 1161) to permit financial institutions to net out financial contract transactions should the institution become insolvent. The bill has wide support from the administration and the financial markets.