Volume 5, Number 2
February 4, 2000

In an early legislative victory for the retail industry, on Wednesday the Senate overwhelmingly passed S. 625, the "Bankruptcy Reform Act," by an 83 to 14 margin.

"It was time for Congress to close the loopholes that let big spenders walk away from debts and update the code to achieve a healthier balance between consumers and creditors," said bill sponsor Senator Charles Grassley (R-IA).

Work on the measure began last year, but due to the seemingly infinite number of amendments offered, including a number of controversial non-germane additions, final action was held over until this session.

Among the amendments that remained was one proposed by Senator Chuck Schumer (D-NY) that would bar violent anti-abortion groups from discharging legal settlements in bankruptcy. The amendment was adopted by a surprisingly large 80 to 17 vote. The margin was expected to be so close that Vice President Al Gore took a break from the campaign trail to return to Washington in case his tie-breaking vote was needed. Senate Majority Leader Trent Lott said he knew the tiebreaker would be unnecessary, but allowed Gore to fly in anyway. "I'm never going to make it easy for him," Lott said.

A second controversial amendment offered by Senator Carl Levin (D-MI) that would deny bankruptcy protection to gun manufacturers faced with expensive liability lawsuits was defeated 69 to 29.

The bill now faces a difficult road through a House-Senate conference. The House passed their version of bankruptcy legislation, H.R. 833, last year, but without the non-germane amendments attached in the Senate this year, or the minimum wage increase added to the bill last session.

Last year, after defeating a proposal by Senator Edward Kennedy (D-MA) for a $1 increase over two years, Republicans agreed to a $1 increase over three years, coupled with over $18 billion in tax relief for small businesses, including an increase in the meal deduction, a decrease in the federal unemployment tax, and a permanent extension of the Welfare-to-Work Tax Credit (WWTC).

In addition to the wage hike, additional controversial policy riders were attached to the bill last session, including provisions that toughen the penalties for certain drug crimes.

Democrats, who were agitating for the increase, have come out in opposition to the tax breaks linked to the Republican-backed wage hike and have indicated they would oppose a bankruptcy bill that included any such package.

The White House weighed in as well, saying the President would oppose any conference report that is too close to the more stringent House bill. "If it's a bill that looks like the House bill, the President won't sign it," said White House Press Secretary Joe Lockhart. "If it's a bill that…reflects the improvements of the Senate bill, it obviously would be…closer to the views held by the President."

NRF will work vigorously during the upcoming House-Senate conference to ensure swift completion of a final conference report, and timely passage before election-year politics take over in Washington.

If you have any questions, please contact Mallory Duncan or Katherine Graham at (202) 783-7971.

As the second session of Congress gets underway, conferees are preparing to begin the difficult job of reconciling two very different managed care bills that passed last year.

Both bills grant access to specialists and provide for an external appeals process, but the Senate measure is somewhat more limited on these issues. In addition, only the House version allows patients to sue their health plans in state courts.

On Tuesday, the House voted on a non-binding motion to instruct conferees to support the House legislation. The measure passed 207 to 175, although a number of Republicans who had voted in support of the bill last year chose to vote "present."

The Senate recently appointed Senator Don Nickles (R-OK) as their conference chairman. "We want to get this thing wrapped up by the end of March," said Nickles, adding that he hoped the report would be through both the House and Senate before the start of Easter recess.

NRF will work to ensure that any language that expands liability to employers is kept out of the final conference report. If you have any questions, please contact Katherine Graham at (202) 626-8195.

February 9, 2000 - Health and Employee Benefits Committee, Washington, DC
February 10, 2000 - Policy Council, Washington, DC
March 16-17, 2000 - International Trade Advisory Council, Washington, DC
March 21, 2000 - Credit Management Advisory Council, Washington, DC
March 22-23, 2000 - Taxation Committee, Washington, DC

Washington Retail Insight is published by the National Retail Federation, 325 7th Street, NW, Suite 1000, Washington, DC 20004. Please contact Mike Epstein at (202) 783-7971 or e-mail with comments, suggestions, or for subscription information.