SECTION: ROP ZONE; News; Pg. A8

LENGTH: 1152 words

HEADLINE: House dooms measure to discourage bankruptcies
Terrorism-insurance proposal passes key test

BYLINE: Seattle Times news services

DATELINE: Washington

BODY:
WASHINGTON -- The House handed the business community a stunning defeat yesterday by killing legislation intended to make it more difficult for consumers to wipe out debt through bankruptcy.

A 243-172 procedural vote was led by conservative Republicans who defied President Bush and their leadership over objections to a three-paragraph provision preventing anti-abortion protesters and others from using bankruptcy law to avoid paying court-imposed fines. Among Washington state's delegation, only Democrats Jim McDermott and Jay Inslee voted against considering the bill.

Opponents later brought the bill back to the floor of the GOP-controlled House without the abortion language and it passed easily, 244-116. But Democrats said it was a charade because the Senate would never accept the bill without the abortion provisions. The maneuvering means the measure, pushed by the credit-card industry and opposed by consumer groups, is dead for this Congress, Republican and Democratic congressional aides said. Meanwhile, Congress yesterday broke deadlocks on two major anti-terrorism bills and agreed to set up an independent commission to investigate government failures surrounding last year's terrorist attacks.

In a key vote sought by Bush, the House late yesterday approved a long-delayed bill to provide federal backup insurance against damage caused by terrorism. Bush and other proponents have said the bill will provide the economy a needed boost by stimulating stalled construction projects.

Under the bill, the government would cover 90 percent of terrorism claims after losses surpass $10 billion in 2003, an amount that would gradually increase to $15 billion in 2005. Covered losses would be capped at $100 billion. If losses are more than that, Congress would have to decide anew what to do.

The Senate is expected to pass the bill within the next few days.

Also headed toward final approval is legislation to tighten security at seaports -- facilities considered especially weak links in the nation's homeland defense. The Senate unanimously approved the seaport bill early yesterday, and the House followed suit last night.

The bill is intended to increase security at the nation's 361 seaports. It would create new anti-terrorism teams, a sea-marshal program and new standards to protect shipping containers. The bill would give more than $100 million to the Customs Service.

Agreement was reached hours before the House prepared to adjourn for the year, with Bush receiving much of what he wanted.

Action on the terrorism insurance, port security and commission measures -- along with expected Senate approval early next week on legislation to create a new Department of Homeland Security -- add to Congress' already extensive response to the attacks of Sept. 11, 2001.

The House and Senate also approved separate unemployment-benefits bills last night.

The House bill would extend unemployment benefits for victims of the recession. Congress had approved a 13-week extension of unemployment benefits as part of an economic-stimulus package it passed this year, but that extension expires Dec. 28.

The House bill would provide for an additional five weeks of benefits for those who have not exhausted their extension. That's designed to give lawmakers time to return in January and examine the issue further. The House bill also extends a welfare law and restores Medicare payments to doctors.

The Senate approved by voice vote a version that would offer an extension through the end of March. It also would allow people who have exhausted their regular 26 weeks of unemployment insurance to qualify for the extension, lawmakers said.

"The House passed a one-month program. This is a three-month program," said Sen. Don Nickles, R-Okla. "I happen to think it's a more orderly, more well-thought-out program."

It is unlikely that the House will consider the Senate's bill before going home for the year, or that the Senate will consider the House bill before ending this session.

On a day when both houses appeared to be working together, fireworks flew over the bankruptcy measure.

Congress has tried repeatedly to pass similar legislation in what would be the most significant change in bankruptcy law in more than a quarter of a century. Twice in five years bankruptcy bills have passed both the House and Senate, only to face defeat -- once when President Clinton pocket-vetoed it by not signing it, and yesterday.

The new bill is almost exactly the same as the compromise a coalition of anti-abortion House Republicans and House Democrats voted down earlier in the day. The only changes were the removal of some new bankruptcy judgeships and the deletion of the "odious language that caused such a bitter debate earlier in the day," Rep. George Gekas, R-Pa., said.

Although most support for the bankruptcy provisions came from Republicans, abortion opponents among them balked because the bill would have prevented anti-abortion protesters from declaring bankruptcy to escape court fines if they knowingly had broken the law by blocking access to clinics.

"What we're dealing with today, with all due respect, is McCarthyism," said Rep. Christopher Smith, R.-N.J., one of Congress' leading abortion opponents. Smith noted that civil-rights leaders, including the Rev. Martin Luther King Jr., knowingly broke the law with acts of civil disobedience.

"Pro-lifers are treated differently," he said.

Democratic opponents said the bill would endanger working Americans who are struggling with the economic slump.

No Republicans voted against the new late-night bill, although more than 80 had voted against the original legislation. The new bill now goes to the Senate.

Democrats accused Republicans of trying to shift the blame to the Democratic-controlled Senate if bankruptcy legislation fails in Congress by passing a bill they know the Senate won't take.

Compiled from the Los Angeles Times, The Washington Post, Knight Ridder Newspapers and The Associated Press.

Port security: The Customs Service would receive more than $100 million over six years to enhance security, improve communications between law enforcers, upgrade installations and ports, inspect cargoes, and track crime. It would cover all 361 U.S. ports.

Unemployment: Would extend unemployment benefits for certain workers to June 2003.

Bankruptcy reform: Meant to hold consumers accountable for more of their debts. Would tighten definitions of who qualified for bankruptcy protection, increase amounts to be repaid to credit agencies, use IRS standards instead of bankruptcy judges to determine a debtor's eligibility for bankruptcy protection, and require financial education counseling. For bankrupt persons, payment of child support would come before payment of credit-card debts and lawyers.

-- Knight Ridder Newspapers

LOAD-DATE: November 16, 2002