Join Today and Benefit Daily from ABI's 35+ Years of Insolvency Expertise.
Join Today!
Help Center

House Committee Strips Bankruptcy Judges from Senate-passed Bill

Journal Issue: 
Column Name: 
Journal Article: 

The House Judiciary Committee on Sept. 8 struck a section in a Senate-passed bill (S. 878) that would authorize 29 new permanent bankruptcy judge positions and seven new temporary positions. The Senate bill would also authorize more Article III judges, as recommended by the U.S. Judicial Conference, in addition to the Article I bankruptcy positions. Judgeship bills are always controversial in that they create more opportunities for a president to leave a lasting mark on the federal judiciary. The bill passed the Senate in May 2003. However, the House committee adopted, by voice vote, an amendment by Rep. Lamar Smith (R-Texas) to strike the bankruptcy judges from the bill: "[T]hese will be dealt with in context of the larger bankruptcy bill," said Rep. Smith. That bill, however, has been at a stalemate over threatened Senate amendments on debts arising from abortion clinic protests, among other issues. The House action seems to kill any effort in the 108th Congress to add bankruptcy judgeships outside the omnibus reform bill package.

Financial Netting Provision Another Victim of Stalemate Over the Larger Bankruptcy Bill Package

Bankruptcy judgeships aren't the only issue affected by the failure of the Senate to move the bankruptcy bill. Members of the House Financial Services Committee expressed frustration at the failure to move on financial contract netting provisions designed to promote more stability in the markets when a bankruptcy occurs. Both the Bush administration and the Federal Reserve Chairman support these provisions, which are also a part of the stalled omnibus reform bill. Officials now warn that the failure to enact a modernization of the netting provision could increase the risk of economic instability in the event of a terrorist attack, a fact noted by the 9/11 Commission. The House Committee held a markup on the provision on Sept. 29.

House OKs Disclosure of Pension Information

Under an amendment approved by the House in September, U.S. workers in a defined benefit pension plan would have access to information on the health of the plan—information that companies now supply to the Pension Benefit Guaranty Corporation in confidence. The amendment's sponsor, Rep. George Miller (D-Calif.), argued that there is no reason why the PBGC should know how poorly funded some plans are, while workers and retirees affected by the shortfalls are unaware. Miller claims that 290 of 362 companies with defined benefit plans are now underfunded by some $165 billion. The provision was tacked on to a government spending bill and must be agreed to by the Senate. The Bush administration is believed to support the change.

Journal Date: 
Friday, October 1, 2004

Reprint Request