WASHINGTON -- The Senate is drawing closer to passing legislation to make it tougher for people to erase debts in bankruptcy court, after voting down two Democratic attempts to restrict credit cards for minors.
Senators voted Tuesday, 55-42, against a proposal that would have imposed a $2,500 limit on credit cards issued to people under 21 unless a parent co-signed the account or the minor could demonstrate sufficient income for a higher credit limit.
Several hours later, the Senate rejected, 58-41, a provision that would have required a minor seeking a credit card either to obtain a parent's co-signature, show adequate income of his own or agree to take a credit counseling course.
The amendments, proposed respectively by Sens. Dianne Feinstein, D-Calif., and Christopher Dodd, D-Conn., responded to growing unease about widespread marketing of credit cards to young people, especially college students, who often have no income or credit record. In the worst cases, critics say, students who run up big debts are forced to drop out and work full time to pay them off.
The West Coast power crisis intruded on the bankruptcy debate when Oregon Sens. Ron Wyden, a Democrat, and Gordon Smith, a Republican, proposed amendments that would require California's financially troubled utilities to pay in full for power they received from outside companies in the event they filed for bankruptcy protection.
"I don't think it's fair for consumers in other Western states to get caught holding the bag if California utilities take our power and then run into bankruptcy court to avoid their debts," Wyden said.
The proposals brought objections from Feinstein, who said they would put the Senate in the inappropriate position of deciding the "pecking order" of creditors in a bankruptcy proceeding.
The legislation to overhaul the bankruptcy laws overwhelmingly passed the House on March 1, and President Bush has signaled he will sign the measure if it reaches his desk.
The legislation was vetoed in December by then-President Clinton, who contended it would hurt ordinary people and working families that fall on hard times. It has been pushed by the banking, credit card and retail credit industries, while consumer groups and unions have opposed it.
In recent days, Democrats in the Senate have been proposing a series of amendments aimed at tempering the legislation but have been rebuffed nearly each time.
A Senate vote was expected Wednesday to choke off debate and set a final vote on the measure, the most sweeping overhaul of bankruptcy laws in 20 years.
After days of debate in the Senate, the House and Senate versions were similar. Negotiators from the two chambers would have to meld the versions into one after Senate passage.
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