An unexpected shift of events, Biden endorses Warrens bankruptcy plan

The two previously sparred over a 2005 bill that her plan would largely undo.

In an unexpected shift of events, former Vice President Joe Biden announced his endorsement of Massachusetts Sen. Elizabeth Warren’s bankruptcy plan, which would largely undo a 2005 law the two famously sparred over in the past.

During a virtual town hall with Illinois voters on Friday night, Biden revealed his endorsement, while answering a question from a participant about actions he would take to appeal to supporters of his current rival Vermont Sen. Bernie Sanders, should he win the Democratic nomination.

“One of the things that I think Bernie and I agree on … I’ve endorsed Elizabeth Warren’s bankruptcy proposal, which in fact goes further, allows for student debt to be released in bankruptcy, [and] provides for a whole range of other issues that allows us to in fact impact on how people are dealing with their circumstances,” Biden said. “So there’s a whole range of things we agree on.”

Biden’s campaign confirmed to ABC News that the former vice president has reviewed Warren’s bankruptcy plan closely, and supports the proposal. They said to expect to hear more from the candidate on this topic during Sunday night’s Democratic debate.

That’s a significant move for Biden, as Warren’s plan would undo much of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, that made it more difficult to file for bankruptcy — a bill Biden voted for and quarreled with Warren over
during his tenure as a Delware senator. Warren also seemed to reference their differences when announcing her plan back in January.

“By making it harder for people to discharge their debts and keep current on their house payments, the 2005 bill made the 2008 financial crisis significantly worse: experts found that the bill ‘caused about 800,000 additional mortgage defaults and 250,000 additional foreclosures,’” Warren wrote in a Medium post announcing her plan. “And despite the claims from the industry and their allies in Congress that the 2005 bill would reduce credit card costs across the board for consumers, the cost of credit card debt went up too.”

She added, “I lost that fight in 2005, and working families paid the price.”

Warren’s proposal would make it easier to file for bankruptcy, as well as end provisions making it difficult for student loans to be discharged while filing for bankruptcy.

Biden’s endorsement of the plan is also significant as he seeks to lock up the Democratic nomination — a fight that has shifted further in his favor against Sanders, who now faces an improbable path to the nomination.

Biden has received endorsements from 11 former 2020 candidates in recent weeks — showing a coalescing of support around the former vice president.

Following her departure from the race, Warren did not offer an endorsement of Sanders or Biden. Instead, she said she needed time following the suspension of her campaign. But in an interview following her exit, Warren did acknowledge the former vice president, and their “bankruptcy wars.”

“We go back a long way. We were in the bankruptcy wars against each other,” Warren said of Biden in an interview with MSNBC. “My whole life has been about working families, and more, about how government should be there to be on their side.”

“I believe that the vice president has the same goal,” she added.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.