Elizabeth Warren rolls out a bankruptcy plan, and revives an old clash with Joe Biden

“I lost that fight in 2005, and working families paid the price."

Sen. Elizabeth Warren (D-Mass.), a Democratic candidate for president, campaigns in Concord, N.H., on Jan. 2, 2020. Bankruptcy has long been a central focus for Warren, who first went to Washington as part of a commission to review related laws in the 1990s. (Elizabeth Frantz/The New York Times)
Sen. Elizabeth Warren campaigning last week in Concord, New Hampshire. –Elizabeth Frantz / The New York Times

Sen. Elizabeth Warren on Tuesday announced a plan to roll back provisions in a 2005 bankruptcy law, reviving a debate she had 15 years ago with Joe Biden, a U.S. senator at the time, over consumer protections and the credit card industry.

Bankruptcy is a critical part of the political origin story of Warren, whose new plan would make it easier for families to file for bankruptcy and increase accountability for creditors. A former law professor who studied the issue as an academic, she first went to Washington as part of a blue-ribbon commission to review related laws in the 1990s.


She spent a decade resisting industry efforts to tighten bankruptcy rules until such legislation, supported by Biden, passed in 2005 despite opposition from consumer groups, making it harder for many Americans to file for bankruptcy. She has portrayed the battle as something of a political baptism in which she learned firsthand about a broken U.S. system influenced by money and power that she is now campaigning to overhaul.

But despite its central role in her life — and Biden’s position as the national front-runner for the Democratic Party’s nomination for most of 2019 — Warren has scarcely brought up her specific bankruptcy battles with Biden, which included testifying before his committee. In the plan she outlined Tuesday, Warren would ease bankruptcy rules, allow students to declare student debt as part of any bankruptcy filing and let more families keep their homes and cars while declaring bankruptcy.

“I spent most of my career studying one simple question: Why do American families go broke?” Warren wrote in a Medium post announcing the policy. “Our research ended up showing that most of these families weren’t reckless or irresponsible — they were just getting squeezed by an economy that forced them to take on more debt and more risk to cling to their place in America’s middle class.”


With less than a month until the Iowa caucuses, Warren is seeking to recapture the excitement and energy that defined her candidacy early in the fall. At the same time, she has generally remained more wary than the rest of the top tier to lob attacks at her opponents.

Previously, Warren had called for the repeal of the 1994 crime bill, another piece of legislation helmed by Biden that helped reshape the criminal justice system. However, even as Biden and others have criticized her plans as politically unrealistic and financially infeasible, she has largely avoided returning fire.

It is not yet clear whether Warren’s bankruptcy plan is meant to start a new phase of her campaign or is simply another in a long list of policy plans.

Warren did take one notable swipe at Biden over the bankruptcy bill: On the day he entered the race, in April, saying the fact that she had sided with consumers and families was a “matter of public record.”

“I got in that fight because they just didn’t have anyone,” Warren said, “and Joe Biden was on the side of the credit card companies.”

But that proved to be more of an isolated note. Throughout the 2019 debates, Warren avoided directly confronting Biden about their past tangles. She has also stayed away from attacking Sen. Bernie Sanders, the other front-runner in the race, who has cut into her progressive support.

In the Senate, Biden had represented Delaware, a favorite state of the credit card industry, and supported the 2005 bankruptcy legislation that Warren opposed. When she testified before his committee, he called her argument “mildly demagogic.”


She urged him to address exceedingly high interest rates as well as bankruptcy protections.

“If you’re not going to fix that problem,” Warren told Biden of interest rates, “you can’t take away the last shred of protection for these families,” she said, referring to bankruptcy.

“You’re very good, professor,” Biden replied.

Later, when Biden swore Warren into the Senate in 2013, he could be heard good-naturedly telling her, “You gave me hell.”

In her plan Tuesday, Warren called the 2005 bill “terrible for families in need” and noted that bankruptcy filings plunged “permanently” by 50%.

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

The package does not mention Biden by name.


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