Moments after the former secretary of state (and N.Y. senator) made this statement, the Bernie Sanders campaign issued a news release titled “Elizabeth Warren on How Wall Street has influenced Hillary Clinton.” The news release recounted how Sen. Warren (D-Mass.), in a 2003 book, blamed campaign contributions from banking interests for why Clinton flipped from being opposed to an overhaul of bankruptcy laws as first lady – calling it “awful”– to voting to advance the bill as a freshman senator.
Warren noted that Clinton had received $140,000 in campaign contributions from banking industry executives as she sought a Senate seat. “Big banks were now part of Senator Clinton’s constituency. She wanted their support, and they wanted hers—including a vote in favor of ‘that awful bill,’” Warren wrote.
In an interview on ABC’s “This Week” on Feb. 7, Clinton offered a lengthy explanation. She said that she had sought a provision to protect “vulnerable women and their children” receiving child support if their spouse went into bankruptcy. She explained that in exchange for receiving the provision, she agreed to support passage in the Senate.
“I didn’t like the bill any more than I had liked it before. It still had very bad provisions. But I also pushed hard for a deal to protect women and children. So okay, I held my nose. I voted for it,” she said. A final version never emerged that year, but in 2005, when a similar bankruptcy bill neared final passage, Clinton opposed it.
Clinton added: “You can look at what I said in 2001. You can look at what I said in 2005. And so I’m glad to set this record straight.”
There’s a lot of complicated legislative maneuvering going on here. Let’s explore.
Warren’s book, “The Two-Income Trap,” devoted four pages to her interaction in 1998 with Clinton, at the time first lady. Warren then was a Harvard University professor who had written an opinion article in The New York Times critical of the pending bankruptcy legislation, and Clinton had sought to learn more.
Warren praises Clinton for quickly grasping the issues. “I have taught bankruptcy law to thousands of students — some of them among the brightest in the country — but I never saw one like Mrs. Clinton,” Warren wrote. “Impatient, lightning-quick and interested in all the nuances.”
Hillary Clinton pledged to help stop the bill and Warren writes that she later learned the Clinton White House — which had been poised to approve the legislation — turned on a dime after the first lady’s concern became apparent. Bill Clinton vetoed the bill after it passed Congress in his waning days in office.
Warren blames Clinton’s about-face as senator on the impact of campaign contributions. “The bill was essentially the same, but Hillary Rodham Clinton was not,” she wrote. “Hillary Clinton could not afford such a principled position. Campaigns cost money, and that money wasn’t coming from families in financial trouble.”
Warren also recounted this perspective in a fascinating 2004 interview with Bill Moyers.
Clinton’s defense? She said that she voted to advance the bill because she had secured an amendment sought by women’s groups.
In her 2001 statement on the floor of the Senate, Clinton acknowledged that she was “a strong critic of the bill that passed out of the 106th Congress because I did not believe it provided a balanced approach to bankruptcy reform.” But she ticked off a number of amendments that she said had been added to protect women, including allowing women to collect child support payments after the father has declared bankruptcy, making it a “first priority” during bankruptcy proceedings.
Clinton warned that without these provisions, her vote on final passage was in doubt.
“Let me be very clear — I will not vote for final passage of this bill if it comes back from conference if these kind of reforms are missing,” Clinton said. “I am voting for this legislation because it is a work in progress, and it is making progress towards reform.”
But in the endnotes of Warren’s book, she was dismissive of Clinton’s argument that she had improved the bill.
“While this amendment may have provided some political cover, it offers virtually no financial help to single mothers, since the overwhelming majority of ex-husbands don’t pay anything in distributions during bankruptcy,” Warren wrote. “Of far more importance was the fact that the bill would permit credit card companies to compete with women after bankruptcy for their ex-husbands’ limited income, and this provision remained unchanged in the 1998 and 2001 versions of the bill. Senator Clinton claimed that the bill improved circumstances for single mothers, but her view was not shared by any women’s groups or consumer groups.”
It is interesting to note that virtually every Democratic female senator at the time voted to advance the bill, even though it was opposed by liberal warhorses such as Sen. Edward M. Kennedy (D-Mass.) and Paul Wellstone (D-Minn.).
Sen. Patty Murray (D-Wash.), for instance, said: “While I have concerns over many of this bill’s provisions, I hope they can be dealt with in conference or in future legislation. This bill should be strengthened in conference, not weakened as has happened to other versions of bankruptcy legislation. I will closely examine a conference agreement with this in mind before voting to send this legislation to the President.”
Still, as Warren noted, virtually every consumer group opposed the bill at the time. The news media also portrayed the vote as a triumph for well-heeled financial lobbyists. “Money interests prevailed over the public interest,” wrote columnist David Broder in The Washington Post. Former senator Howard M. Metzenbaum, at the time head of the Consumer Federation of America, was quoted as saying: “The cries, claims and concerns of vulnerable Americans who have suffered a financial emergency have been drowned out by the political might of the credit card industry.”
The bill actually never came back to the Senate for a final vote in that Congress. But Republican victories in the 2004 elections gave the bill new momentum, and when it came up for a final vote in the Senate, Clinton (as well as almost all of the other female Democratic senators) were in opposition.
Clinton missed the vote because her husband was in the hospital but she issued a statement decrying it. In particular, she said the bill did not take into account “significant changes that have taken place in our national economy” since the Senate had last considered the bill in 2001, because Republicans had joined together to reject Democratic amendments. At least one of the amendments she had won in 2001 was also dropped from the bill.
Let’s unpack some of the politics. In 2001, the Senate was evenly split, with 50 Republicans and 50 Democrats, so Republicans needed to work with Democrats such as Clinton to advance legislation. After the 2004 elections, Republicans had 55 seats in the chamber, making compromise less necessary. Thus Clinton had less incentive to back a bill that was being rammed through Congress.
Warren, of course, made her comments and wrote her book before Clinton’s 2005 vote against the bankruptcy bill—and before she became a Senator herself and had to cast votes on legislation. Warren has remained studiously neutral in the race between Sanders and Clinton, and her office said she declined to comment.
We face a conundrum here. Clinton laid down a marker–that she did not change a vote because of financial contributions — but the example provided by the Sanders campaign does not quite disprove Clinton’s statement.
One could suspect, as Warren did in 2003, that contributions made Clinton more sympathetic to the financial industry as a newly elected senator. But Clinton argues that she voted to advance the bill — “held my nose” — as part of an agreement to make the bill better. Warren says the main provision touted by Clinton was only a fig leaf, but we have no idea of how Clinton might have voted on final passage in 2001 because the bill did not come up for a final vote that legislative session.
In the end, however, Clinton was against the bankruptcy bill at the moment it really counted — final passage in Congress. (In all, 26 Democrats opposed the bill and 18 supported it, along with all 55 Republicans.)
So for all the money the financial interests contributed to Clinton’s campaign, she did not give them the support they desired. At the same time, however, the vote was so lopsided that Clinton’s support was not needed.
In light of subsequent events, Warren’s comments from 2004 at this point appear out of date. We would be curious to know if Warren’s experience as senator has changed her perspective on Clinton’s actions in 2001.
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