Former Vice President Joe Biden says he now backs Massachusetts Sen. Elizabeth Warren’s bankruptcy plan, endorsing his former Democratic rival’s proposal to repeal portions of a law they had clashed over 15 years earlier.
Biden touted his support for Warren’s plan as an olive branch to supporters of Vermont Sen. Bernie Sanders in a virtual town hall for Illinois voters Friday night, calling it “one of the things that I think Bernie and I will agree on.”
He highlighted a portion of Warren’s plan that would allow student loan debt to be eliminated in bankruptcy just like other debts.
“I’m going to endorse – I’ve endorsed – Elizabeth Warren’s bankruptcy proposal, which in fact goes further, allows for student debt to be relieved in bankruptcy, 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 move to back Warren’s plan shows that, as he moves toward clinching the Democratic presidential nomination and seeks to soothe over tensions from a year-long intra-party battle, the former vice president is taking steps to embrace his former rivals and adopt planks of their platforms – and is willing to move left to do so.
Warren’s team got a heads-up from the Biden camp that he would be endorsing the senator’s bankruptcy plan ahead of his public announcement on Friday, a Warren aide told CNN’s MJ Lee. The two teams were in touch leading up to the announcement, the aide said.
A Biden campaign aide said he would likely say more about his support for Warren’s bankruptcy plan in his debate against Sanders on Sunday night.
Biden and Warren’s high-profile battle over a 2005 bill that made it more difficult to declare bankruptcy, when he was a Delaware senator and leading advocate of the measure and she was a Harvard professor and vocal opponent, played a key role in inspiring Warren’s move into politics.
As a presidential candidate, she used it to highlight her differences with Biden. On the day in April 2019 that Biden entered the race, she said at a rally that Biden had been “on the side of the credit companies.”
The law, which was heavily backed by the banking and credit card industries, made it harder for Americans to get out of debt by filing for bankruptcy. Supporters of the measure said it would prevent financially irresponsible people from abusing the system, while opponents denounced it, saying it would hurt struggling people by increasing the regulation, documentation and costs of seeking bankruptcy protection. Bankruptcies plummeted after the law took effect, but not for the right reasons, consumer advocates argued.
Biden was seen as a leading proponent of the bill at the time, though it was largely backed by Republicans and passed by a GOP-controlled Congress. Biden’s campaign has argued he successfully fought for changes to the bill that prioritized child support and alimony in front of lenders and required credit card companies to warn borrowers about their interest rates.
The Warren plan targets a series of provisions that she has criticized for years, arguing that they benefit credit card companies and big lenders at the expense of Americans struggling with consumer, household and student debt.
Warren’s proposal would make the bankruptcy system “simple, cheap, fast, and flexible,” she wrote in a Medium post when she unveiled it in January. It would merge the two types of consumer bankruptcy filings – Chapter 7 and Chapter 13 – into one, offering filers a “menu of options” for dealing with their unpaid debt. It would eliminate what she termed “burdensome paperwork” that makes bankruptcy more expensive, deterring some from filing. It would reverse the 2005 law’s requirement that filers seek pre-filing credit counseling, as well as the additional rules it placed on consumer bankruptcy attorneys.
She would also reduce the cost of filing and make it easier for people to keep their homes and cars during bankruptcy. The proposal would make it harder for the wealthy to shield assets in trusts and would crack down on companies that violate consumer financial protection laws while trying to collect on debts. And her proposal would end the ban on shedding student loan debt in bankruptcy.
CNN’s Gregory Krieg and Tami Luhby contributed to this report.