Legal Commentary

Those of us who follow the banking business, as well as those of us who simply like to watch a train wreck in process, expected a Senate vote on Tuesday of this week on Little Dickie Durban's Bankruptcy Reform-of-the-Reform Bill, that would allow bankruptcy judges to rewrite residential mortgage loans. Lenders have been warning Congress that if they give bankruptcy judges that power over home loans, it will drive up the interest rates and fees, and stiffen the underwriting standards even more than they are already being tightened because of the recent meltdown in the credit markets. Unfortunately, the Senate didn't vote on the bill and chose to take up a much less controversial matter: scaling back military operations in Iraq. Pansies!

Nevertheless, there's been much tough talk and posturing in D.C. by both political parties over the bankruptcy issue. The Decider-in-Chief decided that he'd veto such a bill if it was presented to him. After he threw that glove in the face of the Democrats, Senate Leader "Dirty Harry" Reid told the Prez that if he vetoed it, Harry would make him not only eat his veto, he'd slather the override vote with hot spicy mustard and a plethora of jalapeno peppers.

U.S. Senate Majority Leader Harry Reid said on Wednesday he planned to defy a threatened White House veto and try to win passage of a bill to curb rising home foreclosures by changing bankruptcy law.    

"I have no expectation of reaching any agreement with the White House," said Reid a day after the administration warned the bill would need changes to get President George W. Bush's signature.   

"I have tried for seven years" to reach agreements with Bush on a variety of issues, but have repeatedly failed, said Reid, a Nevada Democrat, at a news conference. [Ed. Note: This must mean that Harry's suffering from a seven-year itch.]   

"So we are going to do what we think is best for the country," Reid said. "If we get 67 votes (in the 100-member Senate to override a possible Bush veto), that's great."

And if you get only 66? Well, as my parish priest once joked, that would be like a convert to Christianity on his way to his baptism ceremony, who gets run over by a bus, arrives at the pearly gates, and St. Peter puts his thumb and forefinger together and sadly informs him, "You were THIS CLOSE!!"

The next thing you know, they'll start screaming "Yo Mama!" at one another and all hell will break loose. I love it when the boys in the band on Capitol Hill "go all macho-like." It makes me want to crank up the "Scissor Sisters," take your mama out all night, get her jacked up on cheap champagne, and show her what it's all about. How about you?

The first hurdle for Harry is to get a cloture vote and cut off any filibustering by those blowhard Republicans. I mean, the prospect of Arlen Specter droning on into the wee hours makes my nether regions shrink to a size detectable only with an electron microscope and my inner child start to whimper for his mommy. Harry swears that he can get the 60 votes to do it, but I think that if he plans to accomplish this critical first step, he'll need to run down to Texas and pry Hillary Clinton off Barack Obama's face, where she's rammed her tentacles down his throat and is trying to implant in him the alien seed that Sigourney Weaver can tell you will grow up to be one nasty piece of work, a piece of work that only The Governator will be able to terminate. Personally, I'm hoping something draws Barack and Hill away from Texas, because we've had all the love we can take down here for the last month and the March 4 primary is still nearly a week away. Oh, and take Bill with you, while you're at it, Hill. That gadfly hit seven different venues in the Dallas-Fort Worth Metroplex yesterday, and the supply of intern-virgins is limited, even in a Red State as big as this one.

The Wall Street Journal has mocked the bill by giving it the title "Son of Stimulus," as well as by noting the unseemly haste with which Dirty Harry is trying to squeeze it through the Senate sphincter pipeline.

For this bill Mr. Reid decided to ignore the normal vetting of committee hearings and markups, and it shows. Democrats laud the $200 million in the bill for credit counseling, but the actual language of the bill directs $200 billion to something called the Neighborhood Reinvestment Corporation. We trust this error will be eliminated before Mr. Reid achieves Guinness fame for creating the world's most expensive typo.

The WSJ also questions the popularity of the "cramdown" even within the party that Harry leads.

Allowing judges to rewrite the terms of mortgages is a tough sale even within Mr. Reid's own party. The Congressional Budget Office, whose leadership is appointed by Democrats, warned in January that such a change could result in higher interest rates for homeowners and bigger caseloads in bankruptcy courts. Other nonlibertarians in opposition include 16 House Democrats who sent a letter to Mr. Conyers last fall. They tried to talk him down from the ledge before he forced a December committee vote. And then there's Supreme Court Justice John Paul Stevens, who noted in a 1993 case that the special treatment of mortgages was specifically intended to encourage lending to prospective homeowners.

I think all the breath wasted on bloviating about bankruptcy would be better spent singing up a storm about a time when men were men and women were women and you could actually tell the difference. You know, a time before boy bands became popular.

In honor of The Decider, Dirty Harry, and posturing hard guys everywhere, let's sing along with the macho man anthem for the ages:

A version of this post previously appeared on Bank Lawyer's Blog