When President Clinton declared the end of the era of big government in 1997, most people thought it would be up to the Republican Congress to hold him to his pledge. When it comes to bankruptcy reform, however, it will be up to Clinton to hold the line.

After the "spend decade" of the '90s (when personal bankruptcies more than doubled), the House and Senate have each passed bills to tighten bankruptcy rules to restore the moral obligation to pay back debts. The moral intention of the bills is fine, and Clinton has said reform is needed, but the bills would inject big government into the consumer economy, with predictably dismal results.

For the first time in our history, the bankruptcy system would be "needs-based." Only certain approved debtors could choose to liquidate in Chapter 7 bankruptcy. The rest could only embark on a Chapter 13 repayment plan: five years of indentured servitude during which the government, via a trustee and for the benefit of government- approved creditors, micromanages every aspect of the debtor's economic activity.