[120][121] He sponsored a law that increased tax credits for low-income workers, negotiated welfare reform, and promoted increased subsidies for childcare.[122] In 2001, as co-chairman of the bipartisan Joint Committee on Administrative Rules, Obama supported Republican Governor Ryan's payday loan regulations and predatory mortgage lending regulations aimed at averting home foreclosures.[123][124]
He was reelected to the Illinois Senate in 1998, defeating Republican Yesse Yehudah in the general election, and was re-elected again in 2002.[125][126] In 2000, he lost a Democratic primary race for Illinois's 1st congressional district in the United States House of Representatives to four-term incumbent Bobby Rush by a margin of two to one.[127]
In January 2003, Obama became chairman of the Illinois Senate's Health and Human Services Committee when Democrats, after a decade in the minority, regained a majority.[128] He sponsored and led unanimous, bipartisan passage of legislation to monitor racial profiling by requiring police to record the race of drivers they detained, and legislation making Illinois the first state to mandate videotaping of homicide interrogations.