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tax refund delay

Posted by on Feb. 5, 2014 at 12:41 PM
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Congressional Democrats Warn Boehner of Tax Refund Delay if Debt Ceiling Isn't Lifted

Washington, D.C. (February 3, 2014)

By Michael Cohn

Democrats on the tax-writing House Ways and Means Committee have written to Speaker of the House John Boehner, R-Ohio, urging him to introduce legislation to raise the debt ceiling without pre-conditions, warning that the Treasury Department would not be able to pay tax refunds without a higher debt limit.

John Boehner

In announcing their letter to Boehner on Monday, they noted that the two-week government shutdown last October had delayed the start of tax season until last Friday. They pointed out that last year, 110 million taxpayers received tax refunds averaging $2,700, and nearly half those refunds were claimed by March 1. However, they complained that House Republicans are again threatening not to raise the debt ceiling unless certain demands are met, and that would risk the Treasury's ability to pay timely tax refunds for American families. In the absence of an increase in the debt ceiling, they noted, tax refunds can only be paid as money is received by the Treasury.

“Failure to act quickly will endanger our economic recovery and send a signal to American taxpayers that their refunds may be in jeopardy, potentially raising unnecessary panic among families awaiting their tax refunds,” all 16 Democrats on the Ways and Means Committee wrote to Speaker Boehner.

“President Obama and Congressional Democrats have been clear: we will not negotiate over the full faith and credit of the United States,” they wrote in the letter. “Past Republican default threats rattled our economy and cost Americans hundreds of billions of dollars in lost retirement savings, increased the cost of owning a home, and cost us hundreds of thousands of desperately needed jobs. Let’s not add delaying tax refunds to the list. We look forward to working with you to protect American taxpayers.”

Treasury Secretary Jack Lew also sent a letter last month to Boehner asking him to raise the debt limit by February 7 "to ensure orderly financing of the government," adding that the debt limit needed to be raised at the latest by the end of February, Lew told the Bipartisan Policy Center during a speech Monday in Washington that the Treasury would be able to use accounting maneuvers for a few weeks after Febuary 7 to keep the government running, but that it would burn through its money more quickly than at other times of the year because it would also be issuing more tax refund checks so it would run out of room to maneuver by the end of the month.

Democrats are insisting that a "clean" debt limit bill be passed without concessions or conditions, and Boehner has admitted that Republicans have few good options for extracting concessions after the party lost support during the government shutdown last October. But he has also expressed concerns about rounding up enough votes among Republicans for passing a clean debt limit bill. Among the concessions that Republicans would like to see, according to The Hlll, are repeal of the medical device tax, the elimination of provisions in the Affordable Care Act for "risk corridors" that help protect insurance companies if the new risk pools end up being unprofitable, and approval of the Keystone XL oil pipeline from Canada, which cleared a major regulatory hurdle last Friday after the State Department issued a report on its environmental impact.


by on Feb. 5, 2014 at 12:41 PM
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