Expecting a federal tax refund? Perhaps you should hurry up and file.
As House Republicans struggle to coalesce around a strategy for embracing an increase to the nation’s $17 trillion-plus debt ceiling so the nation can keep paying its bills, Democrats on the Ways and Means Committee are floating a new bogeyman if the delay continues.
A wave of bank runs by worried depositors was blamed for helping to drive the United States even deeper into the Great Depression in the 1930s.
Now, suggest the Democrats, there could be a potential “panic” when Americans in upcoming weeks file their income-tax returns, particularly if fear builds that the Treasury Department might not be able to immediately refund all that it owes to taxpayers.
“Failure to act quickly [on the debt ceiling] 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,” wrote the Democrats in a letter Monday to Speaker John Boehner. The letter was circulated by ranking member Sander Levin and signed by other Ways and Means members.
The letter goes on to say, “Past Republican default threats” have cost Americans hundreds of billions in lost retirement savings, increased the costs of owning a home, and even jobs.
“Let’s not add delaying refunds to the list,” the letter states.
“First come, first served,” said one senior Democratic aide on Wednesday of the millions of refunds paid out each year, adding that “Treasury can only pay out what it has.”
In fact, Boehner has made it clear that he and other House Republicans do not intend to let the nation default on its bills, and that they will pass a debt-ceiling increase. But the question remains: How soon can he and his conference agree on how to proceed?
Administration officials are already warning that the Treasury Department will run out of “extraordinary measures” to keep government afloat by the end of February if Congress does not approve the hike in the nation’s borrowing limit.
Democrats are now suggesting that timeline might become even more contracted if there is a greater-than-usual number of tax filers in the coming weeks.
The filing period began Friday—already a week later than usual because of the government shutdown last year—meaning that some filers have been antsy to get going.
Democrats are preparing a “fact sheet” outlining this tax-refund doomsday scenario, said the aide.
The fact sheet will note that 110 million Americans received tax refunds in 2013, averaging $2,700 each. It will also point out that 40 to 50 percent of refunds generally are distributed by March 1.
Democrats say they are now monitoring to see whether there is a heavier-than-usual volume of first-week filings.
The upshot of their strategy is that House Republicans who are worried about getting slammed by constituents for passing a clean debt-ceiling increase should think about something else: constituents getting angry over delayed tax refunds.
Boehner’s office had no immediate comment Monday on the Democratic strategy or the letter. And a Treasury Department spokesman responded only by pointing out that Secretary Jacob Lew has previously stated—regarding potential tax refund delays—that “we ought not to be doing things that interfere with the ability of the government of the United States to meet all of its obligations on a timely basis.”
What We're Following See More »
"North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean after President Donald Trump vowed to destroy the reclusive country, with leader Kim Jong Un promising to make Trump pay dearly for his threats. Kim did not specify what action he would take against the United States or Trump, whom he called a 'mentally deranged U.S. dotard' in the latest bout of insults the two leaders have traded in recent weeks."
President Trump this afternoon announced another round of sanctions on North Korea, calling the regime "a continuing threat." The executive order, which Trump relayed to Congress, bans any ship or plane that has visited North Korea from visiting the United States within 180 days. The order also authorizes sanctions on any financial institution doing business with North Korea, and permits the secretaries of State and the Treasury to sanction any person involved in trading with North Korea, operating a port there, or involved in a variety of industries there.
In response to a reporter's question, President Trump said "he’ll be looking to impose further financial penalties on North Korea over its nuclear and ballistic tests. ... The U.N. has passed two resolutions recently aimed at squeezing the North Korean economy by cutting off oil, labor and exports to the nation." Meanwhile, the Guardian reports that South Korea's unification ministry is sending an $8m aid package aimed at infants and pregnant women in North Korea. The "humanitarian gesture [is] at odds with calls by Japan and the US for unwavering economic and diplomatic pressure on Pyongyang."
President Trump on Tuesday night met with UN Secretary Guterres and President of the General Assembly Miroslav Lajcak. In both cases, as per releases from the White House, Trump pressed them on the need to reform the UN bureaucracy.