Plan To End Private Debt Collection May Face Senate Resistance

Three Senators are fighting to maintain a controversial program that allows private debt collectors to recover debts owed to the United States Treasury. As currently written, the $410 billion omnibus spending bill moving through Congress would end what is known as the private debt collection program.

Senators Chuck Grassley, Charles Schumer, and Tom Harkin recently sent a letter to the Treasury Department and the Internal Revenue service asking them to retain the program and the jobs it supports.

"Make no mistake," the Senators wrote. "If the program is genuinely unsuccessful, we would be among the first to concur that it should be terminated. However, we remain very concerned that IRS will terminate the PDC program before a complete and thorough accounting of the program is conducted. For example, while some are critical of the effectiveness and efficiency of the PDC program, we have yet to see solid, reliable numbers. Criticism of the program’s return on investment do not account for its start-up or investment costs, and ignore the fact that the program has not been fully operational for any of its two years."

Critics of the program claim that since its inception in 2006, the IRS has spent $80 million on the program only to recover $60 million, not including $13 million in commissions for the private firms. The president of the National Treasury Employees Union President, Colleen Kelley, has characterized the private debt collectors as "bounty hunters who collect taxes from vulnerable people for profit."

The Senate is set to consider the omnibus spending bill this week.

Comments

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Elaina