Treasury secretary cancels private debt collection program

Treasury Secretary Timothy Geithner Thursday told Senate Finance ranking member Charles Grassley, R-Iowa, he will end the Internal Revenue Service's use of private debt collectors, according to Grassley.

The $410 billion fiscal 2009 omnibus appropriations bill cuts off funds for the program, even though it has bipartisan support from the likes of Grassley, and Sens. Charles Schumer, D-N.Y., and Tom Harkin, D-Iowa.

The senators last week wrote Geithner and IRS Commissioner Douglas Shulman that they believe not enough data is available to make "an informed decision ... about the program's long-term effectiveness" and that their two states stood to lose about 200 jobs if the program ended.

The program has come in for scathing criticism from the National Treasury Employees Union and the IRS' National Taxpayer Advocate. House Ways and Means Oversight Subcommittee Chairman John Lewis, D-Ga., Rep. Chris Van Hollen, D-Md., and others introduced legislation last month to repeal its authority.

Grassley condemned the administration for killing the program, stating in a release: "The administration has decided that after spending nearly a trillion dollars in the stimulus bill to keep people working across the country, they are going to cut a program that provides jobs to hundreds of people during the middle of a recession, including 60 in Iowa."

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