EPA and Wage Garnishment – Fair Criticism or Not

imagesCAAUKO6QEPA once again finds itself in the news this past week, this time for adopting a direct final rule that authorizes the agency to garnish the wages of delinquent debtors.  Here’s a link to the rule, which essentially incorporates by reference U.S. Treasury’s existing regulations on wage garnishment.  The agency has agreed to withdraw the rule in the event of any negative comments and reissue it with an opportunity for notice and comment.   As you can imagine, the action was swiftly rebuffed by some of the agency’s harshest critics.  The Hill had a story here, GOP senators slam EPA on wage garnishment.  Fox News too got in a few jabs here, EPA claims it has the power to garnish wages without court approval.  EPA’s action feeds perfectly into the narrative of a nefarious, overbearing agency hellbent on ruining (or running) the lives of average Americans.  But is the criticism fair?  For those who may have an interest in the broader context and facts surrounding the agency’s action, here it is.

Congress, in 1996, passed the Debt Improvement Collection Act (DCIA) which gave federal agencies greater authority and more tools to recover deadbeat debtors, i.e., those who default on government backed student loans or home loans, overpayments to government contractors, and, yes, those who fail to pay fines and penalties for violating environmental laws.  Congress gave U.S. Treasury the lead in seeking to recover the billions in dollars in delinquent nontax debt, which has grown exponentially in recent years, from $64B to $131B between 2007 and 2011.  See 2012 GAO Report Status of Treasury’s Centralized Efforts to Collect Delinquent Federal Nontax Debt.  The push to recover delinquent nontax debt is coming from the U.S. Treasury, who is also required to report annually to Congress on the government’s efforts to “aggressively” pursue the collection of delinquent nontax debt.  According to the U.S. Treasury:

Federal agencies are required to aggressively pursue collection action on all debts arising out of their activities. Debts owed to the United States can arise from various Federal Government programs and actions, including loan and loan guarantee programs; overpayments to beneficiaries, Federal employees, or contractors; or penalties and fines owed from violations of law, etc. Each Federal agency should establish and implement effective collection strategies that suit its needs. Collection strategies must meet all statutory and regulatory requirements, and should include use of all authorized and appropriate debt collection tools.

No doubt the recession has contributed to the unfortunate rise in delinquency and defaults, and the DCIA, which authorized EPA to do what it did, requires agencies to consider economic hardship.  In fact, the law requires EPA to adopt the rule it did in order to provide fair notice and procedures to those who may find themselves the target of a garnishment proceeding.  Treasury requires that any debt be fixed and otherwise adjudicated before it can become collectable.  Many agencies such as the Department of Interior, Department of Agriculture, Department of Defense, Department of Commerce, General Services Administration, and Federal Communication Commission have already adopted regulations (similar to those just adopted by EPA) that must be in keeping with the requirements and consumer protections outlined by Congress.  EPA is thus a latecomer to the arena of federal wage garnishment.

Certainly some of the ongoing criticism of agency overreach and mismanagement is justified, which creates the perfect climate of cynicism and mistrust.  EPA, like many other federal agencies, posseses enormous powers that can be used for either good or bad.  Such power can be abused and misused by increasingly unaccountable bureaucracies, as reminded by Jonathan Turley’s recent WaPo article on The Rise of the Fourth Branch of Government, or it can be wielded wisely to improve the health and wellbeing of our environment and communities.

We all want good government, which should act in accordance with the laws in fair and prudent manner.  So, if Congress or the public firmly believes the government’s pursuit of delinquent nontax debt is a bad idea before court approval or that an agency, such as EPA, cannot be trusted with such authority, then the proper course is for Congress to change the law it adopted or, alternatively, the agency it created.

1 Comment
  1. Author
    Brent Fewell 3 years ago

    Just today, EPA announced it was withdrawing the rule and will publish it at a later date with more opportunity for notice and comment. Good decision by EPA.

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