We came across this interesting Washington Post article yesterday that illustrates some of the problems with our bloated federal bureaucracy. The story starts with Congress lifting the 10 year statute of limitation applicable to the Government’s right to pursue old debts. As a result, the US Treasury Department and other agencies are now able to go back forever to pursue old debts.

While we are troubled at our Government retroactively changing the rules, in our view that is just the tip of the iceberg. Not only did this change allow the government to go back and attempt to collect old debts, but it expanded the number of potential people responsible for that debt. In one collection action discussed in the article, 58 year old Mary Grice had her tax refund seized without notice. The Social Security Administration claimed that back in 1977 it overpaid someone in the Grice Family. In 1977, Mary Grice was 4 years old and her father had died leaving her mother with five children. Until the children were 18, the government paid them Social Security survivor benefits.

Although the Social Security Administration today can’t actually prove who received the over-payment, it still seized Mrs. Grice’s refund. The Social Security Administration has taken the position that the money can be recovered from anyone in the family who “indirectly” received any benefit or assistance from public dollars. Another concern with this process is the fact that the Social Security Administration is using a private contractor to handle the collection efforts. This is likely to create perverse enforcement incentives.

Also not surprising is the fact that apparently no one in Congress wants to take credit for tucking the enabling language in a massive farm bill. This is yet another example of the problems created by our Congress passing thousand page bills that no one reads. But at least fortunately for Ms. Grice, she did find a lawyer willing to take her case without charge. She is reportedly challenging both the constitutionality of retroactively lifting the 10 statute of limitations as well as the right to seize a child’s money to satisfy a parent’s debt.