Bush: Tax refunds could be delayed
President Bush says a delay in the approval of a spending bill by Congress could slow the processing of tax returns to millions of Americans.
NEW YORK (CNNMoney.com) -- Millions of Americans could receive their tax refunds later than expected, President Bush said in a year-end news conference Thursday.
While the president praised Congress for supporting a spending bill to fund the day to day federal government operations without raising taxes, he complained that the measure was done so late in the year that it could slow the processing of tax returns to millions of Americans.
He said his administration would "work hard to minimize" such a delay.
Bush also complained that Congress had stuffed a spending bill with hundreds of projects that he called wasteful and instructed his budget director to explore options for dealing with them.
On Wednesday, the House voted in favor of a one-year Alternative Minimum Tax "patch" that the Senate had already approved earlier this month.
The measure freezes growth of the AMT for a year. The tax was created in 1969 to make sure that a small group of very rich people were not able to avoid paying taxes.
But since the AMT was never adjusted for inflation, a growing number of middle class taxpayers are being hit. Without the fix, the number of taxpayers affected this year could have grown from four million to 25 million.
There is a downside to the patch, however. The IRS says it will now have to reprogram its computers and that could delay tax refund checks, and the benefits of the AMT fix aren't expected for months.
Wednesday's vote marked the third time the House passed an AMT patch bill in the past two months, but it's the first time House Democrats gave the nod to a "clean" bill, meaning it has no provisions to pay for the patch's estimated $53 billion price tag.
Senate Republicans twice rejected House Democrats' "revenue-neutral" AMT patch bills, which would have raised as much in tax revenue as the patch costs.
The president had threatened to veto earlier versions that paid for the fix - estimated to cost $50 billion - by closing some tax loopholes. The White House argued that the AMT shouldn't be fixed with increased taxes.
"Raising taxes will slow down the economic growth of this country," Bush said Thursday, adding that the White House is focused on reducing the federal deficit, supporting military efforts and and helping the economy grow.
Overall, Bush said his view of the economy is that fundamentals are strong.
"We've had strong growth, we're competitive, we have a flexible workplace, and we've kept taxes low," Bush said Thursday.
But to further stimulate the economy, "We will be considering all options ... We'll be watching carefully," the president said.
On the subprime mortgage front, "We're not going to bail out lenders and we're not going to bail out speculators, but we are going to help credit worthy people," Bush said.