The legislation reflects the GOP’s ongoing determination to undo the IRS expansion that Biden secured in 2022 in the Inflation Reduction Act, which boosted the agency’s funding by $80 billion to improve taxpayer services and pay for more enforcement actions against wealthy tax cheats. Biden and House Republicans agreed to repeal roughly $20 billion of that $80 billion as part of a deal in May to suspend the U.S. debt ceiling. Now, Republicans are pushing for more reductions.
The GOP bill would pare back funds for most parts of the IRS expansion, including increased enforcement and a new online portal to allow taxpayers to file their taxes for free directly with the government. The legislation excludes cuts to improved taxpayer services, which has helped the IRS reduce wait times for calls.
Using the IRS funding to offset the Israel aid might not actually save money: The nonpartisan Congressional Budget Office had estimated in 2022 that the $80 billion IRS expansion would cut the deficit by more than $100 billion, by improving collections and enforcement.
“This is the reverse of the right way to think about this,” said Mark Mazur, the Biden administration’s former assistant treasury secretary for tax policy. “This is like if you take a dollar from the IRS and throw a $5 bill out the window.”
Conservatives say they are optimistic that the debt ceiling deal means the administration has demonstrated it will fold on IRS funding to approve other priorities and could be forced to do so again.
“It becomes the piggy bank the Democrats have accepted already,” said Grover Norquist, an anti-tax crusader at Americans for Tax Reform, which opposed the expansion.
The GOP’s bill kicks off what is likely to be a fierce political battle over support for Israel. Democrats in both chambers of Congress oppose the House GOP bill, and the White House is expected to oppose it as well.
“House Republicans are setting a dangerous precedent by suggesting that protecting national security or responding to natural disasters is contingent upon cuts to other programs,” Rep. Rosa DeLauro (Conn.), the top Democrat on the House Appropriations Committee, said in a statement. “The partisan bill House Republicans introduced stalls our ability to help Israel defend itself and does not include a penny for humanitarian assistance.”
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