House Republicans’ IRS cuts would add over $100B to deficit: Budget Office #usa

The House GOP’s new proposal to slash significant funding for the Internal Revenue Service (IRS) would inflate the federal deficit even more, according to the Congressional Budget Office (CBO).

With Kevin McCarthy finally elected speaker of the House after 15 contentious rounds of voting, Republicans in the House of Representatives are at last beginning to forward new proposals. The first one out of the gate is a budgetary bill set to hit the House floor Monday night, aiming to cut $71 billion in federal funding for the IRS over the next decade, according to The Hill.

The bill could cut back most of the $80 billion in IRS funding from the bipartisan Inflation Reduction Act, which President Joe Biden signed into law last year. The majority of that amount, $46 billion over the next decade, is intended to bolster the service’s enforcement efforts and help prevent wealthy individuals and corporations from paying less than they owe.

In an estimate released on Monday, the CBO said the proposed cuts would ultimately have the opposite of their intention. Despite cutting $71 billion in spending, it would also lead to a loss of $185 billion in tax revenue, adding a net of $114 billion to the country over the next 10 years.

The IRS funding package was among the most heavily criticized aspects of the Inflation Reduction Act by Republicans, with lawmakers often mischaracterizing the enforcement efforts as targeting middle-class Americans. Treasury Secretary Janet Yellen countered these claims, stating that the IRS would not raise audit rates on anyone making less than $400,000 a year. The service also pushed back against claims that it would use the funding to hire 87,000 more auditors over the next decade. That figure represents the total number of all types of employees it plans to hire.

“When we come back, our very first bill will repeal the funding for 87,000 IRS agents,” McCarthy said last year, repeating the inaccurate statistic. “We believe government should be to help you, not go after you.”

In a series of tweets responding to the CBO’s estimate, White House Chief of Staff Ronald Klain called the House GOP’s proposed bill “good for tax cheats, bad for the economy.”

“It’s a giant tax cut for rich tax cheats,” Klain wrote. “Bill #1 from the new House GOP. Adds to the deficit.”

The White House Office of Budget and Management also slammed the GOP bill, criticizing Republicans for prioritizing corporations and the wealthy.

“With their first economic legislation of the new Congress, House Republicans are making clear that their top economic priority is to allow the rich and multi-billion dollar corporations to skip out on their taxes, while making life harder for ordinary, middle-class families that pay the taxes they owe,” the statement read.

Newsweek has reached out to the Treasury Department for comment.