GOP shows true colors on deficit

In the weeks since threatening to cause an economic crisis over their avowed desire to reduce deficits, Republican lawmakers are again pushing legislation that would increase deficits. By billions upon billions of dollars.

On Thursday, for instance, a House appropriations subcommittee marked up a bill covering IRS funding for fiscal year 2024. This legislation would slash more than $1 billion - roughly 9% of annual funding - from the agency relative to last year. After adjusting for inflation, the IRS would be down to its lowest annual appropriations levels so far this century.

Now, if you hear “spending cuts” and assume “Oh, surely that will save money,” I’m sorry to say you are mistaken here.

Each dollar spent on the IRS leads to much more than a dollar flowing back into government coffers, especially when the IRS would use that funding to collect unpaid taxes. Which this spending would: The GOP-proposed cuts specifically target enforcement efforts. The Treasury Department projects this latest proposal to siphon resources away from IRS enforcement would result in an $8.6 billion loss of revenue, by limiting the agency’s ability to audit high-income and corporate tax dodgers.

This newly proposed IRS budget cut should not be confused with a previous $1.4 trillion that Congress rescinded from IRS budgets in its recent debt limit legislation. Both of those cuts are also wholly distinct from the $20 billion in mandatory-spending cuts from the IRS budget that Congress and the White House agreed to in a side deal in May. That is: These are three separate GOP-led efforts to hack away at the federal government’s primary means of funding itself.

This latest round of legislation has some anti-consumer measures in it, too. For example, it would expressly prohibit the IRS from developing its own free, public, electronic tax-return-filing service, as it currently plans to pilot next year.

This IRS bill is not the only development of late that might lead reasonable people to doubt the GOP’s alleged commitment to fiscal responsibility.

This month the GOP-controlled House Ways and Means Committee introduced the “American Families and Jobs Act.” While the bill would do little to help families — it would not, for example, revive the expanded child tax credit, which had slashed child-poverty levels before its recent expiration — it does cut tax levels pretty much across the board for the next few years. The legislation would restore some large business tax breaks that had recently lapsed, even making those tax cuts retroactive. It would also increase the standard deduction.

To reiterate: After (correctly!) reminding Americans that our government is too large relative to the amount of tax revenue coming in, Republicans respond to this challenge by … draining tax revenue further.

Overall (and including GOP plans to rescind some cleanenergy tax breaks), the tax bill would cost roughly $80 billion over a decade with interest, according to an estimate from the Committee for a Responsible Federal Budget. But that figure arguably understates the cost of these measures.

Why? Because the bill’s biggest tax breaks officially expire at the end of 2025, to make the legislation look less expensive. In two years Republicans are expected to push for extending these tax breaks yet again. If the temporary measures are eventually made permanent, this GOP tax plan would cost more than $1.1 trillion over the course of a decade.

To be fair, Democratic politicians do not seem especially committed to fiscal responsibility either. Like their GOP counterparts, Democrats sometimes talk a good game about reducing deficits. President Joe Biden promised significant deficit reduction in his own budget — but his own projections did not include the massive cost of extending most of the 2017 Trump tax cuts, which his administration has lately committed to do.

At least Biden has some kind of budget, a general statement of what gets funded and how much. Republicans still do not. Unless you count the “blueprint” released by the Republican Study Committee, a subset of the House coalition. It includes some policy changes (including to Social Security and Medicare) that Speaker Kevin McCarthy had explicitly ruled out early this year.

So perhaps we’ve returned to the natural state of budget discourse: no one actually caring enough about deficits to do anything at all — or even pretend to.