House bill cuts IRS funds for Israel aid
GOP seeks using $14B for conflict
WASHINGTON — House Republicans on Monday unveiled a proposal to pay for emergency aid for Israel’s war against Hamas by cutting IRS funds aimed at cracking down on rich tax cheats and improving taxpayer service.
The legislation, released by the House Rules Committee, calls for approving roughly $14 billion primarily in military aid to Israel and cutting about the same amount from the IRS budget. President Biden has proposed giving Israel roughly the same amount in aid but did not call for offsetting cuts to other parts of the budget. The new House speaker, Rep. Mike Johnson, R-La., has said the new expenditure must be covered by other spending reductions to avoid adding to the debt. Biden also called for the Israel aid to be packaged with roughly $60 billion for Ukraine — an approach the GOP bill rejected.
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 that have 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.
White House press secretary Karine Jean-Pierre blasted the bill in a statement.
“Politicizing our national security interests is a nonstarter,” she said. “Demanding offsets for meeting core national security needs of the United States — like supporting Israel and defending Ukraine from atrocities and Russian imperialism — would be a break with the normal, bipartisan process and could have devastating implications for our safety and alliances in the years ahead.”
Many Senate Democrats declared the House Republican bill dead on arrival in the upper chamber.
“I had a brief moment of hope the House was getting its act together, but that sounds disastrous to me,” said Sen. Chris Murphy, D-Conn.