Treasury Secretary Janet Yellen is expected to defend the Internal Revenue Service in a speech Tuesday against repeated threats from Republicans to cut the agency’s funding.
“Playing politics with IRS funding is unacceptable. Cutting it would be damaging and irresponsible,” Yellen will say, according to prepared remarks.
The IRS was allocated an influx of $80 billion by the Democrats’ Inflation Reduction Act, which passed last year. The funds are intended to help crack down on tax cheats and improve taxpayer service.
But the funding has become politically controversial.
Most recently, House Republicans voted to rescind $14.3 billion from the IRS to pay for an emergency aid package for Israel in the wake of the Hamas terrorist attacks, but the bill is unlikely to even get brought up for a vote in the Democrat-controlled Senate.
Newly minted House Speaker Mike Johnson said the IRS cuts would offset the spending for Israel, but independent budget experts have repeatedly said that taking money away from the IRS’ enforcement actions will actually add to the deficit. In fact, the nonpartisan Congressional Budget Office said last week that cutting $14.3 billion from the IRS would reduce the amount of tax revenue the agency can collect by $26.8 billion over 10 years.
The House GOP has made several efforts to claw back some IRS funds since taking control of the chamber in January, and some representatives have even called for abolishing the IRS altogether. Earlier this year, Republicans were successful in rescinding $20 billion from the IRS as part of a deal to address the debt ceiling.
Many Republicans claim the IRS will use the money to hound middle-class taxpayers and small business owners, though the Biden administration has said that taxpayers earning less than $400,000 a year won’t face an increase in taxes due to the…
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