A form of tax credit abuse long targeted by conservatives would be on the chopping block in a new package of budget saving measures announced by House Ways and Means Committee Chairman Kevin Brady on Thursday.
The Republican chairman announced three cost-cutting measures totaling $98 billion over 10 years, part of House Republicans’ effort to reach agreement on a budget for fiscal 2017.
One bill, introduced by Rep. Sam Johnson of Texas, would require taxpayers claiming the refundable part of the Child Tax Credit to provide a valid Social Security number.
Claimants are required to show only an individual taxpayer identification number, which the IRS gives to workers who need a taxpayer identification number for tax purposes but are not authorized to work. Conservatives have long warned that the use of the number means that the credits are abused, in some cases by illegal immigrants.
Conservatives tried to get similar policies implemented in the massive package of tax breaks made permanent in December, but were unable to do so in negotiations with Democrats. They were, however, successful in tightening the rules around claims on retroactive claims.
Also in Brady’s package are measures to recover improper Obamacare subsidy payments, which are administered by the IRS, and to eliminate the Social Services Block Grant, a federal program subsidizing state welfare programs.
Brady said the package would “fight fraud and cut wasteful spending,” and that he looks forward “to moving these common-sense bills through our committee and the House in the weeks ahead.”
House leadership had asked for the committees to produce legislation for cutting spending to find a way forward on its fiscal 2017 budget.
Conservative fiscal hawks want the GOP budget to plan for discretionary spending below the $1.07 trillion level agreed to for fiscal 2017 in a deal last fall between President Obama and then-Speaker John Boehner.
Last week, the leadership team and the House Budget Committee suggested proceeding with a budget of about $1.07 trillion, but at the same time advancing separate legislation to cut mandatory spending to match the $30 billion in spending reductions sought by conservatives.
Some conservative representatives reacted skeptically to the idea.
Democrats also criticized the spending cuts introduced by Brady on Thursday.
“It is disappointing that the Republicans did not even attempt to work together with Democrats on real fraud and deficit reduction efforts,” said Rep. Sander Levin of Michigan, the ranking Democrat on the Ways and Means Committee. “Their partisan efforts portend another attack on families struggling to join the middle class. Rather than attack poverty, it appears Republicans continue to attack the poor.”
