The Republican plan to block Democratic-backed funding increases to the IRS would result in a net deficit increase of more than $100 billion, the Congressional Budget Office estimated Monday.
The Family and Small Business Taxpayer Protection Act, introduced by Rep. Adrian Smith (R-NE), would claw back billions of dollars that were set to be used to bulk up the Internal Revenue Service as part of last year’s Inflation Reduction Act.
The CBO found that while the new legislation would reduce spending by more than $71 billion, it would also cut tax revenue by about $186 billion over the next decade.
In total, reversing most of the IRS funding that was part of the bill would result in a net deficit of $114.4 billion.
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Smith’s bill will be the first legislation that the House will get to vote on after House Speaker Kevin McCarthy, and the entire new House, was sworn into office over the weekend.
Slashing those funds has been a top agenda item for McCarthy and Republicans. McCarthy said months ago that reversing Democrats’ efforts to fund the IRS would be the No. 1 priority for his party.
The funding, which would infuse the tax collector with $80 billion, could translate to 87,000 new employees over a decade, according to a 2021 Treasury report. The GOP has criticized the funding, given past acrimony between the IRS and conservatives and the unprecedented 2021 leak of the tax returns of thousands of the nation’s wealthiest people, which still is unsolved.
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The 87,000 new agents forecast was used as a cudgel for Republicans on the campaign trail, although Democrats countered the GOP in noting that the 87,000 new employees will not all be auditors and include thousands of workers in other roles. Many IRS workers are also expected to retire in the coming years, partially offsetting the number being hired.
