House Speaker Kevin McCarthy speaks with reporters

House Speaker Kevin McCarthy (R-Calif.) speaks with reporters on May 24, 2023 in Washington, D.C.

(Photo: Kent Nishimura/Los Angeles Times via Getty Images)

Push for IRS Cuts Confirms Top GOP Priority: 'Enabling Tax Cheating by the Super-Rich'

"Further evidence that this was never about the debt. It's about squeezing families to protect billionaires."

Republican negotiators are reportedly close to securing as much as $10 billion in cuts to recently approved Internal Revenue Service funding as part of a debt ceiling deal with the White House, a development that critics said further shows the GOP's ironclad commitment to shielding wealthy tax cheats as the party targets spending on aid programs for poor families.

The Congressional Budget Office (CBO) noted last month that cutting the $80 billion IRS funding boost that Democratic lawmakers approved as part of the Inflation Reduction Act would add to the federal budget deficit by constraining the agency's ability to audit the tax returns of rich individuals and corporations.

Sen. Elizabeth Warren (D-Mass.) argued Thursday that the Republican push for IRS funding cuts—which the Biden White House appears poised to accept as part of a broader agreement to raise the debt limit for two years—shows that the GOP is only "pretending to care about the deficit."

"Republicans are using the debt ceiling to hold the economy hostage," Warren wrote on Twitter. "One of their hostage demands? Cutting funding for the IRS to track down the hidden cash of wealthy tax cheats—funding that will raise as much as $1 trillion. Terrible idea."

Robert Weissman, president of the consumer advocacy group Public Citizen, echoed Warren, writing that "cutting [money] for the IRS is, simply, enabling tax cheating by the super-rich and corporations."

"That's the Republicans' top priority," Weissman added.

The New York Timesreported Thursday that the Biden White House and Republican negotiators are currently discussing a deal under which "the IRS money would essentially shift to nondefense discretionary spending, allowing Democrats to avoid further cuts in programs like education and environmental protection."

The White House reportedly believes such a shift and other unspecified "budgetary maneuvers" could help lessen the pain of a two-year spending cap that Biden administration officials are negotiating with Republicans, who have demanded massive cuts to aid programs that help low-income Americans afford food, housing, and healthcare.

According toThe Washington Post, "negotiators agreed to slightly decrease spending on these domestic programs—giving House Speaker Kevin McCarthy (R-Calif.) a key victory—while redirecting money from other parts of the federal budget, such as the IRS funding, which would effectively keep domestic spending flat for next year."

"Spending on veterans and the military will rise in line with the increases sought by the president's budget," the Post reported.

Jeff Hauser, executive director of the Revolving Door Project, rejected the notion that the spending cuts outlined in the latest reporting on the debt ceiling talks would be "modest."

"Any deal is a disaster since most government departments and agencies are currently severely underfunded," Hauser said in a statement. "'Non-defense discretionary spending' is a bloodless way to refer to the agencies required to ensure clean air, safe food, safe workplaces, and protect Americans from all forms of corporate abuse."

Hauser stressed that even if the White House is able to prevent domestic spending levels from falling below this year's levels, "it's likely that inflation will undercut the budget's actual spending power by 7-10%."

"Democrats should stand strong and tell Republicans that they refuse to make it easier for the rich to cheat on their taxes."

No deal has been finalized, and key issues—including the GOP push to attach new work requirements to aid programs—have yet to be resolved.

But outside progressives are raising serious concerns about the details of the emerging agreement, including the spending caps, the insertion of permitting reforms craved by the oil and gas industry, and the IRS funding cuts.

"It would be absurd and counterproductive for President Biden to give in to GOP demands to weaken the IRS' ability to catch wealthy tax cheats and prevent corporate tax fraud," said Igor Volsky, the executive director of Groundwork Action. "Republicans have made it clear that they aren't actually focused on the deficit and debt or they wouldn't have rejected raising revenue by closing tax loopholes used by the wealthy and well-connected."

"But to be clear: Weakening the IRS' ability to go after rich tax cheats would actually increase the deficit and push the burden onto the backs of workers and families," Volsky continued. "Democrats should stand strong and tell Republicans that they refuse to make it easier for the rich to cheat on their taxes."

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