House GOP's Israel-IRS bill could add more than $12 billion to deficit: CBO
House Republicans’ $14.3 billion emergency aid package for Israel, which the party seeks to offset with cuts to funding for the Internal Revenue Service, could actually end up adding billions of dollars to the nation’s deficits, the Congressional Budget Office (CBO) said Wednesday.
While the nonpartisan budget scorekeeper estimated the proposal would decrease outlays by more than $14 billion over roughly the next decade, the office also said the cuts to IRS funding would decrease revenues by more than $26 billion during the same period.
The result, the office projected, would be “a net increase in the deficit of $12.5 billion over that period.”
The estimate comes just days after House Republicans rolled out the supplemental funding package for Israel, as lawmakers on both sides of the aisle have pressed for emergency aid to the U.S. ally amid its war against Hamas.
The package also called for more than $14 billion in cuts to funding for the IRS, however, as some conservatives have also demanded the aid be offset with reductions elsewhere in the nation’s budget.
“Here’s the important thing that distinguishes House Republicans from the other team: We’re going to find pay-fors in the budget, we’re not just printing money to send it overseas, we’re going to find the cuts elsewhere to do that,” Speaker Mike Johnson (R-La.) said ahead of the bill’s unveiling.
But some budget experts warn the new proposal could undercut the party’s calls to tackle the national debt, which has climbed to more than $33 trillion.
“Instead of being an offset, it would actually make matters worse,” Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute, said of the proposed IRS funding cuts.
“The general rule of thumb that the budget scorekeepers use is it’s about 2-to-1. So, if you cut IRS funding [by $14 billion to $15 billion], you’re actually going to increase the deficit by about $30 billion,” he told The Hill this week.
In an interview with The Washington Post, IRS Commissioner Danny Werfel said the hidden price tag could be even larger than CBO’s estimate.
“This type of the cut, over the cost of the Inflation Reduction Act, would actually cost taxpayers $90 billion — that’s with a ‘B,’” Werfel told the paper.