The bipartisan spending deal House Speaker Mike Johnson and Senate Majority Leader Chuck Schumer brokered includes speeding up funding reductions to the Internal Revenue Service (IRS) that Republicans support, Johnson announced in a letter to his colleagues.
The agreement entails a $10 billion slash from the IRS budget in fiscal year 2024, which is a year sooner than the 2025 date Democrats and Republicans had previously agreed to for finalizing the $20 billion clawback, according to CNBC. President Joe Biden’s 2022 Inflation Reduction Act was supposed to give the IRS $80 billion, but that is now $60 billion.
“The concessions we achieved will include an additional $10 billion in cuts to the IRS mandatory funding (for a total of $20 billion), which was a key part of the Democrats’ ‘Inflation Reduction Act,’” Johnson wrote in a letter to fellow lawmakers on Sunday.
The deal has not been enacted yet and it’s possible lawmakers will move to vote on a continuing resolution instead, according to CNN. Some Republicans oppose the deal as currently negotiated.
Moreover, critics say the funding cuts will be counterproductive.
“The IRS funding reduces wealthy tax cheating and raises revenue,” Chuck Marr, vice president for Federal Tax Policy at the Center on Budget and Policy Priorities, told Thomson Reuters on Tuesday.
“We’re already seeing great results. And remember: cutting IRS funding does not save money. It loses money. Lots of it. Congress should protect IRS funding to improve customer service and ensure wealthy taxpayers and corporations pay the taxes they legally owe, i.e. deliver what honest taxpayers deserve.”