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Republican Bill Would Strip Away IRS Funding in Exchange for Debt Ceiling Increase

S.J. Steinhardt
Published Date:
Apr 24, 2023

House Republicans have introduced legislation to claw back much of the $80 billion in Inflation Reduction Act funding for the IRS, as they continue to press the Biden administration to make cuts in exchange for increasing the debt ceiling, Accounting Today reported.

The bill, announced by Speaker Kevin McCarthy (R-Calif.), would cut billions of dollars, estimating a savings of $4.5 trillion over the next 10 years, and allowing the debt ceiling to rise by $1.5 trillion to avoid a default. It would repeal most of the extra funding dedicated to the IRS in the Inflation Reduction Act, especially the amount dedicated to extra tax enforcement and clean energy tax credits. It would also block student loan forgiveness and debt cancellation, expand work requirements for Medicaid and food stamp recipients, return discretionary spending for federal agencies to fiscal year 2022 levels and limit future spending growth to one percent a year.

If the bill makes it way through the House, it would be unlikely to pass the Senate, Accounting Today reported. Negotiations over the debt limit have stalled, with President Joe Biden and Democrats calling for a clean bill without preconditions.

"If Washington wants to spend more, it will have to come together and find savings elsewhere, just like every household in America," McCarthy said, according to CBS News. "President Biden has a choice. Come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk bumbling his way into the first default in our nation's history."

Biden criticized McCarthy's announcement during a speech on the economy in Maryland. "Look at what he didn't say," Biden said. "He didn't tell you exactly how much he wants to cut. But the House leading Republican proposal would cut critical programs, so-called discretionary spending, by 22 percent. That would mean cutting the number of people who administer Social Security and Medicare, meaning longer wait times. Higher costs for child care, significantly higher, preschool, college, higher costs for housing, especially for older Americans, people with disabilities, families with children, veterans."

White House Press Secretary Karine Jean-Pierre added, "MAGA House Republicans are holding the American economy hostage in order to take a hatchet to programs Americans rely on every day to make ends meet. ... House Republicans must avoid default and stop playing economic brinkmanship with the American people's livelihoods and retirements. The American people have made clear which economic vision they support."

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