House Republicans have released a proposal to grant Israel billions of dollars in military aid and to pay for it by cutting funding to the Internal Revenue Service, but experts say that the move would increase the federal budget deficit by more than the cost of the aid itself.
The GOP plan would provide $14.3 billion in aid to Israel, in line with what President Joe Biden requested earlier this month, but it purports to offset that spending with a $14.3 billion cut to funding for the IRS.
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“We’re gonna find pay-fors in the budget, we’re not just printing money to send it overseas,” House Speaker Mike Johnson, a Louisiana Republican, told Fox News last week.
Marc Goldwein, senior policy director at the nonpartisan fiscal watchdog group Committee for a Responsible Federal Budget, said that the plan would add roughly $30 billion to federal deficit because the cuts to the IRS would impair its ability collect taxes.
He said in a post on X that “every $1 you cut IRS funding will lose about $2 in revenue.”
He clarified that this formula is not static or linear, and that as the IRS is provided with more funding to enforce tax collection, the marginal return on those dollars declines.
He said that while cutting IRS funding would likely increase the deficit, “it’s not clear they have the capacity to absorb a ton more funding,” which is why he estimates cutting IRS funding now would only cost $2 for every $1 of cuts. On average, the IRS returns $7 for every $1 spent, according to Goldwein.
The Inflation Reduction Act of 2022 provided $80 billion in new funding over ten years, which the Congressional Budget Office estimated would increase revenues by roughly $200 billion over that same time. No Republicans in Congress voted for the measure.
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The Republican proposal has little chance of passing the Democratic Senate and will also be opposed by the Biden White House, and even many congressional Republicans would like to see Israel aid passed without any offsets.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, supports passing the $14.3 billion aid request along with $61.4 billion in military and economic assistance to Ukraine and billions more for domestic immigration enforcement with no offsets, as requested by the White House earlier this month.
“This is a moment for swift and decisive action to prevent further loss of life, and to impose real consequences on the tyrants who have terrorized the people of Ukraine and of Israel. And right now, the Senate has a chance to produce supplemental assistance that will help us do exactly that,” McConnell said at an event on Monday.
“Enemies abroad will be watching closely and waiting for America to falter” he added. “Only our concrete and credible support can deter our adversaries in the future and restore security.”
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