GOP's Proposed IRS Cuts in Israel Aid Bill Would Slash Federal Revenues by $27 Billion: CBO

The Congressional Budget Office on Wednesday said the Internal Revenue Service funding cuts that Republicans proposed as part of a supplemental aid package for the Israeli military would reduce federal revenues by $26.8 billion and add $12.5 billion to the deficit over the next decade.

The CBO's estimates undercut the notion that IRS cuts would "offset" the costs of sending Israel more weaponry and other military assistance.

It is widely known that every $1 invested in IRS enforcement efforts yields at least several dollars of increased revenue. Thanks to funding boosts from the Inflation Reduction Act, the agency has collected $160 million in back taxes from millionaires so far this year.

Analysts and Democratic lawmakers argued that the GOP's proposed $14.3 billion in IRS cuts would hamper the agency's ability to pursue rich tax cheats, thus lowering federal revenue.

"Republicans never miss a chance to protect their billionaire donors," Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.) said in response to the CBO estimates, noting that the IRS cuts would nearly double the GOP bill's total cost.

Rep. Don Beyer (D-Va.), a member of the House Ways and Means tax subcommittee, said Wednesday that "it is extraordinarily cynical for Republicans to try to exploit an international crisis to help wealthy tax cheats avoid paying their taxes."

"The United States Congress should not fund violations of U.S. and international law."

The CBO's estimate of the Republican bill's deficit impact is far lower than the number put forth by IRS chief Daniel Werfel, who toldThe Washington Post on Wednesday that the GOP legislation would cost taxpayers $90 billion.

The House GOP's package, which the chamber's rules panel is set to mark up on Wednesday, includes roughly $14 billion in largely military aid for Israel, in line with President Joe Biden's request earlier this month. But the Republican legislation leaves out other funding that the president asked for, including military aid for Ukraine and disaster relief.

House Speaker Mike Johnson (R-La.) responded dismissively to the CBO's findings, saying he was "not surprised" by the agency's estimates.

"Only in Washington when you cut spending do they call it an increase in the deficit," said Johnson.

The push for additional military assistance for Israel has garnered overwhelming bipartisan support in Congress, but some progressive lawmakers and advocacy groups have argued against providing unconditional aid as Israeli forces continue to carry out mass atrocities in Gaza, such as the deadly bombings of the enclave's largest refugee camp over the past two days.

"Make no mistake: these human rights abuses are being carried out with U.S. weapons, U.S. funding, and with 'no red lines,'" Rep. Ilhan Omar (D-Minn.) wrote Wednesday in response to the refugee camp attack. "And now we are set to vote on an additional $14 billion with no restrictions or conditions. The United States Congress should not fund violations of U.S. and international law."

This story has been updated to include comments from House Speaker Mike Johnson.