New House Speaker Mike Johnson’s first order of business was a bill to fund Israel in its war against Hamas. The “Israel Security Supplemental Appropriations Act, 2024” proposes $14.3 billion in support over the next year for Israel, promising to pay for the aid by clawing back money that was settled on the IRS in the Inflation Reduction Act.
In other words, Johnson’s legislation sought to fulfill a promise to handicap the IRS that GOP lawmakers have long been making, while at the same time fulfilling a broadly popular mandate to support U.S. ally Israel. (The independent, nonpartisan Congressional Budget Office estimated in January that a GOP-led legislation to defund the IRS would cost the U.S. $114 billion.)
The so-called “offset” in the new bill — “Rescission of Certain Balances Made Available To The Internal Revenue Service” — takes money the IRS had targeted to “improve compliance among high-income individuals, complex partnerships and large corporations” and sends it to Israel, leaving high-income individuals in the U.S. with less tax friction.
Johnson and colleagues portrayed this offset as a one-to-one equation: take a dollar from here and put it there. But the Congressional Budget Office (CBO) says Johnson’s math is bad, not unlike the math scores of students in his state. (In 2019, Louisiana public school students finished between 44th and 49th nationally in math and reading assessments.)
The CBO’s math says the one-to-one notion is a fallacy, because the IRS funds are used to collect more taxes and therefore are worth more than one in the equation. For the $14 billion in decreased IRS outlays, the result would decrease revenues by more than $26 billion, the CBO estimates.
🚨 BREAKING — CBO says the House's Israel aid bill is not offset at all.— Jake Sherman (@JakeSherman) November 1, 2023
Will add $12.5B to the deficit in the next decade.
Cuts to IRS will decrease revenue by $26.7Bhttps://t.co/wLg6CUqwzR
“If Republicans had an ounce of shame they wouldn’t condition support for Israel and Ukraine on giveaways to wealthy tax cheats,” said Sen. Ron Wyden (D-OR). “Making aid to Israel and Ukraine dependent on gutting IRS enforcement funding is an absolute nonstarter.” Notably Ukraine aid was separated out in the GOP bill, which addressed only Israeli support.
Slashing IRS enforcement is the most effective way to ensure Hamas gets the funding it needs to continue its atrocities. https://t.co/Pjrk9f4Ncx— Ron Wyden (@RonWyden) October 31, 2023