House Supplemental Should Find Real Offsets

Today, the House of Representatives released draft legislation to provide emergency funding related to the conflict in Israel and Gaza. The $14.3 billion supplemental would be accompanied by a $14.3 billion rescission of funding from the Internal Revenue Service (IRS), which in reality would lose revenue and thus add to the deficit. 

The following is a statement by Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

The House’s call to offset the costs of new emergency spending is welcome news. With high interest rates and huge deficits, even true emergency spending should be offset rather than added to the nation’s credit card, when possible. 

However, paying for new spending by defunding tax enforcement is worse than not paying for it at all. Instead of costing $14 billion, the House bill will add upward of $30 billion to the debt. Instead of avoiding new borrowing, this plan doubles down on it.

Funding the IRS to reduce the tax gap has a long history of bipartisan support and has been proposed by every President from Reagan through Biden. It is one of the few ways to raise revenue without raising taxes.

Getting into the habit of offsetting the costs of new spending and tax cuts is critical given our fiscal situation. But you can’t pay for borrowing with more borrowing.


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