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House GOP's Israel aid bill would add $26.8 billion to the deficit, budget office says

The nonpartisan Congressional Budget Office projects the legislation's IRS cuts would add to the deficit by lowering tax revenues, contradicting the goal of offsetting the cost.
Speaker of the House Mike Johnson, R-La., speaks at an event.
The first major legislation under House Speaker Mike Johnson would add to the deficit, according to a report.David Becker / AP

WASHINGTON — The House Republican bill to provide aid to Israel would add $26.8 billion to the U.S. budget deficit, according to a new report Wednesday by the nonpartisan Congressional Budget Office.

The bill championed by new Speaker Mike Johnson pairs $14.3 billion in aid to Israel with $14.3 billion in cuts to IRS funding that was enacted under the Inflation Reduction Act, the Biden administration initiative passed by Democrats last year.

But the CBO found that the IRS cuts coupled with the Israel aid would lead to a $26.8 billion decline in revenue, contradicting the stated goal of offsetting the aid. The CBO and the Treasury Department have said the funds, if left intact, would lead to tougher IRS enforcement and the collection of more tax revenues.

The bill is headed for consideration in the Rules Committee on Wednesday, with a full House vote expected this week. Johnson has presented the measure as a challenge for Democrats to choose between help for Israel and an expanded IRS.

Johnson said Wednesday he was “not surprised at all” by the CBO score that showed the legislation adding billions to the deficit.

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

The CBO score led to fresh criticism from Democrats.

“It is extraordinarily cynical for Republicans to try to exploit an international crisis to help wealthy tax cheats avoid paying their taxes,” said Rep. Don Beyer, D-Va., who serves on the tax-writing Ways and Means Committee, and said he supports “Israel’s right to self-defense in the face of horrifying acts of terrorism.”

Rep. Gwen Moore, D-Wis., added: "Republican math is complaining about the national debt while putting forward proposals that would add trillions to the debt while simultaneously decreasing revenue."

Senate Minority Whip John Thune, R-S.D., called the CBO report a “selective interpretation” and suggested that reducing overall IRS employees doesn’t have to mean fewer audits.

“It’s obviously a factor the Democrats are going to use in arguing against the pay-for, and probably enhances the chance that they hold Democrats together on the floor of the House,” he said. “We’ll see what happens if they can produce an outcome there.”

Senate Democrats have blasted the bill and made clear it won’t pass the upper chamber, which is hoping to move aid to Israel alongside funding for Ukraine and other security requests from the Biden administration.