Domestic Taxes

GOP seeks to torpedo IRS budget

House Republicans are going on offense against the Internal Revenue Service with measures to slash the agency’s spending and reform what they say has become a culture of abuse.

The House Appropriations Committee released a measure on Tuesday that would roll back the IRS budget by $3 billion — a cut of roughly a quarter — in direct response to the agency’s targeting of tax-exempt groups.

The bill would place other restrictions on IRS staffers, including a prohibition on funding to implement the individual mandate in President Obama’s healthcare law.

{mosads}Separately, House Majority Leader Eric Cantor (R-Va.) unveiled plans to vote on a series of IRS-related proposals before the August recess, including a measure that would allow taxpayers to record conversations they have with federal enforcement employees. 

One of the House GOP proposals would allow federal officials to be put on leave without pay if under investigation for abuses. That comes after the IRS official at the center of the targeting controversy — Lois Lerner — was placed on administrative leave with pay.

“The public is feeling a growing sense of distrust of what this administration and what Washington is doing,” Cantor said. “And that’s why we in the House this month will be taking up a package of bills to stop this government abuse and put the American people first.”

The intensified push against the IRS suggests that GOP lawmakers still see the IRS’s treatment of Tea Party groups as a potent political issue, and want to bring it back to the forefront even as they work on big-ticket issues like immigration.

Some top House Republicans acknowledged that a 24 percent cut in the IRS’s bottom line — from just under $12 billion this year to $9 billion in fiscal 2014 — would be unlikely to gain traction in the Democratic-controlled Senate.

But Republicans said the IRS needed to be put on notice, especially after Danny Werfel, the agency’s temporary acting leader, asked lawmakers for $1 billion in new funding last month.

“It’s a big chunk of money,” Rep. Charles Boustany Jr. (R-La.), the chairman of the House Ways and Means Oversight subcommittee, said about the funding cut an Appropriations subcommittee will consider on Wednesday. “But we’re making a statement to the IRS that enough’s enough.”

“We’re making a statement that they’re going to have to clean up the mess,” Boustany said. “This is part of a process whereby we’re trying to hold the IRS accountable, making a strong statement that they have to account for every dime that they’re spending. They’re going to have to cooperate with us in our investigation.”

House Democrats, while conceding that it was a difficult time to defend the IRS, also accused their GOP counterparts of trying to hurt the government’s efforts to collect revenue.

“There’s more than an abundance of politics in this place. But the IRS has a function and a job to perform, and they ought to be funded in the ability to do it,” said Rep. John Larson (D-Conn.), a member of the House Ways and Means Committee.

“You can’t go out and find fans of the IRS,” Larson added. “But listen, there are many valuable employees who do a great service to the country. The fact that they work for the IRS — that shouldn’t be held against them.”

Some top Senate Republicans — including Sen. Orrin Hatch (Utah), the top GOP member at the Finance Committee — also said the House’s funding proposal sounded harsh.

“I would like to do away with the IRS, by having tax reform that doesn’t require them,” Hatch said. “But I’d be very concerned if that were the amount — that would be pretty steep under the circumstances, because they do have a very tough job.”

Werfel and other IRS officials, past and present, have said that cutting the IRS’s funding is counterproductive, given the agency’s efforts to collect revenue. Current IRS officials have also said that inadequate funding will cause the agency’s service to suffer, even as they revamp amid the targeting controversy.

As the IRS has asked for more funding, Werfel has trumpeted the agency’s cost-cutting efforts since he took over in May. On Tuesday, the IRS’s acting leader announced that the agency would not give bonuses to management, and that he wanted to work with the National Treasury Employees Union to suspend bonuses for employees working under labor agreements. 

In addition to the funding cut, the GOP appropriations bill would withhold 10 percent of the IRS’s enforcement budget until the agency fully implements the recommendations of the taxpayer watchdog that investigated the improper targeting, and hold back conference funding until separate recommendations on excessive spending on IRS conferences are put into place.

Treasury’s inspector general for tax administration found that a single 2010 agency conference in California cost more than $4 million. 

Appropriators would also put a halt to IRS bonuses and other awards until those programs were reviewed by Congress, and stop the production of videos like the recently revealed “Star Trek” and “Gilligan’s Island” parodies that cost the IRS thousands of dollars.

Cantor’s series of bills would target conference practices as well, seek to boost service at federal agencies and bring back a bill requiring congressional approval of major regulations.

The GOP push comes as the congressional investigation into the IRS targeting has mostly gone behind closed doors, with Boustany saying that investigators are sifting through agency documents and emails. 

Democrats in recent weeks have made the case that liberal groups were also on agency watch lists, and some organizations that aren’t conservative have said they faced the same invasive questioning as Tea Party groups.

But House Republicans, who have blasted Obama for only delaying an insurance mandate for large employers, say the IRS controversy is another instance where their party is on the side of small businesses and regular taxpayers.

“We should be about empowering the American people, we should be about holding bureaucrats in Washington accountable, because this town is supposed to work for the people and not the other way around,” Cantor said.

— Russell Berman contributed to this report.

Tags Charles Boustany Eric Cantor Orrin Hatch

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