Republicans Chop IRS Budget Again, Setting Clash With Obama

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US President Barack Obama speaks about healthcare reforms and the Affordable Care Act, known as Obamacare, during the Catholic Hospital Association Conference in Washington, DC, June 9, 2015.

U.S. House Republicans are proposing a 7.7 percent cut to the IRS budget, defying President Barack Obama’s call for an increase in funding for the beleaguered agency.

With a $10.1 billion budget for the Internal Revenue Service, Republicans rejected Obama’s call for an 18 percent rise that would allow the IRS to end a hiring freeze and answer more phone calls from taxpayers.

The parties are now $2.8 billion apart on funding -- a rounding error for the federal budget but an enormous gulf on a politically sensitive topic.

“Every day, Americans are making tough decisions about their own budgets and rightfully expect federal agencies to do the same,” said Representative Ander Crenshaw, a Florida Republican who oversees the IRS budget.

Republicans have been pointing to Obama’s IRS funding as a major source of conflict as the two parties try to hash out a federal budget by Sept. 30 for the first time since Republicans took control of the Senate in January.

“There is the threat to veto funding for the troops and their equipment without similar increases at the IRS and EPA, which would diminish our military’s ability to respond to the myriad threats facing us today,” Senate Majority Leader Mitch McConnell, a Kentucky Republican, said last week, also referring to the Environmental Protection Agency.

Tax Enforcement

Democrats argue that starving the IRS costs the government revenue from tax enforcement, with about a $6 return on every dollar spent.

“These additional proposed cuts simply cannot be absorbed without further impairing IRS’s ability to provide critical taxpayer services and enforce the nation’s tax laws,” Colleen Kelley, president of the National Treasury Employees Union, which represents IRS workers, wrote in a letter to lawmakers on Wednesday.

The IRS budget for the year that ends Sept. 30 is $10.9 billion, about what the agency received in inflation-adjusted terms in 1998.

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