In a recent estimate released on Wednesday, the nonpartisan Congressional Budget Office (CBO) revealed that the House GOP's $14.3 billion aid package for Israel, coupled with $14.3 billion in cuts to the Internal Revenue Service (IRS), could potentially contribute billions of dollars to the nation's deficits over the next decade.

The CBO projection stated that this package could lead to a revenue loss of $26 billion over the course of ten years, as it would reduce the amount of tax income collected by the IRS. House Republicans introduced the supplemental funding package for Israel earlier this week, strategically pairing it with cuts to the IRS in order to argue that the proposal is budget neutral.

Despite the CBO's estimate, Republican leaders and conservatives have shown no signs of wavering on this union. They have been staunchly pursuing cuts to the IRS and continue to support this approach. Last year, President Biden signed the Inflation Reduction Act into law, which allocated $80 billion for the IRS to modernize the agency and strengthen its tax enforcement capabilities. However, after recent debt ceiling negotiations, this amount has effectively decreased to approximately $60 billion.

Including these funds in the legislation helped reduce its overall cost, as IRS funding typically generates more revenue than it costs, with a ratio of two-to-one. Nonetheless, the GOP opposed additional IRS funding, arguing that it would result in increased audits and higher taxes for small businesses and the middle class.

Meanwhile, the White House and Democrats maintain that the funding is necessary to ensure the IRS can better serve taxpayers, answer queries, and crack down on tax evasion. They emphasize that it will not lead to more audits for middle-class individuals and small enterprises.

The House Republicans' decision to pair the Israel aid with the IRS cuts was also driven by a political strategy, aiming to create a challenging vote for Democrats who want to support Israel during its conflict with Hamas.

Prior to the public release of the Israel aid bill, Speaker Mike Johnson (R-La.) applauded the IRS cuts, asserting that they would offset the cost of the assistance to Israel. Johnson emphasized the Republicans' commitment to finding budgetary offsets rather than relying solely on printing more money.

However, some budget experts express concerns that this new proposal may contradict the party's calls to address the national debt, which currently stands at over $33 trillion. Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute, warns that the proposed IRS funding cuts could exacerbate the deficit rather than serving as an offset. According to Gleckman, the budget scorekeepers generally use a 2-to-1 rule of thumb, meaning that cutting IRS funding by $14 billion to $15 billion could actually increase the deficit by around $30 billion.

IRS Commissioner Danny Werfel, in an interview with The Washington Post, noted that the hidden cost might even exceed the CBO's estimate. He stated that this particular type of cut, combined with the Inflation Reduction Act, could end up costing taxpayers a staggering $90 billion.

As the House GOP's Israel-IRS bill progresses, its potential impact on the deficit and national debt remains a point of contention and scrutiny. The debate over funding priorities and fiscal responsibility is likely to continue as lawmakers navigate the complexities of budgeting and addressing both domestic and international needs.