This commentary was recorded before the vote in Congress which passed a continuing resolution, funding the government into next year, thereby avoiding a governmental shutdown. This definitely dominated the news during the week of November 13-17. The crucial vote in the House occurred on November 14 with more Democrats in support than Republicans. I definitely agree that that action was extremely important. Nevertheless, I consider Speaker Johnson’s actions and comments as the House responded to the Biden Administration’s earlier request for a supplemental appropriation (which was the focus of my commentary) very revealing. The continuing resolution kicked the can down the road into January and February. We will have plenty of time in subsequent weeks to check out Speaker Johnson’s skills at negotiating and “herding cats” in his caucus. I just didn’t want the story of the supplemental --- admittedly a little (but significant) issue to be ignored. That is why it was the focus of my commentary.
Like most of you, when Congressman Mike Johnson of Louisiana was elected Speaker of the House, my response was, “Who?” He was first elected to Congress in 2017 and had distinguished himself as an extreme right-winger, but he wasn’t well known nationally. He opposed the Supreme Court rulings on gay rights and marriage equality. He helped develop the legal challenge to some of the electoral college votes after the 2020 election.
According to ProPublica, “More than half of the House Republican Caucus in the 116th Congress signed an amicus brief asking the Supreme Court to allow a lawsuit filed by the state of Texas seeking to overturn the results of the 2020 presidential election in Georgia, Michigan, Pennsylvania and Wisconsin.” (full list of signees available at https://projects.propublica.org/represent/members/trump-texas-amicus-house-members#:~:text=More%20than%20half%20of%20the,states%20where%20former%20Vice%20President). The text of the amicus brief itself is available at https://www.supremecourt.gov/DocketPDF/22/22O155/163550/20201211132250339_Texas%20v.%20Pennsylvania%20Amicus%20Brief%20of%20126%20Representatives%20--%20corrected.pdf. According to reports, Johnson had helped craft the brief.
Now, there is nothing wrong with challenging an election result in Court. However, once the Courts had ruled that the people filing the suits had made no case whatsoever for their charges it was incumbent on members of Congress to count the votes on January 6, 2021. Johnson was among the 147 House Republicans who refused to vote certifying the election – this after the rioters had stormed the Capitol threatening the lives of members of Congress, the Vice President, staffers and law enforcement personnel. This crossed the line of acceptable behavior.
In addition to his extreme views which may be shared by a majority of his constituents in his district but certainly are not shared by the vast majority of Americans, he is also a rather junior member of Congress for the exalted position of Speaker of the House. After all, the Speaker is SECOND IN LINE for the Presidency, right behind the Vice President.
But aside from his very modest national profile, being Speaker requires tremendous skill --- skill at “herding cats” in the majority caucus, skill at negotiating with the White House and the Senate, especially when the White House and the Senate are controlled by the other party, skill at understanding the legislative process. And, because the Constitution requires all spending and taxation bills must originate in the House, the Speaker must understand budgets and budgeting.
Well, Speaker Johnson has just proved that when it comes to understanding the basic facts about government spending and budgeting, he is either an ignoramus or a lying you know what.
Let me explain. Once the Speaker was elected, the House had to get back to business (no business had been done while the Speaker’s chair was vacant). The first order of business was a supplemental budget request to fund aid to Israel, aid to Ukraine and for border enforcement. (The Biden Administration asked for $106 billion.)
The House went ahead and passed (on a totally partisan vote) only a partial supplemental. It only appropriated $14.3 billion because it did not include any money for Ukraine or border security. Because Republicans have (suddenly) gotten religion about deficit spending (which never applies when the bill is a tax cut of course), the House paid for the $14.3 for Israel by cutting almost that exact same amount from the part of the Inflation Reduction Act that increased spending for IRS tax enforcement.
This is where Johnson either demonstrated ignorance or downright dishonesty. When you cut spending for IRS enforcement, you make it easier for tax cheats to get away with paying less taxes than they are legally obligated to pay. And, by the way, some of the under-paying of taxes is not criminal --- it could be the result of honest mistakes.
I’ll give a personal example. A few years ago, I got a letter from New York State saying that by their calculations, I owed some back taxes for a previous tax year. They told me how I could dispute it but what they said looked right. I sent them a check. NOW – if the state of New York did not have enough people working in their revenue department or if the computer systems had not been brought up to date, it is possible my mistake would never have been caught and NY State would have lost that money forever. IRS enforcement often just notifies a tax payer that they have figured out that the individual in question underpaid taxes and asks for a check and explains how the taxpayer can appeal the decision.
And yes sometimes, the tax payer is cheating, and gets indicted for tax evasion. Sometimes even if there was cheating the best result is forcing the individual to pay back taxes and penalties without filling criminal charges. That sometimes permits the treasury to reoup millions of dollars. For example, the Treasury Department issued a report in July of this year entitled “Building on Filing Season 2023 Success, IRS Continues to Improve Service, Pursue High-Income Individuals Evading Taxes, Modernize Technology,” available at https://home.treasury.gov/news/press-releases/jy1614. They reported arresting some tax cheats for fraud but also noted that: “In recent months, the IRS closed about 175 delinquent tax cases for millionaires, generating $38 million in recoveries.”
Had Johnson and his Republican majority succeeded in cutting IRS enforcement by $14 billion, the result would have been more than $14 billion in reduced tax collections – collections that are required by law. When Johnson was confronted by this fact, he just denied it.
“Pressed on “Fox News Sunday” over if the proposed cuts to IRS funding will add billions to the country’s deficit, Johnson responded, ‘But only in Washington, can you cut funding, add a pay-for to a new spending measure and they say that it’s terrible for the deficit’.” [Miranda Nazzaro, “Johnson defends IRS cuts in exchange for Israel aid as taking ‘care of our priorities’.” The Hill, November 25, 2023, available at https://thehill.com/homenews/house/4294186-johnson-defends-irs-cuts-in-exchange-for-israel-aid-as-taking-care-of-our-priorities/ For details on how Congressional Budget Office “scoring” works when confronted with cuts to IRS spending, see https://budgetmodel.wharton.upenn.edu/issues/2023/11/1/why-irs-funding-scored-as-increasing-deficit]
Does Johnson really not understand that IRS enforcement increases government revenue thereby reducing the deficit? Does he therefore not understand that reduced IRS enforcement reduces government revenue thereby increasing the deficit? He cannot be that dumb, can he?
No --- he’s being flagrantly dishonest.
The reason he wants to cut IRS funding is because he wants to make it easier for billionaires to cheat the rest of us out of taxes that are in the law. It was certainly within his rights for Johnson who joined the House in 2017 to vote to give billionaires a big tax cut that December. It was out in the open and could be debated. Cutting IRS enforcement and making believe it would have NO IMPACT on legally required tax collections HIDES the giveaway to the super rich.
At least Johnson was being honest back in 2017 --- even if the Republicans made believe the tax cut was mostly going to benefit middle class taxpayers.
His shameful response to the question about IRS enforcement is, in my opinion, dishonest. He knows what he said was a bunch of garbage.
[For more details, see https://www.reuters.com/world/us/us-house-passes-republicans-israel-aid-bill-faces-dead-end-senate-2023-11-02/#:~:text=WASHINGTON%2C%20Nov%202%20(Reuters),House%27s%20promise%20of%20a%20veto. Clearly, the bill the House passed was for show only. However, Johnson’s bold-faced (and false) assertion that cutting IRS enforcement actually REDUCES the deficit was worth investigating.]
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies.
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