Hoyer Testimony Before Rules Committee on Republicans’ Irresponsible FSGG Appropriations Bill

“...Mr. Chairman, let me reaffirm what I’ve said throughout this process and throughout my career: our debt poses a legitimate threat to the long-term success of the American economy and the American people. Putting America on a fiscally sustainable path ought to be a goal for every Member of this body. 

“This bill does not accomplish that objective. It represents pretense, not principle. As you have said, Mr. Chairman, it does not represent an honest attempt at real debt reduction. Mr. Womack and I, and I think Mr. Chairman, you agree that looking at 10% of the budget will not get you to fiscal responsibility. Period. That's a mathematical. Not an opinion. 

“Instead, this legislation severely impedes this government’s ability to reduce the deficit and to uphold the law of the land. It defunds crucial agencies responsible for enforcing laws, regulations, and rules that protect and promote America’s wellbeing. That includes the FTC, the SEC, the Consumer Financial Protection Bureau, the Consumer Products Safety Commission, the Election Assistance Commission, and the FCC.

“It dramatically cuts funding for the Federal Public Defender Program, which helps ensure every American can exercise their constitutional right to an attorney. It defunds justice.

“Other law enforcement agencies face severe cuts under this legislation. That includes the Financial Crimes Enforcement Network, the Office of Terrorism and Financial Intelligence, the Office of National Drug Control Policy, and the Emergency Planning and Security Costs for the District Of Columbia – all defunding law enforcement.

“Cutting their funding means undermining this crucial work to safeguard the American people and do what all of us claim we are for: law and order. Paring back enforcement has dire consequences for the deficit as well. This bill’s deepest cuts affect the Internal Revenue Service – a continuation frankly of Republicans’ decades-long campaign to undermine the agency’s enforcement efforts.

“The Bureau of Economic Analysis reports that the GDP has grown from $2.63 trillion in 1979 compared to $23.15 trillion in 2021. In that period, the number of annual tax returns increased from [140.1] million in 1979 to 269 million in 2021: a 92% increase in workload. And yet, IRS staffing went from 85,398 people in [1979] to deal with those 140 million to 78,661 in 2021: an 8% decrease, after a 92% increase in workload. 

“Ms. Fernandez mentioned if you had a business, I said in committee Mr. Chairman, you heard me, it's like a corporation having a real problem and not collecting all its debts, and rather [than] increasing the collection department, increases the marketing department — selling more and collecting less. It makes no math sense. 

“The volume of work facing the IRS has grown, as you can see, dramatically. The resources and personnel the IRS has come to complete that work has been dramatically reduced. That means phones will go unanswered. The backlog of taxpayer mail piles up. Refunds get delayed. Returns aren’t audited. Owed taxes — owed taxes, not an increase in taxes, owed taxes — go uncollected. Tax cheats are the winners, at whatever level of income they may be. And our deficit grows even bigger.

“If you’re truly concerned with lowering the deficits, then you ought to be concerned with collecting what is owed. The CBO’s conservative estimate is that on average, every dollar cut from the IRS costs at least $1.87 in lost revenue over the next decade. In other words, where you are cutting – costs us money.

“When did that just happen? Thursday, where you brought to the Floor a bill that would have passed with over 400 votes. And what did you do? You coupled it with another, on top of this bill's $12.5 billion deficit, $28 billion cut, 14 was used for IRS in your bill, but $12.5 billion of additional deficit, additional deficit resulting from that cut. That's what CBO said, just Thursday, last Thursday. That means, well I said that. 

“So much for the crocodile tears about the debt. You're either willing to take tough decisions or you're not — and looking at 10% slice of 100%, meaning 90% is going unattended. Defense obviously is discretionary spending. We need our defense and we increase substantially defense this year.

“This issue isn’t about raising taxes on middle class workers – or anyone else. The Majority Leader was mistaken on Thursday, when he said on Thursday that enforcement agents were raising taxes. No agent in the IRS can raise taxes — that's our responsibility, our duty. What they do is ensure that we each pay the share we legally owe. 

“They go after lawbreakers - tax cheats, particularly rich tax cheats and super wealthy corporations that make [billions] and pay no taxes. This is about revenue, who we choose to collect it from, and who we choose to let off the hook. Too often, Americans with a lot of wealth and with complex tax filings get out of paying what they owe by law.

“Now, I’m not talking about the vast majority of taxpayers whose taxes, they don't have an option, like all of us, every week, or every month, or bi-weekly, or even a longer period, taxes are withdrawn from our salaries. That's not true of those who get their money from pass-throughs or shell companies to shield their vast assets from taxation.

“The average person, family, and small business pays more so the rich pay less – or not at all. We all want to be rich. Frankly, comparatively speaking, we're all rich in this room. People are getting by on a lot less than we get. And they ought not pay more than they need to because some are paying, with vast incomes, nothing. 

“Research from Harvard University and the Treasury Department indicates that we generate $12 for every $1 of IRS enforcement to ensure the top ten percent of earners pay the taxes they owe. Why is that so intense a job? Because it takes a lot of experts to figure out what a 1000-page or 2000-page tax return. And you need real talent to do that. That's what the Inflation Reduction Act did and what you're undermining. 

“Years of budget and staffing cuts, however, led to a sharp decline in the number of audits the IRS is able to conduct on the wealthiest Americans. Hear me. We've gone for a chance of 8 to 9% being audited to now less than 1% chance of a wealthy person, millionaire or above, getting a tax audit. Researchers at Syracuse indicate that that costs us a lot of money. That’s a reduction in oversight, a reduction in oversight of the wealthiest among us.

“The result is a back door tax cut, but only for those who have both the means and guile to exploit accounting tricks to hide profits, income, and – in the end – tax obligation. I know some of you would count that as a success. 

“Unsurprisingly, this bill includes a [22.2%] cut below the request for IRS enforcement of high-earners and corporations. That’s a disservice to all Americans who dutifully pay their taxes. We need to solve this problem, not magnify it.

“This bill defunds these agencies of government that keep us safe. The agencies that ensure the products we buy and the markets we invest in aren’t overrun with fraud and corruption. The agencies that make those who are looking to get one over on the rest of us think twice and that hold those people accountable.

“If Republicans, Mr. Chairman, truly want to be the party of fiscal responsibility, if they want to be the party of law enforcement, they need to shelve these bills – a bill they know will never become law.

“Ladies and gentlemen of this committee, two-thirds of Republicans and a higher percentage by far of Democrats voted for a deal. Because Mr. Roy is not here but he talks about regular order. The regular order is setting numbers — for the Senate and the House as to how much we're going to spend. And very frankly, if you don't set that, it is very, very difficult to have regular order and a result other than an omnibus.

“Mr. Womack and I, and I know you Mr. Chairman, want to see regular order. The last time we passed 12 bills before August was 2007 when I was Majority Leader of the House of Representatives. We haven't done it since. And we've been afflicted with these awful omnibus bills. But if you pass a bill that is not reasonable, not rational, and not acceptable to the Senate or to the President, what have you got? 

“I call your attention to a speech that Mr. Gingrich gave in October of 1998, he called it the Perfectionist Caucus Speech. He made a deal with Clinton on the budget. And the Freedom Caucus of his day raised hell. And he gave them a speech, I'm not going to give it to you, I'm already over time I'm sure, but I urge you to read Newt Gingrich's speech, October 1998. Because it says: let's get real. You had a Democratic President, in that case Clinton. You had a lot of Democrats in the Senate. You had a lot of Democrats in the House. You're controlling both Houses, but the fact of the matter is, he said, if you don't work together, it won't get done. 

“Mr. Womack is my dear friend, I have great respect for Mr. Womack. Not just my Republican friend, he is my friend. He is one of the most decent, honest, real people in the Congress of the United States. We didn't make a deal on this, because that wasn't in the cards. I regret that. I will oppose this bill on the Floor. And hope that in the days ahead Mr. Womack and I can work together, as we have worked together to come up with a bill that all of us can be proud of. As well as America. Thank you very much Mr. Chairman.”