Is this the ideal debt ceiling deal? Absolutely not. The Taxpayers Protection Alliance (TPA) is cautiously and conditionally welcoming the deal b...

Trust But Verify

Is this the ideal debt ceiling deal? Absolutely not. The Taxpayers Protection Alliance (TPA) is cautiously and conditionally welcoming the deal between President Biden and House Speaker Kevin McCarthy (R-Calif.) to avoid a disastrous and costly default. The Fiscal Responsibility Act’s claw back of unobligated COVID funds and energy permitting reform are encouraging but TPA remains concerned with long-term spending and the fiscal future of the country. Avoiding a default is critical and this deal is a step forward, but lawmakers must continue to push for reform in Washington and leverage the appropriations process to restrain ever increasing spending. TPA commends Speaker McCarthy and President Biden’s efforts to reach a deal and avoid the consequences of default, which would be disastrous for taxpayers and consumers. The preliminary Congressional Budget Office score indicates that the spending caps included in the Fiscal Responsibility Act will save $2.1 trillion over their six-year
lifecycle. The legislation also claws back billions in unspent pandemic funds, protecting taxpayers from further waste, fraud, and abuse. It takes positive steps on energy permitting reform, and codifies the repayment of student loans, the pause of which has cost taxpayers $5 billion per month since March 2020.

The problem is that this deal prolongs a recent negative trend regarding the debt ceiling. In the first 90 years of the ceiling’s existence, Congress would generally raise it by a specific dollar amount. Since 2013, Congress has opted to suspend the ceiling seven times, significantly contributing to the burgeoning national debt. It is important for the government to be explicit and transparent in how much debt the Treasury Department can accrue and not just hand over a blank check. And, this deal does not go nearly far enough in resolving America’s deeply rooted spending problems. The proposal paves the way for $4 trillion in new debt over the next two years. In the history of the United States, the annual federal deficit has only eclipsed $1 trillion seven times. Four of those were during the Obama administration’s response to the financial crisis, with the other three coming during the response to the COVID-19 pandemic. Instead of returning to some semblance of normal, this deal accepts
multi-trillion-dollar deficits as a terrifying new normal.

In 2011, then-House Speaker John Boehner (R-Ohio) negotiated the Budget Control Act with President Obama and then-Senate Majority Leader Harry Reid (D-Nev.). These real spending restrictions were by no means perfect, but brought the deficit down from roughly $1.4 trillion in 2011 to only $442 billion in 2015. Given the dynamics at play this time around, it is immensely disappointing that these negotiations did not resemble those. It is a huge, missed opportunity to deliver a win for taxpayers. In the end, this deal also reflects some of the worst tendencies of policy making in Washington. It was negotiated behind closed doors with rank-and-file members of the House and Senate having to find out what is in the bill in a short period of time before being pressed to vote. Further, the American people are left scrambling to figure out what’s real and how this deal will impact them. This is irresponsible. While it’s encouraging that the nation won’t face the consequences of a default, it is
imperative that the House GOP be far more aggressive during the ongoing fiscal year 2024 appropriations cycle. America’s reckless spending is unsustainable and deals like this will do very little to right the fiscal ship.

IRS Mission Creep…Preparing Taxes

Some of the $80 billion in extra funding for the Internal Revenue Service (IRS) through the Inflation Reduction Act (IRA) is being clawed back. Not enough, but some. There was $15 million in the IRA for a study to determine the feasibility of the IRS preparing taxes for millions of Americans. The agency just published its report. It unsurprisingly concluded that “Direct File should be considered among future options.” All along, the books were cooked. The IRA instructed the IRS to recruit further analysis from an “independent third party.” The agency chose the left-leaning New America, a nonprofit whose staffers have previously advocated for a direct filing system. Moreover, well before the report’s release, the agency began work on a direct-file pilot program to be tested in 2024, The Washington Post revealed last week.

The IRS, as an institution, has not earned the public’s trust. If Congress wishes to ease the burden tax season imposes on Americans, it ought to simplify the tax code, rather than initiate an inevitably error-prone mitigation mechanism. Policymakers should eschew consolidating more power in the agency. They should further avoid discouraging citizens from engaging with private institutions — such as tax-preparation services – that mediate between the federal government and everyday citizens. The IRS too often rules as a petty tyrant within its realm of authority. The IRS report pegs the annual cost of a direct-filing system at between $64 million and $249 million. The government serially understates the price of new programs, however, and more sober estimates dwarf even the IRS’ highest figure. In 2021, Govini, a Virginia-based software firm, compared direct-filing proposals to Healthcare.gov — the latter born in 2010 of the Affordable Care Act. Through October 2021, Healthcare.gov had
devoured $21.2 billion from taxpayers. The interface cost $2.84 billion in 2014, which equates to over 20 percent of the IRS’ appropriated 2023 budget of $14.1 billion. Further, “Despite exorbitant costs, the launch of Healtcare.gov [sic] was plagued by IT crashes, downtime, and data security shortfalls,” Govini notes. Compared with Healthcare.gov, Govini found that direct filing would necessarily serve many more users, process more complex datasets, and require far broader commercial integration. Thus, the IRS would likely face higher costs and obstacles than the Department of Health and Human Services. Policymakers ought to review Washington’s past fiscal and technological debacles more thoroughly before rushing to create new ones.

Roughly 160.6 million people filed taxes in 2022. The provision of an e-filing service to even a fraction thereof would place considerable strain on the IRS’ historically abysmal customer service. In 2021, agency staff fielded just 11 percent of 282 million taxpayer calls. To its credit, the agency improved customer service greatly in 2023. However, these improvements give no assurance that the agency could withstand the added workload a federal direct-filing system would inevitably impose. What’s more, Americans making less than $73,000 per year qualify to file for free with private tax services through the IRS’ “Free File” initiative. The IRS should perfect this program before inventing and injecting into the market a new, socialized filing option. Consulting the IRS on the feasibility and prudence of establishing an in-house direct-filing system resembles asking a toddler if he should be allowed to have more cake. Invariably, both will answer in the affirmative, even though it will not
be in the best interests of their long-term health.

BLOGS:

Tuesday: Taxpayers Protection Alliance Weighs in on Debt Ceiling Deal ([link removed])

Wednesday: Time To End DoD’s Earmark Dependence ([link removed])

Thursday: Op-Ed: Broadband Industry Hopeful to Get Waivers from Biden Administration Protectionist Policies ([link removed])

Friday: Op-Ed: Lina Khan’s FTC Is Importing Crushing European Tech Banditry ([link removed])


MEDIA:

May 28, 2023: The Daily Mail ([link removed]) quoted me in their story, "Taxpayers shell out $14 billion on 'air taxis' since the start of the Trump administration - and Joe Biden BLEW more than $4.5 billion!"

May 29, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about the Baltimore mayor and city council members spending money on travel to Las Vegas.

May 29, 2023: I joined WBFF Fox45 ([link removed] ceiling deal reached over the weekend) (Baltimore, Md.) to discuss the debt ceiling deal.

May 29, 2023: WBFF Fox45 (Baltimore, Md.) quoted me in their story, “Baltimore City Councilman demands details on the fight against summer crime.”

May 30, 2023: I appeared on WCHV (Charlottesville, Va.) to talk about the debt ceiling,

May 30, 2023: I appeared on KFTK 97.1 FM (St. Louis, Mo.) to talk about the debt ceiling.

May 30, 2023: Patrick Hedger joined 'Special Report' on Real America's voice to talk about the debt ceiling.

May 31, 2023: I appeared on the Philadelphia's Morning Answer with Chris Stigall on 990 AM (Philadelphia, Pa.) to talk about the debt ceiling.

May 31, 2023: NTD Television ([link removed]) interviewed me about the debt ceiling.

May 31, 2023: RealClear Defense ran TPA’s op-ed, “Time To End DoD’s Earmark Dependence. ([link removed]) ”

June 1, 2023: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the debt ceiling legislation.

June 1, 2023: Real Clear Markets ran TPA’s op-ed, “Lina Khan's FTC Is Importing Crushing European Tech Banditry. ([link removed]) ”

June 1, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about unspent federal relief money for Baltimore.

June 1, 2023: WBFF Fox45 ([link removed]) (Baltimore, Md.) quoted me in their story, "City ignores concerns of homeowner who says her home was wrongfully sold in a tax sale."

June 2, 2023: RealClear Science ([link removed]) ran TPA's op-ed, "It's Time to Bring NASA's Moon Mission Budget Back to Earth."

Have a great weekend!

Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])

============================================================
** ([link removed])
** Like Us On Facebook ([link removed])
** ([link removed])
** Follow Us On Twitter ([link removed])
Our mailing address is:
1101 14th Street NW
Suite 1120
Washington, DC xxxxxx

Want to change how you receive these emails?
You can ** update your preferences ([link removed])
or ** unsubscribe from this list ([link removed])