Sen. Menendez denounces Republican threats of a national default, highlights how House GOP IRS cuts would increase the federal deficit and worsen customer service

WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Finance Committee, today questioned witnesses during a hearing about how House Republican funding cuts to the Internal Revenue Service (IRS) would contribute to the federal deficit and would reverse recent improvements to customer service and processing at the agency.

The Senator also pointed out the GOP’s hypocrisy, noting Congressional Republicans voted to avoid default under President Trump without hesitation as they simultaneously ballooned the deficit with their tax giveaway of 2017.

“Time and again my colleagues across the aisle have hijacked negotiations to avoid default in order to extract spending cuts in the name of fiscal responsibility,” Menendez said. “It seems hypocritical to me for Congressional Republicans to threaten default and call for spending cuts on the backs of working families when they have depleted the revenue side of the ledger over the last five years.”

In response to a question from Sen. Menendez during the hearing, Dr. Natasha Sarin, an economist and associate professor at Yale Law School, emphasized how the 2017 Republican Tax Law will add about $3 trillion to the federal deficit over ten years.

During the exchange, Sen. Menendez said, “[I proudly] voted for the Inflation Reduction Act (IRA), which actually cuts deficit spending while supercharging investments in renewable energy. It also provides resources for the IRS to modernize its IT system, restore customer service, and hire the personnel necessary to collect the taxes that everyone, including wealthy individuals, legally owe.”

Sen. Menendez highlighted how the IRA made a significant difference in reversing a concerning trend from the last decade that had resulted in 20 percent of the IRS workforce being laid off and exacerbated customer service problems at the agency.

“While middle class families and small businesses bear the brunt of the IRS customer service problems, wealthy individuals and large corporations are all too happy to take advantage of the IRS’ limitations. Ultimately, that means less revenue to cover the costs of our federal budget,” Menendez said. “We are already seeing improvements at the IRS due to the Inflation Reduction Act. Customer service has significantly improved, and the IRS is planning to hire the personnel needed to ensure the wealthiest are paying what they legally owe. But now Republicans’ answer to balance the budget is to slash this critical IRS funding and reverse this progress.”

Because of the Senator’s oversight efforts over the last year, including eight letters to the head of the IRS, paired with Inflation Reduction Act investments in the IRS, the agency has hired 5,000 new customer service workers to help meet taxpayers’ needs. Over this year’s tax filing season, the IRS consistently answered the phones between 80 and 90 percent of the time, at an average speed of answer of 4 minutes, compared to last year where the average level of phone service was 17 percent with a speed of answer rate of 27 minutes.

The Senator concluded by calling out Republican efforts to slash other critical government programs proven to grow jobs and the economy, such as the Child Care and Development Block Grant (CCDBG). This block grant is the main federal program that provides funding for child care providers to support low-income families in accessing affordable child care.

Last month, Sen. Menendez joined with advocates, providers and parents to highlight the devastating impacts the House Republican Default on America plan would have on working families and to the child care industry which is already struggling to stay afloat from the impact and strain of the COVID-19 pandemic. Sen. Menendez has long been a strong supporter of increased child care support for families.

During the height of the COVID-19 pandemic, the Senator, along with Democratic colleagues secured $10 billion in additional funding for the Child Care & Development Block Grant (CCDBG) program through the Consolidated Appropriations Act in December 2020. In March 2021, Sen. Menendez and Democratic colleagues, through the American Rescue Plan, appropriated an additional $40 billion in stabilization grants through the CCDBG program, including $694,327,527 to support New Jersey child care providers.