House Republicans' $14.3B Israel Aid Bill Would Impact the IRS

By Briana Reilly, CQ-Roll Call (TNS)

House Republicans released a $14.3 billion stand-alone bill Monday dedicated solely to aiding Israel, decoupling it from aid for Ukraine and border security as the White House had proposed in its own emergency funding request earlier this month.

The legislation seeks to offset the Israel support by clawing back $14.3 billion in IRS funding that Congress passed in last year’s reconciliation measure, a frequent target of Republicans.

The proposal could lead to a showdown with the White House and Senate, where leaders have expressed support for the Biden administration’s broader $106 billion package, which includes further aid for Kyiv, the Indo-Pacific and the U.S.-Mexico border.

The House Rules Committee is slated to consider the bill on Wednesday.

Delinking the aid for the Israeli and Ukranian war efforts has been a focus for some Republicans across both the House and the Senate, with proponents arguing that political divisions associated with continuing to arm Ukraine could hamper efforts to expeditiously deliver support to Israel.

While Senate Minority Leader Mitch McConnell, R-Ky., has repeatedly stressed the two are interrelated and should move together, there are clear divisions among his own members, four of whom last week introduced a $14.3 billion stand-alone bill seeking to “immediately” boost Israel’s defenses.

In the five days since he was elected speaker, Mike Johnson, R-La., has signaled his preference for separating the funding streams, saying in a Fox News interview last week that he has communicated to White House staff that House Republicans’ consensus “is we need to bifurcate” aid for Israel and Ukraine.

Still, he expressed support for continuing to aid Ukraine in its ongoing war with Russia, pledging that lawmakers are “not going to abandon them” while acknowledging the “stewardship responsibility” Congress has over the aid heading abroad.

But Democrats maintained that the supplemental package should not be broken up, and they moved quickly to decry the House Republicans’ offset approach with their legislation.

“We must pass the president’s supplemental as soon as we can—with bipartisan support,” Senate Majority Leader Charles E. Schumer, D-N.Y., said on the floor after the House bill was posted.

White House press secretary Karine Jean-Pierre said Monday that green-lighting supplemental funding doesn’t necessitate rolling back other spending commitments.

“There are emergency funding requests, right?” she told reporters. “We’ve been very clear about that. Like other emergency funding, funding that Congress has passed with bipartisan support, they do not require offsets.”

House Appropriations Committee ranking member Rosa DeLauro, D-Conn., said her GOP colleagues’ insistence on offsetting crisis expenditures “stalls our ability to help Israel defend itself.”

“House Republicans are setting a dangerous precedent by suggesting that protecting national security or responding to natural disasters is contingent upon cuts to other programs,” she said.

And ahead of the bill’s release, House appropriator Debbie Wasserman Schultz, D-Fla., slammed Republicans for what she called “playing political games with Israeli emergency funding” by pursuing spending offsets, saying the approach “undercuts our credibility.”

“When your neighbor’s house is on fire, you don’t haggle over the price of the garden hose,” she continued. “Speaker Johnson’s political games are offensive to all pro-Israel Americans, and I hope he reverses course immediately. ”

Bill details

The bill’s $14.3 billion topline is consistent with what the White House requested for Israel in its war against Hamas.

Under the Biden administration’s framework, the lion’s share of the funds—$10.6 billion—would be earmarked for replenishing Israel’s air and missile defense systems, with the remaining $3.7 billion earmarked for the State Department for foreign military financing and embassy support.

In the House GOP bill, the big-picture spending breakdown is largely the same. Within the $10.6 billion of defense funding, $4.4 billion would be earmarked for backfilling Defense Department stockpiles and reimbursing the Pentagon for any military education and training provided to Israel, while another $4 billion would be available for Israel to buy missile defense systems known as Iron Dome and David’s Sling.

The bill would also put $850 million toward further procurement efforts, while an additional $1.35 billion would be largely designated for Israel’s development of an “Iron Beam” system to counter short-range rockets, according to the bill text.

For State Department-related expenditures within the bill, $3.5 billion would be used for foreign military financing, while $150 million would go to diplomatic programs and the remaining $50 million would be available for emergency evacuation of U.S. government personnel and citizens in Israel, as well as surrounding countries impacted by the war effort.

The legislation would require Defense and State leaders to share written, unclassified reports with various congressional committees outlining U.S. security assistance provided to Israel dating back to the Oct. 7 Hamas attack on the country. The report should involve “a comprehensive list of the defense articles and services” sent to Israel, in addition to the funding levels and associated authorities leveraged for their provision.

To counterbalance the $14.3 billion in Israel aid, the bill would target funding for IRS enforcement and operations support, along with money for other agency efforts including to test a government-run free online tax filing system.

Opponents maintain that pulling back the IRS funding would erode its ability to collect revenue. The money is meant to fund a crackdown on wealthier tax evaders and bigger corporations that aren’t paying their taxes.

In the case of the targeted IRS funds, the White House had already agreed to shrink the original $80 billion to about $60 billion in a deal with the House GOP to suspend the debt limit earlier this year. Further decreasing that sum for tax enforcement, however, would likely increase the deficit rather than cover costs, based on previous Congressional Budget Office projections.

The stand-alone Israel aid bill does not appear to contain humanitarian aid. All told, the White House’s request included $9.15 billion in funds for humanitarian support in Israel, Gaza, Ukraine and elsewhere. But some Republicans have worried that aid earmarked for Palestinians would be diverted by Hamas.

— Niels Lesniewski and Laura Weiss contributed to this report.

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