Republicans in Congress have often characterized the IRS funding in the bipartisan Inflation Reduction Act as intended for an “army” of tax enforcers to harass small businesses and conservatives.

Republicans in Congress have often characterized the IRS funding in the bipartisan Inflation Reduction Act as intended for an “army” of tax enforcers to harass small businesses and conservatives. STEFANI REYNOLDS/AFP via Getty Images)

Proposed funding cuts could prevent IRS, Justice and other agencies from meeting their missions, employee groups say

Controversial plans to deeply slash spending at OPM, IRS and the Justice Department have drawn the ire of the federal employees who work at or rely on those agencies. They say the cuts would harm mission delivery.

As House Republican appropriators work their way through the appropriations process, proposing deep cuts to discretionary spending, there has been a growing chorus of federal employee groups decrying their plans, which the groups say will cause grievous harm to agency operations.

President Biden and House Majority Leader Kevin McCarthy last month reached a deal whereby Congress raised the debt ceiling and avoided a governmental default in exchange for spending caps remaining essentially flat in fiscal 2024. But as part of a gambit to keep the GOP House majority intact after an attempted mutiny by conservatives over the deal, the Republicans at the helm of the House Appropriations Committee aimed to cut more than $100 billion in government spending during this year’s appropriations budget, something Democrats said is tantamount to reneging on the debt ceiling agreement.

The resulting spending bills that have emerged over the last month propose steep cuts at agencies like the IRS, Justice Department and the Office of Personnel Management. And as the House prepares to begin voting on those bills next week, groups either representing employees who either work that those agencies or, in the case of OPM, representing employees and retirees who rely on the agency, warn that the GOP’s spending plan will disrupt the agencies’ ability to meet their respective missions.

In the case of OPM, Republicans have proposed to revert its funding to fiscal 2022 levels, which equates to a $49.2 million cut from current spending levels and a $134.7 million reduction from Biden’s budget request. Much of Biden’s extra funding for the government’s HR agency would go toward improving the federal hiring process, as well as plans to modernize the retirement process, which remains largely paper-based.

In a letter last week to the leadership of both House and Senate appropriations committees, William Shackelford, national president of the National Active and Retired Federal Employees Association, urged lawmakers to reject the House’s spending plan for OPM. Shackelford said less funding for the HR agency could starve the agency at a time it can least afford it.

“NARFE is concerned that a drastic cut in funding for the Office of Personnel Management could result in worsening customer service levels for federal retirees interacting with OPM [Retirement Services],” he wrote. “We continue to receive complaints regarding the inability of retirees to connect with RS (via phone, email or other method) to receive necessary assistance; and regarding substantial delays processing retirement and survivor benefits claims, as well as other transactions related to federal retirement and health benefits.”

Shackelford also decried a policy rider that would bar the Thrift Savings Plan, the federal government’s 401(k)-style retirement savings program, from offering participants access to mutual funds that invest in companies that follow environmental, social or governance criteria. TSP officials have said that efforts to require the program to monitor and police individual mutual funds’ investments would effectively ban them from offering the recently launched mutual fund window at all due to the costs associated with such an endeavor.

“If included, the policy rider would, according to the Federal Retirement Thrift Investment Board, force the TSP to consistently monitor the thousands of funds available through the window for ESG criteria, costing a tremendous amount of money and opening the TSP to potential legal exposure,” Shackelford wrote. “This is unfeasible and would force the TSP to close the mutual fund window to avoid this burden. As a result, TSP participants would not be prevented from investing in ESG funds—they would simply be forced to move their money out of the TSP to do so.”

The National Treasury Employees Union said that across four spending bills and legislation already in place to rescind some of the $80 billion set aside for the IRS in the Inflation Reduction Act, GOP lawmakers have proposed upwards of $67 billion in cuts to the tax enforcement agency.     

“Frontline IRS employees, with proper resources, staffing and training, are proving they can deliver the kind of tax administration system that this country deserves, where the wealthy pay what they owe under the law and regular Americans get the help they need to file their returns,” said NTEU National President Tony Reardon. “It remains shocking how eager some lawmakers are to, once again, hobble the agency responsible for enforcing the tax laws they wrote and collect the revenue needed to run the country.”

Although Republicans in Congress have often characterized the IRS funding in the bipartisan infrastructure law as intended for an “army” of tax enforcers to harass small businesses and conservatives, Reardon argued that the money has already paid dividends in the form of happier taxpayers. Customer service metrics rose to a 87% rating during the 2023 filing season, while the agency expanded its returns digitization operation and reopened dozens of taxpayer assistance centers that previously had been closed due to lack of funding.

“This remarkable progress in a short amount of time shows the IRS and its workforce are worthy of the investments that ultimately benefit the American people by making the system fairer and more efficient, and reducing the deficit by collecting more of what is owed under the law,” Reardon said.

The House GOP has an unlikely new target for funding cuts in the fiscal 2024 appropriations process: the Justice Department. That’s at least in part as a reaction to the investigation and subsequent indictment of former President Trump over allegations he improperly took classified documents from his time in office and stored them in nonsecure locations at his Florida club Mar-a-lago.

The House spending plan axes plans for a new FBI headquarters in the Washington, D.C., area and cuts the Justice Department’s budget by $2.1 billion compared with current spending levels and $4.9 billion less than Biden’s budget request. The magnitude of red ink directed toward law enforcement agencies drew the ire of Larry Cosme, national president of the Federal Law Enforcement Officers Association, who accused the GOP of “defunding” the police.

“The House Republican proposal to slash the budgets of the FBI and other Department of Justice components is an insult to the thousands of federal law enforcement officers working daily to protect the American people,” Cosme said in a statement. “Congress should not levy disagreements with political leadership by slashing resources and budgets that front-line law enforcement rely on to investigate terrorists, respond to violent crime and counter transnational drug and human trafficking networks. If Congress is concerned about the American people’s trust in our law enforcement agencies, crippling their capacity is not the manner to deal with these concerns—especially since the proposal cuts community relations services by 60% and information sharing technology by 72%.”