How the Democrats' push to make the IRS more efficient accelerated the debt limit crisis

Tax Day 2023
(Image credit: Joe Raedle/Getty Images)

President Biden and congressional Democrats gave the Internal Revenue Service an $80 billion infusion in last year's Inflation Reduction Act to modernize the agency and hire more workers to process returns, cut down on wealthy tax avoidance, and improve customer service. House Republicans tried to claw back that money in the first bill passed by their new majority. Now both parties are scrambling to find a way out of a debt-ceiling impasse before June, when the Treasury Department predicts the U.S. will start defaulting on its financial obligations.

It turns out, Politico reports, that one "surprising culprit behind the sooner-than-anticipated debt-limit deadline" is the "better IRS service" this year, due in large part to the Democrats' $80 billion in extra funding. The IRS has a much smaller backlog of tax returns to work through this year — about half the 5.2 million piled up at this time last year — so there are fewer checks left to be deposited in the federal coffers.

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