House GOP Spending Bill Floats Cuts to IRS, SEC Funding (1)

House Republicans floated annual funding cuts to the IRS and the District of Columbia, but called for a slight increase to the General Services Administration buildings fund as part of a measure that will likely face stiff opposition from Democrats.

The proposal represents House Republicans’ first volley in what’s expected to be protracted negotiations with Democrats over base agency funding next year. Most agencies’ funding expires at the end of September, when lawmakers would need to agree to greenlight discretionary spending or risk a wider government shutdown.

The proposed Financial Services and General Government funding bill released Thursday by House Appropriations Committee Republicans includes $25.3 billion overall, a $1 billion reduction from current funding, according to a GOP summary.

The legislation, slated for a Friday markup, calls for $10.2 billion in fiscal 2027 funding for the IRS, a reduction slightly above the White House request released earlier this month.

It also seeks $10 billion in judiciary funding, including $1.8 billion for federal defenders and $920.9 million for court security.

Democrats Thursday pounced on the GOP proposal, accusing appropriators of seeking to traumatize federal workers and promote corruption by billionaires and large corporations by making cuts to the IRS and the Securities and Exchange Commission. The bill’s $2 billion for the SEC represents a $123 million cut from last year’s funding legislation.

“This partisan bill will cost taxpayers—not only in benefits and services but also in lost revenue,” said Financial Services Appropriations Subcommittee ranking member Steny Hoyer (D-Md.) in a statement.

GSA Funds, Digital Currency

Democrats accused Reublicans of crafting the legislation in a truncated and shrouded process, where the panel conducted few hearings and didn’t offer many opportunities for lawmakers to question administration officials. They also decried proposed GOP cuts to the Consumer Product Safety Commission and the Election Assistance Commission.

The GOP proposal would push another step-down in IRS funding, which dropped to $11.2 billion in fiscal 2026. Congress provided the agency $12.3 in fiscal 2025. It also cuts $86 million from the District of Columbia’s budget, which is based on local taxes. The $792 million for DC represents a 9.8% cut from enacted fiscal 2026 levels.

The GSA Federal Buildings Fund would get $9.74 billion in the GOP legislation, about $49 million above the fiscal 2026 enacted level. Republicans floated $872 million for the Executive Office of the President, $495,000 below fiscal 2026.

Lawmakers seek to cement several executive orders issued by President Donald Trump through legislation, including those pushing federal office relocation to lower-cost areas, returning to the use of plastic straws over paper, and moving taxpayers toward electronic money transfers.

The legislation also would prohibit the study, design, or development of a US Central Bank digital currency. The issue has also cropped up as a sticking point in bipartisan, bicameral negotiations over housing legislation.

The billions in cuts amount to another slash for the IRS, which not only has seen a drastic cut in its workforce but also has received less funding since President Donald Trump took office. Democrats and watchdogs have warned that the deep cuts will likely damage the agency’s ability to enforce tax laws on wealthy scofflaws.

Trump earlier this month proposed trimming $1.4 billion in annual 2027 funding over fiscal 2026 levels.