GOP negotiator: Senators ditch tougher IRS enforcement as way to pay for bipartisan infrastructure plan

By Devan Cole and Daniella Diaz, CNN

A Republican senator who’s helping to negotiate a bipartisan infrastructure proposal said Sunday that the group is no longer looking at toughening enforcement at the Internal Revenue Service as a way to pay for the massive bill.

“Well, one reason it’s not part of the proposal is that we did have pushback. Another reason is that we found out that the Democrats were going to put a proposal into the reconciliation package, which was not just similar to the one we had, but with a lot more IRS enforcement,” Sen. Rob Portman told CNN’s Dana Bash on “State of the Union” when asked about Republican opposition to the idea.

“That created quite a problem because the general agreement is that this is the bipartisan-negotiated infrastructure package and that we will stick with that,” added Portman, a lead Republican negotiator in the group who said he has been working with the White House on the legislation.

The comments from the Ohio Republican mean that the group of lawmakers will have to continue looking for ways to pay for the costly infrastructure package, the latest version of which suggested that an additional $100 billion could be collected by the IRS over the next 10 years simply by beefing up enforcement and making sure the government is collecting what taxpayers actually owe — also known as closing the “tax gap.”

A Democratic aide confirmed to CNN on Sunday that Republicans and Democrats in the bipartisan group have agreed to scrap the enhanced IRS enforcement provision after conservatives pushed back it, endangering the group’s ability to get a deal ahead of a procedural vote scheduled for Wednesday to advance the legislation.

CNN reported earlier this month that it’s unclear exactly how much could be raised and how much it would cost to increase enforcement. The latest IRS report available says that nearly 84% of federal taxes are paid voluntarily and on time, leaving $441 billion uncollected. After late payments are made and enforcement actions taken, the gap narrows to $381 billion, according to the report.

But that’s based on tax years 2011, 2012, and 2013 and IRS Commissioner Chuck Rettig told lawmakers earlier this year that he believes the tax gap could be much bigger now — up to a massive $1 trillion a year.

President Joe Biden had supported tougher IRS enforcement and his administration has put the figure somewhere in the middle. A recent Treasury analysis found that the tax gap totaled nearly $600 billion in 2019 and could rise to about $7 trillion over the next decade if left unaddressed — roughly equal to 15% of taxes owed.

Portman, who told Bash that the group of senators working on the package are meeting again on Sunday to work through its details, criticized what he called the “arbitrary deadline” for the bill set by Senate Majority Leader Chuck Schumer, a New York Democrat.

“Chuck Schumer, with all due respect, is not writing bill. Nor is (Senate Minority Leader) Mitch McConnell, by the way,” he said. “So that’s why we shouldn’t have an arbitrary deadline of Wednesday. We should bring the legislation forward when it’s ready. And it’s incredibly important legislation.”

The meeting later Sunday is expected to be about how to replace the now-abandoned IRS idea.

Asked about Schumer’s push to start debate on the issue this week, Portman stressed that the negotiators don’t yet have a concrete bill to consider.

“Start debate on what? You know, we don’t have a product yet. And we won’t have a product until we can finish the negotiations properly,” he said. “Again, this is a complex bill — it involves several committees, it involves, you know, a lot of very tough issues because we’ve got to resolve them between us first, so again we’re meeting today. … We’re moving as fast as we can.”

GOP Sen. Bill Cassidy, who participated in bipartisan negotiations to create the bill’s framework, on Sunday also criticized the procedural vote planned for Wednesday, telling “Fox News Sunday” that he wouldn’t support it without a completed version of the bill.

“How can I vote for a cloture when the bill isn’t written? Unless you want programmed failure, unless Sen. Schumer doesn’t want this to happen, you need a little bit more time to get it right,” Cassidy said.

The Louisiana Republican said a written version of the bill could be completed ahead of the vote but stressed that the White House and Democrats will need to work with Republicans to come up with pay-fors to fund the legislation.

This story has been updated with additional details Sunday.

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CNN’s Lauren Fox and Katie Lobosco contributed to this report.