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Why reporters play dumb
Congressman Mike Johnson (R-LA) launched his tenure as Speaker of the House by proposing $14.3 billion in military aid for Israel. Although Johnson's proposal excluded funding for Ukraine, the funding for Israel aligned with President Biden's request. (Whether the funding request makes sense is a separate question considered by Popular Information last week.) The twist was that Johnson paired the funding for Israel with cutting $14.3 billion in funding for the IRS.
House Republicans proclaimed on October 30 that by cutting funding for the IRS, the money for Israel was "fully offset."
This claim was dutifully repeated by media outlets, including Jake Sherman, the top Congressional reporter for PunchBowl News. Sherman's post on X was purportedly viewed 7.6 million times.
But the claim that cutting IRS funding would "offset" spending on Israel is obviously bunk. The 2022 Inflation Reduction Act included $80 billion in funding for the IRS over ten years. The additional money was included to pay for audits of millionaires, which "fell by more than 80 percent between 2010 and 2018" due to a lack of IRS resources. The Congressional Budget Office (CBO) estimated that, over ten years, the $80 billion investment would yield $203 billion in revenues, largely by cracking down on wealthy tax cheats.
And the CBO may be underestimating the impact of additional funding for the IRS. A group of independent researchers found "that every $1 the IRS spends auditing a very high-income taxpayer yields over $6 in revenue from audit collections." When you account for voluntary compliance due to increased enforcement, every additional $1 in funding yields $12 in revenue.
Sherman covered the Inflation Reduction Act and the budgetary impact of additional IRS funding. So why did Sherman repeat information he knew was false? Publications like Punchbowl seek to provide intelligence about Congress to an audience of corporate lobbyists and other influential people. In order to provide that intelligence, Punchbowl reporters need access to the people in charge, which now includes Johnson. One way to get access is to be a useful megaphone for a politician's preferred message on a particular topic.
This type of coverage is justified as "unbiased," but it is actually misleading. On Wednesday, Sherman reported some "BREAKING" news — the CBO had issued a new analysis saying that cutting $14.3 billion in IRS funding would increase the deficit by $26.7 billion.
This news, of course, was not breaking.
Unfortunately, Sherman's reporting on this issue was not an anomaly. It is representative of an endemic problem in many media outlets.
A media failure
Over the last few days, several major media outlets have parroted the GOP’s lie that aid to Israel would be “offset” by IRS cuts.
Bloomberg wrote that the bill’s Israel funding would be paid by “cutting President Joe Biden’s signature Inflation Reduction Act, calling for a $14.3 billion reduction in funding for the IRS.” The Guardian published the headline, “US House Republicans plan to give Israel $14.3bn by cutting IRS funds.” “New Speaker Mike Johnson has proposed focusing on Israel alone, and slashing money for the Internal Revenue Service to pay for it,” the Associated Press reported.
The nonprofit Media Matters also flagged CBS News for promoting the GOP’s spin. “The House GOP released a $14.3 billion standalone measure on Monday that would pay for aid to Israel by cutting the same amount in funding that was allocated to the IRS under the Inflation Reduction Act,” CBS News reported. Reuters repeated the same line. All of these articles offer hardly any pushback against the proposal and, more importantly, fail to mention that IRS cuts would actually increase the deficit.
In some cases, outlets cited critics who questioned the GOP’s proposal, but these were often buried deep within the article. NPR, for example, published a story with the headline, “House Republicans aim to pay for Israel aid with cuts to IRS funds.” One section, titled “IRS funding has become a political flashpoint,” includes a quote saying that IRS cuts “would translate into a larger loss of money in collected revenues” and that it “could be twice as expensive as the actual bill.” But this was only mentioned after nearly 900 words.
Axios’ coverage was similar. The news outlet told its readers that aid to Israel would be “offset…by rescinding an equal amount in IRS funding from the Inflation Reduction Act.” But later in the piece it acknowledges that “the rescission would cut against Republicans' stated goal of saving as much money as they spend by dampening tax collection enforcement and thus diminishing federal revenue.” Media Matters reports that the Washington Post, NBC News, CNN, and Semafor also acknowledged the effects of the IRS cuts, yet, ultimately, “privileged the House GOP’s false ‘offset’ framing.”