House approves rules package in key test for McCarthy's speakership

The GOP-controlled House, in its first piece of legislation as the new majority, has voted for a bill that will roll back funding for the Internal Revenue Service that was implemented in the Inflation Reduction Act, a massive social spending bill passed by Democrats in the last Congress.

“Our very first bill will repeal the funding for 87,000 new IRS agents,” House Speaker Kevin McCarthy said shortly after taking the gavel early Saturday morning to a standing ovation from his party. “You see, we believe government should be to help you, not go after you.”

The legislation rescinds $80 billion included in the Inflation Reduction Act to staff 87,000 new IRS agents.

The messaging bill was passed down a strict party line vote, 221-210. It now goes to the Democrat-controlled Senate, where it will not be taken up. The Congressional Budget Office estimated Monday that the bill would increase the deficit by more than $114 billion over a decade.

GOP lawmakers have railed against the nearly $80 billion the IRS will receive over the next decade as part of the Democrats’ Inflation Reduction Act ever since the law was enacted last summer. Republicans have argued that the agency intends to hire an army of new agents to harass taxpayers, though the IRS has said the money will be used for improving customer service, supporting operations and addressing other needs as well. It has already hired several thousand new staffers to help taxpayers with the upcoming filing season.

The House vote fulfills a promise McCarthy made in September that the top priority of a Republican House majority would be to roll back “harmful provisions” in the Inflation Reduction Act, the right-leaning Americans for Prosperity said Monday, urging lawmakers to support to bill.

Oregon Sen. Ron Wyden, chair of the Senate Finance Committee, blasted the House GOP legislation. “The CBO has confirmed what was obvious from the start — the Republican IRS bill, a handout to wealthy tax cheats, would add $114 billion to the deficit,” Wyden, a Democrat, said.

The White House already vowed that President Joe Biden would veto the legislation should it come to his desk, calling the bill “reckless.”

It also noted that the Treasury Secretary has already directed that the additional IRS funding not be used to increase audit rates relative to historical levels for small businesses or households with incomes below $400,000.

Republicans already successfully snipped the IRS’ funding, cutting more than $275 million from the agency’s budget in the fiscal year 2023 federal spending bill that was enacted last month. It provided the IRS with $12.3 billion for the current fiscal year.

Rep. Don Bacon, a Nebraska Republican from a swing district, told CNN that “it does” concern him that only one member is needed to call for a vote to oust the speaker, down from the previous rules where only half of the House could call for such a no-confidence vote.

Asked if it could be too late by the time someone has abused it, Bacon said, “It could be the case. I won't deny that.”

Bacon said he pushed for 30 members to call for such a vote, but House Speaker Kevin McCarthy ultimately agreed to set the threshold at one member in order to secure votes from GOP hardliners to win the speakership.

“I would have preferred 30, because I think you do need vacate the chair capability," he added. "But you can't have it where like any one person that's angry or something, and I just don't think that works.”

Meanwhile, Rep. Lauren Boebert, a Republican from Colorado, indicated that she is open to calling for a motion to vacate the chair if McCarthy does not follow the agreement that he made with his detractors last week.

“I mean, that's what vacate is for,” she said. “But I don't anticipate using it. I hope I never have to. I hope that he is a great speaker and I'm pulling for his success.”

Boebert voted against McCarthy on 13 ballots but voted "present" on the final two, essentially helping him win the speakership.

She told CNN that she voted "present" on the last two ballots because “we got some amazing concessions in these rules that benefit the American people. And that's what I've been fighting for all along.”

Freshman Rep. Elijah Crane, a Republican from Arizona and another McCarthy holdout who eventually voted present on the 15th ballot, would only say, “no comment" when asked why he voted that way.

Tensions are running high in the House GOP conference as lawmakers still do not know the full extent of the promises Speaker Kevin McCarthy made to his opposition in a weeks-long negotiation that secured him the gavel, but did not become public in the House Rules package.

How the talks unfolded: Negotiations among the 20 GOP holdouts last week happened behind closed doors and spread out among multiple rooms, leaving some to wonder if it was done so by design as many have said they have not seen the full extent of the promises made. 

There's a document flying around about what's allegedly in the deal to further underscore how little they actually know about McCarthy's concessions. 

When asked repeatedly by reporters about when he's going to release the full scope of the deal, McCarthy wouldn't share when he planned to do so.

The tensions are likely to spill into the GOP conference-wide meeting Tuesday morning, the first time all members will be meeting since McCarthy was elected speaker. 

Republican Rep. Nancy Mace told reporters Monday night during votes that she plans to stand up during the GOP conference Tuesday and demand information.

She added, "Is it only the fringes that get priority on legislation or does everybody get priority on legislation? And so, as a member, I have more questions than I had answers like you all do."

What a key holdout of McCarthy is saying: “The tough thing about negotiations is you can’t always be in all negotiations," GOP Rep. Byron Donalds said.

He said the details are all starting to come out and added that when all of the concessions get unveiled “everybody will be okay.”

Defending the negotiations process, Donalds said, “What I can tell you is that when we negotiate, we went through just about everything to make sure that the members would have the ability, one, to have the most open process possible, two, to make sure that we accomplish things. So that was the point of the negotiations and we got that done.”

House Speaker Kevin McCarthy said Monday night that Democratic Reps. Adam Schiff, Eric Swalwell and Ilhan Omar will not be members of the committees they previously served on.

Schiff served as chair of the House Intelligence Committee during the last Congress when Democrats controlled the majority. Swalwell was a member of the same panel.

Omar previously served on the House Foreign Affairs Committee.

Rep. Mike Rogers, a member of the Republican Steering committee which decides committee membership, told reporters the rest of those decisions will be made next week. 

“They told us they’re going to bring us back Monday," Rogers said to build out the committees, “even though we’ll be out of session we’ll do it Monday, Tuesday.”

He estimated the process would take about two and a half days. 

Earlier today: The Steering Committee had been meeting Monday to select several committee chairs. 

Republican Rep. Jason Smith was chosen to serve as chairman of the Ways and Means Committee and Republican Rep. Mark Green of Tennessee won the chairmanship of the House Homeland Security Committee, according to sources.

The House approved a rules package for the 118th Congress — which will govern how the chamber operates for the next two years — after Republicans scrambled to garner support from moderate members Monday.

The vote was seen as a key test of House Speaker Kevin McCarthy's ability to navigate his slim Republican majority.

The package codifies provisions that were agreed to by McCarthy in his quest to obtain the speaker’s gavel, including the ability for any single member to call a vote to oust him. 

The package was passed 220-213, with Texas Republican Rep. Tony Gonzales joining all the Democrats in voting against the measure.

More context: McCarthy’s concessions to GOP hardliners to win the gavel frustrated some centrist House Republicans, and GOP leaders worked throughout the day to alleviate those concerns ahead of the vote.

The skirmish over the House rules underscores the herculean task McCarthy faces as the leader of a House with a slim four-vote Republican majority that gives a small bloc of members on either side of the Republican political spectrum outsized sway to stand in the way of legislation.

The House is now voting on a rules package that will govern how the 118th Congress operates.

Speaker Kevin McCarthy’s concessions to GOP hardliners to win the gavel frustrated some centrist House Republicans, and GOP leaders have been racing Monday to alleviate those concerns ahead of the vote.

Sources told CNN that GOP leaders placed numerous calls and texts to Rep. Nancy Mace of South Carolina, who said Sunday she was “on the fence” over the House rules package.

On Monday afternoon, Mace’s office said the South Carolina Republican would vote for the rules package – a significant sign that centrist Republicans weren’t going to revolt.

GOP leaders are hoping to quickly push past the rules and onto their legislative agenda, with a vote slated for Monday evening after the rules on a bill to roll back $80 billion funding to staff up the Internal Revenue Service that was included in the Inflation Reduction Act, a massive social spending bill passed by Democrats in the last Congress.

Still, the skirmish over the House rules underscores the herculean task McCarthy faces as the leader of a House with a slim four-vote Republican majority that gives a small bloc of members on either side of the Republican political spectrum outsized sway to stand in the way of legislation.

In a sign of what could be to come for the new Congress, the Biden administration says it strongly opposes the first new economic legislation proposed by House Republicans — which would roll back funding for the Internal Revenue Service provided in the Inflation Reduction Act — and vowed that if it passes, President Joe Biden will veto it. 

OMB called the bill “reckless,” alleged it would increase the deficit, and wrote it would enable “wealthy tax cheats to engage in additional tax fraud and avoidance.”

“Far from protecting middle-class families or small businesses, H.R. 23 protects wealthy tax cheats at the expense of honest, middle-class taxpayers,” the statement said. “With their first economic legislation of the new Congress, House Republicans are making clear that their top economic priority is to allow the rich and multi-billion dollar corporations to skip out on their taxes, while making life harder for ordinary, middle-class families that pay the taxes they owe. That’s their agenda; not lowering costs or cutting taxes for hard working Americans — as President Biden has consistently advocated.”

Biden, if “presented with H.R. 23 — or any other bill that enables the wealthiest Americans and largest corporations to cheat on their taxes, while honest and hard-working Americans are left to pay the tab” would veto the legislation, the administration wrote.         

Now that Republicans are in charge of the House, they are moving full speed ahead to fulfill one of their top promises: defund the Internal Revenue Service.

GOP lawmakers have railed against the nearly $80 billion the IRS will receive over the next decade as part of the Democrats’ Inflation Reduction Act ever since the law was enacted last summer. Republicans have argued that the agency intends to hire an army of new agents to harass taxpayers, though the IRS has said the money will be used for improving customer service, supporting operations and addressing other needs as well. It has already hired several thousand new staffers to help taxpayers with the upcoming filing season. 

One of the House GOP’s first moves, which could happen as soon as Monday, is to consider the Family and Small Business Taxpayer Protection Act. It would rescind more than $71 billion of the additional IRS funding. 

The bill, which has no hope of passing the Democrat-controlled Senate, would increase the deficit by more than $114 billion over a decade, the Congressional Budget Office estimated Monday. 

More background: The House vote will fulfill a promise McCarthy made in September that the top priority of a Republican House majority would be to roll back “harmful provisions” in the Inflation Reduction Act, the right-leaning Americans for Prosperity said Monday, urging lawmakers to support to bill.

Oregon Sen. Ron Wyden, chair of the Senate Finance Committee, blasted the House GOP legislation.

“The CBO has confirmed what was obvious from the start — the Republican IRS bill, a handout to wealthy tax cheats, would add $114 billion to the deficit,” said Wyden, a Democrat.

The White House already vowed that President Joe Biden would veto the legislation should it come to his desk, calling the bill “reckless.”

“Far from protecting middle-class families or small businesses, H.R. 23 protects wealthy tax cheats at the expense of honest, middle-class taxpayers,” the White House said in a statement on the bill.

It also noted that the Treasury Secretary has already directed that the additional IRS funding not be used to increase audit rates relative to historical levels for small businesses or households with incomes below $400,000.

Republicans already successfully snipped the IRS’ funding, cutting more than $275 million from the agency’s budget in the fiscal year 2023 federal spending bill that was enacted last month. It provided the IRS with $12.3 billion for the current fiscal year.