White House pushes Biden agenda with surprising embrace of tax season amid fight with Republicans

By Nikki Carvajal and Donald Judd, CNN

The fraught politics of tax season have been met by the White House with a perhaps surprising response: a welcoming embrace.

The Biden administration has moved this week to elevate the moment, making the case that President Joe Biden’s law that surged $80 billion to the Internal Revenue Service has delivered tangible results at the same time Biden’s tax proposals sit at the center of a White House itching for a fight with House Republicans over long-term spending and raising the nation’s borrowing limit.

IRS funding has been at the center of Republican efforts to undo one of Biden’s cornerstone legislative achievements. They’ve alleged, without evidence, it would result in more menacing knocks on the door by the tax man, something internal GOP polling repeatedly showed was a politically salient message. But as Tax Day arrived, the administration was far from defensive.

Instead, from the White House to the Treasury Department, the administration pressed to elevate the issue, pointing to improved customer service such as shortened call times, upgraded service, and a cleared backlog of last year’s returns at the IRS due to the funding from the Inflation Reduction Act.

On Wednesday, Biden addressed a union training center — home turf for the president — and used the developing fight over the debt ceiling, which must be raised in the coming months to avoid a historic default.

“Folks, because it’s really dangerous — MAGA Republicans in Congress are threatening to default on the national debt, the debt that took 230 years to accumulate overall — overall, unless we do what they say, they say they’re going to default, unless I agree to all these whacko notions,” Biden said Wednesday afternoon. “To default would be worse than totally irresponsible. It would mean cutting Social Security and Medicare, higher interest rates for things like credit cards, car loans, mortgages. Working people, middle class seniors are taking the pressure, the entire economy would be at risk.”

“America is not a deadbeat nation — we meet our obligations, and I made clear to (House Speaker Kevin) McCarthy about how we should proceed to settle our differences,” he added. “And no one should do anything to jeopardize the full faith and credit of the United States of America.”

Biden’s speech presented a stark split screen with Capitol Hill, as McCarthy took to the House floor just minutes before the President’s remarks to preview his 320-page bill, which the the House speaker claimed will save $4.5 trillion, though official cost estimates have not yet been released.

“President Biden has a choice: come to the table and stop playing partisan political games or cover his ears, refuse to negotiate, and risk bumbling his way into the first default in our nation’s history,” McCarthy said in his floor speech.

Asked later by CNN’s Manu Raju if it was a risk to push it to 2024, McCarthy replied, “Isn’t it risky to continue to have a debt this size?” as he went on to attack Senate Democrats and the White House for not acting on the nation’s debt, which is north of $31 trillion.

While Republicans have said they want to make cuts across the board, they haven’t laid out where those cuts will come from specifically.

The White House is banking on the plan being popular among Americans despite being dead on arrival on Capitol Hill.

In a memo sent to Congress obtained exclusively by CNN, the White House — typically wary of discussing poll numbers — is pointing to a series of surveys showing Americans “overwhelmingly support” Biden’s overall spending plan. The administration said the data shows “the public clearly backs a plan to cut deficits by asking the wealthy & big corporations to pay their fair share, while ensuring no one earning less than $400,000 will pay more taxes.”

The memo cites more than a dozen polls showing broad support for not only Biden’s plan to tax the wealthy, but also support for protecting Social Security and investments made through the Inflation Reduction Act.

Republicans have made the exaggerated claim that the money that the IRS receives through the Inflation Reduction Act would be used to target middle-class taxpayers and to hire 87,000 auditors, CNN previously reported. In their first vote after taking control of the House, Republicans voted to repeal the funding. McCarthy tweeted that repealing the funding was a priority, “because government should work for you, not against you.”

The House GOP bill has no future with a Democratic-controlled Senate and Biden in the White House. But Republicans are increasingly urging their leadership to include the repeal in their debt ceiling proposal as part of an effort to cut down Biden’s Inflation Reduction Act entirely.

“If it’s gonna pass, it’s gonna have to” include a repeal of the entire Inflation Reduction Act, Freedom Caucus Chairman Scott Perry of Pennsylvania said Tuesday of the House GOP’s debt ceiling plan.

But officials with the Department of Treasury insist the changes in the act aren’t about the optics or proving critics wrong; they’re about the taxpayers.

“This is not about the politics,” Deputy Treasury Secretary Wally Adeyemo said during a call with reporters on Monday. “For as long as I’ve been here, which is more than a decade, part of what we’ve done at the Treasury Department is provide the American people with information about how they can do what the vast majority of them do, which is pay their taxes.”

“The difference this year than the previous years: the Congress has made a serious investment in improving customer service.”

Adeyemo said the agency is telling the American people that if they call the IRS, “the wait times are going to be down dramatically. If you want to see someone in person, there’s likely to be someone in your community where you can go and see in person. And then if you want to use our automated services, those are vastly improved.”

He also added that the money put the IRS in a position to “make sure those people who generally are wealthier, who are trying to avoid their taxes, we now have the resources to go after them to make sure that they also are paying their fair share going forward.”

“So fundamentally,” he said, “investing in the IRS is investing in helping us bring down our debts and deficits over time and also improving the customer service that the American people deserve.”

But that doesn’t mean that audits across the board have increased as Republicans warned they would. IRS Commissioner Daniel Werfel said during the same call that the rate of audits has “steadily declined across the board” and is now “at a historic low.”

He said middle- and low-income taxpayers should see no change in how the IRS audits, “in terms of like the likelihood of getting an audit.”

The White House was more than happy to make the issue about the politics. At Tuesday’s press briefing, White House press secretary Karine Jean-Pierre accused “MAGA congressional Republicans” of wanting “to repeal this progress, making customer services worse for hard-working taxpayers and making it easier for wealthy tax cheats and big corporations to get away with cheating on their taxes.”

“President Biden and congressional Democrats have a different agenda,” she said. “More help for taxpayers while ensuring the super-rich pay what they owe.”

This story and headline have been updated with additional developments.

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CNN’s Phil Mattingly and Arlette Saenz contributed to this report.