Lowey statement at hearing on Department of Treasury FY 2019 budget request

March 6, 2018
Press Release

I’d like to thank Chairman Graves and Ranking Member Quigley for holding this hearing. Secretary Mnuchin, welcome, and thank you for being here this morning.

Mr. Secretary, your Fiscal Year 2019 budget request would harm taxpayers by slashing IRS funding by $100 million, and stall federal investments in economic development by eliminating all discretionary grant programs in the Community Development Financial Institutions Fund.

Under your budget, the IRS would not have enough manpower to catch bad actors, ranging from those who cheat on their taxes to those who perpetrate identity theft scams that prey on the elderly and non-native English-speaking populations.

It’s not just enforcement that we need to be concerned about, it’s also taxpayer services. In her 2017 Annual Report to Congress, Taxpayer Advocate Nina Olsen identified the IRS’s limited telephone service as one of the most serious problems facing taxpayers. She wrote, “Because of the IRS’s archaic telephone technology and operations, taxpayers face long wait times with the worry that the IRS’s telephone assistors will not be able to answer their questions if they are able to get through.” Yet, your budget cuts the IRS by $100 million.

This is all the more important as the Republican tax scam, which was rushed into law last year, has created a great deal of confusion.  Taxpayers are turning to the IRS for clarity, and not getting it.   

This has been a particular issue in high cost-of-living areas, like New York. When you testified before this committee last year, I made clear how unwelcome any reductions to the state and local tax deductions would be in tax reform. Less than a year later, a deduction that 45 percent of my constituents take at an average of $26,000 has been slashed beyond recognition.

The impact of this scam is so disastrous that I’ve called on the IRS to accept prepayments of 2018 state and local taxes that many New Yorkers made in 2017. At least 17,000 taxpayers paid some portion of their 2018 taxes in advance at an estimated $51 million. I hope that you and the IRS will at least give this break to families that will be hurt by your new tax policy for years to come, but quite frankly, I am concerned that your proposed budget cuts will make it harder for the IRS to assist my constituents.

Let me be clear, capping the SALT deduction at $10,000 targets residents of high-cost states like New York and California, which you know all too well. In 2015 alone, New York sent $48 billion more in taxes than it received. Simply put, the new tax law is a scam that unfairly takes money from the pockets of hard working families living in states that send more money to the federal government than we get back in federal investment.

One bright spot of your budget is the increase for the Office of Terrorism and Financial Intelligence of $36 million. This is essential to combatting terrorist financing and other national security threats, and I am pleased it’s included.

Mr. Secretary, I trust that you are aware of just how influential your position is. I am disappointed by some of the distractions surrounding your tenure. It is my hope that going forward, you will respect the taxpayers I represent in New York by acting as a good steward of their dollars, both in policies you implement and your actual use of them.

I look forward to a productive discussion this afternoon and to working to serve the best interest of the American taxpayer.

115th Congress