The IRS Says It's ‘Outgunned’

House Speaker Nancy Pelosi (D-CA) speaks to reporters at the U.S. Capitol in Washington
ELIZABETH FRANTZ
By Yuval Rosenberg

Good Thursday evening. It's March Madness! And St. Patrick’s Day! And Purim! Cheers! Here’s what else is going on:

Pelosi Says White House Should Push for Billions More in Covid Aid

The White House warned this week that more Covid-19 funding is urgently needed, but after Congress last week failed to approve an infusion of more than $15 billion for pandemic response efforts, the path to providing new money remains unclear.

Health and Human Services Secretary Xavier Becerra and White House medical adviser Anthony Fauci reportedly pleaded with Democrats Thursday to approve more funding — and House Speaker Nancy Pelosi (D-CA) reportedly apologized to the Biden health officials in front of her caucus for Democratic lawmakers’ making them have to ask.

An angry Pelosi reportedly castigated her members Thursday, saying: “You want to tell me about what you didn’t get? Don’t tell Noah about the flood.”

Pelosi later told reporters that the Biden administration should up its Covid request significantly. The White House had asked Congress for $22.5 billion. Lawmakers later negotiated a deal to provide $15.6 billion in response to Republican skepticism about the need for additional Covid funding and demands that any new aid be fully offset. But some House Democrats objected to the proposed compromise, which would have repurposed some pandemic response money allocated to states. The Democratic revolt forced House leaders to pull the pandemic aid from the $1.5 trillion omnibus package funding the federal government through September.

Pelosi on Thursday indicated she thought north of $40 billion would now be needed.

"I think they should be double what they asked for, because even when they were asking for like 20-some [billion dollars] it was only going to get us to June," she told reporters, according to The Hill.

Democrats had initially said they would hold a separate vote to provide new Covid funding without offsets, but that bill lacks the votes to pass, leaving Democrats looking for other ways to cover the cost of the additional aid.

“We’re just going to have to pass it, and we’ll pass it when we have the votes to pass it,” Pelosi told Politico. “In order to have bipartisan votes, we want it to be paid for, and that’s what we’re doing.”

The Biden administration, meanwhile, is reportedly looking to convince Republicans that the need for new money is real — even as some in the administration believe that GOP senators understand the need but are feigning uncertainty, according to Politico.

The administration sent a detailed accounting of remaining Covid funding to lawmakers Wednesday evening, CNN reports. An administration document sent to lawmakers and obtained by CNN said that 93% of the remaining money from the American Rescue Plan passed last year has already been obligated or distributed. The remaining 7% have "sound governmental reasons for not having been distributed yet," with some of the money specifically provided for future use and not legally available now, the administration argues.

Biden Names a New Covid-19 Response Coordinator

White House Covid-19 response coordinator Jeff Zients will be replaced by Dr. Ashish Jha, the dean of the Brown University School of Public Health, President Joe Biden announced Thursday.

The change comes as the Biden administration shifts to a new Covid response strategy, unveiled earlier this month, focused on preparing for new variants and developing vaccines, tests and treatments while allowing the public to move back to “more normal routines.”

That strategy faces a high degree of uncertainty, though, given that the White House is struggling to secure billions of dollars in new funding it says are necessary (see above). Zients warned in recent days that lawmakers’ failure to approve additional Covid funding would have “severe consequences.”

Jha, the incoming Covid response coordinator, has been a regular presence on television news coverage of the pandemic. He will assume his new role on April 5, according to a news release from Brown University.

“Dr. Jha is one of the leading public health experts in America, and a well known figure to many Americans from his wise and calming public presence,” Biden said in a statement announcing the change. “And as we enter a new moment in the pandemic — executing on my National COVID-19 Preparedness Plan and managing the ongoing risks from COVID — Dr. Jha is the perfect person for the job.”

Both Biden and Jha said Thursday that the nation has more work to do to address the pandemic.

“We must continue the effort to provide more vaccines and boosters,” Biden said. “We must get a vaccine approved for the youngest children. We must continue to improve how our schools and workplaces cope with COVID. We must take special care to protect the vulnerable from COVID, even as many restrictions are lifted.  We need to provide tests, and treatments, and masks. We must fight the virus overseas, prepare for new waves, and new variants — all of which can be coming. And we must work with Congress to fund these vital steps, as time is running out to stay ahead of the virus.”

Zients, a wealthy management consultant and entrepreneur, earned a reputation as a “Mr. Fix It” in the Obama administration. He served as director of the National Economic Council and acting director of the Office of Management and Budget under President Obama, and the president called on him to help address problems with the "Cash for Clunkers" car program and fix the Affordable Care Act marketplace website after its disastrous launch.

Biden tapped Zients to lead the nation’s coronavirus response efforts at a time when the logistical challenges of Covid vaccine and test distribution were of paramount importance.

“I called on Jeff Zients to lead my Administration’s COVID-19 response because there is no one better at delivering results than Jeff,” Biden said in his statement. “COVID-19 is the greatest public health crisis we’ve faced in my lifetime and it required the country to build from scratch an emergency response infrastructure that could quickly and equitably get people life-saving protections. Jeff put his decades of management experience to work formulating and executing on a plan to build the infrastructure we needed to deliver vaccines, tests, treatment, and masks to hundreds of millions of Americans.”

Yet while the vaccination program has gotten 217 million people, or nearly two-thirds of the country, “fully vaccinated” according to the Centers for Disease Control and Prevention’s definition, it has also struggled to overcome resistance from millions of other Americans. Critics also faulted Zients and the administration for failing to ensure enough tests to meet demand that spiked around the holidays and for messaging that has at times been confusing.

Zients’s deputy, Natalie Quillian, will reportedly also be leaving next month.

IRS Is ‘Outgunned,’ Commissioner Rettig Says

IRS Commissioner Chuck Rettig said Thursday that his agency doesn’t have the budget or the personnel to deal with the increasingly complicated tax strategies deployed by large corporations.

“We do not have the resources to go after the bigs or the superbigs, as we refer to them, and we get outgunned routinely in that space,” Rettig told House Ways and Means Committee.

The commissioner also warned about further cuts to the IRS budget, which he said has been reduced by roughly 15% over the last decade. Rettig said that if the IRS budget were cut by 50%, as Sen. Rick Scott (R-FL) has proposed, “you might be better off and save more money by just shutting it down completely.”

Congress last week approved a $675 million, or 6%, increase in the agency’s funding, the largest in years. President Biden has proposed boosting the IRS budget by $80 billion over 10 years to empower it to take on tax cheats, but that funding is part of the Build Back Better bill that has been stalled in Congress.

Taking aim at a massive backlog: Rettig said that he expects the IRS to be able to clear out its backlog from last year, which totals roughly 23 million items that need attention, from tax returns to responses to taxpayer inquiries. “If the world stays as it is as of today, we will be what we call healthy by the end of calendar year '22, and enter the '23 filing season with normal inventories — healthy through the eyes of the taxpayer,” Rettig said.

The IRS announced last week that it is hiring 10,000 workers to help address the backlog. The agency also plans to create a 700-member surge team, in addition to an existing team of 800, to work through old returns and correspondence.

A good start in 2022: Rettig told lawmakers that the current tax filing season is going well, with no major disruptions. “Through March 11, the IRS received more than 63 million individual federal tax returns and issued more than 45 million refunds totaling more than $151 billion,” he said. “Refund returns continue to be processed on a priority basis ahead of returns with a balance due or full payment of the underlying liabilities.”

Poll of the Day: Inflation on Our Mind

Americans are deeply concerned about inflation and the state of the economy, according to a Wall Street Journal poll conducted earlier this month and highlighted Thursday by analyst Chris Krueger of investment bank Cowen. Poll respondents put that issue ahead of the war in Ukraine, Covid-19 and immigration as the most important issue for President Biden and lawmakers to address.

Voters in the poll “gave Democrats poor marks for handling inflation and the economy,” says the Journal’s Michael C. Bender, “a troubling sign for the party seeking to extend its controlling majority of Congress for another two years.”

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