REED: Thank you, Chairman Hagerty, for convening today’s hearing.  Secretary Bessent, thank you for joining us. I know you have been traveling extensively over the last several days and this is your second hearing of the day. 

I look forward to your testimony, which comes at a pivotal moment for our country and our economy, as we deal with the impacts of the Administration’s up-and-down trade policy, another looming debt crisis, and a reconciliation bill that will do great harm to average Americans.

Mr. Secretary, there is a growing sense among the American people that the Trump Administration…an Administration that is run by billionaires…is rigging the system for its own benefit and against the interests of average citizens.  It’s hard to argue with that view. 

Your budget request is $2.7 billion below the fiscal year 2025 level and would slash the IRS by 20%. 

These proposed cuts come in addition to reports that the IRS has lost nearly a third of its tax auditors this year. While the IRS is often the object of ridicule, it secures 96% of federal revenue. 

This morning, you indicated before the House Ways and Means Committee that there have been no impacts to the tax filing season, implying that IRS is functioning smoothly after cutting 11,000 staff, 31 percent of which were revenue agents.  That’s simply inaccurate.  First, the IRS forced critical filing staff who are taking early retirement or buyouts to stay on the job through the end of the income tax season. 

Second, IRS individual income and payroll tax collections through April 2025 are $83 billion below CBO projections.  Third, any increase in overall revenue is largely the result of the tariff taxes that the Administration has imposed.

The fact is that cutting IRS staffing and funding, particularly its enforcement budget, is a proven windfall for the rich. 

Each year, wealth taxpayers are able to dodge around $375 billion in taxes and accounting for around 65% of our nation’s unpaid taxes. 

The last time IRS enforcement funding dropped precipitously…IRS audits of the wealthiest taxpayers dropped by around 75% and unpaid taxes in our country jumped by $200 billion. 

Gutting IRS funding once again will help the wealthy pass the buck to average Americans.

The story is the same for the President’s huge billionaires-first tax bill. 

The Joint Committee on Taxation, a nonpartisan committee currently led by Republican tax leaders, has found that most of the bill’s tax cuts will go to the top 10% richest Americans.  Similarly, University of Pennsylvania researchers estimate that 70% of the benefits of the entire bill will also flow to the richest 10%. 

And for all the lip service given to the national debt, the bill will actually increase the debt by another $3 trillion, according to the Congressional Budget Office. 

The projections are much less rosy for the rest of America. 

Indeed, around 11 million people will go uninsured because of this bill: 7.8 million people would be kicked off Medicaid and millions more would lose insurance through the Affordable Care Act’s marketplace.  In total, the President’s bill will make the lowest-income Americans $820 poorer next year.  It’s no wonder Americans are fed up with the President’s economic policies.

Even the President’s trade war disproportionately hurts working Americans. Tariffs are tax increases that hit every household, but they take a much larger bite out of middle-class Americans’ budget than they do for billionaires.  Researchers at Yale estimate that the President’s tariffs will cost households $2,500 this year. 

Meanwhile, the Administration has given DOGE and Elon Musk extraordinary access to the Treasury Department’s most sensitive systems.  Musk and DOGE orchestrated the ouster of nonpartisan career staff responsible for making sure that the government makes payments correctly and on time.  These career public servants have been replaced by unqualified and untested representatives with clear conflicts of interest. 

It’s been reported that these individuals have attempted to stop authorized payments because the recipients of those funds are politically disfavored.  If this is how the Administration is operating, how can the American people have confidence that their own payments … their Social Security benefits or tax refunds… won’t be tampered with by these political appointees? 

I am deeply concerned the Administration is attempting to undermine the independence of the Fed and bank regulatory agencies.  These agencies are meant to operate independently in order to protect depositors and taxpayers, but the Administration is pushing on monetary policy and urging agencies to take a light touch on capital requirements, supervision and other matters in a way that will corrode confidence in these agencies.

Secretary Bessent, suffice it to say, I believe the path the Administration has embarked on is one that will put our economy and the economic security of average Americans at risk.  Nonetheless, I want to thank you for being here.  I look forward to your testimony and your candid answers to our questions.  

Thank you, Mr. Chairman.