Watch: Treasury Secretary Janet Yellen Testifies Before Congress

Shawn Thew | Pool | Reuters

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Treasury Secretary Janet Yellen will ask a Senate Appropriations subcommittee on Wednesday afternoon to approve billions in funding earmarked for her department in President Joe Biden's fiscal 2022 budget proposal.

In prepared remarks, Yellen told the Subcommittee on Financial Services and General Government that Treasury needs additional financial support to sustain components of the $1.9 trillion American Rescue Plan that the Biden administration passed in March.

"In order for relief dollars to effectively reach their intended targets, we have to stand up and manage new federal programs," she told lawmakers. "Our challenge is that while our portfolio has grown to match the urgency of this moment, our annual budget has not grown in tandem, and the funding provided to administer new programs is temporary."

Yellen also said the department is seeking reinforcement for the Internal Revenue Service, the body that oversees the federal government's taxation. Congress has cut the IRS budget several times in recent decades, leaving it understaffed and ill-equipped to audit the raft of filings it should each year, Yellen said.

She noted that the IRS has fewer auditors than at any time since World War II, and that the nation could lose out on $7 trillion over the next decade due to a tax gap the result of earners paying less than their tax bill.

"Our proposal would give the IRS the funding it needs," Yellen, who once served as the chair of the Federal Reserve, added. She is expected to field questions from a bipartisan group of senators trying to determine how much to adjust the budget of the economy's top regulator.

Deputy Assistant Secretary Mark Mazur told Congress earlier this month that the so-called tax gap will only worsen over the next several years without more funding from lawmakers. He added at the time that the estimate of the gross tax gap is around $580 billion for 2019 alone.

Yellen herself has been hard at work trying to broker a global minimum corporate tax rate between Group of Seven nations as part of the Biden administration's efforts to drum up tax revenues for its expansive spending plans.

The G-7 group of advanced economies announced on June 5 that it had agreed to enact a floor on the taxes paid by corporations worldwide. Yellen said at the time that the U.S., Germany, France, Japan, Italy, the United Kingdom and Canada committed to working to institute a minimum tax at a rate of at least 15 percent.

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