Washington Snapshot: Government Shutdown Deadline Nears, Immigration Deal is Key

In This Week's Edition of Snapshot:

• With no agreement on DACA, Congress pursues another short-term funding deal to avoid a government shutdown
• Senate races with potential Finance Committee implications
• Administration continues push to expand broadband access
• House committee marks up bill impacting the Foreign Agent Registration Act
• In the States: State of the States Addresses 2018

News from the Hill

With No Agreement on DACA, Congress Pursues Another Short-Term Funding Deal

Congress has until tomorrow to reach a spending deal and avert a government shutdown. Just before the they recessed for the holidays in December, congressional leaders agreed to pass a short-term continuing resolution (CR) to fund the government through Jan. 19—delaying negotiations on funding for programs such as Deferred Action for Childhood Arrivals (DACA) and the Children’s Health Insurance Program (CHIP).

Spending legislation will require 60 votes to pass the Senate—meaning that Republicans need Democratic support to pass any spending proposal put forward. As a condition for their support, Democrats were seeking to attach a DACA fix that would allow individuals who were brought to the U.S. as children without documentation, to stay without threat of deportation. It seemed like an agreement may have been within reach last week when a bipartisan group of senators presented a tentative agreement with President Trump, but the President rejected it and later stated on Twitter that “DACA is probably dead”—for which he received pushback from some congressional Republicans who favor reaching a deal on DACA.

With no agreement on DACA, Congress is back at square one—facing another short-term CR to fund the federal government and avoid a shutdown. On Tuesday evening, Republican leaders released a short-term proposal that would keep the government open through Feb. 16. The measure would include a six-year extension of CHIP as a strategy for securing Democratic support. Despite murmurs of discontent from some of the most conservative members of the Republican party, the proposal seems to have the support of the party—a strategic move to put the onus on Democrats to avoid a shutdown.

Senate Races with Potential Finance Committee Implications

With Senate Finance Committee Chairman Orrin Hatch’s (R-UT) announcement earlier this month that he will be retiring from Congress at the end of the year, speculation immediately arose that Mitt Romney would run to replace him. According to a recent report from The New York Times, Romney will indeed be running to be the next senator from Utah. The article notes, “Last Saturday, Mr. [Kem] Gardner [a close Romney friend and prominent business leader] called the [Utah] governor and read from a text that Mr. Romney had offered: ‘I’m running.’”

In another race involving a Senate Finance Committee member, Sen. Sherrod Brown (D-OH) will be challenged by Rep. Jim Renacci (R-OH), who had previously been running in the race for governor in Ohio. According to The Hill, “His decision to jump into the Senate race comes days after Ohio state Treasurer Josh Mandel, who was considered the front-runner, surprisingly ended his bid, citing his wife’s health issues. Renacci reportedly met with President Trump's political team this week, during which he was urged to run to unseat Brown.”

Executive & Regulatory News

Administration Continues Push to Expand Broadband Access

In an effort to expand broadband access to rural America, President Donald Trump recently issued an executive order and a Presidential memorandum on the subject. An email from the Department of Commerce noted, “An executive order released on Monday—Streamlining and Expediting Requests to Locate Broadband Facilities in Rural America—instructs agencies to remove obstacles to capital investment and broadband services and more efficiently employ government resources. It also proposes using the GSA Common Form Application as a tool to streamline and expedite the review of requests to locate broadband facilities on federal property. The order contains key actions that will likely spur further investment, speed up deployment and decrease costs. A separate Presidential memorandum issued Monday directs the Secretary of the Interior to increase access to tower facilities and other infrastructure assets managed by the Department, with the purpose of supporting rural broadband deployment and adoption. The availability of these facilities could help bring 5G to rural areas more quickly.”

News from Around the Globe

House Committee Marks Up Bill Impacting the Foreign Agent Registration Act

This week, the House Judiciary Committee marked up and approved the Disclosing Foreign Influence Act (H.R. 4170). If passed, this bill would expand the Department of Justice’s (DOJ) capabilities to enforce registration under the Foreign Agents Registration Act (FARA).

FARA was signed into law in 1938 to track certain foreign lobbying activities by individuals acting on behalf of other countries—with the intent of combatting Nazi propaganda leading up to World War II. It requires such individuals to register with DOJ and report all lobbying materials so that the U.S. government is aware of their efforts to influence public policy. Registered individuals are also required to report regularly to DOJ and clearly communicate to the public about working on behalf of a “foreign principal,” or otherwise be subject to criminal penalties for noncompliance.

Since late 2017, the Council has been working with the International Center for Not-for-Profit Law, Open Society Foundation, Interaction, and Human Rights First to engage with lawmakers and share concerns about the potential unintended consequences of FARA for nonprofits, including grantmaking organizations. This coalition’s primary concern with the Disclosing Foreign Influence Act is that it would expand enforcement capabilities according to the original, 1938 definition of which “foreign principals” are required to register with DOJ. Under current law, some U.S. foundations that work with partners from around the world are required to register with DOJ under FARA. However, the intent behind the 1938 law was to combat Nazi propaganda—not hinder philanthropic activity. As a result, many foundations have not registered and have not faced enforcement penalties (given that the nature of this philanthropic work was never meant to be penalized).

If these changes to FARA enforcement are made without strengthening the definition of what constitutes a “foreign principal,” clarifying the “principal-agent relationship,” or better outlining activity within the law, many nonprofits and grantmakers would face penalties for failing to have registered as foreign agents. Further, it would require any U.S. organization working at the request of a foreign individual, non-profit, or company to influence any section of the public within the United States to register under FARA.

We have also seen the impact of FARA in other countries, where the Russian, Egyptian, and Hungarian governments have used the U.S. law to justify domestic laws that limit the ability of civil society to operate locally and restrict U.S. philanthropy from operating in their countries. As such, the Council has concerns that expanding FARA without strengthening the definitions in the law could lead to other countries similarly further restricting civil society abroad.

Non-Profit Times wrote an article this week outlining concerns around the impact of FARA on nonprofit organizations. The Council is committed to continuing to work in partnership with our peers to educate lawmakers on the potential unintended ramifications on the nonprofit sector for enhanced enforcement of FARA by DOJ, without changes to the current broad and often undefined terminology within the existing FARA law.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

State of the States Addresses 2018

Governors’ annual State of the State addresses and budget statements often offer a good indication of how upcoming legislative sessions, state budgets, and responses to tax reform will affect foundations and charitable nonprofits.

New York Governor Cuomo outlined numerous cuts and spending freezes, along with $750 million in new taxes and fees. He is seeking to fill a projected $1.8 billion budget deficit. He also reiterated his concerns about the federal tax law and vowed that "we will explore the feasibility of a major shift in tax policy, and are developing a plan to restructure the current income and payroll tax system."

Nebraska Governor Ricketts, after reducing the state workforce by four percent last year, announced he is preparing to reduce the budget through additional across-the-board cuts of two percent this year and four percent next year. He charged lawmakers to “remain laser-focused” through cutting red tape, balancing the budget, and delivering tax relief.

Kentucky Governor Bevin is proposing a two-year state budget that would eliminate about 70 state government programs and cut spending at many state agencies by more than five percent, all reportedly to fund the Commonwealth’s public pension programs, which have more than $40 billion in unfunded liabilities. The Kentucky Nonprofit Network responded to the budget proposal by calling “on the Governor and members of the General Assembly to take a balanced approach to getting Kentucky’s fiscal house in order,” and noting that “Kentucky cannot cut its way to prosperity.”

New Mexico’s Governor is proposing using the growing revenue surplus of up to $330 million (after years of shortfalls) to increase spending, add to the State’s reserves, and “give a big chunk of that back to the taxpayers.” However, New Mexico Thrives warns that Governor Martinez’s proposed state tax reform “could have devastating impacts on how nonprofits operate” as charitable nonprofits and foundations get swept into “faulty assumptions and a misunderstanding of the complexity” of tax exemptions vital to the nonprofit sector.

State of the State addresses also give governors the opportunity to show a little respect for the work nonprofits do every day. Arizona Governor Ducey hailed nonprofits, specifically foster care and adoption, childcare, veteran’s services, and foodbanks, for providing vital human services. Separately, the Governor of Mississippi praised museums as a place where “political agendas melted with the morning snow.” Both mentioned strains caused by the federal government for programs affecting their states, namely the Children’s Health Insurance Program and Medicaid and Medicare funding.