Washington Snapshot - September 19, 2013
Somber week in Washington
As you can imagine, the nation’s capital, along with the rest of the world, was shocked and saddened by the tragic events at the Washington Navy Yard on Monday. The thoughts of the entire Council team go out to the victims, and the families and friends of those who were injured or lost their lives this week.
The Fall Conference for Community Foundations is just days away!
The Council’s Fall Conference for Community Foundations in San Diego is almost here! We are very excited to be offering a number of public policy sessions, including the Washington Update session. This year the Washington Update will feature new panelists and a new format! We hope to see you there!
Washington Update: What's Happening (what's not!) and What it Means for You
What’s happening on Capitol Hill that could impact community foundations? What is – and is not – on the radar screen in Washington and how will tax reform, the debt ceiling, budget deliberations and other measures raise issues of concern to nonprofits? How is the Council on Foundations positioning itself in these considerations? Our panel of Washington insiders and a community foundation leader will share with participants their individual perspectives on the looming issues. And, more importantly, they’ll discuss the crucial need for engaging in the process, building and maintaining relationships with Members of Congress, aligning with other organizations to amplify our message, and building the most effective strategy to protect the issues we care about. Come with your burning questions about all things public policy!
Speakers: Javier Alberto Soto , President and CEO, The Miami Foundation, Sue Santa, Senior Vice President for Public Policy and Legal Affairs, Council on Foundations, Jeff Hamond, Vice President, Van Scoyoc Associates, Brad Fitch, President and CEO, Congressional Management Foundation
Partisan divide intensifies on economic issues
Congress seemed to inch closer to a showdown on a government funding plan (the continuing resolution) and an increase in the debt limit. The Washington Post is reporting that Speaker John Boehner (R-OH-8) will attach legislation defunding “Obamacare” to the House GOP continuing resolution.
House Republican leadership
Discussion on comprehensive tax reform stayed behind the scenes
Chairman Max Baucus (D-MT) kept comprehensive tax reform in the headlines by hosting business CEOs at the Montana Jobs Summit. The focus of the meeting was simplifying the corporate tax code, but the Chairman did reiterate that he and House Ways and Means Chairman Dave Camp (R-MI-4) are determined to push forward with comprehensive legislation. Baucus went so far as to predict in Business Week that passage of comprehensive reform would be politically possible in an election year. Other Washington observers were less optimistic:
Former Senator Bill Bradley offers his historical perspective on what it would take to accomplish tax reform this week in Nonprofit Quarterly. Bradley was one of the leaders of the 1986 tax code overhaul and outlines what he feels it would take to happen this year: a committed President and Treasury Secretary, committed leaders of the tax writing committees, and a few zealous voices keeping the focus on reform all the time. He does not sense all those elements coming together this year.
Treasury Secretary Jack Lew spoke this week insisting that parties have to reach agreement on the “revenue raising” vs. “revenue neutral” divide before comprehensive tax reform could be accomplished. As Snapshot readers know, we have frequently highlighted this “revenue raising” vs. “revenue neutral” debate in past issues. Lew seemed to leave open the possibility of the Administration backing an overhaul of the corporate tax code if comprehensive reform is not possible.
We urge Snapshot readers not to be distracted by predictions of success or failure. Without a crystal ball, we do not know exactly when tax reform will happen, but it is inevitable that it will. Every discussion and draft version of language that occurs in the next few months will be a building block for a future bill. As ideas develop behind the scenes, we will keep our voice strong in support of priorities like protecting the charitable deduction.
More developments, and a hearing, in the IRS Scandal
The drip, drip, drip of information about the exempt organization section of the IRS continued this week. E-mails were made public that could prove damaging, and Politico reports that some of the IRS officials involved have retained lawyers in anticipation of further scrutiny.
Another House Ways And Means Oversight Subcommittee hearing on the scandal was held Wednesday. Committee members probed IRS Acting Commissioner Danny Werfel on steps the agency is taking to make sure tax-exempt applications are reviewed without political bias. Werfel said that the agency is implementing the nine recommendations from the Treasury Inspector General for Tax Administration audit report on the issue. He also said the IRS is working to improve the criteria it uses to screen applications and strengthen checks and balances on requests for more information from applicants.
Republican committee members also asked for specifics about Lois Lerner’s actions, such as the e-mails that recently emerged suggesting that she took a special interest in applications from Tea Party groups. On the other hand, Democrats commended Werfel for the reforms the agency is taking to eliminate political bias. No one mentioned any changes to the tax status of 501(c)(4)s or what lobbying activity should be permitted, or legislative changes to IRS structure.
Commentaries this week
Stuart Comstock-Gay’s blog post on the Vermont Community Foundation website caught our eye. He emphasizes a quote from a colleague that ran earlier this year in the Burlington Free Press:
“As our legislators debate implications of a tax overhaul, I hope they remember that nonprofits serve a triple bottom line, all subsidized by donations: they deliver programs in a fiscally balanced, cost-effective manner, their double bottom line makes programs accessible to serve those less fortunate, and their triple bottom line is achieved when those they reach contribute to society.”
He goes on to say, “in an era where we’re seeing reduced federal and state support of nonprofit programs, a challenging economy leading to flat donation levels, and a constantly increasing demand for services—we need to be wary of anything that discourages giving.”
Stanley Carlson-Thies’ commentary “Tax Reform is About More than Taxes” showcases the great work of the Faith and Giving Coalition. Carlson reminds us that the charitable deduction is “more than a tax break. It is only available to federal taxpayers who give away significant amounts of money to causes that do not immediately benefit themselves. It helps to make possible our extensive and flourishing civil society-by encouraging giving but also by acknowledging that, while we help each other in part through government, we also help each other through civil society.” His comments echo last week’s opinion piece by Katie Bascuas that was highlighted in Snapshot urging us to look at the charitable deduction as more than “dollars and cents.”
Interesting articles
Just as the Council is raising awareness and connecting with lawmakers to protect the charitable deduction, other organizations are doing the same to protect their section of the tax code. Forbes takes a look at other deductions that could be modified or eliminated in tax reform and includes some links to tax and budget think tanks which may interest some of you.
Martin Feldstein, who has written before on the charitable deduction, gave his insight this week in the Wall Street Journal on strengthening the economy and moving toward tax reform. He advocates entitlement reform as a first step, which would free up revenue for lower tax rates.
Keep in touch
We hope to see many of you in person in San Diego, and we would welcome your input on Snapshot. Let us know in person what you think – or of any additional topics you’d like to see covered. But always feel free to reach out to any member of our team at govt@cof.org.
