Nov 22, 2009
Healthcare Update –
ACR and coalition work to ensure charitable deduction are left off the table
On Saturday, November 21st, the Senate voted 60 – 39 in favor of a procedural motion to allow the Senate to begin debating their health care package, “The Patient Protection and Affordable Care Act.”
ACR is pleased that, until this point, a limitation on the itemized deduction has not been included in either the House or Senate health care legislation. However, we remain concerned that it could get added during the Senate floor amendment consideration that begins next week, after the Thanksgiving recess and may last for several weeks moving this debate likely into 2010.
ACR has been heavily engaged on the charitable deduction issue since the beginning of the health care reform process, and has been working closely with the Charitable Deduction Coalition in efforts to fight any attempts to add a limitation to the charitable deduction. During the Senate Finance Committee’s consideration of health care legislation, ACR and the Coalition fought off such attempts by helping to organize communications to Finance Committee members, including a letter opposing any caps to the charitable deduction signed by 17 organizations (i.e., The Philanthropy Roundtable, the Council on Foundations, the American Red Cross, and United Way Worldwide, Association of Gospel Rescue Missions, United Jewish Communities and the American Institute for Cancer Research) which was sent to Finance Committee Chairman Baucus. We also served as a resource to the Senate Finance Members’ staff by drafting and delivering opposition talking points for engaged senators to defend the charitable deduction during the mark-up.
In preparation for Senate floor debate, ACR engaged our Senate champion, Sen. John Thune (R-SD) and worked closely with his staff and the Coalition to gather signatures from 31 Republican Senators on Sen. Thune’s Dear Colleague letter opposing any caps to the charitable deduction that was circulated throughout the Senate. The Coalition is also helping to ensure that senators are hearing from their nonprofit constituents regarding their concern about efforts to limit the charitable deduction while they are back home in their districts.
The House of Representatives passed their version of healthcare reform on November 7th by a vote of 220-215. The main revenue raiser to pay for the House package is an AGI surtax on couples making more than $1 million or individuals making more than $500,000. The surtax is a non-starter in the Senate and the Senate’s major revenue raiser, the excise tax on high-cost health insurance plans, is a non-starter in the House. As a result, House and Senate negotiators may end up in January searching for a new revenue source to fund health reform once conference negotiations begin– placing the charitable deduction at continued risk.
ACR is also monitoring several other items of interest to the nonprofit community that are part of the Senate health care legislation including a provision allowing nonprofits with 25 or fewer employees to receive a 35% tax credit if they provide their employees with healthcare (for-profit small businesses are allowed a much more generous 50% tax credit under the Senate legislation). As you know, the legislation also includes language dealing with tax-exempt hospitals – specifically a requirement that nonprofit hospitals conduct a community health needs assessment every three years, and implement and publicize a written financial assistance policy, as well as a mandate on the IRS to review information about a hospital’s community benefit activities at least once every three years.
ACR will continue to monitor Congress’ work on healthcare legislation and keep you updated on the latest developments