Apr 8, 2011

ACR newsletter (4.8.11)

Current Issue

Friday, April 8, 2011

The latest edition of the ACR newsletter is available below.

Note: Expect to see the next edition of the ACR newsletter arrive in your email box a little earlier than usual.  We plan to publish it on Wednesday, April 20.

Washington Roundup


Next week is the final work-week before both the House and Senate break for Easter recess (April 18th - 29th). Following are updates from Capitol Hill

as of Friday, April 8 at midday:
  • Federal Budget As we reported in our last newsletter, the current Continuing Resolution (CR) that funds the government expires at midnight on Friday, April 8th. As of this writing, a deal for either another “stop gap” or a long-term spending measure has not been reached.  As a result, the government is due to shut down on Saturday, April 9th. That means that federal entities such as the post office, the Smithsonian Museums, and other “non-essential” programs will not be open. “Essential” services such as the military and utilities providers will continue to operate. While leaders on both sides of the aisle are working on a compromise, the amount of spending cuts as well as policy “riders” are still in dispute.

    On Thursday, April 7th, the House passed H.R. 1363, a spending measure that would fund the government through April 15th and the Pentagon through the end of the fiscal year on September 30th. Senate Majority Leader Harry Reid (D-NV) has said that he will not take up the bill, while President Obama said that he would veto it if it came to his desk.  As a result, negotiations to keep the government going continue.

    Separate from the expiring CR debate, House Budget Committee Chairman Paul Ryan (R-WI) released his budget for the next fiscal year of 2012 on Tuesday, April 5th. The bill contains significant cuts in entitlement programs and sweeping changes to the tax code.  Ryan’s proposal calls for lowering the top individual income and corporate tax rates from the current top rate of 35 percent to 25 percent; eliminating nearly all tax expenditures, including the charitable deduction; making permanent the Bush-era tax cuts; and eliminating the estate tax.

    While at the end of the day we do not expect that the House and Senate will be able to agree on a budget framework, we do expect the Ryan budget –or something close to it– to be adopted by the House.  His budget was voted out of the House Budget Committee on Wednesday night with no Democratic support and we expect it to be on the House floor next week. The full document, The Path to Prosperity, can be accessed here: http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf.

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  • Congressional Hearings
    As noted on our hearing last week that examined “AARP and its affiliates, revenue, charitable giving, Boards of Directors, and lobbying expenditures.” Representatives Charles Boustany (R-LA) and Wally Herger (R-CA) called the hearing in response to AARP’s advocacy spending on health care reform last year and how it stands to benefit from that legislation. During the hearing, Rep. Herger said that he expects the AARP hearing to be the first in a number of hearings to examine advocacy by select tax-exempt organizations.

    Finally, as part of the continued effort to examine comprehensive tax reform, House Ways and Means Chairman Dave Camp (R-MI) announced a hearing next week that will “examine some of the difficulties that individuals and families face in navigating the current tax code, including both compliance burdens and challenges faced in making long-term financial decisions when confronted with confusing, overlapping, and frequently temporary tax preferences.” As always, we will monitor the hearing to see if issues affecting our sector are discussed. It will be held at 10:00AM on Wednesday, April 13th.


Consider This…

Advocacy by Tax-Exempts Taking Hits from the Right and the Left
Here is an issue we’ve been watching that has been heating up over the last few months: political advocacy by tax-exempt organizations.

The outcry on this issue is coming from both sides of the political spectrum… (continued)

Making Headlines

Here are recent headlines you may find interesting:

Federal
Reporting on the federal budget battle and its impact on the charitable sector:

3/27 Tax Break for Charitable Giving Targeted, The Hill
The Hill reports on the president’s proposal to limit the charitable deduction and references the Nonprofit Coalition letter to the President.

State/Local
4/2 New Orleans Tax Fairness Commission Calls for Lowering Exemptions for Nonprofits, NOLA.com
Reporting on recommendations from a panel charged by Mayor Landrieu with simplifying the New Orleans tax code.

4/5 Mass. Loses Trust of Rich, Boston Herald
The Boston Herald reports that wealthy families and corporations from Massachusetts and other states are opting move their trusts to New Hampshire because of legal reforms that have created more flexible laws governing trusts.

Studies/Reports
3/29 Obama’s Latest Proposal to Reduce Charitable Deductions Would Crowd Out Civil Society, Heritage Foundation
Policy paper by the Heritage Foundation explaining the harmful impacts of the president’s FY 2012 budget proposal on charitable organizations.

Giving Pledge
3/29 Is Warren Buffett and Bill Gates’s New Philanthropic Initiative Condescending?, Vanity Fair
Vanity Fair praises the Giving Pledge for its challenge to the wealthy, but is critical of Gates and Buffett for trying to export their vision of American philanthropy abroad.

Other
Reviews of the new book GIVE SMART: Philanthropy That Gets Results, by Tom Tierney and Joel Fleishman:

4/1 Mission Accomplished, Nonprofits Go Out of Business, New York Times
Stephanie Strom reports on nonprofit organizations that are closing their doors because they have achieved their missions—not because they are out of money.
New giving models that focus on small donations continue to get coverage:


112th Congress
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