Healthcare Reform
ACR recaps highlights from the President’s State of the Union Address
Following is a broad summary of the proposals offered by the President (select ‘Continue reading’).
The important take-away from his speech is that the Administration has made a hard pivot away from health care reform, which wasn’t mentioned until half an hour into the speech, toward job creation in a clear effort to win back some of the political favor lost over the last few months. This new focus, combined with his plan to freeze government spending, will no doubt send Congress searching for additional revenue raisers – potentially including higher marginal tax rates for those singles earning more than $200,000 and couples earning more than $250,000.
ACR will be carefully monitoring both the President’s FY 2011 Budget and Congress’ work on the budget for any potential issues relating to the nonprofit sector. As always, we will continue to keep you updated on the latest.
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Future of healthcare reform stands in limbo
The election of Scott Brown on January 20, 2010 to the seat of junior senator for Massachusetts - replacing the late-Sen. Ted Kennedy - represents a potential game changer for the future of healthcare legislation. The election of Brown to the Senate now gives Republicans a “blocking minority” of 41 seats, breaking the previous 60-vote hold that Democrats in the Senate has held up to this point. As such, the status of healthcare reform has been thrown in doubt.
As you know, ACR has been actively working with the Charitable Deduction Coalition to ensure that a limitation on the itemized deduction would not be included in the final healthcare legislation – and have been successful thus far as the provision was not included in either the House or Senate healthcare bills.
As all things healthcare-related are up in the air at this point, ACR will remain vigilant on this important issue as leaders of the House and Senate ponder their next course of action.
Healthcare reform works through final procedural phases to passage without the funding of the charitable deduction
Senate Majority Leader Reid was successful in getting the 60 votes necessary to pass the first procedural motion to move forward debate on the Senate’s healthcare reform legislation - setting up a vote for final passage for Christmas Eve. If Republicans do not force the full debate on all of the procedural motions, the vote on final passage could come as early as tomorrow morning.
No other substantive amendments will be offered before final passage other than Sen. Reid’s substitute which was released this weekend. ACR is pleased to report that the charitable deduction limitation was NOT included in Sen. Reid’s substitute, and therefore will not be included in the Senate’s bill. There was a small change in Reid’s amendment to the tax-exempt hospital provision that would change the limit that charitable hospitals can charge for emergency or medically-necessary care from “lowest amount charged” to individuals with insurance to “amount generally billed.”
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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.
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Further Reading
Senator Thune rallies more colleagues in support of protecting the charitable tax deduction
Last week, Senator John Thune (R-SD) sent to all of the members of the Senate a letter signed by 31 senators urging them to oppose any attempts to limit the charitable deduction. Senator Thune has been a champion for ACR and the charitable deduction coalition working closely with us to help inform and rally support in preparation for the fight on health reform.
ACR remains concerned that amendments will be offered during the Senate battle that could use the limitation of the charitable deduction to help pay-for the legislation. We will continue to work with Senator Thune, other allies on Capitol Hill, the charitable deduction coalition and other partners to help preserve, protect and promote the work grantmakers do every day.
To review the Chronicle of Philanthropy’s coverage, read comments from those in the philanthropic community or voice your own opinion, click here.
Further Reading
United Way Worldwide speaks out against using charitable deduction to pay for healthcare reform
A member of the charitable deduction coalition speaks out against Congressional proposals to cap the charitable deduction to pay for health care reform or other purposes. Brian Gallagher, CEO of the United Way Worldwide, reminds Roll Call readers that giving is part of the fabric of American society and has been embodied in our federal tax laws. Capping the deduction is akin to taxing income Americans would use to benefit the common good. As a result, the people served by charities will suffer.
Gallagher notes, “Disconnecting the charitable deduction from the tax rate is a step toward abandoning who we are as a nation — one that lifts up and supports those in need.”
Read the full article here.
Senate Committee passes health care bill without cap on charitable tax deduction or exec compensation
Yesterday, in a 14-9 vote, the Senate Finance Committee pushed healthcare legislation on to the next phase of passage. ACR is pleased to report that none of the nonprofit related amendments we were monitoring made it into this final bill.
None of the amendments using the 35% limitation on itemized deductions were offered during the mark-up. However, one senator briefly mentioned the limitation and how it was necessary to restore fairness in the current system. The ACR team is working closely with the charitable deduction coalition and Sen. John Thune’s office to gather support and ensure that our message to oppose any attempts to limit the charitable deduction will be heard on Capitol Hill.
In addition, amendments from Sen. Charles Grassley clarifying IRS authority regarding governance questions on the Form 990 and eliminating the safe harbor for tax-exempts from the IRS when determining “excessive” executive compensation were not included in the bill. We anticipate that these proposals may resurface in the future. Sen. Grassley highlighted his concern about the profit-motive of nonprofits and his desire to hold tax exempt organizations more accountable in the executive compensation area.
For more information, check out The Chronicle of Philanthropy’s coverage:
ACR & coalition submit a petition to Senator Baucus
Today, a letter was sent by a coalition of organizations and foundations to Senator Max Baucus, the current chairman of the United States Senate Committee on Finance, to spare the charitable tax deduction. ACR joined this coalition with the aim of protecting the charitable deduction from future reductions as a policymakers look to it as a revenue raiser for expansions in government programs. The coalition includes the American Red Cross International, Council on Foundations and the United Way among others. We’ll keep you posted.
Further Reading
U.S. Senator Thune on the Administration’s proposal to limit charitable giving
Senator John Thune of South Dakota explores the impact of President Obama’s proposal to reduce the charitable tax deduction. Thune makes the case for why the charitable community will be hurt by diminished giving and makes clear his stance to preserve the full charitable tax deduction.
Further Reading
ACR prepares for a busy fall on The Hill
Sandra Swirski sits down with Philanthropy This Week, of the The Chronicle of Philanthropy, for an interview on the future of the charitable deduction and other tax changes that impact the charitable community in light of health policies currently in debate.
Episode 7: Update from Washington: The Charitable Deduction and the Social Innovation Fund
Further Reading
