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Update from D.C.

by Jennifer Gray

The following content from the National Council of Nonprofits has been reprinted with permission.

The Taking and Giving of Federal Appropriations

As Congress is getting down to work on spending bills for fiscal year 2019 that starts in October, the Administration is calling on lawmakers to vote on rescinding (taking back) $15 billion in appropriations from prior fiscal years. The House is expected to take up the President’s so-called rescission package that, among other things, would cancel $7 billion in unspent Children’s Health Insurance Program balances, as well as programs in the Departments of Agriculture, Commerce, Energy, HHS, HUD, Justice, Labor, Transportation, and Treasury. Under law, the President notifies Congress of his intent to not spend certain funds and Congress has 45 days to approve the action. While successful rescission of the proposed $15.3 billion is in doubt, many believe the bill before the House last week is only the first of many rescissions measures that Congress will be asked to approve in the months leading up to the elections.

The proposal to cancel past appropriations comes at a time of renewed hope that Congress will get much of its appropriations work done in advance of the next fiscal year that starts on October 1. For the past many years, Congress has had to rely on stopgap spending bills at the end of September, known as continuing resolutions, to keep some or all of the federal government open. Senate Budget Committee Chairman Mike Enzi (R-WY) got the Senate off to a good start last month by forgoing a formal budget process and instead filing the topline spending numbers that allow appropriators to begin work immediately. The House typically works quickly to approve each of the dozen appropriations bills at the subcommittee and full committee levels, but there rarely is the bipartisan give-and-take that Senators are promising in advance of floor action this year.

Regular Order

Not seen in a generation, Senators are seeking to follow “regular order,” the procedure for appropriations and other legislation that used to be the norm. Last summer, Senator John McCain (R-AZ) famously lamented the absence of regular order, saying that as a result, “We’ve been spinning our wheels on too many important issues because we keep trying to find a way to win without help from across the aisle.”

In its purest form, regular order means each of the 12 appropriations subcommittees crafts a spending bill based on agreed-upon spending levels, approves the measure, and sends it to the full committee for debate and votes. This approach enables the subcommittees with the expertise in their areas to make spending decisions based on the priorities of the majority, but also with input from all members of each subcommittee.

Often in the past, subcommittee bills passed with wide support, as opposed to party-line votes. A perfect example of the breakdown of “regular order” was seen in March when Congress enacted the Consolidated Appropriations Act for 2018 (bipartisan spending bill) that in one 2,232-page piece of legislation cobbled together by congressional leaders with little committee input to fund all federal departments and agencies.

Regular order, when followed, allows Congress to break the budget into bite-sized pieces and facilitates oversight, according to the Brookings Institute. It may be too much to ask that lawmakers ignore the looming elections and focus on their jobs and procedures developed over 200+ years. Recently, seeing regular order in action has been as rare as seeing a unicorn, but one can still hope.

Congressional Census Scrutiny Stifled, at First

A House hearing to get a Progress Report on the 2020 Census earlier this month produced headlines mainly for what didn’t happen. Much to the outrage of Republicans and Democrats alike, the Justice Department witness failed to show up to explain why the Administration is including a citizenship question on the 2020 Census questionnaire. Committee Chairman Trey Gowdy (R-SC), visibly angry that DOJ failed to appear, agreed to issue a subpoena to compel testimony.

While the witnesses who did appear spoke mostly to the Census Bureau’s efforts and shortcomings in preparing for the 2020 Census, including serious questions about failures to test adequately and cyber security, the citizenship question remained at the center of the participants’ attention. Witness Justin Levitt from Loyola Law School in Los Angeles testified, “The addition is counterproductive and potentially pretextual — and in the current political climate, likely explosive.”

The National Council of Nonprofits submitted a statement identifying the many reasons that charitable nonprofits and foundations care that the census count is fair, accurate, and complete, emphasizing how a flawed count will harm all businesses, governments, nonprofits, and residents, and expressing strong opposition to the inclusion of a divisive citizenship question.

Uncapped Charitable Deduction Bill Introduced

A bipartisan bill to expand charitable giving incentives was recently introduced by Representatives Chris Smith (R-NJ) and Henry Cuellar (D-TX). If enacted, the Charitable Giving Tax Deduction Act (H.R. 5771) would enable all taxpayers to deduct charitable donations from their taxes, regardless of whether they itemize. The amount a taxpayer could deduct would not be capped, unlike similar universal, also known as non-itemizer, deduction bills introduced by Representative Walker (R-NC) and Senator Lankford (R-OK) last year. Note: Representative Chellie Pingree is a cosponsor.

In introducing the legislation, Representative Smith said, “Americans have been generous patrons of charitable causes, and we want to ensure that everyone has the support they need to continue their generosity to charitable and philanthropic causes.” Representative Cuellar added, “This bipartisan bill not only encourages us to help our fellow neighbors, but it also makes sure that taxpayers can receive their due deduction for charitable giving if they choose not to itemize. I am glad to support this legislation that will encourage charitable actions.”

Federal FastView

  • Tax Reform Hearings Announced: The House Ways and Means Committee and Tax Policy Subcommittee are conducting a series of hearings on the new federal tax law to discuss “how tax reform is growing the U.S. economy, creating jobs here at home, and increasing paychecks for hard-working Americans.” The full committee kicked off the series last week. Individuals and organizations are invited to submit written testimony by May 30 to the Committee as it considers additional tax-law changes this session.
  • Reimbursement Rate Increase for Volunteers: U.S. Representative Rick Nolan (D-MN) introduced legislation to increase volunteer mileage rate from 14 cents to 54.5 cents per mile to bring parity with business rates. Nolan stated that “many volunteer drivers are simply unable to continue their charitable and much needed work” because of the inequality and unfairness that “discourages charity” and “doesn’t nearly reflect the true cost volunteers incur.”
  • Combined Federal Campaign Survey: The Combined Federal Campaign (CFC), the largest workplace campaign for charitable donations by federal workers, saw a drastic decline in giving and large fee increases, according to reports for 2017. Total giving dropped by 40 percent to $101 million, and some nonprofits are reporting that the distribution fees exceeded 25 percent of the total raised, with some expenses deferred to 2018 and 2019 to be deducted from future donations. If your organization participates in the CFC, United Way Worldwide asks you to fill out a 5-minute survey to help determine costs and benefits of the program to charitable organizations.
  • Nonprofit Search Tool Upgraded: The Internal Revenue Service has posted a new tool on its website intended to provide easier and more complete access to publicly available information about exempt organizations. The Tax Exempt Organization Search, which replaces EO Select Check, makes images of newly-filed Form 990s available and allows users to search multiple data files for information in one inquiry. See the IRS announcement (IR-2018-116) and frequently asked questions.

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