Text of letter to Senate leaders from OMB Watch supporting passage of the CARE Act with Title VIII, which deals with government funding of religious groups, dropped from the bill. April 1, 2003 The Honorable Bill Frist Majority Leader The Honorable Thomas A. Daschle Minority Leader U.S. Senate Washington, D.C. 20510 Dear Senator Frist and Senator Daschle,

The House of Representatives is continuing to move forward with its faith-based agenda despite the fact that the CARE Act is stalled in the Senate amid controversy over issues relating to hiring discrimination, protection of beneficiaries, preemption of state and local laws and the role of intermediary organizations. (See March 4, 2003 Watcher for background.) Draft amendments are still circulating, but the Administration has made it clear it will veto the bill if it passes with a prohibition on religious discrimination for hiring in program positions paid for with federal funds.

Over the past few weeks several 501(c)(3) organizations in the midwest have been notified by the IRS that they will be audited in what appears to be selective targeting of charities that elect to use the expenditure test to measure their allowable lobbying budgets. While no written verification is yet available, three leading advocates of charity lobbying – the Alliance for Justice, Charity Lobbying in the Public Interest and OMB Watch – have written IRS Tax Exempt and Government Entities Director Evelyn Petschek “to express our grave concern and dismay.”

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