Form 990 Draft Up for Comment on IRS Website

Oct 7, 2005 by Guest Blogger

A draft of IRS Form 990, Return of Organization Exempt From Income Tax, for Tax Year 2005 is available for public comments on the IRS website for tax-exempt organizations.

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Latest Newsletter Articles on Nonprofit Advocacy Issues

Oct 6, 2005 by Kay Guinane

 Latest Headlines. . .
  • Supreme Court, FEC Take on Regulation of Issue Advocacy
  • Nonprofit Anti-Advocacy Language Proposed for Housing Bill
  • Early Reports of FEMA Reimbursement Policy Misleading
  • CARE Act Re-Introduced in the Senate and House
  • Social Justice Grantmaking Rises, Shifts Toward Pragmatism
  • Gag Orders Extended; Libraries Must Remain Silent

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Usefulness of Tax Breaks For Katrina Relief Questioned

Oct 6, 2005 by Adam Hughes*

A week after a hearing of the Senate Finance committee cast doubt on the usefulness of tax cuts in relief efforts to help individuals and businesses on the Gulf Coast, additional economists and expert analysts have supported that position. The New York Times reported this morning that economists from the very conservative Heritage Foundation to the more centrist Tax Policy Center have confirmed that President Bush's tax incentive proposal will do less for individuals who live in the affected areas and more for rich investors and businesses from other parts of the country. The Times article quoted William Beach, chief economist at the Heritage Foundation as saying, "People in the area obviously won't have tax liabilities for some time. What we're talking about is getting very wealthy people from around the United States to invest in New Orleans." In addition to growing concensus among private economists that tax cuts are not the best option for relief and reconstruction efforts in the Gulf Coast, the highly respected Congressional Research Service released a report last week that found little evidence of the positive impact of tax incentives such as the "opportunity zones" proposed by President Bush in growth and employment in those areas. Nonetheless, Congress continues to explore writing yet another tax cut bill under the guise of "Katrina relief." Treasury Secretary John Snow was the lead witness today at another Senate Finance Committee hearing to promote the president's tax proposals for reconstruction of the Gulf Coast and spent most of his time defending the proposals against attacks from skeptical Senators.

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Grassley Lashes out at White House

Oct 6, 2005 by Adam Hughes*

During a Senate Finance Committee hearing this afternoon at which Secretary of the Treasury John Snow was testifying on the president's tax incentive proposals for rebuilding the Gulf Coast, Chairman Charles Grassley (R-IA) vocalized his anger at the White House for what he perceives to be a covert effort to derail legislation to temporarily extend Medicaid to hurricane victims. “Unfortunately, the White House is working against me behind the scenes, and I resent that considering how much I’ve delivered for the White House” in recent years, Grassley said. Sens. Grassley and Max Baucus (D-MT), the ranking member on the Finance Committee, have been trying to win approval from a number of conservative Senators for legislation that would extend Medicaid coverage to all low-income victims of Hurricane Katrina and guarantee that the federal government would pay for 100 percent of the costs. The legislation is supported by the National Governors Association, Majority Leader Biill Frist (R-TN) and Minority Leader Harry Reid (D-NV), the American Medical Association, and dozens of other groups. The White House has proposed instead to grant a waiver to individual states who are currently providing health care coverage for victims. This proposal has been heavily criticized, particularly by the Center on Budget and Policy Priorities for excluding many low-income vicitims from receiving benefits and for not assuring states that 100 percent of the cost would be covered by the federal government. Grassley has previously threatened to withhold support or delay the tax reconciliation bill his committee must write this fall if Senators do not support his Medicaid bill. Unfortunately, it seems these threats have had little impact.

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GOP Continues to Obsess Over New Tax Cuts

Oct 6, 2005 by Adam Hughes*

Division in Congress appear to be widening over plans to offset emergency spending in the wake of Hurricane Katrina. The House seems intent on instituting an across the board cut to discretionary spending in addition to finding 10 percent more cuts in the reconciliation spending bill this fall, while the Senate has rejected the across the board cut and is focusing on the reconciliation bills and appropriations pork projects. Yet neither chamber is being realistic or genuine in their quest to pay for Katrina spending. Even the most generous estimates of the total cuts Congress could enact to the budget would only pay for approximately 10 to 15 percent of expected Katrina costs. And while the justification for these cuts has been concerns about the deficit, the GOP is insisting on continuing with plans to pass $70 billion in unpaid-for new tax cuts this fall through the reconciliation process. This tax cut bill will actually increase the deficit, despite severe cuts to the budget that will leave Americans less secure, and is conterproductive to other efforts to find offsets for Katrina. If Congress is truly concerned about dealing with the deficit in light of Katrina costs, it needs to address both the spending and revenue side of the equation. There is evidence some Republicans in the Senate are somewhat tuned into this reality, such as Sens. Lincoln Chafee (RI), George Voinovich (OH), and Susan Collins (ME). But it will take a more genuine effort by GOP leaders to revisit the necessity of tax cuts for the most well off in our society in order to change course this fall.

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Growing Unease With Nussle's Budget Cut Plans

Oct 6, 2005 by Adam Hughes*

As House Budget Chairman Jim Nussle (R-IA) continues to push for an amendment to the budget resolution passed in April to institute an across the board cut to discretionary spending by 2 percent, many Republican members of the Senate have expressed reservations or outright disdain for such a plan, threatening its survival. While not ruling out any avenue for finding budget cuts to offset the cost of Hurricane Katrina relief and reconstruction spending, a number of key Senate Republicans criticized Nussle's proposal. Senate Budget Committee Chairman Judd Gregg's (R-NH) preference is to use the reconcilation process already in place to look for larger cuts to entitlement programs. Senate Majority Leader Bill Frist (R-TN) called Nussle's proposal a "nonstarter," ruling out re-opening the budget resolution. And Defense Appropriations Subcommittee Chairman Ted Stevens (R-AK) stated he opposes the proposal and believes a substantial majority of the Senate would also oppose it. Discretionary spending makes up only 26 percent of the total federal budget and Stevens believes it should not have to shoulder a disproportionate share of the cuts. Unfortunately, Congress has yet to realize the damage done by cutting investments in America to pay for Katrina costs will not only make communities and families around the country less secure, it will actually do very little to offset the cost of Katrina. It's time Congress realizes it needs to revisit the massive tax cuts for the wealthy if it wants to truly keep Katrina spending deficit neutral.

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Allen Urges Treasury To Allow Supporting Orgs

Oct 6, 2005 by Guest Blogger

In a Sept. 19 letter, Sen. George Allen, (R-VA) urged Treasury to continue to allow the responsible use of supporting organizations for charitable efforts while working to eliminate abusive practices associated with the organizations. The letter can be found here

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Hearing on Tax Policy to Help Katrina Rebuilding

Oct 5, 2005 by Guest Blogger

The Future of the Gulf Coast: Using Tax Policy to Help Rebuild Businesses and Communities and Support Families after Disasters October 6, 2005, at 10:00 a.m., in SD215 Dirksen Senate Office Building Panelists Include: The Honorable John W. Snow, Secretary, U.S. Department of the Treasury, Washington, DC The Honorable Jack Kemp, Founder and Chairman, Kemp Partners, Washington, DC and Honorary Co-Chairman, Free Enterprise Fund, Washington, DC The Honorable Tate Reeves, State Treasurer, State of Mississippi, Jackson, MS

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New Mad Cow Rule Fails to Close Loopholes

Oct 5, 2005 by Guest Blogger

The Food and Drug Administration squandered yet another opportunity to close loopholes in its BSE firewall yesterday. According to an href="http://www.fda.gov/bbs/topics/news/2005/new01240.html"> agency press release, a new rule proposed by FDA to control mad cow disease expands current protections by banning the use of specified-risk material-brain and spinal cord tissue-from older cattle, but the proposed rule fails to close loopholes that allow cattle to be fed other cow parts through restaurant plate scrapings, chicken litter, and calf formula. A proposed 2004 rule

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Medicaid Bill Held Up in Senate

Oct 5, 2005 by Guest Blogger

The White House and many Congressional GOP leaders continue to oppose the Grassley/Baucus Medicaid bill to expand Medicaid eligibility for displaced Hurricane Katrina victims. Sens. Charles Grassley (R-IA) and Max Baucus (D-MT) of the Finance Committee have encountered resistance to their bill from conservatives who object to its cost. However, Grassley noted yesterday that "some of the very same people that are impediments" to the bill will be looking to him for help extending the capital gains tax cut this year. Last friday Sen. John Sununu (R-N.H.) blocked Grassley's attempt to bring the Medicaid bill up for an unanimous consent vote in the Senate. In response, Grassley warned that there might not be a reconciliation bill for spending or tax cuts if key conservatives continue to oppose his Medicaid bill.

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