Congress Kicks Off Summer by Turning to Tax, Spending Priorities

After avoiding a potential debt-ceiling crisis in early June, lawmakers turned their attention to a host of other priorities over the past several weeks, including tax and government spending proposals. June saw the Ways and Means Committee, which has sole jurisdiction over the nonprofit sector in the House, advance a GOP-led tax package along party lines. During the markup of the package, committee Democrats Rep. Brad Schneider (D-IL) and Rep. Danny Davis (D-IL) offered an amendment to include a revival of the universal charitable deduction for non-itemizers in a bill that would temporarily expand the standard deduction, but it was voted down by Republicans who thought it was outside the scope of the markup.

The House and Senate have also been working on government funding bills, with House Republicans seeking steeper spending cuts than the Democrat-controlled Senate. These federal spending decisions could increasingly impact nonprofits that rely on government spending to fund their work. Spending negotiations may come to a head in September when current spending levels expire, at which point it will likely be more clear how the Republican-led House and the Democratic Senate will compromise on funding levels.

Giving Data and the Case for the Universal Charitable Deduction

The recently released Giving USA Report found that overall giving fell by an inflation-adjusted 10.5 percent last year, and giving by individuals shrunk by 13.4 percent. Sector advocates have pointed to these declines as underscoring the need to continue advocating for policies that could reverse or soften downward trends in philanthropic engagement, such as the bipartisan Charitable Act (S. 566, H.R. 3435) to restore the universal charitable deduction. That said, lawmakers will likely need to clear must-pass items like spending and defense legislation before turning to a potential tax package that could carry measures that uplift the charitable sector. We expect to learn more about the potential for bipartisan compromise in the coming months and how it may lay the groundwork for a revival of the universal charitable deduction.