Prospects dim in push for tax breaks

Source: By Bernie Becker, The • Posted: Thursday, December 11, 2014

President Obama and House Democrats mobilized Wednesday against a bill to permanently extend three separate incentives for charitable donations, giving the measure a difficult path to becoming law.

The White House threatened to veto the measure on Wednesday, complaining that its $11 billion cost wasn’t offset one day after hinting about its opposition.

Meanwhile, House Democratic leaders urged rank-and-file members to vote against the plan, which has the support of the tax-writing chairmen in both chambers. The measure would indefinitely restore tax breaks for land preservation, contributions from certain retirement accounts and food donations, all of which expired at the end of 2013.

House Ways and Means Chairman Dave Camp (R-Mich.) said that he still expected the measure, which needs a two-thirds vote to clear the chamber, to pass when it hits the floor on Thursday. Democratic aides agree that the measure might squeak by, pointing ot that a similar measure got two-thirds support in July.

Camp told reporters Wednesday that the charitable groups helped by the incentives are “doing things the government can’t possibly fulfill.”

“There’s a lot of bipartisan interest and support,” Camp said.

But even if the House does pass the bill, the White House’s veto threat could easily end any chance the bll has in the Senate.

Camp said Wednesday that he expected Senate Majority Leader Harry Reid (D-Nev.) to take up the measure once the House passes it. But Reid said this week he didn’t think the Senate will have time to take up the bill. Lawmakers from both parties have said the only chance for the bill would be for all senators to agree to pass it, meaning just one senator loyal to Obama could torpedo the deal.

“We have to get it to him first, and then we’ll see,” Camp said about Reid. “I’m not going to make promises on his behalf.”

The White House’s veto threat is its second in just the last couple weeks on bipartisan tax legislation, underscoring the divisions that Democrats have faced on tax issues. Wyden, for instance, said Tuesday that he thought the bill would get to Obama’s desk without issue, just hours before the White House first noted that it opposed the measure.

Obama, with help from Wyden and House Democrats, wrecked a broader tax deal that Reid and Camp were negotiating because it wouldn’t permanently extend two tax credits for working families. The emerging deal between Reid and Camp, which other Democrats thought was too weighted toward corporate America, would have revived the three charitable provisions for good, along with seven other tax breaks.

Aides from both parties say that the nonprofit sector urged both Camp and Wyden, who both have long supported the three charitable incentives, to try to get a permanent deal for those tax breaks before Congress leaves town this year.

A Senate Democratic aide said that Wyden didn’t give House Democrats or the White House a head’s up that he was pursuing the legislation with Camp.

Instead, the aide said that Wyden informed the White House that he’d support the bill, and had assumed Obama wouldn’t issue a veto threat – despite the fact that the administration had said it would block the similar measure the House passed over the summer.

At the same time, Wyden decided not to intervene with House Democrats, since the House passed the charitable deal over the summer with a two-thirds majority, and left it up to Camp to ensure the bill could pass.

Rep. Sandy Levin (D-Mich.) said Wednesday that he opposed the charitable deal, but denied that Democrats were divided on tax issues.

Still, he acknowledged that there was some miscommunication between House and Senate Democrats on the measure. “I’m not sure how it happened over there,” Levin told The Hill. “But there was misinformation.”

Wyden’s push for the charitable provisions is his last chance for a victory on the slew of tax breaks that expired at the end of 2013, after he and other Senate Democrats lost their battle to extend dozens of tax breaks through 2015.

The House passed a bill restoring most of those provisions just for 2014 last week, which the Senate is expected to consider in the coming days.

But the White House on Wednesday made much the same argument against the current charitable tax deal as it did over the summer, accusing Republicans of supporting tax cuts that aren’t paid for but seeking offsets for Democratic priorities.

“House Republicans also are making clear their priorities by rushing to make these tax cuts permanent without offsets even as the House Republican budget resolution calls for raising taxes on 26 million working families and students by letting important improvements to the Earned Income Tax Credit, Child Tax Credit, and education tax credits expire,” the administration statement said.

Democrats like Levin and Rep. Chris Van Hollen (Md.) sounded the same note on the bill, saying they couldn’t support permanent extensions just for the charitable breaks.

“It’s the fact that they’re leaving behind the child tax credit, in support of these other provisions. We just had this whole discussion,” Van Hollen said.

Trying to beef up support for the measure, GOP lawmakers noted the strong backing of a wide range of nonprofit groups. Five of those advocates urged urged House Democrats to reconsider their growing opposition to the bill, saying its “impact on low-income Americans, underserved populations, communities of color and the nation’s community food banks cannot be overstated.”

“In this season of giving, when we are challenged to act selflessly and do more to help others, we are calling upon rank and file Democratic Members of Congress to vote for this critical legislation today to promote charitable contributions and enable the nonprofit sector to better serve those most in need,” Feeding America, Council on Foundations, Independent Sector, National Council of Nonprofits and the Land Trust Alliance said in their joint statement.