Policy Update

Bill Passes House With Nonprofit Gag Provision Intact

10/26/2005

While debate on the Federal Housing Finance Reform Act, H.R. 1461, was dominated by discussion of the Nonprofit Gag Provision, the bill passed easily by a 331-to-90 vote on the afternoon of Oct. 26 (http://clerk.house.gov/evs/2005/roll547.xml).

Two key votes focused on the Gag Provision, while far closer, went down in defeat.

It was clear that members of the House heard from the nonprofit community. Many offices reported receiving lots of calls, emails, and faxes expressing opposition to the Gag Provision. The sector should be pleased that we drew major attention to the provision, despite having only heard about it less than two weeks ago.

About the Key Votes

The first key vote was on the manager's amendment, which contained the offensive language. The amendment passed 210 to 205. (http://clerk.house.gov/evs/2005/roll541.xml)

During debate, Republicans claimed that the provision did not limit the "political" speech of nonprofits. They said that nonprofits can do "political" activities; they just can't take money from the Affordable Housing Fund. Typical of these wrong-headed arguments was the statement of Rep. Richard Baker (R-LA), a sponsor of the bill, that nonprofits simply "can't back your truck up to the Treasury Department" and take all the money.

Baker and other Republicans claimed that money is fungible. Interestingly, as Rep. Barney Frank (D-MA) pointed out, during the floor discussion on the Faith Based Initiative, Republicans claimed that federal money is not fungible. Taking federal grants, Republicans claimed today, frees up other money to do the "political" activities. In this way, they argued, the Affordable Housing Fund would be underwriting political speech of nonprofits.

Baker also posited that if he asked someone who as a result of Hurricane Katrina is in a "FEMA trailer" whether he or she would want a lift to the polls in a couple of years or a roof over his or her head right now, he or she would take the housing. Baker said that nonprofits should make a choice between "political activism" and providing housing support.

Democrats disagreed, arguing that making such a choice is unnecessary, if not unconstitutional. There were several powerful speeches concerning strengthening democracy and averring the right to vote is "sacred," as Rep. John Lewis (D-GA) said. Several Democrats, including Rep. Barbara Lee (D-CA) and Joseph Crowley (D-NY), argued the Nonprofit Gag Provision was a "right wing assault on democracy" and that the bipartisan bill was being "hijacked by the extremist wing of the Republican party."

Most Democrats focused on two points. First, the bill would exclude faith-based groups from receiving grants under the Affordable Housing Fund because the bill says the "primary purpose" of an organization must relate to housing, while most faith-based groups have religion as their primary purpose.

Second, the provision, which restricts grants under the AHF for those groups engaged in nonpartisan voter participation issues, is unfair to the underserved families and communities who are already underrepresented at the polls.

Rep. Barney Frank (D-MA) announced he would offer a "motion to recommit" the bill, which, in essence, would have served as a means for fixing the Nonprofit Gag Provision. Although Frank filed amendments the previous evening to strike the provision (which the Republicans did not allow a vote on), the motion to recommit took a strange turn.

Instead of the motion striking the Gag Provision, Frank made two modifications. First, he changed the "primary purpose" language to be "one of the primary purposes" so that faith-based groups could apply for the funding. Second, leaving in place all of the provision's other restrictions, including the affiliation language, Frank simply excluded nonpartisan voter participation activities for the list of restrictions. Many groups, including OMB Watch, were surprised and disappointed by the action.

His motion to recommit lost on a 200-to-220 vote (http://clerk.house.gov/evs/2005/roll546.xml).

For a list of how your representative voted, see the OMB Watch Resource Center at http://www.ombwatch.org/gseresourcecenter. For more on affordable housing, visit http://www.nlihc.org.

What's Next

Despite the Nonprofit Gag Provision now being part of the Federal Housing Finance Reform Act passed by the House, it does not follow necessarily that it will become law. It must pass the Senate, survive a conference, and be signed by the President. Coincidentally, the White House issued a statement that it has problems with the House bill, although the statement did not address the Gag Provision.

At a broader level, that the House could pass such incredibly restrictive anti-advocacy language should serve as a warning to our sector to keep a vigilant eye out for similar efforts. Over the last 20 or so years, conservatives have tried to silence the advocacy voice of nonprofits. We have successfully defended these rights--and we will need to continue doing so in the future.

We hope you will thank those representatives that voted to delete the Nonprofit Gag Provision. Those who voted for the restriction should still hear from you.

Thanks for all your great work!

For questions, please contact any of the following:

Kay Guinane (kguinane@ombwatch.org) and Jennifer Lowe (jlowe@ombwatch.org), OMB Watch

Liz Towne (ltowne@afj.org) and Shannon Garrett (sgarrett@afj.org), Alliance for Justice

Perry Wasserman (perry@viverogroup.com), Center for Lobbying in the Public Interest

Erica Greeley (egreeley@ncna.org), National Council of Nonprofit Associations

Rick Cohen (rick@ncrp.org), National Council on Responsive Philanthropy