Policy Update

Tax Bill, Blogs, CFC Ruling Postal Rate, Budget Reconciliation Packages

11/30/2005

Source: National Council of Nonprofit Associations (NCNA)

Senate Reconciliation Tax Bill
On November 18, the Senate passed a tax reconciliation package with almost $60 Billion in tax cuts, including the extensions of popular tax cuts and 25 charitable incentives and reforms. The charitable provisions include tax-free distributions from IRA accounts, revised rules regarding donations of clothing and household goods, and tax deductions for charitable donations for taxpayers that do not itemize their returns. Some nonprofits oppose the latter provision as it introduces a floor of $210 for itemizers and non-itemizers alike. Charitable provisions are outlined on pages 7-11 of this bill summary,  (PDF). These charitable provisions are not expected to appear in the House bill and it is unclear which, if any, of these provisions will make it through the conference process.

House and Senate Pass Budget Reconciliation Packages
The House passed a budget reconciliation bill on November 18 which would cut spending by approximately $50 Billion over 5 years, including cuts to funding for low-income Medicaid beneficiaries, food stamps, and childcare subsidies. The Senate passed a spending reconciliation bill on November 3, which included approximately $39 Billion in cuts. The Senate made some efforts to shield low-income groups from the cuts. For more information, see the Center on Budget and Policy Priorities' analysis of the reconciliation bills.

FEC Exempts Blogs from Campaign Finance Rules
In a unanimous decision, the Federal Election Commission (FEC) held that a blog is covered by the "press exception" and therefore not subject to campaign finance rules. The press exception applies to press entities acting within their role as press entities. For more information, see the Alliance for Justice summary of this issue.

CFC Ruling
The Office of Personnel Management withdrew a regulation that required all nonprofits participating in the Combined Federal Campaign (CFC) - the federal government's workplace charitable giving program - to screen employees and donation recipients for possible terrorist ties. The new final rule, which applies to 2006 CFC applicants, requires participating charities to instead certify that they are in compliance with existing anti-terrorist financing laws. For more information, see the OMB Watch article describing the change.

USPS Rate Increase Approved
Governors of the U.S. Postal Service voted to accept the Postal Rate Commission's recommendations to increase most postal rates and fees by approximately 5.4 percent across-the-board to take effect January 8. See the USPS press release for more information.