Washington Snapshot - August 2, 2013
Up on Capitol Hill . . .
Countdown to the August Congressional Recess
Congress heads off on recess today. We delayed our usual Thursday delivery of Snapshot until today so we could report to you on the latest breaking news.
Tax Reform
Anticipating a House Tax Reform Bill this Fall
Both Politco and The Hill reported this week that Ways and Means Committee Chairman Dave Camp (R-MI-4) anticipates that he’ll mark up his tax reform bill in October. The Committee staff will be working feverishly over the August recess to put together that legislation. This morning we gathered further intelligence: Bloomberg reported that Chairman Camp “plans to advance legislation through his panel by the end of the year that would lower tax rates for individuals and companies…. To pay for those changes and produce a revenue-neutral bill, Camp said he’s considering altering the deductions for mortgage interest and charitable contributions.” We do not have specifics on the changes that Camp is considering. The Council and its consulting team will connect with Chairman Camp to inform him about the potential effects on charitable giving that could result from changes to the charitable deduction.
Did the “Blank Slate” plan yield results?
As you are well aware by now, the “blank slate” deadline was last Friday. Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) indicated that they received “substantial feedback” from their colleagues during the process (Bloomberg Government, July 29, 2013). As we anticipated in Snapshot last week, the feedback ranged from high level principles to very specific laundry lists of tax reform requests. For more details, we direct you to the following articles in Politico, Roll Call, Wall Street Journal, and National Journal.
Chairman Baucus took to the Senate floor on Monday to give an impassioned speech calling for “patience and perseverance” – something that he is sure to need to push tax reform across the finish line. (Bloomberg Government, July 26, 2013). And, we understand that Baucus could release a conceptual outline of the plan, and discussion drafts of legislative language ahead of an autumn markup (Tax Analysts, July 29, 2013).
Most importantly, the close of the “blank slate” chapter should mark the end of the information gathering process in the Senate. We fully anticipate that the next major action will be some variation of details put to paper.
But Major Questions on Revenue Remain
Chairman Baucus is getting “squeezed on all sides,” according to Bloomberg Government (July 26, 2013). He is being pressured by a bloc of Democrats urging him to include more than $1 trillion in new revenue in the tax reform package, and Republicans are pushing back equally as hard to resist adding any revenue raising items. Last night, The Hill reported that Senator McConnell (R-KY) was pessimistic that the revenue questions could be resolved, and this morning The Wall Street Journal reported that Sen. Reid (D-NV) reiterated his calls for revenue-raising tax reform. This debate will continue, but we do not anticipate it will derail tax reform at this time.
On the House side, Chairman Camp is facing the same pressures and made outreach this week to Committee Democrats, Politico reported. Several of them are quoted in the article saying that they have not ruled anything out or anything in for comprehensive tax reform. Representative Richard Neal (D-MA-1) said, “I want to wait and see. It’s a long way from me being in, but we’re going to keep the conversation going.’’ And Connecticut Representative John Larson (D-CT-1) also kept the opportunity open for conversation, while remaining skeptical of the push of a revenue neutral plan. “You can quote me as saying I remain to be convinced, but I’m not going to push away from the table because of that.’’
The President Weighs In
The President brought the tax reform debate into his Jobs Deal plan during a speech in Chattanooga, TN. He said, “I’m willing to work with Republicans on reforming our corporate tax code, as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middle-class jobs. That’s the deal.”
The reactions have varied on Capitol Hill, as you would expect, from positive responses on the Democratic side to criticism from Republicans. If you’re interested to read more, several lawmakers posted blogs in Politico on July 30.
The Max and Dave Tax Reform Road Show
“Simplify!” was the message the two leaders heard over and over on Road Show stops this week in Pennsylvania and New Jersey (The Hill). Chairmen Baucus and Camp held closed meetings with small business owners in Philadelphia, PA, and Lawrenceville, NJ, on Monday. The focus continues to be on the intersection between taxes, small business and jobs, and the complexity of the current tax code for the average American.
The tone of the meetings was informal as Baucus browsed kitchen appliances at the “Mrs. G TV and Appliances” store in Philadelphia, and Camp enjoyed a homemade blueberry smoothie.
While we anticipate that the Road Show will have additional stops, details have not been announced.
Continuing Support for Preserving the Charitable Deduction
Kudos to Barbara Taylor, of the Grantmakers of Western Pennsylvania, for a great opinion piece in the Pittsburgh’s Post-Gazette. It’s a strong defense of the charitable deduction, saying we should do more to incentivize charitable giving, not less. And, it links charitable giving to “on the ground” activities such as the great educational efforts of the Pittsburgh Promise program.
Last week, the National Association of Evangelicals (NAE) submitted a letter to the members of the Senate Finance committee urging them to preserve the charitable deduction as it currently stands. The letter encouraged preserving the charitable deduction because “it advances important policy objectives, helps bolster the economy and makes the tax code fairer.” Participation by NAE again demonstrates the broad and diverse groups of organizations voicing their support for charitable incentives.
Join the Conversation!
As great op-eds illustrate, it’s important to be part of the ongoing dialogue. And, the diversity of voices adds to the power of our collective messages in support of philanthropic and charitable organizations. If you are interested in writing an op-ed for your local paper please contact Brian Horn. And, if you’ve posted an op-ed recently, please bring it to our attention.
IRS Scrutiny
The Scrutiny Continues and Possibly Expands
Politico Pro reports that Oversight and Government Reform Committee Chairman Darrell Issa (R-CA-49) is now asking the Internal Revenue Service Inspector General to investigate whether tea party organizations who had already secured exempt status faced undue scrutiny.
Debate on the House Floor
As we reported in Snapshot on July 18th, some legislation has been introduced that addresses some of the elements of the IRS scrutiny. This week, the House passed several bills: Rep. Peter Roskam’s (R-IL-6) HR 2768, HR 2769, and Rep. James Renacci’s (R-OH-16) HR 2565. While we see this activity as largely symbolic, it does signal the issues that are on the minds of members right now.
Obama Names New IRS Commissioner
On Thursday, President Obama tapped John Koskinen to be the next commissioner for the IRS. A report from The Washington Times, quotes the president saying “John is an expert at turning around institutions in need of reform.” Mr. Koskinen comes most recently from Freddie Mac and will most certainly have a difficult task ahead of him.
Other Interesting Legislation...
Representative Cory Gardner (R-CO-4) introduced legislation to jump-start economic development in rural and urban areas. The Philanthropic Facilitation Act (HR 2832) would make it easier for foundations and other philanthropic organizations to contribute financially to job creators across the country. The bill works by streamlining the approval process that determines eligible recipients of charitable investments.
And Senators Patrick Leahy (D-VT), Thad Cochran (R-MS), Bob Casey (D-PA), and Jerry Moran (R-KS) introduced the Good Samaritan Hunger Relief Tax Incentive Act (S 1395).” The bill would “continue and expand a proven and effective tax incentive to encourage businesses and farms to donate surplus food to their local food banks." (Press Release)
Keep in Touch...
Let us know how we are doing, or about any issue that you’d like to see highlighted in a future Snapshot, by touching base with any member of our government relations team.
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