In this Week’s Edition of Snapshot…
- Meet our team!
- Tax Reform Update: ACA repeal faces obstacle following the release of a CBO report
- East coast snow storm prompts a bipartisan road trip from Texas to D.C.
- The President’s budget is released
- President Trump issues new executive order
- In the States: More states consider minimum wage hikes, when good tax checkoffs get a bad rap
- Opinion: How Congress can spur giving
You’ve read our updates. You’ve heard us on conference calls and webinars. Now it’s time to meet the Council’s government relations (GR) team!
Over the past year, we have grown our team, refined our capacity, and increased our presence on Capitol Hill by building lasting relations with Congressional members and staff, working in coalitions with allies and partners, and raising the profile and priorities of the philanthropic sector within the halls of Congress.
The GR team effectively has three areas of focus: legislative branch, executive branch, and legal. For the legislative branch focus, team members Hadar Susskind, Serena Jezior, Peter Gordon, and Eliana Briceno meet with Congressional staff and Members of Congress to educate them on the Council’s legislative priorities and advocate on behalf of the membership. While our focus this year is unquestionably on tax reform, we also engage on other issues that impact the sector and work to empower the advocacy of our members on their own legislative priorities.
For the executive branch focus, team members Stephanie Powers and Peter Gordon work with public-philanthropic liaisons in various federal agencies to identify areas where the philanthropic sector can work with the federal government; they also work to promote these partnerships. For the legal focus, in addition to their work answering legal inquiries from members, team members Suzanne Friday, Lara Kalwinski, Bryan Del Rosario, and Christina Gonzalez work closely with federal agencies such as the Treasury Department and IRS to give guidance on how regulations will affect the philanthropic sector. They also provide expert legal analysis of legislation impacting the sector.
In the coming months, we will provide weekly updates with new developments in the tax reform process.
This Monday, the Congressional Budget Office (CBO) — a nonpartisan entity that conducts impartial analyses of budgetary and economic issues to support the Congressional budget process — released its estimate on the House GOP’s recently debuted legislation that would “repeal and replace” the Affordable Care Act (ACA).
The report projects that 24 million people would lose health insurance coverage by 2026, and that the federal deficit would be reduced by $337 billion between 2017 and 2026 under the proposed bill — the American Health Care Act. This news further divided Republicans in the House and Senate, calling into question how realistic a swift progression of this legislation will be.
So, what does all of this mean for tax reform? The answer is: It depends who you ask. In the House, Chairman of the Ways and Means Committee Kevin Brady (R-TX) told BNA reporters that “from the Ways and Means perspective, we’re staying right on the same track, which is to deliver tax reform this summer,” and that he expects to “act in our committee this spring.”
On the Senate side, however, the outlook from key Republicans is less optimistic. When asked if the debate over repeal and replacement of the ACA could delay tax reform, Senate Finance Chairman Orrin Hatch (R-UT) stated that it could "because it’s a very complex debate.” Chairman Hatch also indicated, with regard to the House tax reform package (which hinges on the border adjustability proposal), that “I don’t think it’s going to pass over here. There’s not a lot of enthusiasm for it. We’re already working on what we’d like to do.” Senate Majority Leader Mitch McConnell’s (R-KY) recent comments have not provided much additional hope, stating that he thinks “finishing tax reform will take longer.”
From the administration’s point of view, Secretary of Treasury Steven Mnuchin has reiterated the commitment to accomplish “very significant” tax reform before the Congressional recess in August.
Beginning at 10 a.m. ET today, the House Budget Committee marked up the combination of bills that passed out of the Ways and Means and Energy and Commerce committees last week.
After a snow storm along the east coast caused Representatives Beto O’Rourke (D-TX) and Will Hurd’s (R-TX) flights to Washington, D.C., to be cancelled, the two colleagues decided to set forth on a 24-hour road trip — making their way from Texas to D.C. in a rental car.
Livestreaming the endeavor on Facebook Live, the two Congressmen decided to call the bipartisan road trip a “town hall meeting on wheels,” where they welcomed questions from those following along on Facebook.
President Trump has released his first budget — calling for steep spending cuts to areas including but not limited to: anti-poverty programs, environmental protection, foreign aid, and the arts.
Under this budget, defense spending would be increased as would spending for border security. The budget proposal has been met with bipartisan skepticism in Congress and will likely face significant opposition.
“This is a budget blueprint, not a complete budget…you will not see revenue projections. You will not see large policy statements, and — importantly — you will not see anything having to do with mandatory spending,” Office of Management and Budget (OMB) Director Mick Mulvaney stated yesterday. The complete budget is due to be released in May.
On Monday, President Trump signed an executive order (EO) intended to cut waste from the federal government. According to The Hill, “Trump signed the measure in the Oval Office, telling reporters it requires a ‘thorough examination of every executive department and agency’ to find out ‘where money is being wasted [and] how services can be improved.’”
The EO instructs OMB Director Mick Mulvaney to reorganize the federal government and propose a plan to “eliminate unnecessary agencies (as defined in section 551(1) of title 5, United States Code), components of agencies, and agency programs.” This order continues the push of the Trump administration to shrink the size of the federal government.
Exclusive from our colleagues at the National Council of Nonprofits.
Several more states are considering minimum wage increases. A Nevada bill would raise the state’s minimum wage by $1.25 per hour until it reaches $15 per hour for employers that do not offer health insurance and $14 per hour for employers that do provide health insurance. A separate Nevada bill proposes to amend the state constitution to increase the minimum wage to $9 per hour — and beginning in 2022, to increase an additional $0.75 per hour per year until the minimum wage is $12 per hour. That proposal also calls for removing provisions authorizing an employer and employee to waive the minimum wage requirement in a collective bargaining agreement.
In New Mexico, legislation would increase the minimum wage from $7.50 per hour to $9 per hour over the next year. A new measure in North Carolina would increase the minimum wage from $7.25 per hour to $15 per hour by 2022. An earlier bill would have hiked the rate to $15 per hour one year earlier — by 2021.
This week, the Arizona Supreme Court unanimously upheld a voter referendum from November that raised the state minimum wage to $12 per hour by 2020, with the first increase effective this past January 1. The Arizona Chamber of Commerce and Industry had challenged the new law on the grounds that the state would be forced to spend more money on contracts, including services performed by charitable nonprofits on behalf of governments. The Court rejected the argument, but the fact remains that employment costs are going up in Arizona as a result of the voter initiative. As a result, nonprofits will likely need to seek support from philanthropy to in order to cover expenses not reimbursed by the governments. See the Open Letter from the California Association of Nonprofits for the role philanthropy can play in helping nonprofits transition to higher labor standards.
When Good Tax Checkoffs Get a Bad Rap
State income tax checkoff programs are likely to come under greater scrutiny across the country in the coming months and years. The Denver Post ran an expose on the Colorado program, alleging that politics rather than merit determined which nonprofits get listed on the state tax form for tax refund donations. The Colorado Nonprofit Association published a rebuttal op-ed and issued a more thorough explanation of checkoff programs. Illuminating how nonprofits have a “legitimate role in shaping public policy and engaging with legislators,” the rebuttal respectfully shows the other side and positive outcomes of effective advocacy.
A recent opinion piece by Eugene Steuerle in the Chronicle of Philanthropy argues that, when it comes to charitable giving, only the status quo for tax policy would produce no losers in the outcome of tax reform.
Given that the status quo is inherently not an option when it comes to a comprehensive overhaul of our tax system, Steuerle argues for six tax policy changes that Congress could enact as a part of tax reform to strengthen charitable giving, including:
- Allowing all taxpayers to claim a deduction for charitable contributions (above some determined minimum);
- Extending the deadline to claim the charitable deduction from December 31 to April 15;
- Creating a better system for reporting donations;
- Decreasing the age restriction and cap for giving from an IRA;
- Reducing and simplifying the private foundation excise tax; and
- Encouraging charitable bequests.