Offsets, Child Tax Credit Make CARE Act Fate Uncertain - Nonprofit Issues

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Published: 10/06/2003

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Offsets, Child Tax Credit Make CARE Act Fate Uncertain

Although legislation promoting charitable giving has passed both houses of Congress this year, it could still be derailed in conference committee. There are major differences over whether or not to include offsets that pay the cost of tax breaks for charitable giving. Further complications were added last week when Sen. Olympia Snowe (R-ME) proposed attaching the child tax credit provision to the bill that House Republican leaders strongly oppose. The move could either bring the child tax credit issue back to life or bog down the charitable giving legislation. The Senate version of the child tax credit provides $9.8 billion in tax relief that are offset through an extension of U.S. Custom user fees. The House version, which has a number of tax provisions, would cost $82 billion and has no offsets.

Snowe has blocked the process for sending the CARE Act to conference negotiations until the child tax credit issue is resolved. She has the support of Senate Republicans, including Majority Leader Bill Frist (R-TN), who said he is committed to working out an agreement when the Senate returns from a one-week recess. He did not think the delay would prevent Congress from concluding action on the CARE Act this year.

Sen. Rick Santorum (R-PA), a co-sponsor of the CARE Act, told the Associated Press that add-on provisions are not likely to survive a conference committee, and, “If other people, for political motives or to express concern about the movement of other bills, want to tack things on for some sort of message purposes, that’s all well and good.”

The proposed unanimous consent agreement for the CARE Act also includes extension of welfare-to-work and work opportunity tax credits, which are currently expiring.

The conference on the CARE Act will need to address major differences between the House and Senate bills in addition to offsets, including funding for the Social Services Block Grant and fees for foundation trustees. To get to a conference, the Senate must consider the House bill since the House constitutionally must generate all revenue legislation. Thus, the Senate could consider H.R.7 and then substitute its bill that was passed earlier in the year, or it could add the Snowe amendment on the child tax credit, or it could accept H.R.7 and send the bill directly to the President.