Passage of the CARE Act Remains Uncertain - October 20, 2003 Vol. 4 No. 21

October 20, 2003 Vol. 4 No. 21:

Published: 10/20/2003

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Passage of the CARE Act Remains Uncertain

A CARE Act update.

As reported earlier in the Watcher, the future of the CARE Act on charitable giving continues to remain in limbo in spite of the fact that both congressional chambers have passed a version of the bill. The CARE Act provides tax incentives to increase charitable giving by individuals and companies to both faith-based and secular social service groups, and is fairly uncontroversial. However, major stumbling blocks to bringing the bill to conference remain, including:

Sen. Olympia Snowe (R-ME) proposed an amendment that would attach an extension of the child tax credit to low-income families to the bill. House Republican leaders are adamantly opposed to the expansion of the child tax credit, unless the child tax credit also includes higher income families - which under the original tax bill are scheduled to sunset.
The Senate version of the Act includes a provision for an additional $1.3 billion for the Social Services Block Grant (SSGB). The House bill includes no additional funds for the SSBG.
The Senate version offsets the cost of the bill (including the expanded child tax credit) by extending US Custom user fees, while the House version includes additional tax expenditures with no offsets.

Because of the strong differences between the House and Senate version of the CARE Act over the above items, getting the bills to conference and negotiating these differences seems to be a long shot. To add to the challenge, Sen. Tom Harkin (D-IA), has put a “hold” on the legislation because of some of the tax extenders in the bill, particularly one dealing with pensions. Other Democrats may use the CARE Act to protest being excluded from conferences on other legislation.