- The Washington Times - Wednesday, June 19, 2002

A Senate panel yesterday approved a part of President Bush's faith-based initiative that would increase the tax benefits of donating to faith-based or community charities, but the measure still has a few hurdles to clear.

Encouraging charitable giving through tax benefits is a priority for the president and a remaining part of his larger faith-based initiative. The bill approved by voice vote by the Senate Finance Committee was crafted by Finance Committee Chairman Max Baucus, Montana Democrat, and ranking member Charles E. Grassley, Iowa Republican. It is based largely on legislation crafted by Sens. Joseph I. Lieberman, Connecticut Democrat, and Rick Santorum, Pennsylvania Republican, with the White House.

Mr. Santorum praised the bill's passage and said it will provide "immediate help to those smaller faith- and community-based groups who act as our foot soldiers in the war against hopelessness."

While charitable giving has increased since September 11, some charities not directly associated with the terrorist attacks have suffered financially.

But senators on both sides of the aisle have concerns about the bill. Sens. Jeff Bingaman, New Mexico Democrat, and Sen. Craig Thomas, Wyoming Republican, are concerned about how to pay for it. The committee included revenue-raising provisions in the bill, designed to offset its cost, but the two said these were insufficient.

Assistant Minority Leader Don Nickles, Oklahoma Republican, and Sen. Phil Gramm, Texas Republican, oppose provisions in the bill that would establish government-matched savings accounts for the poor and provide a tax break for environmental groups.

Senate Majority Leader Tom Daschle, South Dakota Democrat, has said he would like the Senate to vote on the bill, but nothing is scheduled. Mr. Santorum urged him to bring it to the floor before the Fourth of July recess.

The House passed a comprehensive faith-based bill last year that contains similar tax benefits for charitable donations but also contains the hotly debated "charitable choice" component, which would allow religious organizations to compete for a wide array of government grants. The Senate bills do not contain charitable choice.

The Finance Committee bill approved yesterday, like the Lieberman-Santorum bill, would allow those who do not itemize on their tax returns to deduct a portion of their charitable giving, allow tax-free donations from individual retirement accounts (IRAs) to charities and provide enhanced tax benefits to farmers or restaurants that donate excess food to charity.

The Lieberman-Santorum bill proposed a much larger food-donation provision. Mr. Baucus said the Finance Committee might bolster the food-donation provision on the Senate floor.

Some Lieberman-Santorum provisions were left out of the Finance Committee bill, such as an increase in the tax-deductible amount corporations can donate to charity.

But the panel restored to the bill yesterday one Lieberman-Santorum idea it had left out. The committee agreed to provide $450 million to gradually establish 300,000 individual development accounts government-matched savings accounts for low-income people that are designed to allow them to further their education, start a business or buy a first home.

But Mr. Nickles does not like the IDA provision because he has "concerns about the cost." Mr. Gramm said he plans to offer amendments on the floor to strike the IDA provision as well as a provision added by the Finance Committee that would give a 25 percent discount on the capital-gains tax to private-property owners who sell their land to environmental groups or the government, rather than to other private parties. The committee included several of its own provisions in the bill.

The Lieberman-Santorum bill was estimated to cost $11.6 billion over 10 years, and the Finance Committee bill would cost about $9.9 billion over the same time.


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