Charities Offer Mixed Reviews of Bipartisan Plan to Help Religious Groups

Charity leaders are giving mixed reviews to a bipartisan Senate plan, drafted with the support of President Bush, to help religious organizations obtain and use federal funds for their social-service programs.

The proposal — crafted by Sens. Joseph I. Lieberman, Democrat of Connecticut, and Rick Santorum, Republican of Pennsylvania — is being touted as a compromise between members of Congress who want faith-based groups to have expanded freedom in running programs with federal money and others who worry that making changes in current law would improperly cross the constitutional line that separates church and state.

The Senate plan, known as the Charity Aid, Recovery and Empowerment Act of 2002, would also offer a variety of tax incentives to spur charitable giving that Mr. Bush has endorsed, including a provision to allow people who do not itemize on their tax returns to claim charitable deductions.

“This legislation will not only provide a way for government to encourage faith-based programs to exist without breaching the separation of church and state, it will also encourage charitable giving,” said President Bush in an Oval Office appearance with Mr. Lieberman and other senators.

The Senate bill, called the CARE Act, prohibits the federal government, when distributing funds for social-service programs, from discriminating against religious groups that seek money just because the organizations have religious symbols, icons, or art on their walls; religious names in their titles; or religious missions in their charter documents.

The Senate legislation does not contain a key provision of a bill passed by the House last year, defined by some as “charitable choice,” that had the President’s support: specific permission for faith-based organizations that use federal funds to follow their own religious views when they make hiring or other administrative decisions, even if the actions ran afoul of certain laws. Groups would be exempt from local anti-discrimination statutes, such as laws that prohibit discrimination against homosexuals, and could require their employees to share a particular faith or view of how services should be delivered.

‘A Little More Faith’

While the president and many members of Congress praised the Senate compromise bill, other elected officials were cautious. House Republican Conference Chairman J.C. Watts Jr., a representative from Oklahoma who was a sponsor of the House bill, called the Senate agreement a “good start,” but added that “a little more faith will be required to pass this bill through the legislative process.” Mr. Watts said he had “the utmost confidence that, once the Senate finally passes a bill, we can work out our differences.”

Some charity leaders held similar views. Charles W. Colson, chairman of Prison Fellowship Ministries, which uses state money to help run prisons, said that the Senate bill “isn’t all we want,” but is “a decent start … a huge step forward.”

Tax Breaks Proposed

However, organizations such as the Family Research Council were worried that the Lieberman-Santorum bill had watered down the House bill. “We do regret [that] the president’s goal to expand charitable choice and the role of faith-based organizations was thwarted by the Democratically controlled Senate,” said Ken Connor, the council’s president. “We encourage the president to continue to look for opportunities to revisit his original proposal.”

Officials of Americans United for Separation of Church and State, which has helped lead the opposition to Mr. Bush’s proposals for faith-based groups, said that the Senate bill was better than the House bill but still went too far. For example, Congress should not allow religious groups to receive government funds while displaying “unlimited amounts” of religious art, icons, Scripture, or other symbols, the group said. “Such displays will make many religious minorities feel like second-class citizens at institutions providing social services with tax dollars,” Americans United said.

Apart from the faith-based measures, most charity leaders were delighted about sections of the Lieberman-Santorum bill that would provide new tax incentives for charitable giving.

One would allow people who do not itemize on their tax returns to claim a deduction of $400 each year; married couples who file jointly could deduct up to $800. A bill passed by the House last year would phase in, over several years, a deduction of $100 for individuals and $200 for couples.

The Senate provision would be effective for two calendar years, 2002 and 2003, and would expire at the end of 2003 unless Congress renewed it.

Some other provisions in the Senate bill would allow holders of individual retirement accounts who are age 67 and older to make charitable contributions directly from the funds without tax penalties; provide an enhanced deduction for corporate donations of food and books; and reduce and simplify the excise tax on foundation investment income from 2 percent to 1 percent to encourage greater “social investments.”

The Senate tax proposals altogether would cost the Treasury an estimated $8-billion to $10-billion.

Several of the tax proposals are similar to ones that passed as part of the House bill last year. Some versions of the giving incentives are also expected to be included by the top members of the Senate Finance Committee — Sen. Max Baucus, a Democrat from Montana who chairs the committee, and Sen. Charles E. Grassley, an Iowa Republican — in a bill they plan to introduce soon.

A summary of the provisions in the Lieberman-Santorum compromise legislation is available on Mr. Lieberman’s Web site at http://www.senate.gov/~lieberman. A copy of the full bill written by Senators Lieberman and Santorum, S 1924, is available on the Library of Congress’s Web site at http://thomas.loc.gov.