March 18, 2004 | Read Time: 2 minutes
A major charity measure that had stalled in Congress has breathed new life, as two U.S. senators announced that they would add the legislation to a jobs bill that is almost certain to pass the House and Senate.
Sen. Rick Santorum, Republican of Pennsylvania, and Sen. Joseph I. Lieberman, Democrat of Connecticut, reintroduced the Charity Aid, Recovery, and Empowerment (Care) Act of 2003, which passed the Senate by a vote of 95 to 5 in April, as an amendment to the Jumpstart Our Business Strength (Jobs) Act.
Despite strong support in both the House and Senate last year, proposed charity legislation failed to pass Congress for a third consecutive year. After the Senate approved the Care Act, the House of Representatives passed a similar bill, called the Charitable Giving Act, by a vote of 408 to 13 in September.
After that, however, lawmakers failed to reconcile their bills, with each side blaming the other for the impasse.
The charitable-giving measure introduced by Senator Santorum and Senator Lieberman would allow people who do not itemize on their income-tax returns to write off some of their charitable gifts. The amendment also would permit people 70Z\x and older to withdraw money from their individual retirement accounts and donate it directly to charity without being subject to income tax.
The tax breaks in the amendment would cost the federal government $11-billion a year, Mr. Santorum said. But to lower the cost to $2-billion, he said, he and Mr. Lieberman also added provisions designed to make it harder for taxpayers to take an income-tax deduction for an inflated amount when they donate cars or pieces of art to charities.
The charitable-giving measure would also authorize $1.4-billion in social-services block grants.
While the measure the senators introduced is very similar to the bill passed by the House, it does have some differences that would have to be reconciled before any charitable-giving legislation could be sent to President Bush’s desk for approval.
The House version includes a provision to reduce the excise tax on net income that private foundations now must pay, but the senators did not include such a provision in their bill.
Foundations currently pay an excise tax of up to 2 percent on their investment income. Foundations say that lower taxes would enable them to give more money to charities. In addition, the provisions to prevent taxpayers from exaggerating the value of donated cars and artwork are not in the House version.
