Clinton’s Budget Proposes Increases for the Arts and Social Welfare

President Clinton’s proposed budget for the coming fiscal year calls for increased spending on a variety of programs, including the arts, social welfare, and community service. The plan released last week also has numerous other provisions that could affect chariites.

The President’s proposal opens the debate on federal spending each year. The House and Senate will now consider the proposals and send their versions to the White House for approval later this year. Lawmakers hope to complete their work before October 1, the start of the government’s 2000 fiscal year.

A table summarizes items in the Clinton Administration’s budget that are of interest to charities and foundations. Among the key proposals:

Arts and humanities. President Clinton is seeking $150-million apiece for the National Endowments for the Arts and the Humanities. That represents increases of 53 per cent for the arts agency and 35.5 per cent for the humanities endowment over current levels of support.

Community service. President Clinton sought a 24-per-cent budget increase for AmeriCorps, the program that offers stipends and scholarships to encourage people to spend a year or more performing community service. The $585-million budget plan would allow the program to add 16,000 new participants in 2000.

But getting Congressional Republicans to approve the increase will probably be an uphill battle. Last year the House voted to eliminate AmeriCorps altogether before Congress settled on a 4-per-cent budget increase.

Over all, Mr. Clinton requested a total of $848-million for the Corporation for National Service, which oversees the budget for AmeriCorps, as well other volunteer and community-service programs, such as the Points of Light Foundation.

Housing. The President asked for a major expansion of the Low Income Housing Tax Credit to spur construction of low-cost housing. His proposal would increase tax credits for businesses by $5-billion over the next five years and encourage construction of an additional 150,000 to 180,000 housing units.

Other housing programs would see modest increases next year under the President’s proposal. Mr. Clinton asked for slightly more than $1-billion in grants for programs that help the homeless, an increase of nearly 5 per cent from fiscal 1999.

The Community Development Block Grant program, which provides funds to local governments to be disbursed to charities and other groups for housing and economic development, would receive nearly $4.8-billion under the President’s budget, an increase of less than 1 per cent.

Public broadcasting. The Corporation for Public Broadcasting would receive $350-million in fiscal year 2002, an increase of $10-million, or 3 per cent, over spending that Congress has already approved for fiscal year 2001. (Public-broadcasting money is approved two years in advance of the time it is needed because of the timetable involved in producing shows.)

Social services. One of the President’s top priorities is expanding child-care services. He proposed $3.7-billion for such programs in fiscal 2000, up from $2.3-billion this year.

In addition, Mr. Clinton would increase the amount awarded to the Legal Services Corporation, which helps provide lawyers for poor people, from $300-million this year to $340-million next year. The group once feared for its life: Congress slashed its appropriation from $400-million in 1995 to $278-million in 1996, and many Republicans had vowed to eventually eliminate the corporation entirely.

Mr. Clinton would spend $100-million on a new “Anti-Drug Diversion Program” to help young people who live in or near public housing. That sum would include money to finance mentor programs that are run by charities.

Taxes and retirement plans. The Clinton Administration proposed taxing the investment income of trade associations, business leagues, and other groups that are classified as tax-exempt organizations under Section 501(c)(6) of the Internal Revenue Code. Net investment income above $10,000 would be subject to the tax. Some lawyers for non-profit groups worry that Congress could adopt the idea and eventually extend its provisions to cover charities as well.

The President also proposed to make it easier for employees of non-profit groups to consolidate their retirement savings. One suggestion: Allow people to transfer funds from individual retirement accounts to tax-sheltered annuities called “403(b)” retirement plans, after the section of the tax code that governs them, which many charities offer their employees.

The Clinton Administration’s 2000 budget plan and related documents can be viewed — and searched — by going to the Government Printing Office’s World-Wide Web site at http://www.access.gpo.gov/usbudget.