Meaning of Senate Language on Charitable Deductions in Eye of Beholder

In adopting its 2010 budget resolution on Thursday, the Senate included some language on charitable deductions — a hot topic since President Obama proposed limiting them as a way to raise money to help reshape the health-care system.

However, what the Senate language means is in the eye of the beholder.

Sen. Bob Bennett, Republican of Utah — who said Mr. Obama’s proposal would deprive charities of much-needed donations — proposed an amendment he said would prohibit Congress from reducing charitable deductions to pay for the health-care plan.

Specifically, it said legislation to set up a health-care fund should “not result in diminishing a taxpayers’ ability to deduct charitable contributions as an offset to pay for such purposes.”

The Senate approved his proposal by “unanimous consent,” a procedure that allows a measure to go forward if no one objects.

“The Senate sent a clear message to the president that we do not support increasing taxes on charitable contributions to try to cover the costs of health care reform,” Senator Bennett said in a press release.

However, Sen. Max Baucus, chairman of the Senate Finance Committee, seemed to view it differently when he urged his colleagues to adopt the amendment, portraying it simply as a way to record support for charitable deductions.

“The Bennett amendment would express the importance of taxpayers’ ability to take deductions for contributions to charity,” he said on the floor. He said the amendment was “not inconsistent” with the president’s budget and was consistent with a vote the Senate took last week on tax breaks for charitable gifts.

But that vote came after the Senate narrowly rejected a resolution offered by Sen. John Thune, Republican of South Dakota, that was designed to criticize President Obama’s deduction plan.

Senator Thune, in a proposed amendment to a national-service bill, asked lawmakers to state that Congress should preserve the “full” federal income-tax deduction “and look for additional ways to encourage charitable giving.”

But after Senator Baucus argued that language was too broad, senators adopted an alternative text removing the word “full” and just saying that Congress should preserve the deduction.

Senator Thune was more successful this time around. During the budget debate, senators adopted an amendment he introduced that would require a “supermajority” of 60 votes to approve legislation to raise certain revenues, which he said would apply to limits on charitable deductions.

The Senate budget outline now goes to a conference committee that will iron out differences with the House’s budget blueprint, adopted this week.

Nick Giordano, a legislative consultant who advises Independent Sector, a coalition of charities and foundations, noted that the budget outlines, or resolutions, are nonbinding and that Senate amendments are often dropped when the two houses reconcile their differences on bills.