House Dems block charitable tax bill

House Democrats blocked legislation on Thursday that would have permanently extended three tax credits for charitable giving, ending an effort to give nonprofits a last-minute victory. 


The bill got a strong majority in the House, with 275 members voting for it, including 47 Democrats. But the measure fell eight votes short of the two-thirds majority it needed to pass, with 149 Democrats voting against it after House Democratic leaders whipped against it and President Obama threatened a veto.

House Republicans tried to fast-track the bill, with time quickly running out on the current Congress and more pressing issues like funding the government still looming. Even if the House passed the measure, there was no guarantee the Senate would have enough time to take it up.

That fast-track process required a two-thirds vote – a threshold the House would need anyway to overcome a veto from Obama. The House also got the support of more than two-thirds voting when a similar proposal on charitable tax breaks hit the floor in July.

The vote ends a last-ditch effort by the nonprofit sector to get three of its priorities into law for good, after a broader deal that would have accomplished that fell apart last month. The measure was pushed by Congress’s top tax writers, House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenTrump trade deal likely to sow division in Democratic presidential field House GOP unveils alternative drug pricing measure ahead of Pelosi vote Pelosi gets standing ovation at Kennedy Center Honors MORE (D-Ore.), but would have faced a difficult path in the Senate even if it had cleared the House.

In scuttling the bill, Democrats argued that the bill’s $11 billion cost should be offset, especially after Republicans opposed permanently extending tax incentives for working families.

"What this is about is fiscal responsibility and fiscal priorities," Rep. Sandy Levin (Mich.), the top Democrat on the House Ways and Means Committee, said this week.

The legislation would have permanently renewed an incentive for conservation easements, which aid in land preservation, and the deduction for food inventory contributions.

It also would have extended a provision allowing taxpayers to claim itemized deductions for charitable contributions from individual retirement accounts. All three of those incentives, which expired at the end of 2013, would be extended just through this year in the tax bill that passed the House last week.

Camp said making the popular tax breaks permanent would have helped simplify the tax code. Supporters of the measure were betting that enough Democrats wouldn’t oppose a bill to help charities during the holiday season.

"Every day, selfless Americans nationwide decide to donate in support of causes," Camp said. "However, because these policies are only temporary, they are not nearly as effective as they can or should be."

In a statement of administration policy, the White House said it supported the tax breaks on their merits, but opposed extending them permanently without offsets that add to the deficit.

The Obama administration also threatened to veto that similar measure this summer that would have permanently put into place the three charitable breaks and two other incentives. House Democratic leaders didn’t actively whip against that bill. 

Senate Majority Leader Harry ReidHarry Mason ReidNevada journalist: Harry Reid will play 'significant role' in Democratic primary The Hill's Morning Report - Sponsored by AdvaMed - A crucial week on impeachment The Hill's Morning Report — Pelosi makes it official: Trump will be impeached MORE (D-Nev.) told reporters this week that he generally supported the bill’s aims but doubted there was time to take it up in the Senate. The Senate still needs to vote on a major defense bill, the one-year tax bill passed by the House last week and a measure to fund the government.

The three charitable provisions would also have been permanently extended in a broader tax deal being negotiated last month by Reid and Camp. President Obama and congressional liberals undercut that emerging agreement because they thought it favored business interests over working families.

After that deal was scuttled, the House moved on to the one-year deal to extend more than 50 of the provisions that expired at the end of last year. Charitable groups then urged Wyden and Camp to make a last-ditch push to permanently revive the charitable provisions, leading to Thursday’s vote.

Wyden, who helped torpedo the broader Reid-Camp deal, started pushing the permanent charitable deal after falling short in his efforts to extend the expired tax breaks for two years

Now, charitable groups will have to settle for reviving the tax breaks only until the end of the year, which many in the nonprofit sector insist is insufficient.

“The legislation’s impact on low-income Americans, underserved populations, communities of color and the nation’s community food banks cannot be overstated,” several groups said this week in an effort to gin up more Democratic support in the House. 

This story was updated at 4:49 p.m.