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Jewish Groups Mainly Pleased by Provisions in Budget Bill

August 11, 1993
See Original Daily Bulletin From This Date

President Clinton’s narrow victory as Congress passed his budget bill last week was also a victory for antipoverty measures contained in the bill and backed by many in the Jewish community.

Jewish groups had been actively lobbying members of Congress to support an increase in such programs as the earned income tax credit for working families, the Head Start childhood education program and childhood immunization measures.

And the compromise legislation containing these anti-poverty provisions, which squeaked through both houses of Congress late last week and was expected to be signed into law by Clinton in Tuesday, was for the most part welcomed by Jewish organizational officials this week.

The budget bill, which aims to reduce the country’s ballooning deficit, contains tax provisions that will have an impact on donors to charitable causes and on tax-exempt organizations.

Marc Stern, co-director of the American Jewish Congress legal division, said he thought the provisions were “do-able” and would not cause problems for Jewish organizations.

According to the new legislation, if a donor gives a charity $75 or more as part of a “quid pro quo,” the charity must notify donors what the value of the “quid pro quo” is, for the donor’s tax deduction purposes.

For example, if a donor attends a charity dinner and pays $100, the charity must inform the donor of the value of the dinner.

Under another provision in the new legislation, if a donor gives $250 or more, the charity must now provide the donor with a receipt in order for the donor to claim a deduction.

Eric Stein, a consultant in the Council of Jewish Federations’ department of planned giving and foundation relations, said the bill is “a great thing for charity,” primarily because of a provision dealing with gifts of appreciated property.

Such gifts, which increase in value from the time a donor bought them to the time the donor donates them to a charity, will now be removed as a preferred item from alternative minimum tax calculations.


For example, if a donor bought an item at $40,000 and it increased in value to $100,000, at which point the donor donated the item to a charity, the donor would continue to receive a deduction based on the $100,000 value.

But now, the $60,000 in appreciated value will be removed from the donor’s alternative minimum tax calculations, thereby encouraging more people to make large donations.

Stein of CJF said that many potential donors around the country have been waiting to see what was enacted in the bill before making their donations.

One “minus” in the bill, according to Stein, is that the so-called 3 percent floor limiting the deductions that high-income donors can take on their contributions has been made permanent.

Stein said that this provision will have more of a psychological impact on giving than a real impact, but that charitable organizations had been hoping the “3 percent floor” would be removed.

Another provision of the bill defines a “quid pro quo” as not including a religious service, and this definition could halt what was a looming threat to Jews’ abilities to deduct the purchase of High Holy Day tickets.

A group of Scientologists had filed a lawsuit arguing that if Jews could deduct the cost of their High Holy Day seats, then Scientologists should be able to deduct payments to their church, Stern said.

While the case is still to be decided, Stern said he feels the High Holy Day deductions will be saved because of the congressional legislation.

On the anti-poverty front, several Jewish groups had been lobbying members of Congress to enact provisions from the more generous House version of the budget bill. These group included the American Jewish Committee, AJCongress, the National Council of Jewish Women and the Union of American Hebrew Congregations.

The House and Senate conferees ended up adopting compromise language that satisfied Jewish leaders because funding for the poverty programs was increased.

The earned income tax credit program for working families, an issue on which Jewish groups have been lobbying hard, received a $21 billion expansion and childhood immunization programs received a $500 million boost. Funding for the Mickey Leland Childhood Hunger Relief Act was increased by $2.7 billion over the next five years.

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