Early this morning, the U.S. Senate and U.S. House of Representatives approved a bipartisan agreement to end another brief federal government shutdown by setting federal funding levels for the next two years. The bill, which funds the federal government through March 23, allows Congress to increase defense spending by $165 billion over the next two years and to increase domestic spending - including funding for many programs that are important to the work of nonprofits - by $131 billion over the same period. The bill extends funding for nonprofit community health centers for two years and extends funding for the Children's Health Insurance Program (CHIP) for four more years. It also suspends the debt ceiling through March 1, 2019 and could add significantly to the national debt. Congress now has until March 23 to work out the details of its omnibus spending plan for the rest of the current fiscal year (through September 30).
While the budget agreement includes several tax law changes, two notable nonprofit tax provisions aren't included:
- The bill does not include a universal deduction for charitable contributions, which could offset the projected drop in charitable giving from the tax legislation that was signed into law last December. The Center will continue to advocate for Congress to pass the Universal Charitable Giving Act (H.R. 3988) that was introduced by Congressman Mark Walker (R-NC) in the fall.
The bill makes no changes to the Johnson Amendment, the provision in Section 501(c)(3) of the Internal Revenue Code that keeps partisan politics out of charitable nonprofits. A House appropriations bill had included a provision to weaken IRS enforcement of this law, so it is still possible this could be included in the spending plan that works its way through Congress in the coming weeks. Also of note on nonprofit nonpartisanship, President Trump did not mention the repeal of the Johnson Amendment in yesterday's National Prayer Breakfast. His comments at least year's event sparked the (thus far) failed congressional effort to weaken or repeal the Johnson Amendment last year.