New Legislation Affects Non-profits and Social Services

Republicans in the House of Representatives recently proposed a blueprint for next year’s budget that cuts federal spending and redefines major safety net programs including food stamps and Medicaid.

The plan involves an overall strategy to redo the tax code, leaving just two personal tax rates of 10 and 25 percent, as well as a 25 percent corporate income tax. It will be paid for by ending or curtailing all deductions, credits, and loopholes. (http://www.nytimes.com/2012/04/14/us/politics/house-republicans-to-tackle-federal-budget.html).

Known as “The Path to Prosperity,” the document, which has to be approved by the Budget Committee, would impact myriad government assisted programs that help low income clients and the non-profit organizations that serve them.

Because it is not specific as to whether or not charitable deductions will be eliminated as tax breaks, a Budget Committee spokeswoman indicated that the House Ways and Means Committee would have to hold hearings to decide if charitable deduction tax incentive breaks would be chopped.

The plan offers guide­lines for fu­ture leg­is­la­tion and discusses many spend­ing goals rather than concentrating on spe­cif­ic cuts. Therefore, many feel that the plan would af­fect a rather broad spec­trum of gov­ern­ment pro­grams that benefit non-profits and their low-in­come cli­ents. Ultimately, this means there could be drastic cuts to these programs. (http://philanthropy.com/article/Republicans-Outline-Spending/131259/).