Congressional Republicans are attempting to pass a tax and spending reconciliation bill, however first they must reconcile their differences. Budget reconciliation is a congressional procedure that allows for expedited consideration of certain tax, mandatory spending, and debt limit legislation. The reconciliation process will allow the bill to pass with a simple majority and avoid a filibuster in the Senate.
Several House Committees have passed their respective reconciliation measures, many of which are of interest to Goodwill®. Those bills will be combined into one bill and pass through the House Budget Committee before going to the House floor for a vote. Once passed, the Senate will consider the measure where there will likely be further changes. Each Chamber will then likely conference their bills and vote on one identical bill. At the time of this writing, a vote to pass the bill in the Budget Committee failed as fighting within the party exists over Medicaid cuts and timing of work requirements, the amount of state and local tax deductions, and changes to the Supplemental Nutrition Assistance Program (SNAP) among other issues.
As currently written, the bill extends the 2017 tax cuts enacted during the first Trump term via the Tax Cuts and Jobs Act and makes cuts to entitlement and food assistance programs and other measures that Republicans project will save at least $1.5 trillion over a decade. Promising provisions include a charitable giving incentive for all individual taxpayers, expansion of the Pell Grant student aid program for workforce providers, and the transformation of certain “college savings plans” to “career savings plans” by allowing beneficiaries to use funds in those plans for, among other things, obtaining and maintaining professional certifications, licenses, and credentials. However, there are also several areas of concern including the impact of changes to Medicaid and SNAP, limits on foundation and corporate giving that could affect philanthropy, expansion of Unrelated Business Income Tax (UBIT) for nonprofits, and provisions related to terminating a nonprofit’s tax-exempt status.
Despite the divisions, House leadership would like to pass a bill by Memorial Day and the Senate is reportedly aiming for passage of their bill by July 4th. We will keep our advocates informed of pertinent updates and ways in which they can engage as negotiations continue.
