Report from Washington: Changes Coming for Nonprofits in the New Congress and New Administration

From our friends and the National Council of Nonprofits.

The first 100 days of a new Administration are often marked by a flurry of activity. With one party about to be in control of the White House, the U.S. Senate, and the House of Representatives, significant executive and legislative changes are a near certainty. Many of these changes will affect the ability of nonprofits to advance their missions. To helpnonprofits and grantmakers prepare to take swift action to defend against shared threats, the National Council of Nonprofits analyzed six federal issues of sector-wide importance that likely will be taken up in the coming weeks and months. That analysis, published in theChronicle of Philanthropy as “Nonprofits Need to Stand Together to Push for Smart Public Policies,” identifies specific challenges and opportunities in budget and spending decisions, tax reforms (including threats to charitable giving incentives), efforts to repeal and replace the Affordable Care Act (Obamacare), independent private control of endowments, preserving nonprofit nonpartisanship, and perhaps positive reforms to regulations and federal grantmaking rules. Readers are encouraged to share the analysis with board members, staff, and other stakeholders so all can be prepared to take collective action on these issues that affect all nonprofits and grantmakers.

The First 100 Days

The 115th Congress convened January 3 and Donald Trump will be sworn into office late next week as the 45th President, two events that signal the end of federal gridlock and guarantee to bring changes to federal policymaking. Here’s a look at the much-heralded first 100 days, a time of intense legislative and executive activity:

  • Confirmations: In addition to its lawmaking role, the Senate will be busy conducting hearings and floor debates on scores of nominees for executive-branch jobs that require Senate confirmation. Several nominees have already proven to be controversial, making it hard to predict when the Senate will complete the process that takes up considerable floor time.
  • Affordable Care Act Repeal: A budget resolution introduced in the U.S. Senate on the first day of the session started the process for repealing the Affordable Care Act (ACA). The resolution, which both the House and Senate are expected to approve quickly, directs four congressional committees to craft legislation by January 27 to repeal many of the major components of the ACA. That legislation will be taken to the floors of the House and Senate in a measure called the Budget Reconciliation bill, which requires only a majority vote rather than the usual 60 votes needed to overcome a filibuster in the Senate. Congress and the White House have not yet worked out details on what provisions they would create to replace a repealed ACA, and some Republican Senators are expressing concern about proceeding with repeal votes before a replacement plan is prepared.
  • Tax Reform: Federal tax reform is expected to begin in earnest in early February. Most observers presume the bill will seek to lower individual and corporate tax rates, increase the standard deduction, and repeal the federal estate tax, among other things. The tax outline offered by Speaker Ryan is considered the best indicator of what the legislation will contain. That plan offers support for charitable giving incentives, but an unclear position from President-elect Trump keeps preserving the charitable deduction high on mostnonprofits’ policy agendas.
  • Spending: Before adjourning for 2016, Congress passed a short-term Continuing Resolution (CR) that funds the federal government through April 28. The new Congress must pass a spending bill by that date, presumably one that runs through the end of the 2017 fiscal year (September 30, 2017). It is unclear, however, whether wholesale cuts are contemplated in April, or whether those will be put off until the next fiscal year.
  • Debt Ceiling: Congress and the Administration ostensibly have only until March 15 to address whether to increase the debt limit, which was extended through the budget deal brokered in October 2015. The Treasury Department, however, can use accounting tools to avoid defaulting on the government’s obligations until mid-summer of 2017. The bipartisan Committee for a Responsible Federal Budget is a good resource on this issue.

Federal FastView

  • Blocking Future Regulations: Late Thursday, the House passed a measure that would require Congressional approval of major federal regulations before they take effect. The legislation, the “Regulations from the Executive in Need of Scrutiny Act of 2017 or (REINS Act), was drafted to “increase accountability for and transparency in the federal regulatory process,” but has raised concerns among environmental and other advocates that the measure could hamper the work of various federal agencies. The bill would require the House and Senate to accept or reject within 70 legislative days rules that have an economic impact of more than $100 million. A version of the same bill passed the House last July by a vote of 243-165.
  • Repealing Nonpartisanship: Rep. Walter Jones (R-NC) reintroduced legislation to repeal the 62-year-old tax-lawprovision that prohibits 501(c)(3) organizations from engaging in partisan, election-related activities. The proposal, which was a recurring topic in the 2016 election campaigns, is opposed by many charitable nonprofits because of concern that it would politicize the sector, subject nonprofits and foundations to demands for campaign contributions, and damage public trust in the work of nonprofits. See theNational Council of Nonprofits‘ Public Policy Agenda andadvocacy rights video.
  • Standard Mileage Rates: Beginning on Jan. 1, 2017, the standard mileage rates for the use of a vehicle will be 53.5 cents per mile for business miles driven, down from 54 cents for 2016, the Internal Revenue Service announced last month. The IRS also lowered to 17 cents the standard rate per mile driven for medical or moving purposes, down from 19 cents last year. The volunteer mileage rate for miles driven in service to charitable nonprofits remains unchanged at 14 cents per mile because the rate is fixed in federal statute.
  • Loan Forgiveness Program in Turmoil: The American Bar Association filed a lawsuit last month against the U.S. Education Department seeking to reverse the Department’s decision to retroactively refuse to honor loan forgiveness commitments it made under the Public Service Loan Forgiveness Program to individuals who have dedicated their careers to public service. The suit claims the Department of Education approved public service work prior to changing the eligibility requirements, and that individuals made decisions based on the approval that were then retracted. Read the ABA complaint.

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