The midterm elections are over, and Congress is back after the Thanksgiving break to power through a hectic year-end session. If you have been busy watching the World Cup games, feasting on Thanksgiving leftovers, or putting up holiday decorations, fear not, here is a download of issues in Washington, DC affecting nonprofits:
Legislative Outlook
The House and Senate are back from the Thanksgiving break for the final stretch before the end of the year. Members have kept busy negotiating an omnibus appropriations measure to extend funding through the duration of the fiscal year ending September 30, 2023, which could possibly include tax, retirement, and health items. A lack of progress in the negotiation increases the chances that a continuing resolution until December 23, or even into next year, will be required given the December 16 deadline.
As the end of the year approaches, nonprofits are paying close attention to a potential tax package that could include bipartisan and bicameral policy priorities, such as the Legacy IRA Act (S.243), the Universal Giving Pandemic Response and Recovery Act (H.R. 1704/ S.618), and the Employee Retention Tax Credit Reinstatement Act (H.R.6161/S.3625). Independent Sector, along with numerous other nonprofits and businesses, sent a letter to IRS Commissioner Charles Rettig expressing the challenges many organizations are facing due to the delays in the disbursement of the Employee Retention Tax Credit.
Congressional Midterm Election Update
We are headed into a divided Congress next year. After the November 8 midterm elections, Democrats kept control of the Senate with either a 51-49 or 50-50 threshold, depending on the outcome of the December 6 Georgia runoff election. On November 17, Republicans officially secured control of the House of Representatives with a narrow majority of at least 220 seats. The House will have new Democratic leadership at the beginning of the next Congress. Speaker Nancy Pelosi (D-CA) announced she would not seek re-election as the top Democrat in the House, but will remain in Congress. Majority Leader Steny Hoyer (D-MD) will also step down from his leadership post. Rep. Hakeem Jeffries (D-NY), chairman of the House Democratic Caucus, has announced that he will seek the top Democratic spot. House Republicans elected Kevin McCarthy (R-CA) as their nominee for Speaker with 188 votes; his nomination must also be backed by a majority of the entire House in a public vote on January 3, once the new Congress is seated.
Senate Minority Leader Mitch McConnell (R-KY) handily won reelection to his leadership post after a challenge from National Republican Senatorial Committee Chairman Rick Scott (R-FL). Senate Democrats will wait until the week of December 5 to hold their leadership elections. Senate Majority Leader Chuck Schumer (D-NY) is expected to easily win re-election as Senate Democratic leader.
Federal Court Blocks Biden Student Debt Relief Program
On November 14, a federal appeals court issued a nationwide injunction temporarily barring the Biden administration’s student loan debt relief program. The ruling by the 8th Circuit Court of Appeals in St. Louis is the latest in a series of legal challenges to President Joe Biden’s plan to cancel up to $20,000 in student debt for millions of Americans. The decision by the appeals court came after six Republican-led states argued in a lawsuit that the loan relief program threatens their future tax revenues, and the plan circumvents congressional authority. The Biden administration stopped accepting applications for its relief program on November 11 after a federal district judge in Texas struck down its plan, calling it “unconstitutional.”
On November 22, the U.S. Department of Education announced an extension of the pause on student loan repayment, interest, and collections. Payments will resume 60 days after the Department is permitted to implement the program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current term. If the program has not been implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that date.
Nonprofits Urge Congress to Renew and Expand the Non-itemizer Deduction
Nonprofit leaders from across the nation participated November 15-16 in the Grow Giving Now DC Fly-In organized by the Charitable Giving Coalition. During the two-day fly-in, 50 charitable leaders met with more than 60 lawmakers and staff on Capitol Hill in both the House and Senate. The goal of the fly-in was to urge Congress to include the renewal and expansion of the universal, non-itemizer charitable deduction in an anticipated year-end tax package.
If you were not able to participate in the fly-in, please sign on to the coalition’s letter addressed to Congressional leaders urging them to renew and expand the non-itemizer charitable deduction. The deadline to sign on to the letter is the close of business tomorrow — Thursday, December 1 at 5:00 pm ET. Also, take a minute to send a letter to your members of Congress asking them to renew and expand the much-needed deduction.
Letter in Support of Raising the Charitable Mileage Rate
On November 20, the National Council on Nonprofits, Meals on Wheels, and Independent Sector sent a letter to the leaders of the Ways and Means Committee urging action on legislation to increase the charitable mileage rate from 14 cents per mile to the standard business rate of 62.5 cents per mile. The rate of individuals who volunteer their time decreased to 58% in 2020, according to the Gallup organization, and fell even further to 56% in 2021. Volunteers point to high gas prices and poor tax incentives as among the main reasons they have stopped donating their needed time and talent to helping others. Gas prices directly affect the ability of volunteer drivers to help charitable nonprofits provide essential services to the public, such as meal delivery and access to healthcare. Help advance this vital work today by asking your legislators to support volunteer driver tax fairness.
Ana Montañez is manager of government relations at Independent Sector.
