The Senate overwhelmingly approved a bill yesterday to encourage contributions to charitable groups, two weeks after its sponsors shelved controversial proposals by President Bush that would have made it easier for religious charities to receive federal grants.
Despite strong bipartisan support for its proposed tax breaks for people who make charitable donations, the bill stalled in the Senate last year -- and threatened to bog down there this year -- because of a church-state controversy arising out of Bush's "faith-based initiative."
Faced with continuing deadlock, Sen. Rick Santorum (R-Pa.) agreed to drop contentious provisions that would have expanded religious groups' access to federal grants and contracts under conditions that critics said would lead to government-funded proselytizing and job discrimination. Without those provisions, opposition evaporated and the Senate approved the bill, 95 to 5.
The action was the last hurdle in Bush's two-year effort to pass "faith-based" legislation, one of the signature issues of his presidential campaign.
Along the way, the legislation became a shadow of its former self. Originally, Bush proposed a 10-year, $90 billon plan with an ambitious goal to test the bounds of church-state separation. But the price tag was cut in the vote yesterday to $13 billion, and the legislation retreated from significant new protections for religious charities.
The dissenters in yesterday's vote were western-state Republicans who objected to a provision providing a capital gains tax reduction for gifts of land to conservation groups. Some senators said western states had too much land off the tax rolls, and others said any tax break should apply to all charities rather than just land conservancies.
A proposal by Sen. Don Nickles (R-Okla.) to extend the tax reduction to all charities was rejected, 62 to 38.
The bill goes to the House, where it is likely to be approved without undue delay, said John Feehery, spokesman for Speaker J. Dennis Hastert (R-Ill.). To pave the way for the bill's passage in the Senate, House leaders agreed earlier that they would not try to revive the provisions for religious charities in negotiations over a final version of the bill.
Although loss of the faith-based provisions marked a defeat for Bush and his efforts to help religious charities, Santorum and others noted that the rest of the bill, including the tax breaks, would help those charities as well as nonreligious ones.
It is a "comprehensive response to a complicated problem," said Sen. Joseph I. Lieberman (D-Conn.), who co-sponsored the bill with Santorum. "This bill puts our shared values into action by elevating the priority we place on helping our most vulnerable citizens."
Santorum noted the high degree of bipartisan support for the measure and described it as a "win, win, win across the board."
Also, Republicans noted that Bush has issued executive orders giving religious groups expanded access to federal grants and contracts; the orders achieve much of the purpose of the legislation but can be rescinded by future presidents. Santorum has said he will try to add the legislative proposals to welfare legislation that will be considered later this year. Foes of the proposals have vowed to continue their fight against them.
The bill provides nearly $13 billion in tax breaks and other incentives over the next decade, including a provision allowing a deduction of as much as $250 (over the first $250) for charitable contributions by taxpayers who do not itemize deductions.
People could roll over their individual retirement accounts directly to charities without paying a tax penalty, and new incentives would be provided for donations to food banks and for banks to help low-income people set up savings accounts.
In addition, the block grant that helps states fund an array of social welfare programs would be increased by $1.4 billion over the next two years, and $150 million would be set aside every year to help small community and faith-based organizations with technical assistance to compete for federal funds.
The White House welcomed passage of the bill but objected to the additional funds for the social services block grant, saying they exceed Bush's request and will likely lead to large spending increases.
But Lieberman, who had championed the grant increase, regarded the White House's statement as a "major reversal" and was "very upset about it," Lieberman spokesman Dan Gerstein said. Gerstein added that the White House agreed to the spending increase in negotiations on the bill last year.