Breaking Down The Budget Deal

— by CAP Action War Room

The Omnibus Spending Bill And Tax Extenders Package Contain Significant Progressive Accomplishments

After weeks of negotiations, congressional leaders and the White House have agreed to a spending deal to fund the government through 2016. The omnibus spending bill and the tax extenders package still need final approval from the House and Senate. But with the release of the bill, all that’s left are the final votes, which are both expected tomorrow. There’s a lot to unpack in the 2,009-page bill, so we’ve broken it down into the good, the bad, and the fun.

The Good:

  • Permanent Renewals Of Earned Income Tax Credit And Child Tax Credit Expansions: Under the stimulus bill, the Earned Income Tax Credit and Child Tax Credit—two key programs that help keep millions of Americans out of poverty—were expanded until 2017. But the tax extenders package made the extensions permanent, a clear win for working families. Allowing these expansions to expire would have pushed 16 million Americans, including 8 million children, into or deeper into poverty.
  • Wind and Solar Tax Credit Extension: Renewable energy was also a winner in this year’s budget deal, thanks to a five-year extension of the solar Investment Tax Credit and the wind Production Tax Credit. Solar accounts for 1 in 78 new jobs in the country, and the solar Investment Tax Credit has been a crucial driver in the growing industry. The increase of wind and solar capacity is seen as a critical way for the U.S. to meet its goals under the Clean Power Plan as well as its commitments under the new UN climate agreement.
  • Accountability For Fast Food Chains: Congressional Republicans tried to block a National Labor Relations Board (NLRB) ruling that makes large corporations like McDonald’s responsible for how their franchises treat workers. The ruling, which remained intact, may force McDonald’s and similar brands to take responsibility for workplace conditions. This could significantly improve the chances that workers can force change in the industry.
  • Health Care For 9/11 First Responders: A health care bill for 9/11 first responders—brought to national attention thanks to the advocacy of Jon Stewart—was included in the year-end spending bill. The legislation was also included in the omnibus, only after 9/11 first responders made hundreds of advocacy trips to D.C.
  • Investment In The Middle Class: The omnibus bill funds key investments in a number of areas to strengthen the middle class and grow the economy. These investments include education from early childhood through college, medical and science research, transportation infrastructure, and conservation. These investments were made possible by the recent budget deal, which reversed about 90 percent of the cuts sequestration would have made to nondefense discretionary programs in fiscal year 2016.
  • Defeat of Many Policy Riders: Congressional Republicans had a long wish list of inappropriate and nongermane partisan policy riders. Luckily, many failed, including riders that would have defunded Planned Parenthood, made it harder for Syrian refugees to come to the United States, blocked the Department of Labor from protecting retirees’ savings, and hindered the Consumer Financial Protection Bureau’s ability to protect consumers.

The Bad:

  • A Win For Big Oil: Unfortunately, lawmakers also handed a win to big oil. As a part of a broader energy package, including the wind and solar tax credit extensions, the 40-year-old crude oil export ban was lifted, meaning American crude oil can be shipped abroad for the first time since the 1970s. Lifting the ban has been a priority for the oil industry. Many environmental groups are concerned that the policy change could lead to more domestic drilling and the potential for additional pollution.
  • Decreased Transparency In Money In Politics: Snuck into the 2,009-page omnibus bill are two sections that will only make the influence of money in politics worse. Section 735 would block the Securities and Exchange Commission’s ability to require companies that receive federal contracts to disclose their contributions to political organizations. And Section 127 will prohibit the IRS from formalizing proposed rules to reign in political groups who use the title of tax-exempt 501(c)(4) “social welfare” non-profits to avoid disclosing their funding.
  • Bans On Gun Violence Research (Still): Public health, medical, and gun violence prevention advocates were unable to take out a rider known as the “Dickey amendment,” which effectively prevents the CDC and NIH from doing any research on gun violence. The provision was maintained despite the fact that former Rep. Jay Dickey (R-AR), for whom the amendment is named, has since spoken out against the policy saying he regrets no research is being done. The good news is, despite the fact that the NRA spent more than $27 million to elect a Republican majority in the 2014 elections, several other gun lobby priority items failed to make it in.
  • Budget Cuts For The IRS Enforcement Division: The budget deal cuts $25 million in funding for the IRS team that keeps people from evading their taxes. The IRS enforcement team has already experienced huge cuts, which limits its ability to save the government money through auditing returns and pursuing tax evaders.

The Fun:

  • Sledding provision: The crude oil export ban wasn’t the only ban lifted as a part of the budget deal: In a big win for winter cheer, the sledding ban on Capitol Hill was also lifted, ending an official ban of 14 years.

BOTTOM LINE: Crisis averted?  We’ll see tomorrow when the House has scheduled a vote on this ill-conceived budget. Congress has (almost) successfully avoided a government shutdown and agreed on a spending bill to fund the government for the next year. The deal is imperfect, but it is largely absent of highly partisan riders and funds key investments in a number of areas to strengthen the middle class and grow the economy.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe. ‘Like’ CAP Action on Facebook and ‘follow’ us on Twitter

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IRS Finally Taking a Stand Against Citizens United by Fixing Their Interpretive Error

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have announced they will issue initial guidance regarding qualification requirements for tax-exemption as a social welfare organization under section 501(c)(4) of the Internal Revenue Code.  This proposed guidance defines the term “candidate-related political activity,” and would amend current regulations by indicating that the promotion of social welfare does not include this type of activity.  The proposed guidance also seeks initial comments on other aspects of the qualification requirements, including what proportion of a 501(c)(4) organization’s activities must promote social welfare.

There are a number of steps in the regulatory process that must be taken before any final guidance can be issued.  Given the significant public interest in these and related issues, Treasury and the IRS expect to receive a large number of comments.  Treasury and the IRS are committed to carefully and comprehensively considering all of the comments received before issuing additional proposed guidance or final rules.

“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by tax-exempt social welfare organizations,” said Treasury Assistant Secretary for Tax Policy Mark J. Mazur.  “We are committed to getting this right before issuing final guidance that may affect a broad group of organizations.  It will take time to work through the regulatory process and carefully consider all public feedback as we strive to ensure that the standards for tax-exemption are clear and can be applied consistently.”

“This is part of ongoing efforts within the IRS that are improving our work in the tax-exempt area,” said IRS Acting Commissioner Danny Werfel.  “Once final, this proposed guidance will continue moving us forward and provide clarity for this important segment of exempt organizations.”

TP501c4

Organizations may apply for tax-exempt status under section 501(c)(4) of the tax code if they operate to promote social welfare.  The IRS currently applies a “facts and circumstances” test to determine whether an organization is engaged in political campaign activities that do not promote social welfare.  Today’s proposed guidance would reduce the need to conduct fact-intensive inquiries by replacing this test with more definitive rules.

In defining the new term, “candidate-related political activity,” Treasury and the IRS drew upon existing definitions of political activity under federal and state campaign finance laws, other IRS provisions, as well as suggestions made in unsolicited public comments.

Under the proposed guidelines, candidate-related political activity includes:

  • Communications
  • Communications that expressly advocate for a clearly identified political candidate or candidates of a political party.
  • Communications that are made within 60 days of a general election (or within 30 days of a primary election) and clearly identify a candidate or political party.
  • Communications expenditures that must be reported to the Federal Election Commission.
  • Grants and Contributions
  • Any contribution that is recognized under campaign finance law as a reportable contribution.
  • Grants to section 527 political organizations and other tax-exempt organizations that conduct candidate-related political activities (note that a grantor can rely on a written certification from a grantee stating that it does not engage in, and will not use grant funds for, candidate-related political activity).
  • Activities Closely Related to Elections or Candidates
  • Voter registration drives and “get-out-the-vote” drives.
  • Distribution of any material prepared by or on behalf of a candidate or by a section 527 political organization.
  • Preparation or distribution of voter guides that refer to candidates (or, in a general election, to political parties).
  • Holding an event within 60 days of a general election (or within 30 days of a primary election) at which a candidate appears as part of the program.

These proposed rules reduce the need to conduct fact-intensive inquiries, including inquiries into whether activities or communications are neutral and unbiased.

Treasury and the IRS are planning to issue additional guidance that will address other issues relating to the standards for tax exemption under section 501(c)(4).  In particular, there has been considerable public focus regarding the proportion of a section 501(c)(4) organization’s activities that must promote social welfare.  Due to the importance of this aspect of the regulation, the proposed guidance requests initial comments on this issue.  The proposed guidance also seeks comments regarding whether standards similar to those proposed today should be adopted to define the political activities that do not further the tax-exempt purposes of other tax-exempt organizations and to promote consistent definitions across the tax-exempt sector.

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