Nonprofits could soon face significant cuts in government aid in the wake of Monday’s announcement of an impasse among members of a Congressional committee seeking to close the mounting federal deficit.
Congress voted this summer to require the federal government to slash spending in 2013 if lawmakers don’t pass a deficit-reduction bill by December 23. Now that the “super committee” in charge of drafting such a measure failed, that deadline will be hard to meet.
“The only way these spending cuts will not take place is if Congress gets back to work and agrees on a balanced plan,” President Obama said, challenging lawmakers to devise a plan after they return from the Thanksgiving holidays.
He said that if no such agreement was reached, the cuts would indeed take effect in 2013.
The spending curbs would not affect Social Security, Medicaid, unemployment insurance, or programs for low-income people.
But they would probably affect many federal programs that provide money to nonprofits, says Michael Reinemer, a member of the Healthcare at Home Initiative, a coalition of charities, foundations, associations, and companies that advocate for the disabled.
“We’ve been cut down to the bone,” Mr. Reinemer says of charities that provide home health care. “Given past history, we suspect that we will be a target.”
Meanwhile, many nonprofit leaders are also worried that Congress will continue to debate limits on charity tax breaks for the wealthy.
The Alliance for Charitable Reform, a group that represents grant makers and donors, says that it will continue to lobby Congress to protect the current deduction.