Bush Administration Will Not Ask Congress to Pass a Giving Incentive Many Charities Sought

By Grant Williams

The Bush administration no longer supports legislation that would provide a charitable deduction to people who do not itemize their deductions on their tax returns because it decided Congress was "not going to budge," according to the White House.

About 70 percent of taxpayers currently do not itemize. Many charities have long been lobbying Congress to allow those taxpayers to deduct their charitable gifts because they expect that such a change would significantly increase donations to charity.

"It was very clear that there was never a lot of enthusiasm for this from the standpoint of tax policy" from Congress, said James Towey, head of the White House Office of Faith-Based and Community Initiatives.

What's more, said Mr. Towey, the House and Senate had "completely different perspectives" on whether a deduction for people who don't itemize should be made permanent or simply for two years. In addition, Mr. Towey said, nonprofit leaders had "mixed feelings about what the non-itemizer might mean to charities."

The Bush administration had in previous years supported the deduction for people who do not itemize.

Other Tax Incentives

President Bush himself made clear in a speech Tuesday in Washington, that he continues to support other measures aimed at increasing charitable giving.

Among them: Allow donors to give money to charity directly from their individual retirement accounts without incurring taxes, and expand tax breaks that encourage businesses to donate food to charities.

Of the IRA proposal, Mr. Bush said, "It's a simple change, but it's a substantive change to law. And I believe it will help encourage giving."

In his remarks, Mr. Bush restated his "continued commitment" during his second term to helping religious organizations compete for government funds while retaining their "religious identity."

Said the president: "The goal is, over the next four years, to change the culture permanently so faith- and community-based organizations will be welcomed into the grant-making process of government."

To read Mr. Bush's speech, and to obtain more information on the president's "faith-based initiative," go to http://www.whitehouse.gov.