April 16, 2003

WASHINGTON - A bill providing tax breaks for charitable giving and more than $1 billion for social service grants to states has passed the Senate.

Bearing almost no resemblance to President Bush's "faith-based initiative" proposal, the stripped-down piece of legislation encourages giving to charities by granting non-itemizing taxpayers a tax deduction of up to $250 for their gifts. The Senate passed the bill in a 95-5 vote April 9.

The tax breaks in the bill include a provision that allows people to roll over their individual retirement accounts directly to a charity without paying a tax penalty. The bill also reduces capital gains taxes on land gifts to conservation groups. Other incentives relate to donations to food banks and provisions that would help low-income people set up savings accounts.

In addition, almost $1.4 billion during the next two years would be added to the block grant that helps states fund social service programs, and $150 million would be allocated each year to assist small-community and faith-based organizations in competing for federal funds.

The Senate approved the bill once controversial provisions related primarily to hiring rules were dropped. It now goes to the House of Representatives, where bipartisan passage is expected. Objections based on church-state separation issues had halted the faith-based initiative in the Senate last year, and the bill was stalled until sponsors dropped provisions that critics said allowed for federally supported proselytizing.

The bill originated as President Bush's faith-based initiative - a plan to encourage more faith-based and community organizations to participate in providing social services through federal grants. Although often described as a 10-year, $90 billion proposal, administration officials insisted that it would not have used new money. Instead, they said, it would have removed barriers to religious groups seeking federal support for social service plans.

At the time, officials of the United Methodist Board of Church and Society and other agencies gave the concept a mixed review because of concerns about maintaining constitutional separation of church and state. In June 2001, the board joined with two other United Methodist agencies - the Board of Global Ministries and the General Council on Finance and Administration - in publishing a guide to faith-based initiatives because of the many questions being asked.

A series of executive orders were issued last year to accomplish the president's plans to "even the playing field" so religious organizations could compete with non-religious groups for money to fund such services as welfare-to-work training, substance abuse programs, day care for poor children and housing for the needy.

Two differences exist between executive orders and congressional legislation: Executive orders are prepared without public hearing and debate, and subsequent presidents can undo them.

One of this bill's sponsors, Sen. Rick Santorum (R-Penn.), said he also plans to support legislative proposals for expanding faith-based groups' access to federal grants. He has promised to try adding those proposals to welfare legislation that will be considered later in the session.

United Methodist News Service