Obama says Republican proposals would put nonprofits at risk

WASHINGTON Tue Dec 4, 2012 9:23pm EST

President Barack Obama gestures while addressing his first news conference since his reelection, at the White House in Washington November 14, 2012. REUTERS/Larry Downing

President Barack Obama gestures while addressing his first news conference since his reelection, at the White House in Washington November 14, 2012.

Credit: Reuters/Larry Downing

Related Topics

WASHINGTON (Reuters) - President Barack Obama warned on Tuesday that Republican tax proposals could threaten the collapse of hospitals and universities benefiting from charitable deductions.

"There's been a lot of talk that somehow we can raise $800 billion or $1 trillion worth of revenue just by closing loopholes and deductions," Obama said in a Bloomberg TV interview. "The only way to do that would be if you completely eliminated, for example, charitable deductions."

Senior administration officials met with representatives of the largest charities in the country at the White House Tuesday to press their case, a White House official said.

The president and congressional Republicans are clashing over how to prevent so-called fiscal cliff year-end tax increases and spending cuts that analysts say could throw the economy into a recession. The two sides are deadlocked over Obama's insistence that tax cuts enacted under former President George W. Bush expire for the wealthiest 2 percent of Americans.

Republicans oppose any increase in tax rates, but have said they are willing to agree to $800 billion in additional revenues to help ease a massive budget deficit that both sides want to see tamed.

However, House of Representatives Speaker John Boehner's proposal would lower tax rates, not raise them, and rely instead on closing loopholes and eliminating deductions.

Obama said on Tuesday he believes that no more than $300 billion to $400 billion in additional revenue can be raised through closing loopholes and cutting deductions.

The president and his aides argued that raising revenues solely by closing loopholes and eliminating deductions could cut deeply into programs that benefit the middle class, such as the mortgage interest tax deduction, and could have a devastating impact on organizations that depend on donations.

"If you eliminated charitable deductions, that means every hospital and university and not-for-profit agency across the country would suddenly find themselves on the verge of collapse," Obama said.

White House Chief of Staff Jack Lew, senior adviser Valerie Jarrett, Domestic Policy Council Director Cecilia Munoz and National Economic Council Director Gene Sperling met with non-profit and charity leaders, the official said.

The attendees included American Red Cross chief executive Gail McGovern, United Way Worldwide U.S. President Stacey Stewart, and Catholic Charities USA President the Reverend Larry Snyder. Together, those three organizations draw more than $6 billion in contributions annually.

(Writing by Mark Felsenthal; Editing by Eric Walsh)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (6)
Randy549 wrote:
Of course, raising tax rates will also result in charitable donations going down (the money has to come from somewhere), but that aspect seems to conveniently go unmentioned…

Dec 04, 2012 9:49pm EST  --  Report as abuse
freshstart222 wrote:
Obviously, hospitals and similar institutions are essential and donations must be continued. A lot of other non-profits are fairly worthless. I have a particular problem with charities designed to send our money overseas. Go ahead and make your contributions, but why should the taxpayers be required to subsidize your pet projects.

Dec 04, 2012 10:54pm EST  --  Report as abuse
justamaz wrote:
It would be much more likely that Obama and the Democrats would be the ones eliminating charitable deductions. Nice try Obama.

Dec 04, 2012 11:02pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.