Why do OMB Watch and the Center for Budget and Policy Priorities worry a proposed charitable tax incentive may not be a good idea? The President's budget proposes deep cuts in domestic programs. To learn more read the full story. On February 21 OMB Watch and the Center for Budget and Policy Priorities issued a joint letter to the nonprofit community that criticized the $400 per person version of the nonitemizer deduction in recent faith-based compromise legislation (S. 1924, named the “Charity Aid, Recovery and Empowerment” (CARE) Act ) as too costly and not generating enough new charitable contributions. The letter emphasized that, in light of last summer’s $1.35 trillion tax cut, additional planned tax uts, and proposed cuts in domestic programs, the $400 per person nonitemizer deduction does not make sense. For more, read the full text of the letter. The CARE Act, co-sponsored by Sens. Rick Santorum (R-PA) and Joe Lieberman (D-CT), is a compromise on the President’s controversial faith-based initiative. Independent Sector has endorsed the nonitemizer deduction and issued a letter outlining its support for the nonitemizer deduction provisions. While OMB Watch continues to support the concept behind the nonitemizer deduction, we believe the design and structure of the current version in the CARE Act would not generate enough new giving to justify the cost to the Treasury. The tax cuts of last year, combined with the recession and effects of September 11, have already greatly reduced the resources available for investment in domestic programs. (Read more on this year’s budget situation.) We hope that a full examination of these issues will be made as the Senate bill comes under consideration. For more information, read this full explanation of our position on the CARE Act’s nonitemizer deduction. Another OMB Watch position letter on the nonitemizer deduction appeared in the Chronicle of Philanthropy in the issue dated March 7, 2002.