A review of recent activity on faith-based charity and charitable giving legislation. Effectiveness Report Released A report released by the University of Pennsylvania's Center for Research on Religion and Urban Civil Society has found no proof that religious social service programs are more effective than secular ones. The report, which was based on 25 other studies on the subject, did not find fault with faith-based programs, but found no evidence of their much-touted increased effectiveness, and called for more research on the subject. Meanwhile, the Rockefeller Institute's Roundtable on Religion and Social Service Policy has begun a national study of faith-based social services. The study will focus on the efficacy of faith-based organizations, as well as the future of faith-based social service. Charitable Contribution Bill Markup Senate Finance Committee Chairman Max Baucus (D-MT) has said that his committee could mark up a bill expanding tax incentives for charitable giving after the Senate returns from the spring recess. It is not known if the bill marked up will be the Santorum-Lieberman compromise faith-based charity bill (The CARE Act (S. 1924)), or if different legislation preferred by Baucus will be used, or if a compromise between the two will be offered. It is unlikely, however, that any Senate legislation will contain the most controversial "charitable choice" elements of H.R. 7, the faith-based charity bill that passed the House last year. Non-Itemizer Deduction Still In Doubt The fate of the tax proposal that allows those who do not itemize on taxes to take a deduction for charitable contributions is still uncertain. It is known that key staff members to Baucus and Sen. Charles Grassley (R-IA), the ranking member of the Finance Committee, do not support the non-itemizer in the CARE Act because of its cost in lost federal revenue and/or its uncertainty in generating much new charitable giving. On March 13, 2002, the research arm of Congress, the Congressional Research Service (CRS), released an analysis of legislative proposals to deduct charitable contributions for those who do not itemize their taxes. Based on the economic effect of the deduction, they conclude that, "the impact of the proposed deduction on charitable giving is likely to be relatively small." In fact, CRS claims that for every dollar in lost federal revenue, there will be only 12 cents in new charitable giving and only 6 cents of that will be for activities outside of religious sacramental services. For details, see this OMB Watch report. This was followed by a March 18 Joint Committee on Taxation (JCT) report, "Description of Revenue Provisions Contained in the President's Fiscal Year 2003 Budget Proposal," which provided a review of the President's plan for the non-itemizer deduction. JCT described arguments for and against the proposal and concludes on page 11, "The proposal adds complexity to the tax law." JCT points out there would be additional record keeping to substantiate a contribution was made to a qualified charity. JCT adds: "In addition, the proposal, like any other 'non-itemizer' deduction, would undermine the purpose of the standard deduction, which exists in part to relieve taxpayers with small deductions from the burdens of itemization and substantiation. One motivation behind the substantial increase in the standard deduction in the Tax Reform Act of 1986 was that '[t]axpayers who will use the standard deduction rather than itemize their deductions will be freed from much of the record keeping, paperwork, and computations that were required under prior law.'" (Quoting from JCS-10-87, May 4, 1987, page 11) On March 21, the Center on Budget and Policy Priorities published a report on the non-itemizer deduction that echoed the concerns raised by CRS and JCT. Regarding the proposal in the CARE Act, they conclude that the tax break is "a cost that is difficult to justify given the deterioration in the long-term budget outlook." Rep. Scott Sends Letter, Rep. Watts Campaigns Rep. J.C. Watts (R-OK), a strong proponent of H.R. 7, went on the offensive in Connecticut, the home state of Sen. Joseph Lieberman (D-CT), who is one of the lead supporters of the Senate's faith-based charity bill. The Senate's CARE Act contains many of the same provisions of H.R. 7, but does not contain the highly controversial "charitable choice" provision that allows religious congregations to compete for government grants for social service work. Watts said that the "armies of compassion are waiting for the Senate to follow the House's lead and pass a solid faith-based bill" and also called for the Senate to bring its legislation to a conference with the House after passage. A conference on the legislation would "reopen old wounds" according to a Lieberman spokesman, and might prevent either piece of legislation from becoming law. Meanwhile, Reps. Barney Frank (D-MA), Bobby Scott (D-VA) and Chet Edwards (D-TX) sent a letter to all 100 Senators, suggesting ways to pattern non-discrimination language for the CARE Act along the lines of AmeriCorps and Senior Corps. The bill currently allows faith-based groups working with federal funds to discriminate in hiring by allowing them to only hire members of their own faith.