In This Issue Nonprofits Experiment in Setting Agenda for Next President   Nonprofit Sector Wins as Estate Tax Repeal Veto Override Fails   Lawsuit Challenges New Nonprofit Soft Money Disclosure Law   President's Information Technology Advisory Committee Report   People from Across the Country Say Use the Surplus to Invest in America   Presidential Candidates' Economic Plans   The Impact of Tax Cuts on You   Tech Help: Streaming Media and Webcasts   Notes and Sidebars   Nonprofits Experiment in Setting Agenda for Next President Want to let the next President know what his Administration can do to strengthen the nonprofit sector? By participating in an innovative online survey you can have input into a Nonprofit Agenda now -- without getting out of your seat. The Advocacy Institute, National Committee for Responsive Philanthropy, OMB Watch, and The Union Institute are taking advantage of the Internet's low cost and rapid turn-around to get your input on ideas for a Nonprofit Agenda to present to the next President. These ideas will lead to specific proposals that the new President can make to strengthen the nonprofit sector, particularly to address social justice issues. To participate, go to the survey website at <http://ombwatch.org/node/490>. The survey asks you to rate ideas that were developed from conversations with local, state and national nonprofits and foundations. Visitors can rate the ideas in terms of their importance, provide any comments or specific recommendations, and add ideas they feel are important that are missing. The sponsoring organizations are encouraging a wide audience to fill out the survey and have encouraged groups around the country to let others know about the survey. The survey is open for responses until September 26 at 6:00 p.m. eastern time. After tabulating the results from the survey, the sponsoring groups will identify how the ideas were ranked to everyone who provides their email address on the survey. An advisory group made up of local, state and national nonprofit leaders will be convened to develop specific recommendations based on the top ranked ideas. These recommendations will be available on the same web site as the survey and will be widely announced so that any additional feedback can be obtained. After reviewing the feedback, the sponsoring groups will prepare written materials for the President's transition team. The plan is to request one or more meetings with the President's new team and invite the advisory group to discuss the ideas and recommendations. Since nothing like this has been done before, the sponsoring groups are also seeking comment on the process at the end of the survey. MAKE YOUR VOICE HEARD. Fill out the survey to create a Nonprofit Agenda to present to the next President. Back to Top Nonprofit Sector Wins as Estate Tax Repeal Veto Override Fails In a major victory for the nonprofit sector, the House failed to override the President's veto of legislation that would have repealed the estate tax. The override attempt, which took place September 7th, was 14 votes short of the required 2/3 majority. This was largely due to 13 Democrats who originally voted for repeal, but voted against a veto override, as well as support from some members who did not vote the first time. The inability of the House leadership to rally enough votes to override the veto is due in no small part to efforts by the nonprofit community as well as considerable arm-twisting by the President. OMB Watch opposed the bill on several grounds. The estate tax is a cornerstone of our progressive tax system, preventing undue concentrations of wealth. Repeal of the tax would have benefited less than 2% of American taxpayers, the wealthiest Americans. There are considerable exemptions from estate tax liability already in place, as well as even more protections for small farms or businesses. Finally, the estate tax is estimated, conservatively, to cost over a half a billion dollars during the ten years after full repeal. Another reason for OMB Watch's opposition, which was largely lost in the debate over the Congressional attempt to repeal the estate tax, was the impact on nonprofits. Charitable donations are often included in wills to reduce estate taxes, or eliminate them altogether, and are a major revenue source ($5-6 billion annually, according to the White House) for the sector. The Treasury Department stated that that abolition of the estate tax would reduce bequests by 12% a year among estates large enough to be subject to the tax. Furthermore, private foundations that fund a wide variety of nonprofits are especially vulnerable, since they receive almost 1/3 of the value of estates taxes. According to the July 27, 2000 edition of the Chronicle of Philanthropy, in 1998 the 595 estates with $10 million or more in assets accounted for nearly half of all deductions for charitable bequests. Bequests from these "mega-estates" averaged $8 million. The potential loss of support for the nonprofit community would have been a major blow. It is almost certain that repeal of the estate tax will return like the proverbial bad penny. House Majority Leader Richard Armey (R-TX) said as much: "We expect it to be back next year…". House Majority Whip Tom Delay (R-TX) was even more adamant about ultimately obtaining passage. But for the remainder of this Congress, the estate tax repeal is no longer a threat. Back to Top Lawsuit Challenges New Nonprofit Soft Money Disclosure Law The National Federation of Republican Assemblies and its Alabama and Mobile affiliates have filed suit in the U.S. District Court for Southern Alabama challenging the newest campaign finance reform law, which became effective July 1st. The law requires nonprofits whose primary goal is to influence elections (known as 527 organizations) to register with the Internal Revenue Service and make periodic reports detailing expenditures and listing donors. NFRA is claiming the law violates the First Amendment because it requires identification of donors who contribute $200 or more per year. A spokesman said such disclosure will have a chilling effect on donors and open the door to harassment. The lawsuit, which makes additional legal arguments, is believed to be the first of many challenges to the new law. OMB Watch has also voiced concerns about the donor disclosure provisions of the law and believes alternate means can better achieve the goal of informing the public about the nature and extent of 527 organizations' activities. In August, the IRS, responding to requests from Public Citizen and 21 Senators and Representatives, issued a proposed Revenue Ruling that clarified application of the law to political organizations with multiple accounts. During the summer some leadership PACs, including Rep. Tom DeLay's (R-TX) ARMPAC, claimed all their accounts were exempt from the new reporting requirements because one account was exempt. (PACs that report to the Federal Election Commission or do not expect receipts over $25,000 in any year are exempt.) The proposed ruling makes it clear that the law treats separate accounts as separate organizations, so that political organizations like ARMPAC must register and disclose soft money donations and expenditures, even if they have an exempt hard money account that is reported to the FEC. OMB Watch filed comments with the IRS supporting the IRS position as consistent with the goal of the statute, the intent of Congress and the tax code. We also asked that they adopt terminology that clearly defines and recognizes the types of political organizations covered by the new law. The proposed Revenue Ruling refers to "federal" and "non-federal" accounts, borrowing terms from election law regulations that preceded the development of soft money. This can cause confusion, since "federal" accounts refers to hard money and "non-federal" to soft money. A PAC involved in issue advocacy at the federal level would be viewed as a "non-federal" political organization. Full text of OMB Watch's comments to the IRS. Back to Top President's Information Technology Advisory Committee Report The President's Information Technology Advisory Committee (PITAC) on August 31st released its report "Transforming Access To Government Through Information Technology" which highlights findings and recommendations for both improving public access to Federal information resources and simplifying internal and external government transactions. A key PITAC finding is that "major technological barriers prevent citizens from easily accessing government information resources that are vital to their well being. Today government information is often unavailable, inadequate, out of date, and needlessly complicated." The PITAC offers three key recommendations to make government more easily accessible and usable by all its citizens regardless of their physical location, level of computer literacy, or physical ability:

• Fund an aggressive IT research program that addresses the Federal government's most critical long-term technology challenges (these include security and privacy, data integration, and understanding the social, economic, and workforce implications of digital government).
• Create within the Office of Management and Budget an Office for Electronic Government (OEG), to promote innovative IT efforts and policies across Federal agencies, and a Government IT Innovation Program (GITIP) that would fund high-risk, exploratory, and experimental IT projects. OEG should be empowered "to create incentives for strong cooperation where required to develop standards and cross-agency systems...and should measure improvements and disseminate best practices and lessons learned."
• Establish pilot projects and Emerging Technology Centers (ETCs) to encourage information integration across government sectors and to push leading-edge information technology into operational systems. The three areas recommended for highest priority are:
  1. Crisis Management
  2. Access for Disabled Children
  3. Extending FirstGov.gov

Regarding FirstGov, they note that the currently envisioned project "does not provide for information integration or federation, nor does it require standardization among agencies." "Firstgov.gov should focus efforts on government-specific capabilities such as transaction support, metadata creation, and comprehensive searchable catalogs of information and services." The PITAC was created in 1997 by Executive Order and renewed for a two-year term in 1999. The PITAC is comprised primarily of corporate leaders with a few academic representatives. View the report Back to Top People from Across the Country Say Use the Surplus to Invest in America The Accountability Project sponsored a series of events around the "Invest in America" theme at the end of July in New Mexico, Kentucky, and Arkansas. In Albuquerque, home of the well-known Albuquerque Balloon Festival, the theme was "don't let the budget surplus float away," and the focus was on using the surplus for education, to improve air quality and clean up water, and to address child poverty. In Lexington, oversized postcards from constituents urged spending on investment in the country, and speakers talked about the need to Invest in America -- in our children, healthcare, seniors, and education. In Little Rock, the participants used "donut holes" to symbolize what working families would get from the surplus if it was used for tax cuts instead of investments that would benefit low- and middle-income families. Cake was passed out to represent proposed tax cuts -- the wealthiest would get the biggest pieces of cake, leaving little for the rest of us. Participants emphasized that we need a "new recipe" for our country's priorities in this new era of surpluses. The events garnered considerable media attention, both print and radio. A speaker in Kentucky made a very important point that is all too often overlooked now that we have a budget surplus: "In times of budget deficit we saw many programs designed to help children, seniors, and working families cut or eliminated. Now, there is no excuse -- with this once-in-a-generation opportunity, we do have the power to invest in the future and invest in the needs of our children, seniors and working families." Back to Top Presidential Candidates' Economic Plans Vice President Gore has issued his budget plan, "Prosperity for America's Families," a 200 page document outlining his budget proposals. While Gov. Bush has not issued a comprehensive plan, his proposals can be found on his website, including his rebuttal to Gore's plan. The two proposals contain very different visions of the role of government and, consequently, of how the new surpluses should be used. Bush, believing that surpluses represent tax "overpayments" would spend more of the surplus than Gore in tax cuts that are not specifically targeted to low- or middle-incomes and so would offer more benefits to wealthier Americans since they pay higher taxes. Gore would spend considerably more than Bush on government efforts to benefit low- and middle-income families -- including a retirement plan with government matching contributions, lowering the poverty rate, increasing college attendance and completion, increasing family incomes and the rate of homeownership, cutting the wage earning gender gap, establishing universal preschool for all four-year old children, and creating and educating workers for high-tech jobs. Gov. Bush would spend less on addressing social needs through government efforts and Vice-President Gore would spend less on tax cuts. The tax cuts that Gore proposes would be primarily and specifically targeted to low- and middle-income families. For a comparative analysis of the two tax plans, see Citizens for Tax Justice. Bush believes the surpluses will materialize and that the prosperous economic climate, and individual initiative, will largely insure individual prosperity. Gore is more concerned that they may not materialize to the extent predicted, and even sets aside $300 billion over ten years as "Surplus Reserve Fund," devoted to debt reduction. He also recognizes that the general overall economic prosperity has not benefited all Americans, and that there is still a role for an activist government to address problems that cannot be solved by the booming economy alone. In terms of Social Security, Gore would put interest savings from debt reduction into the Social Security Trust Account. This means putting more Treasury Bonds into the Trust Account, bonds that will still need to be redeemed if and when the Social Security system no longer takes in enough payroll taxes to pay current beneficiaries. Gore would also make changes in Social Security to increase benefits for widows and for women who often receive lower benefits because of taking time out from work to raise children. Bush has a plan to partially privatize Social Security through individual Social Security accounts, which again, as with his tax plan, would be most financially rewarding to those with higher incomes since the most benefits come to those with the highest earnings. (It's not fair to say that Bush is specifically targeting tax cuts and Social Security benefits to the wealthiest, but since the cuts are not targeted to lower incomes that would be the result.) Gore would expand Medicare to include a prescription drug benefit and more benefits for children. Bush's plan focuses on partially privatizing health plans under Medicare and encouraging competition among providers to lower costs. Vice President Gore intends to pay down the national debt by 2012, by devoting all of the so-called Social Security surplus to debt reduction, along with the Medicare Hospital Insurance Surplus (now included in the on-budget or non-Social Security surplus), in addition to the $300 billion "Surplus Reserve Fund" over ten years from the non-Social Security surplus. Altogether, Gore would use $3 trillion of the total surpluses for debt reduction. Gov. Bush's plan would be to reduce the debt by 2016 primarily by using the Social Security surplus solely for debt reduction. The federal budget reflects the policy priorities of the nation. This is clear from looking at the very different budgets and uses of the budget surplus proposed by Vice President Gore and Gov. Bush. Their visions for the future of the nation are expressed perhaps more clearly in their budget proposals than anywhere else, so we should all be paying attention to them.

• Bush Budget Proposals
• Gore Budget Proposals

Chart: How the Candidates Will Spend the Surplus NOTES Estimate of Gov. Bush’s use of the surplus actually exceeds $4.6 trillion. He includes savings from "government reforms." DEBT REDUCTION Bush’s debt reduction includes a $540 billion "reserve cushion." Gore’s includes a $300 billion "Surplus Reserve Fund" and $450 billion of Medicare surpluses. The reserve amounts could be used for other purposes if necessary, or if the surplus does not materialize to the extent estimated. TAX CUTS Many of the Bush tax cuts are phased in over time and will be far more expensive during the following ten years. Gore’s “Retirement Savings Plus” accounts are estimated at the low range of participation ($200 billion)—depending on how many people open these accounts, the cost could be more than three times that amount. OTHER SPENDING The amount of other spending includes all other discretionary spending (domestic and military spending appropriated each year). Not included in the figure for Bush is the cost of privatizing Social Security or the cost of his promised Medicare prescription coverage. While the figure includes increased military pay, it does not include military modernization or a missile defense shield. Included in the figure for Gore is $75 billion for Medicare reform and $338 billion for Medicare prescription drug benefit. It includes military pay increases, military modernization, and a limited missile defense system. Back to Top The Impact of Tax Cuts on You Family 1: A single mother with an annual income of $22,00 and two children, ages 2 and 6, who spends $30 per week in work-related child care:

Tax Under Current Law:      $1,800 credit Savings Under Gore Plan:   $878 Savings Under Bush Plan:   $0

Family 2: A married couple with an annual income of $59,800 (one earns $39,800 and the other $20,000) and two children, ages 15 and 19; if they save $1,200 a year for retirement and pay $9,000 for college tuition for the older child:

Tax Under Current Law:      $2,800 Savings Under Gore Plan:   $1,950 Savings Under Bush Plan:   $1,400

Family 3: A married couple with an annual income of $250,000 and three children:

Tax Under Current Law:      $57,800 Savings Under Gore Plan:   $0 Savings Under Bush Plan:   $7,140

Source: Deloitte & Touche from Time, September 4, 2000. Back to Top Tech Help: Streaming Media and Webcasts Streaming media and webcasts are providing the means for nonprofit organizations to deliver a wider range of content than previously imagined, including sound, animation, and video. It is a technology that takes into consideration the disparity of end user capacities, but also poses challenges for organizations attempting to navigate the range of options. Will your organization have a good time with streaming media, or is it another technology through which you might get hassled or hustled? NPTalk attempts to help you keep your head above water, and help your organization make a .wav when it can... Subscribe to NPTalk Back to Top Your comments are always welcomed! Notes and Sidebars Free E-Mail Providers The Free Email Providers Guide provides a searchable database of over 1,300 free e-mail providers in more than 85 countries, as well as links to providers of other free electronic communication services. Users can search using a wide variety of criteria, including services by region or options offered. Visit FEPG.net. Privacy Workshop The National Telecommunications and Information Administration (NTIA) is hosting a public workshop to examine technological tools and developments that can enhance consumer privacy online. They will also host a Technology Fair to demonstrate the capabilities of a wide array of online privacy technology. The workshop and fair will be held September 19, from 9:00-4:00, and are free and open to the public. They will be held in the U.S. Dept. of Commerce building on 1401 Constitution Ave, NW in Washington, DC. For more information visit the NTIA website.