Washington – Bucking her party and the White House, Rep. Elizabeth Esty on Thursday helped House Republicans approve by a veto-proof margin a bill opposed by the Obama administration.
The Fighting Hunger Incentive Act passed 279-137, with 39 Democrats, including Esty, voting for the legislation. So did all House Republicans, except Rep. Walter Jones of North Carolina.
The Obama administration had threatened a veto, but the legislation was approved by two thirds of the House, a veto-proof margin. That margin was slim however. The flip of a couple of votes would have made overriding President Obama’s veto impossible.
The legislation would extend and make permanent a tax break that allows the deduction of food inventory donations of up to 15 percent of the donating organization’s net income. This is an increase from the 10 per cent that was previously allowed.
The bill would also make permanent a conservation easement tax break and another measure that allows tax-free donations from a 401 (K) and cuts the excise tax on the investment income of certain foundations.
Government analysts estimated the bill would add $14.3 billion to the deficit over the next ten years.
“As a country, we should do all we can to encourage giving back to our communities,” Esty said. “I voted for the Fighting Hunger Incentive Act because it makes the tax deduction for charitable giving, including the charitable contributions of land for conservation purposes, permanent. I heard from non-profits and organizations throughout central and northwest Connecticut that rely on the generosity of their neighbors to survive. They told me directly how important these tax incentives are to funding their core missions.”
Those breaks are now among dozens of tax cuts called “extenders” that Congress must extend every year because they are not a part of the tax code.
The Office of Management and Budget has recommended President Obama veto the bill because the legislation does not provide any offsets to their loss of government revenues.
“The administration supports measures that enhance non-profits, philanthropic organizations, and faith-based and other charitable organizations in their many roles, including providing a safety net for those most in need…” the OMB said. “However, the administration strongly opposes House passage of (the Fighting Hunger Incentive Act,) which would permanently extend three current provisions that offer enhanced tax breaks for certain donations and add another similar provision without offsetting the cost.”
The OMB also said it opposed making the tax breaks permanent because the GOP has not addressed other extenders scheduled to expire that would benefit “16 million working families with children.”
But Esty said, “We should not let incentives that work expire, but we should instead provide predictability for taxpayers and organizations.”
“While I strongly believe Congress must act to reform our overly complex tax code, we should not focus on punishing non-profit organizations,” she said. “Instead, let’s close unfair tax loopholes for companies that ship jobs overseas and avoid paying their fair share of taxes.
The bill now goes to the Senate.
Correction: An earlier version of this story misstated the amount the bill would add to the deficit.