House passes tax cuts to encourage giving

? The House on Wednesday passed more than $12 billion in tax cuts to encourage charitable giving, while some Democrats said the bill’s generosity would cost future generations billions in extra debt.

The bill, passed 408-13, is the legislative offspring of President Bush’s effort to give religious organizations federal money and encourage them to take a bigger role in providing social services.

Majority Whip Roy Blunt, R-Mo., said the tax breaks would encourage $45 billion to $50 billion in additional charitable donations over the next decade.

“It’s really about $50 billion — $50 billion that the American people decide they want to give to charities to help their fellow citizens,” he said.

The biggest tax break gives new charity-contribution incentives to taxpayers who can’t deduct charitable donations from their taxes because they don’t itemize their deductions. Taxpayers using the standard deduction could deduct up to $250 in charitable contributions. The new deduction would be in effect for two years.

Some Democrats praised the bill but argued that its $12.7 billion, 10-year cost should be paid for by shutting down corporate tax shelters. The Senate’s version of the bill, passed in April, included language targeting illegal tax shelters and would cost the Treasury nothing.

“For every tax cut we give today, it goes on the deficit, and your kids and your grandkids are going to pay for it,” said Rep. Jerry Kleczka, D-Wis., calling himself “the skunk at the picnic.”

“The plain, simple fact is, it’s nice but we can’t afford it,” he said.

The House rejected, 220-203, a Democratic effort to push a bill similar to the Senate’s. The Senate reduced the bill’s cost to zero by balancing the new tax breaks with a ban on transactions corporations use solely to reduce their taxes but which have no apparent business purpose.

¢ Connections to the Internet would remain tax-free under a bill the House passed Wednesday.The legislation, passed with bipartisan support, makes permanent a ban on taxing Internet connections.New language clarifies that all types of Internet access — ranging from dial-up connections and high-speed DSL to cable modems — cannot be taxed.¢ On track for a record deficit, the government has produced $400.5 billion in red ink in the first 11 months of the 2003 budget year — twice the total for the same period a year earlier.The figures, released Wednesday by the Treasury Department, highlighted the worsening condition of the government’s books.The deficit so far this fiscal year, from October through August, compares with a shortfall of $200.2 billion a year earlier.The Bush administration believes the deficit for the entire 2003 budget year will total $455 billion. The current record in dollar terms is the $290.4 billion of 1992.¢ The Senate advanced one step closer Wednesday to final congressional passage of a bill to ban certain abortions, clearing a procedural hurdle on a 93-0 vote that belied years of struggle surrounding the legislation itself.The bill would ban what critics call partial-birth abortions, and Republican leaders hope to have the legislation on President Bush’s desk by the end of next month.Final passage is not in doubt, since the measure cleared the House and Senate by wide margins earlier this year.