Lost amid the debate about the budget put forward by the White House yesterday was a provision that continues the administration’s war on philanthropy. Obama’s call for dangerous cuts in defense spending he says he will spend on infrastructure at home got most of the headlines. But the budget also called for limiting itemized deductions, a measure that could have a grievous impact on philanthropies that are more desperate for funds than ever in a shrinking economy.
Though Obama will attempt to sell this package as part of his now standard class warfare tactics in which the wealthy are demonized, the attempt to cut back those deductions is just as much about the administration’s statist goal of granting more power to government and restricting the private sector’s ability to impact society. The losers here are not the rich who will find other ways to spend their money but the poor, medical research, the arts and other philanthropic causes that will suffer from the president’s crusade for “fairness.”
The measure got the attention of two major Jewish organizations, the Jewish Federations of North America — which brings together the umbrella group of local Jewish charitable giving — and the Orthodox Union. The Federations rightly complained the budget will “disincentivize large charitable gifts” upon which philanthropies depend. The OU noted that the changes could cost American charities up to $4 billion annually.
While Obama put this forward in the name of tax reform, nothing in this scheme promotes fairness. By hamstringing the private and religious charities that are often far more effective in aiding the needy than the government, the net result will be more sacrifice by the poor, not the rich.
COMMENTARY first brought attention to this issue back in 2009 with David Billet’s still apt article on the subject. As Billet wrote then, Obama’s desire to cut back on deductions to charity does not harm the wealthy. Instead, it is rooted in a liberal suspicion of the free market world of private philanthropy that Obama and his minions would like to see replaced by a system rooted in more central government planning and control. In 2009, then Budget Director Peter Orszag said the pain the crackdown on charitable donations would create would be offset by the benefits to society that would accrue from the extra cash government could spend. Orszag even said the creation of a national health care law would more than compensate the country for the decimation of private charities.
Seen in this light, this war on philanthropy is all part of the mindset that sees Obamacare as being not only a panacea for the country’s health care problems but also the lynchpin of a vast expansion of state power over every sector of American life. Far from being a minor clause in a controversial budget and tax plan, the bid to cut back on charitable giving is actually a key element of the administration’s plan to remake America in the image of European-style governments.
As much as some fear the impact of a second Obama administration on foreign policy issues such as Israel and Iran, the prospect of a re-elected president pursuing his anti-philanthropy agenda ought to send a chill down the spines of those committed to a variety of causes that will be impacted by his plans.