Posted on February 15, 2011

President's Budget Calls for Cuts in Support for Nonprofits

The Obama administration's budget for fiscal year 2012 includes, among other things, a proposal to cap the value of itemized deductions, including those for charitable contributions, for households earning more than $250,000 a year, the Chronicle of Philanthropy reports.

According to the Washington Post, the $3.7 trillion budget proposal would trim or terminate more than two hundred federal programs in 2012 while investing in education, transportation, and research. The plan also would cut hundreds of billions of dollars of domestic programs over the next decade, including many that are strongly supported by Democrats. "It would mean cutting things that I care deeply about," the president said. "But if we're going to walk the walk when it comes to fiscal discipline, these kinds of cuts will be necessary."

Among other things, the administration's plan calls for a $300 million reduction in funding for the Community Block Grant program, as well as a 50 percent cut to federal low-income heating assistance and the consolidation and elimination of several education programs. The president has said he would push to allow the Bush tax cuts for households earning more than $250,000 to expire at the end of 2012 and will propose changes to the estate tax, which currently allows couples to pass on estates as large as $10 million to their heirs tax-free. Dropped from the budget was the administration's plan to develop a system of tradable vouchers for greenhouse gas emissions, which had faced opposition from Republicans and industry.

"While it's absolutely essential to live within our means, while we are absolutely committed to working with Democrats and Republicans to find further savings and to look at the whole range of budget issues, we can't sacrifice our future in the process," Obama said. "Even as we cut out things that we can afford to do without, we have a responsibility to invest in those areas that will have the biggest impact in our future — and that's especially true when it comes to education."