House Republicans axed a section of their party-line megabill Monday that would have given the Trump administration more power over nonprofits’ tax-exempt status.
The move happened ahead of President Donald Trump’s meeting with GOP lawmakers Tuesday morning. His goal was to urge them to advance the tax cut, energy and national security budget reconciliation package as soon as possible.
One point of contention delaying progress is the fate of climate law tax credits. Trump also discussed pipelines after leaders struck a provision on permitting.
When it comes to the language affecting nonprofits, the package had at one point included a measure to allow the Treasury secretary to revoke tax-exempt status for groups deemed to have supported terrorist organizations.
Environmental group leaders sounded alarm bells that Trump could use such authority to punish organizations who countered his objectives.
But the language was struck from the megabill in an updated version posted on the House Rules Committee’s website Monday.
A spokesperson for Rep. David Kustoff (R-Tenn.), who championed the proposal, said the language did not adhere to Senate rules requiring budget reconciliation legislation — meant to bypass the filibuster — to have a clear fiscal nexus.
Kia Hamadanchy, senior policy counsel at the American Civil Liberties Union, said the group was surprised to see the provision stripped out while the megabill moved through the House. They were expecting to have to appeal to the Senate parliamentarian.
“We’re cautiously optimistic,” Hamadanchy said. “It looks like we’re OK on reconciliation, but the expectation is this will come back from the dead at some point, and we’re going to have to continue to make sure it doesn’t become law.”
Brett Hartl, government affairs director at the Center for Biological Diversity, said that the elimination of the provision from the megabill is “good news for all nonprofits.”
Pipelines
Republicans on Monday axed two measures that would have allowed accelerated permitting for pipeline developers willing to pay high fees. And they removed a number of funding clawbacks at the Department of Energy.
Trump spoke about the need to accelerate pipeline permitting. The legislation still includes measures to accelerate National Environmental Policy Act reviews and natural gas exports.
“He talked about getting pipelines approved,” House Majority Leader Steve Scalise (R-La.) said. “We’ve been trying to get some kind of approval on pipelines in the bill to expedite permitting. This has been a problem for a long time.”
Asked whether stripped provisions could be inserted back in the legislation, Scalise demurred. “We’re going to go talk about what we’re going to do to expedite permitting in America.”
Tax credits
Still up for debate is the future of clean energy credits established in the Democrats’ 2022 climate law. Some GOP hardliners have said the current bill does not go far enough in repealing the credits. But over a dozen moderates want the bill revised to make the credits usable for a longer period of time.
One of those lawmakers, Rep. Andrew Garbarino (R-N.Y.), who is also pushing for higher state and local tax deductions, said Trump did little to quell concerns.
“There’s a lot of problems if they put the bill on the floor as is,” Garbarino said.
Industry pressure has been increasing. The Solar Energy Industries Association launched a new campaign, Solar Under Threat, in response to GOP plans to scrap or limit Inflation Reduction Act incentives.
On Tuesday, the American Clean Power Association released a report saying clean energy manufacturing pumps in $18 billion a year into the gross domestic product and that nearly three-quarters of new clean energy manufacturing plants are in red states.
“For American energy manufacturers to continue creating jobs and strengthening our economy, we need policy certainty,” ACP said, specifically naming the clean energy credits.
Trump on Tuesday did not appear to be in a negotiating mood. Concerning divisions about Medicaid, the president said, “Don’t fuck around with Medicaid,” according to two Republicans granted anonymity to describe private conversations.
Reporter Meredith Lee Hill contributed.
