Washington • In a minor win for Democrats, the final GOP tax bill will not include a repeal of the Johnson Amendment, a change which would have enabled religious institutions and all nonprofits organized as 501(c)3s to endorse political candidates.
President Donald Trump had advocated strongly in favor of the repeal.
Trump promised to "totally destroy" the Johnson Amendment at the National Prayer Breakfast in February. Getting rid of it has been a priority of some spiritual leaders, especially in evangelical circles that have typically leaned Republican. The tax bill that passed the House in November scrapped the Johnson Amendment entirely, but the Senate bill did not, setting up as a difference that had to be ironed out in this final week of negotiations.
"I'm pleased to announced that Democrats successfully prevented the repeal of the Johnson Amendment from being jammed into any final Republican tax deal," said Sen. Ron Wyden, Ore., the top Democrat on the Senate Finance Committee. He added that he would "continue to fight all attempts to eliminate this critical provision."
Democrats knew they would have little leverage to influence the final Republican tax bill because it was passed entirely with GOP votes in both the House and Senate. Republicans are using a process known as reconciliation to pass the tax bill, which only requires a simple majority in both chambers. But senior Democratic leaders in the Senate had one final card to play: They could challenge any part of the tax bill not actually having to do with taxes.
It's formally known as a "Byrd Rule" challenge. The Senate parliamentarian has the final say on what parts of the bill meet the Byrd Rule and which ones do not. Democrats were already successful in kicking out a provision in an earlier version of the Senate tax bill that would have allowed parents to start tax-preferred college savings accounts (known as 529 plans) for a fetus. The parliamentarian agreed that did not meet the Byrd Rule test.
Republicans did not immediately respond to requests for comment.
The Johnson Amendment has been in place since 1954 and is widely seen as a way to separate church and state in modern American life. Religious leaders are not supposed to give sermons endorsing specific candidates ahead of elections. Churches, synagogues, mosques and other nonprofit institutions are also prohibited from raising money for political candidates. If nonprofits or religious institutions want to engage in explicit political activities, they have to give up their 501(c)3 tax-exempt status.
There were concerns the repeal would create a new dark money channel for powerful donors to quietly funnel their money to political candidates. Under the House plan, both the Clinton Foundation and Trump Foundation would be able to explicitly get involved in political lobbying, for example.
The Joint Committee on Taxation, Congress's official scorekeepers, estimated the repeal of the Johnson Amendment would cost the government $1 billion as the rich donated more money to religious institutions and nonprofits and got tax write-offs for doing so.