Economy tops congressional agenda

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The economic crisis that dominated the last couple months of the presidential campaign will be the major focus of Congress next year, Jewish political insiders say.

With a bolstered Democratic majority on Capitol Hill and a Democrat at the other end of Pennsylvania Avenue, expect measures that will stimulate the economy and help out those hurt by the downturn. Also, look for actions in areas that have a large impact on the U.S. economy, such as health care and energy.

“Under a Democratic president, I expect to see policies more focused on supporting the middle class as well as society’s most vulnerable,” said Tom Kahn, staff director and chief counsel of the House Budget Committee.

The focus of the Jewish federation system will be on “dealing with the economic crisis,” said William Daroff, the United Jewish Communities’ vice president for public policy and director of the group’s Washington office.

Daroff noted that Jewish social service groups are being hit from “two different sides” by the downturn, with a decline both in charitable contributions and aid from cash-strapped state and local governments, as well as an increase in the number of people in need of social services.

Chief among his organization’s goals will be to raise the Federal Medical Assistance Percentages, which would increase the financial contribution of the federal government to state social service programs such as Medicaid and the State Children’s Health Program, or SCHIP. That would specifically benefit nursing homes that depend on reimbursement from Medicaid.

A hike of that sort is likely to be part of any “economic enhancement” package offered by Democrats, said a congressional insider who asked not to be named. This type of package could be offered during a lame-duck session later this month or after the new Congress convenes in January. It would also include an extension of unemployment insurance and funding for infrastructure projects.

Also likely to be on the federation system’s agenda, Daroff said, would be various initiatives to spur charitable donations. They include making permanent and expanding the amount of the IRA charitable rollover, which allows charitable donations of up to $100,000 from a regular or Roth IRA without it counting as taxable income through the end of next year, and adding a charitable deduction that taxpayers could take even if they don’t itemize their deductions.

Daroff said that with Democrats dominating the levers of power in Washington, his organization might take a different tack in promoting its proposals than it would with the GOP in control.

“With Republicans, you stress tax incentives and credits,” he said. With Democrats, “you’re more likely to stress social service programs.”

Daroff cautioned that just because Democrats have more of an affinity for such programs doesn’t mean they will be a slam dunk. Every Congress is different, he said, and it takes time to discover “where the levers of power are and which issues will most resonate.”

Rabbi David Saperstein, the director of the Religious Action Center of Reform Judaism, said his group would be working to expand SCHIP, perhaps to cover all children.

Saperstein and others said development of alternative energy sources and other vehicles to help the United States move toward energy independence also would be a priority for Jewish groups. The “economic enhancement” package Democrats are working on is expected to include incentives to create environmentally related “green jobs.”

With so much focus on the economy, it is unclear how much attention will be paid — by both the new president and Congress — to Barack Obama’s campaign promise to continue a modified version of Bush’s faith-based initiative. Non-Orthodox Jewish groups opposed Bush’s faith-based effort, while Orthodox groups have been supportive.

Nathan Diament, the director of the Orthodox Union’s Institute of Public Affairs, said he believed that Democrats who objected to Bush’s version of providing funds to religiously infused social-service groups might be more receptive to a pitch from someone of their own party.

But Marc Stern, the interim co-executive director of the American Jewish Congress, said Obama’s pledge not to allow recipients of government funds to discriminate in hiring would bring objections from religious groups that supported Bush’s initiative.

Also a possibility is legislation to permit embryonic stem-cell research, which was backed by all corners of the Jewish community and passed easily in the last Congress but vetoed by Bush. Obama supports the bill.

Efforts to roll back Bush administration restrictions on funding for contraception and its promotion of abstinence-based sex education programs could also be taken up by the 111th Congress.

As for Israel, one congressional insider said that compared to 2006, when the Democratic takeover of Congress ushered in new committee chairmen through- out the House and Senate, this week’s election won’t bring much change to Capitol Hill. And with an election in Israel on the horizon as well, the insider said it would be premature to speculate on any new initiatives from Congress or the new administration.

The Jewish community is likely to keep attention on Iran. Legislation that Obama sponsored earlier this year that would make it easier for companies and pension plans to divest holdings from the Islamic Republic was blocked by Republicans in the final weeks of the campaign but now is a possibility.

The upcoming fiscal year will be the second in the 10-year, $30 billion military aid package to Israel approved by Congress. No change is expected. Obama expressed support for the plan in his speech to AIPAC earlier this year.

Decision '08