A previous bill passed by the House included a contentious element exempting religious groups from adherence to antidiscrimination laws that normally bind federal grantees. Senate Democrats made it clear that such a provision would not pass in the Democrat-controlled Senate.

Overall, though, the bill does expand an organization's ability to express its religious beliefs. Federal grants cannot be withheld because of the presence of religious symbols and art in the organization's facilities, or because of religious language in its name or mission statement. The bill also prohibits discrimination on the basis of an organization's past grant receipts or religious criteria for membership on its board of directors. Religious groups would still be prohibited from using federal money for religious services and from proselytizing clients.

The bill would also remove some of the obstacles organizations face in being granted 501(c)(3) status and established separate capital funds for the Departments of Health and Human Services, Housing and Urban Development, Justice, and the Corporation for National and Community Service.

The Senate bill allows non-itemizing taxpayers to deduct charitable donations from their taxable income. Married couples would be allowed a maximum of $800 deduction each year, while single filers could deduct as much as $400. According to IRS statistics, more than two-thirds of taxpayers do not itemize. Over two years, this measure is estimated to cost the government $8.4 billion, but its goal is to increase charitable giving and is part of President Bush's campaign promise of "compassionate conservatism."

OMB (Office of Management and Budget) Watch would usually be in favor of such a measure. But in the current economic climate, it says the cost is not worth the possible benefit. Kay Guinane, of OMB Watch's Community Education Center, says, "The non-itemizer provision is a good idea—in another form, at another time. The problem is that the tax cuts enacted last summer are hitting domestic programs hard. We know that the programs that serve low-income communities will be the first to see budget cuts, and the individual benefit a $400 deduction could bring is not worth the impact it will cause on the treasury."

She added, "We are faced with a no-win situation. The money from the estate tax alone would have been enough to cover social service programs from being cut. But with the tax cuts, we are forced to look at the bigger picture."

Currently, the bill has bipartisan support with four sponsors from each side of the aisle.—Tara Dix