WASHINGTON Debate on President Bushs proposal to provide some federal social services through religious charities has focused largely on church-and-state and discrimination issues, but the bill the House passed Thursday also includes little-noticed savings incentives for the poor.
The bill, which faces an uphill battle in the Senate, would authorize $25 million annually for a five-year demonstration Individual Development Account program.
Similar savings proposals have been floated frequently since former President Clintons first term, but none have been made law.
The connection? Two of the so-called charitable choice legislations sponsors, Rep. Tony P. Hall, D-Ohio, and Sen. Rick Santorum, R-Pa., have proposed similar, stand-alone IDA bills in the past.
Under the bill, the program would provide federal matching funds, through qualifying organizations, to low-income people that they could later use to make a down payment on a first home, start or expand a business, or get an education or job training.
During the five-year trial, individuals could get a maximum of $2,000 from the government through nonprofit organizations, state, local, and tribal governments, community-development financial institutions, or federally insured credit unions. Those institutions would be assigned to monitor the accounts and to ensure withdrawals are only for one of the three specified purposes. Accountholders would get 50 cents from the government and 50 cents from the group managing account for each $1 they deposited.
The maximum federal grant per group would be $1 million for each project year.
Separately, in another provision, the bill would permit tax-free distributions from an individual retirement account directly to a qualified charity.