Senate Floor Speech
Senator Kay Bailey Hutchison
January 30, 2001 -- Page: S709

MRS. HUTCHISON. Mr. President, today I rise to introduce legislation that will enhance and encourage charitable contributions in the United States.

As many know, this week, the President is set to unveil a number of initiatives to promote charitable giving and to expand the role that charities and faith-based institutions play in attacking social problems in the United States.

Government alone is incapable of solving society's most vexing problems. In fact, government programs often fail in their missions. The old welfare system is a perfect example of what often goes wrong. Under the old system, we encouraged people to stay on welfare. We encouraged out-of-wedlock births. We encouraged fathers to live out of the home. We ended this with our welfare reform bill. Welfare rolls have now dropped by half across the United States.

The track record of charitable organizations have been far superior than the government's in tackling social ills. America's top charities cover a broad range of problems, from the Salvation Army to the YMCA, and the American Cancer Society to the Red Cross. Each is playing a role in improving America's health, education and welfare. How successful can they be? It has been known that mentors in the Big Brothers/Big Sisters program can cut drug abuse by 50 percent.

Americans appreciate the role of these groups. They are actively involved in charitable causes. Nearly half of all Americans volunteer in some capacity on a regular basis.

Nearly 25 percent of all Americans are active in their religion on a volunteer basis. This is why it is so logical to use faith-based organizations as means of accomplishing objectives at which the government has failed. The Chicago Tribune recently noted that ``churches, temples and prayer halls cannot replace the mammoth task of helping the needy. But, they do a better and more efficient job of understanding their communities and meeting the need of their citizens.''

The legislation I am introducing today will make it easier for charitable contributions to the made and for charitable organizations to pursue their missions. Under this bill, individuals age 59 1/2 and older will be able to move assets penalty-free from an IRA directly to a charity or into a qualifying deferred charitable gift plan, such as a charitable remainder trust, pooled income fund or gift annuity. Current law requires taxpayers to first withdraw the IRA proceeds, pay the taxes due and then contribute the funds to a charity. Taxes can be offset by the current charitable deduction, but only to an extent.

Americans currently hold well over $1 trillion in assets in IRAs, and nearly half of America's families have IRAs. This bill will allow senior citizens who have provided for their retirement--but find that they do not need their entire IRA for living expenses--to transfer IRA funds to charity without dilution. This will cut bureaucratic obstacles to charitable giving and unlock a substantial amount of new funds that could flow to America's charitable organizations.

I first introduced this legislation in 1998, and it was folded into our tax bill in 1999. Regrettably, it was vetoed by the President. But, given our new leadership in the White House, this is an idea whose times has come. In fact, President Bush made this part of his tax plan when it was unveiled in 1999.

This is also not a partisan proposal. Senator DURBIN was an original co-sponsor of this legislation. I look forward to working with him, and the White House on this bill. It also has the support of numerous universities and charitable groups, including the Charitable Accord and the Council of Foundations, two umbrella organizations representing more than 2,000 organizations and associations.