Buried in the GOP budget bill: a new weapon to use against liberal non-profits

From reproductive rights to church/state separation, liberal causes would be under threat due to a provision that's received little attention

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UPDATE (5/20): The most recent version of the bill no longer includes the section allowing the Treasury Secretary to go after certain non-profits. According to Punchbowl News, it was taken out for violating the Byrd Rule, which prevents non-budgetary matters from being added to reconciliation bills.

The expansion of “529 accounts,” however, is still in the current version.

The original article is below.

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Republicans, as you may have heard, are trying to pass a single massive bill that incorporates everything on their agenda, ranging from tax cuts for the wealthiest people in the country to work requirements for Medicaid. It’s a mix of conservative cruelty and unnecessary burdens placed on the most vulnerable people in America.

Some of the most damning aspects of the bill, however, have also received the least attention.

Like the part that would allow the government to target liberal non-profit groups by revoking their tax exemptions simply by declaring that they’re working against the country’s interests.

Speaker Mike Johnson (screenshot via YouTube)

I first mentioned this issue last year when a similar stand-alone bill passed in the House. (It later died in the Senate.)

H.R. 9495, officially called the “Stop Terror-Financing and Tax Penalties on American Hostages Act,” included a provision that would allow the Treasury Secretary to revoke the tax-exempt status of any non-profit deemed to be sponsoring terrorism. Because that phrase was so vaguely defined, though, it could theoretically apply to groups that support protests against the Israeli government’s genocide against Palestinians, groups supporting reproductive freedom and abortion access, and church/state separation groups deemed a threat to conservative Christianity.

Back in September, a coalition of over 100 civil rights organizations (including American Atheists) sent a letter to House leaders urging them to rethink the bill. It pointed out that supporting terrorism is already prohibited under federal law while this bill would merely prevent “fundamental due process” since targeted groups wouldn’t be able to defend themselves in front of a neutral third party.

The potential for abuse under H.R. 6408 is immense as the executive branch would be handed a tool it could use to curb free speech, censor nonprofit media outlets, target political opponents, and punish disfavored groups across the political spectrum. Moreover, the addition of this authority to the tax code would allow the IRS to explicitly target and harass domestic nonprofits using its investigative authority.

They noted that even if the groups didn’t lose their tax exemptions, “nonprofits will curtail their activities as a precaution in order to avoid stigmatizing and financially devastating punishments.” (For Republicans, that was a feature, not a bug.)

For years now, conservative Christians have lied about how Democrats were doing exactly this through the use of the Johnson Amendment. They said the IRS was targeting Christian churches merely using their freedom of speech to endorse political candidates.

There were two problems with that argument. First, there was no evidence the IRS was actually going after any of those churches even when they had every reason to do so. Second, even if that were to happen, the Johnson Amendment wasn’t a weapon against a particular group of people or a particular ideology; it was a blanket rule that applied to the ACLU as well as the NRA, to liberal churches as well as conservative ones.

Still, the threat of the government going after non-profit churches was such a rallying cry for conservatives that Trump, during his first term, claimed he got rid of the Johnson Amendment. (That was a lie.) The argument was that churches had free speech rights, too, and it was appalling to think the government could get in their way.

But when it comes to those same rights being exercised by their ideological opponents, Republicans have no objection to it.

Like I said, that bill didn’t pass last year. But the same content has been included in the text of the new reconciliation bill now being considered (on page 1107). Even if the Republican government never succeeds in revoking any of these tax exemptions, by allowing the Treasury Secretary to unilaterally go after them, it would force the groups in question to defend themselves against the charges, costing them time and money. It would also divert attention from their missions. Which appears to be the point.

And if their tax-exemptions are revoked, it would cause a lot of people to stop donating to those causes, cutting off a vital lifeline for the work they do.

Groups that fight for church/state separation are already sounding the alarm::

“This is an alarming abuse of executive power that could be used to silence dissenting voices,” warns FFRF Co-President Dan Barker. “No administration or agency should have that kind of unchecked authority.”

American Atheists urged people to write to their representatives (with a sample letter included) and tell them to vote against this bill:

Criminal law already prohibits nonprofits from supporting terrorist groups. By allowing the executive branch to take politicized, discriminatory, defamatory, and frankly ruinous actions against nongovernmental organizations, this new, far-overreaching legislation would swing the doors wide open to unconstitutional abuse.

It’s not just atheists calling this out, either. Plenty of non-profits could be targets of this administration:

“This is a five-alarm fire for nonprofits nationwide,” said Lia Holland, campaigns and communications director at the nonprofit group Fight for the Future, which advocates free speech online. “Any organization with goals that do not line up with MAGA can be destroyed with a wink from Trump to the Treasury.”

Holland said the “terribly thought-out legislation” puts environmental, racial justice, LGBTQ+ and other groups at risk.

There’s another dangerous element to this provision: If the Treasury secretary says a non-profit group is supporting terrorists, the explanation for how this determination was made could be kept secret—even from the group itself—if the administration believes it’s in the best interest for national security.

Slate’s Shirin Sinnar adds:

Worse still, once one group is deemed a terrorist-supporting organization, the bill could be interpreted to allow the government to strip the tax-exemption of other charities that supported that group—creating a daisy-chain effect that links liability from one group to the next to the next. And unlike the existing criminal law prohibiting material support to terrorist groups, this bill doesn’t explicitly require that groups know that the money or services they provide are going to a terrorist organization.

If this “big beautiful bill” gets signed into law, then, the Trump administration could conceivably use it to target any organization giving them trouble. The very people who have spent months promising to get revenge on their perceived enemies would have a potent new weapon to use in the fight. All it would take is the Trump administration insisting a group is assisting enemies of the country and his Treasury Secretary would have the ability to shut down the heartbeat of that organization.

It’s not like his supporters would rally on behalf of the free speech rights of those groups. They’re not guided by principles. Hypocrisy doesn’t faze them. They have no problem using the levers of power to shut down their ideological opponents because they have no other way to do it; their ideas are almost never popular enough to win support on their own.

The reason this provision is now a bigger concern is that the earlier bill failed because it couldn’t get 60 votes in the Senate. With a reconciliation bill, only 50 votes would be needed. The bar is lower, so there’s a greater likelihood of this passing.

Another aspect of the bill that has flown under the radar is the expansion of “529 accounts.” These accounts are meant to help families save money for higher education—or for K-12 tuition expenses or for paying off student loans—but the Republicans want to expand the options to include homeschooling expenses and private religious schools (page 798)

According to FFRF:

This transformation turns a college savings tool into a stealth national voucher program with no standards, no oversight and no accountability, further undermining the public education system.

It’s essentially another tax break for people who want to indoctrinate their children with religion.

As I write this, the bill is stalled because some hard-right Republicans don’t think it’s extreme enough. A handful of Republicans from swing districts, however, believe some elements of the bill could doom their chances of re-election, so they’re pushing back from another direction. But there’s no reason to believe a few Republicans will have the courage to actually vote against the final version of the bill, whatever it is, preventing the party from making everyone’s lives considerably worse. It’s what they do.

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