February 5, 2013; Source: The White House

Come again? What did President Barack Obama say about sequestration? It seems that the president’s words have become a Rorschach test of everyone’s biggest hopes and worst fears. President Obama spoke for less than 10 minutes, offering some comments on sequestration, before tossing press secretary Jay Carney to the White House press corps as he decamped for other events.

Was it before he started speaking that Republican House Speaker Rep. John Boehner (R-Ohio) and Armed Services Committee Chair Rep. Buck McKeon (R-Calif.) decided that his detail-free plan was already dead on arrival? How did the president’s detail-free speech lead Independent Sector to blast out an e-mail announcing, “As part of the effort to put forward a plan that could avoid sequestration, the President will include a 28 percent cap on the charitable deduction?”

Just for the record, here is what the president said about sequestration:

“The threat of massive automatic cuts have already started to affect business decisions… Deep, indiscriminate cuts to things like education and training, energy and national security will cost us jobs, and it will slow down our recovery. It’s not the right thing to do for the economy; it’s not the right thing for folks who are out there still looking for work.

[T]he good news is this doesn’t have to happen…The proposals that I put forward during the fiscal cliff negotiations in discussions with Speaker Boehner and others are still very much on the table. I just want to repeat: The deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward are still on the table.

[M]odest reforms in our social insurance programs have to go hand-in-hand with a process of tax reform, so that the wealthiest individuals and corporations can’t take advantage of loopholes and deductions that aren’t available to most Americans. Leaders in both parties have already identified the need to get rid of these loopholes and deductions. There’s no reason why we should keep them at a time when we’re trying to cut down on our deficit.


I know that a full budget may not be finished before March 1st, and, unfortunately, that’s the date when a series of harmful automatic cuts to job-creating investments and defense spending – also known as the sequester – are scheduled to take effect. So if Congress can’t act immediately on a bigger package, if they can’t get a bigger package done by the time the sequester is scheduled to go into effect, then I believe that they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until Congress finds a way to replace these cuts with a smarter solution…Congress is already working towards a budget that would permanently replace the sequester. At the very least, we should give them the chance to come up with this budget instead of making indiscriminate cuts now that will cost us jobs and significantly slow down our recovery.”

The remark that what was on the table is still on the table was apparently enough to spark Independent Sector’s e-mail blast about a potential 28 percent cap on the charitable deduction.  It’s not clear that that proposal, a non-starter for the four years of Obama’s first term in office, ever had the level of bipartisan support that would make it one of the president’s easily-done tax reforms to stave off sequestration a little while longer, but that is what IS seems to have heard.  Interestingly, the IS e-mail message didn’t suggest anything like that kind of alarm for the discretionary domestic spending that will be whacked if the sequester goes through, leaving many social safety net programs by the curb as collateral budgetary damage.

Whatever one thinks of a potential cap in the deductibility of itemized deductions, the nonprofits dependent on government contracts for the delivery of critical human and health services—at the federal level or through federal pass-through funds at the state and local levels—are in line to suffer big time if the domestic part of sequestration happens. Better stated, the families and communities those nonprofits serve will be harmed. Where is the nonprofit sector voice of alarm about potential cuts to the federal social safety net?—Rick Cohen