Abortion Foes Run Into Tax Obstacle in Bid to Curb Funding

House Republicans’ efforts to limit government funding for abortion are bumping up against their emphasis on tax cuts, underscoring potential tensions between the party’s social and fiscal agendas.

A Republican bill that would cut taxpayer funding for abortion aims to prevent women from using itemized medical deductions, certain tax-advantaged health-care accounts or tax credits included in last year’s health-care law to pay for abortions or for insurance plans that cover the procedure.

Under common Republican definitions, limiting a tax benefit is viewed as a tax increase -- which is anathema to the House majority.

“I understand the point they’re trying to make through the tax code, saying abortion is not health care,” said Grover Norquist, president of Americans for Tax Reform, a Washington-based advocacy group that says 237 House members have signed its no-tax-increase pledge. “We’re just concerned that policy, however well-intentioned or virtuous, not ever mask a net tax increase.”

The Congressional Budget Office released a report yesterday saying that the bill would have a “negligible” effect on tax revenue, which means it wouldn’t be viewed as a violation of the pledge.

Increased Revenue

That estimate assumes that increases in revenue generated by the bill would be balanced by increased deductions taken for medical care because more pregnancies would be carried to term, Thomas Barthold, chief of staff of the congressional Joint Committee on Taxation, said during a House Ways and Means subcommittee hearing today.

“Negligible’s fine,” Norquist said in an interview yesterday after hearing about the revenue estimate. “Zero’s better, so there needs to be an offset.”

In a letter sent to the subcommittee today to clarify the group’s position, Norquist wrote that negligible and zero are “synonymous” for budget purposes.

“The bill has no net tax change whatsoever, and is therefore not legislation at all relating to the Taxpayer Protection Pledge,” he wrote. “Attempts to claim otherwise are not based on reality, but on mere political gamesmanship of the lowest order.”

Complying With Pledge

Norquist said he has been discussing the tax issue with bill sponsors and committee staff members. They have assured him, he said, that the bill will comply with his group’s pledge.

“As the sole House committee that generates tax policy, we speak with a lot of groups that are mindful of how specific legislation may impact the code and taxpayers alike, and ATR is one of those groups,” said Ways and Means spokeswoman Michelle Dimarob. The purpose of today’s hearing, she said, was to give Congress “the information it needs to ensure that the provisions are administrable and operable.”

The bill, sponsored by Representative Christopher Smith, a New Jersey Republican, also prohibits government funding for abortion and forbids federal health-care facilities to offer abortion services. The bill provides exceptions for abortions performed to save a woman’s life or to end pregnancies resulting from rape or incest. The House Judiciary Committee approved the measure March 3.

Cutting Spending

Most congressional Republicans support cutting spending for abortion. The 2011 budget bill the House passed last month included a ban on funding for Planned Parenthood, and some lawmakers have been pushing to include similar language in the short-term spending measures that are funding the federal government until lawmakers devise a longer-term plan.

Spending provisions in Smith’s abortion bill, which expand and make permanent previous restrictions, fit with the party’s stated agenda of reducing government expenditures.

The tax provisions raise a complex question because they would generate more money for the government. If a woman can’t use the itemized medical deduction -- which is available for expenses exceeding 7.5 percent of adjusted gross income -- for an abortion, she would pay more in taxes than she would have otherwise.

The bill would attempt to apply the same logic to health savings accounts and flexible spending accounts by removing abortion from the list of eligible medical expenses, said David Christensen, senior director of congressional affairs at the Family Research Council, a Washington-based group that advocates religious values in public policy.

Abortion Incentive

“We think that the IRS should not be incentivizing abortion through the tax code,” he said.

Changing the tax treatment of abortion is a “very different concept” that could lead to other social policy changes through the tax code, said Donna Crane, policy director at NARAL Pro-Choice America, an abortion-rights group in Washington.

“There’s a lot of policies that can be enacted and changed that are super-creepy,” she said.

The bill isn’t designed to affect the two largest tax breaks for health care: allowing employers to deduct the cost of health insurance for employees and letting employees receive employer-sponsored coverage without paying taxes on the value of the benefits.

Christensen said his group would support examining those tax provisions as well.

Some of the language in the bill is ambiguous, making it hard to tell how it would affect individuals and businesses in some cases, Barthold said.

Causing Split

As Congress pursues broader tax changes, similar provisions could cause fractures between fiscal conservatives who don’t want taxes to increase and social conservatives who want to use economic policy as a tool.

Representative Richard Neal, a Massachusetts Democrat, suggested that death penalty opponents could use similar logic to seek to deny deductions to pharmaceutical companies that produce drugs used in executions.

“The tax code can be an extremely powerful tool to accomplish a policy goal, including social policy,” he said at today’s hearing. “But it can also be a very blunt instrument.”

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