Nonprofit Groups Fear A New House Bill Could Silence Them

A panoply of civil liberties advocacy groups and other nonprofits are raising alarms over a bill that passed the House Thursday, saying it could be used to punish them for speaking out under the incoming second Trump administration.

The bill, which failed on the House floor last week, squeaked by on a 219-184 vote, with more than two dozen members not voting.

It now goes on to the Senate, where its fate is unclear. But if the turnaround by many Democrats in the House Thursday is any indication, it faces an uphill climb in the upper chamber.

A request for comment to Senate Majority Leader Chuck Schumer’s (D-N.Y.) office was not immediately returned.

“This is the kind of bill that the infamous House Committee on Un-American Activities would’ve introduced back in its day,” said Patrick Eddington, senior fellow with the libertarian Cato Institute, referring to a House panel notorious during the anti-Communist “Red Scare” days of the 1950s.

“By voting for H.R. 9495 today, the House of Representatives chose fear over freedom,” said Kia Hamadanchy, senior federal policy counsel at the American Civil Liberties Union, in a statement. The ACLU signed a public letter Monday opposing the bill with almost 300 other civil society groups, including the Brennan Center for Justice, the Center for Democracy and Technology, and Demand Progress.

The bill has also raised worries among groups active on the issue of Israel’s war in Gaza and related relief efforts.

“We have seen bills like this in other countries, and we know what they do: silence criticism and put lifesaving humanitarian operations like Oxfam’s at risk,” said Abby Maxman, president and CEO of Oxfam America, which has been active in restoring clean water and sanitation to war-torn Gaza.

Robert McCaw, director of the government affairs department with the Council on American-Islamic Relations, echoed that point: “This bill was designed to silence and financially drain organizations that oppose Israel’s genocide of Palestinians, the slaughter of Lebanese, and the broader erosion of human rights in the region,” he said.

The bill, from Rep. Claudia Tenney (R-N.Y.), would grant new powers to the Treasury Secretary, allowing them to designate nonprofit groups as “terrorist supporting organizations.” Such nonprofits could be subject to having their tax-exempt status suspended if they are found to have provided support to groups formally listed by the government as terrorist organizations.

Under the bill, nonprofits flagged by the government would be given 90 days’ notice and could avoid suspension if they take steps to stop providing support to terrorist groups. They could also challenge the designation with the IRS and in federal court.

In September, the bill flew through the House Ways and Means Committee, passing on a bipartisan 38-0 vote. And it garnered wide bipartisan support as recently as Nov. 12, winning 256 votes in the House but falling shy of the two-thirds majority needed to pass under a procedure used for non-controversial bills. That vote saw 52 Democrats vote in favor of the bill.

But as word circulated about the bill’s possible impact, pressure mounted on lawmakers to reject it when it came up again Thursday, this time under normal rules requiring only a majority of yes votes. The 219 votes it got was only one more than needed to pass in a full House, and only 15 Democrats backed it.

What changed since September? The expected occupant of the White House next year, for one thing.

Trump’s openness about seeing the levers of power as a potential way to settle scores, new in modern U.S. history in its sheer brazenness, spooked some Democrats. In June, Trump told TV personality Phil McGraw, “Sometimes revenge can be justified, Phil. I have to be honest. Sometimes it can.”

The dispute has left the parties in an odd position: House Republicans, who decried a boost to Internal Revenue Service funding because they said it would lead to government overreach and the hiring of thousands of new agents, now support a bill that could radically expand Treasury’s power. And House Democrats, who supported boosting IRS enforcement with an eye to better enforcement, is now overwhelmingly opposed to expanding Treasury’s powers due to worries over government power.

Rep. Steny Hoyer (D-Md.), the moderate former House majority leader who voted for the bill Nov. 12 and against it Thursday, specifically cited Trump as a reason why.

“There is legitimate reason in today’s world to expand the Treasury Secretary’s ability to police non-profits supporting terrorist organizations. This bill’s drafting, unfortunately, goes further,” he said in a statement.

“After careful review, I believe additional protections are necessary for this bill to shield non-profits with no connection to terrorism from politically motivated punishment.”

Of the 17 Democrats who voted for the bill when it was in committee, only two — Reps. Jimmy Panetta (D-Calif.) and Bradley Schneider (D-Ill.) — wound up voting for it again Thursday.

Republicans defended the measure Thursday. Ways and Means Chairman Jason Smith (R-Mo.) accused Democrats of engaging in “fearmongering scenarios” and “partisan antics” with their opposition. And Rep. Blake Moore (R-Utah) said he could not name specific examples of where the new authority would have been useful, but maintained it was needed.

“We absolutely needed the power to be able to deter that type of activity from happening,” he said.

The groups that cosigned the ACLU’s letter against the bill say the protections in it aren’t enough to prevent abuse.

“The bill’s creation of an after-the-fact administrative or judicial appeals process not only comes too late, but it is also unlikely to remedy these fundamental deficiencies. Instead, it functionally shifts the burden of proof about whether a nonprofit provides material support from the government to the nonprofit,” they said.