Abortion Amendment Likely to Delay Tax Bill

As the Senate resumed debate Monday on a sweeping tax overhaul bill, Sen. Gordon J. Humphrey (R-N.H.) announced that he will introduce an amendment this week to eliminate tax exemptions for nonprofit abortion clinics, a move that is likely to delay action on the package.

Although the amendment is not expected to win approval, deputy Republican leader Alan K. Simpson of Wyoming predicted a long, “difficult, emotional debate” on an issue that always “gums up the machinery” of the Senate.

Meanwhile, Majority Leader Bob Dole (R-Kan.), urging that the Senate Finance Committee tax package be kept intact on the Senate floor, said he will support a non-binding resolution on individual retirement accounts calling for changes to the committee’s proposal to eliminate IRA deductions for most taxpayers.

Modifications Urged

“It would be my hope that we can make those choices (later), if necessary, or make certain modifications--and I believe some should be made in the IRAs,” Dole said.

He suggested he will push for some changes to the bill’s politically sensitive IRA provisions once the measure reaches a conference committee, which would be necessary to settle differences between it and the House version of the legislation.

Several senators have said that they will offer amendments to restore at least part of the IRA deduction, but IRA supporters have not yet united on a method to pay for the $25 billion over five years it would cost to maintain the full deduction.

The Senate bill would allow all individuals to continue to contribute to IRAs and to defer taxes on the earnings until they are withdrawn, but it would end the maximum $2,000 deduction for payments by those who already are covered by a company pension. About 20 million of the 28 million households with IRAs would lose the deduction.

House Version

The House bill would retain deductions for IRAs but would require workers who contribute to a company-sponsored 401(k) retirement savings plan to reduce their IRA contributions by the amount they put in a 401(k) plan. An estimated 14 million workers are employed at companies with 401(k) plans.

On the abortion issue, Humphrey previously had indicated that he expected to offer the proposal, which is co-sponsored by Republican Sens. William L. Armstrong of Colorado and Jesse Helms of North Carolina. But Senate leaders, suggesting that there were so few amendments pending that they might be able to win approval of the tax bill by the end of this week, had hoped that conservatives would decide against offering the amendment.

Under Humphrey’s proposal, no organization that performed, financed or made facilities available for abortions could receive a tax exemption as a nonprofit organization. He said about 30% to 50% of the estimated 3,000 medical facilities that perform abortions would lose their tax exemptions if the amendment became law.