Obama Lays Out Aggressive Deficit-Reduction Plan; Charitable Organization Adjusts to Keep Philanthropy Alive

Sep 25, 2011, 05:30 ET from Works of Life International Ministries

SAN FRANCISCO, Sept. 25, 2011 /PRNewswire-USNewswire/ -- Vincent Everett, CEO of Works of Life, a non-profit charitable organization in operation for over a decade, is announcing the start of a reinvigorated donation program as President Obama's recent deficit reduction plan bodes a bleak picture for the philanthropic community.

A few months ago President Obama laid out a "grand bargain" that pushed for Democrats and Republicans to compromise on a deal to end the debt ceiling debate: both sides would have to make sacrifices to reduce the nation's deficit and ensure the viability of the social safety net. But House Speaker John Boehner adamantly rejected the President's offer to slash government spending and reduce the deficit saying that concessions to the Republican party, such as cuts to Medicare and Social Security, weren't an incentive for Congress to pass any sort of tax increase. Democrats were frustrated at Obama's compromise deal, which many viewed more as a handover to the GOP even before the bill was rejected the first time around. Obama's prospects for re-election dimmed.

The compromise narrative changed dramatically at the Rose Garden on Monday, where Obama outlined a new deficit reduction plan calling for higher taxes on the rich. His conciliatory language about compromise annulled, the President ignited an unyielding rhetoric in support of tax hikes for the rich, beneficiary protections for Medicare recipients, and safeguards to Social Security. Obama went as far as to coin the phrase "Buffet Rule" to signal his belief that people earning more than $1 million per year should not pay a lower tax rate than the middle class.

"This sudden switch is symptomatic of the negative feedback Obama has been receiving from the general public, reflected by his achingly low approval ratings so close to election season," says Everett, who has long been a proponent of increasing the number of non-profit organizations that operate independent from the federal government. He adds, "Listen, no one is really taking this proposal at face value. Unsurprisingly, Republicans rejected the plan almost as fast as it was described. It's more of a political move to show voters that Obama is not going to compromise on the backs of working class people. If the President stands a chance of getting reelected, he needs to show firmly where he stands; He needs to say that it's unfair for the middle class to pay lower taxes than the rich, that the painful effects of massive spending cuts can be balanced by higher taxes."

But for the Works of Life CEO, it's too little too late. "The non-profit sector is going to have to shoulder the responsibility of maintaining the social safety net. The climate in Washington has been markedly dominated by Republican sentiment, what Obama calls compromise," says Everett.

Traditionally the social safety net has been entrusted to the federal government and the non-profit sector, along with various charitable organizations. Everett explains that now is the time for non-profits and charities to step up and take on a greater level of responsibility as the federal government faces the possibility of massive downsize. "In today's economy it's all about how you can help people," says Everett, "which is why we don't expect the middle class to have to choose between donating to charity or having enough money for gas."

Works of Life, together with its charitable affiliate the With Causes Charitable Network, receives thousands of property and asset donations each year that generate charitable income for a wide range of causes, which in turn benefits the donor through tax deductions. "When you donate car, donate boat, donate real estate, or even donate aircraft to charity, you give back to the community without cutting into your spending power. This is the key to keeping philanthropy alive in a recession. We [the non-profit sector] have to continue to think of ways of becoming less dependent on the federal government, to ensure the social safety nets stays afloat."

SOURCE Works of Life International Ministries