A law known as HR 9495 has passed the US House of Representatives, allowing a presidentially appointed Treasury Secretary to unilaterally deprive a nonprofit of its registration if it is determined to be a “terrorism-supporting” group. Republicans supported the plan, while Democrats opposed it; 15 Democrats deviated from their caucus to vote in favor of it, and the law passed 219-184, mostly along political lines. A wide range of organizations, including advocacy and direct service groups, nonprofit media, and civil rights organizations, have mobilized against the bill, which is officially known as the Stop Terror-Financing and Tax Penalties on American Hostages Act. The measure has caused concern in the nonprofit sector and US civil society.
In the midst of massive university demonstrations against the war in Gaza, an earlier version of the measure was filed with bipartisan support, at least with the implication that some organizations coordinating or supporting such demonstrations were also (or consequently supporting) “terrorism.” That presumption alone would be sufficient to incite worries of political retaliation against disfavored nonprofit organizations by any president, through the secretary of the Treasury. However, Donald J. Trump’s reelection this month elevated the bill’s stakes.
Opponents of the bill are worried that Trump, who has made it clear that he wants to punish those he believes are his political rivals, will use the bill to single out and quiet any group that he doesn’t agree with. “Deep concerns about the bill’s potential to grant the executive branch extraordinary power to investigate, harass, and effectively dismantle any nonprofit organization—including news outlets, universities, and civil liberties organizations like ours—by stripping them of their tax-exempt status based on a unilateral accusation of wrongdoing,” the ACLU and about 150 other organizations wrote in a letter opposing the legislation this September.
The United Philanthropy Forum, the National Council of Nonprofits, the Independent Sector, and the Council on Foundations wrote another letter last week that read as follows: Without having to provide the accused NGOs with all of the evidence or justification, this law would give the Secretary of the Treasury the authority to classify section 501(c) nonprofits as “terrorist supporting organizations” at the Secretary’s discretion. Furthermore, by giving the accused group the burden of proof and giving them only ninety days to prove their innocence before losing their tax-exempt status, the law violates the safeguards of due process guaranteed by the constitution.
52 Democrats broke with their caucus to vote in favor of the law, but supporters were unable to muster the two-thirds vote needed for procedural reasons, and the bill failed an earlier House vote last week. But today’s House vote simply needed a simple majority to pass. Speaking on the House floor Thursday, Democrats who opposed the bill cautioned that Trump and his administration would use it as a weapon to target perceived opposition to the incoming president’s program and political rivals.
Rep. Lloyd Doggett (D-TX) called the bill a “death penalty for nonprofits,” arguing that instead of safeguarding Americans, it would enable President-elect Donald Trump to “use it as a sword against those he views as his political enemies.”We would provide him a bludgeon for a campaign against “the enemy within,” or individuals he believes pose the biggest threat to America, if this bill were to become law. “We should be concerned not only about Trump’s death sentence but also about his ability to intimidate,” Doggett stated. “It is obvious that the bill would chill any group that dared to oppose his chilling vision.”
The bill was described as “an authoritarian play by Republicans to expand the sweeping powers of the executive branch to go after political enemies and stifle political dissent” by Rep. Pramila Jayapal (D-WA), the chair of the Democratic Progressive Caucus. “A dangerous and unconstitutional bill that would allow unchecked power to target nonprofit organizations as political enemies and shut them down without due process,” said Rep. Rashida Tlaib (D-MI). Such complaints were rejected by Republican members. House Ways and Means Chair Jason Smith (R-MO) criticized his colleagues on the other side of the aisle for voting against the plan, pointing to prior bipartisan support for it.
Smith stated, “the majority of our Democrat colleagues voted last week to block passage of this bill despite that consistent bipartisan support.” Smith stated, “They now think the authorities in this bill might be abused.” “However, this bill addresses all of the concerns expressed by Democrats in order to protect legitimate nonprofits and to ensure due process.” The bill now moves from the Republican-controlled House to the Senate, where it might be defeated by Democratic senators, who still have a narrow majority, though its future is uncertain.
In any case, organizations that support the law caution that it will probably reappear in 2025—when President Donald Trump is in office and the Congress is controlled by Republicans—at least in some form.
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