In attempting to prevent a total meltdown of the American financial system, and while weighing the pros and cons of the federal rescue program that involves up to $700 billion in taxpayer dollars, the nation's lawmakers perhaps entered their most-contentious period since the 2002 debate over whether or not Congress should authorize the president to use force in Iraq.
Such weighty issues are rarely, if ever, tackled in such proximity to national elections, since Congressional members are loath to cast late-term votes that could be used against them in the voting booth, and are generally more anxious to get back to their districts and engage in full-throttle campaigning.
So it's not surprising that the major national Jewish groups avoided taking a strong position on Treasury Secretary Henry Paulson's plan for the government to purchase bad mortgage-related assets from American financial institutions. In such a charged atmosphere, with the stakes so high, Jewish groups either tiptoed into the waters or stayed completely on dry land.
And for several organizations, the message was that, in acting to save Wall Street and stop the free fall in the mortgage and credit markets, the government should not abandon programs that help the less fortunate.
Several days before the House first voted on the bailout package -- a vote that would go down in flames and leave stock markets reeling worldwide -- the Religious Action Center of Reform Judaism released a statement urging policy members to consider that "the ultimate test of any government action to help the economy is how it will affect the most vulnerable: the poor, the elderly and the sick.
"Congress must prioritize helping the most needy in our society, as they consider how to spend taxpayer money to address the most significant economic crisis in decades."
Sammie Moshenberg, director of the National Council of Jewish Women's Washington, D.C., office, noted that since the group does not usually weigh in on fiscal issues, it would have needed more time to study the proposals in order to issue an opinion. Moshenberg added that the NCJW had pushed for the multibillion economic stimulus package that faltered in Congress last month.
Hard Decisions Ahead
"Whoever becomes president is going to be starting with a huge deficit and have to make some hard decisions. For us, taking care of the neediest among us should be a priority, and there hasn't been a lot of talk about that," said Moshenberg.
After the Senate passed a version of the bailout plan -- one filled with enticements aimed at getting both Republican and Democratic House members to switch their votes -- and it became clear that the House would pass the bill and Bush would sign it into law, several Jewish groups issued more-extensive statements, largely praising the bipartisan efforts to shore up confidence in the economy.
The United Jewish Communities lauded the fact that the Senate and House chose to attach the bailout plan to a bill that addressed the issue of mental-health parity. By linking the fiscal package to a law that had already passed the House, but failed in the Senate, lawmakers both streamlined the process and offered an incentive for colleagues in the House to back the measure.
Specifically, the legislation stipulates that health insurance companies offer comparable coverage for mental-health illnesses as they do for physical illnesses. The new law should make it easier for patients to be covered for treatments for a wide range of mental-health issues. Advocates have lobbied for such a measure for more than a decade and consider it a milestone.
In addition, William C. Daroff, vice president for public policy and director of the Washington office of UJC, hailed Congress for including a stipulation that allows people over 70 to transfer up to $100,000 from their Individual Retirement Accounts to a charity without suffering a tax penalty, something that could help nonprofit groups during what are sure to be tough economic times ahead.
According to Daroff, such a tax policy was in effect for two years, but it expired at the end of 2007. During the time the law was enacted, the policy allowed Jewish federations to receive approximately $20 million in funds directly rolled over from IRA accounts. In that time, the Philadelphia Federation earned about $500,000 from non-taxed IRA rollovers, according to Daroff.
He acknowledged that, while Congress and the president may have headed off an economic catastrophe on the scale of the Great Depression, charitable foundations may be hit hard by the contraction of wealth.
"Donors are being stretched for their funds. All of us are 10 percent poorer on paper. All of us have homes that are less valuable than they were a year ago," said Daroff.
"The hope is that the actions that Congress and the president have taken will stop the economic downturn from getting worse," he added. "But the needs will still be there ... the federation system is really around for times like this, when there is a need for a deeper and more-elastic social safety net."