The House on Thursday passed legislation that would allow the government to revoke the tax-exempt status of nonprofit groups it accuses of supporting terrorist entities, despite significant opposition from Democrats who warned that President-elect Donald J. Trump could exploit it to target his political enemies.
The bill, which also waives the tax liability for U.S. hostages while they are in captivity, began as a strongly bipartisan venture. In April, the House overwhelmingly passed identical provisions, and in September, the measure earned the unanimous support of the Ways and Means Committee.
But then Mr. Trump was elected president. And suddenly, what many Democrats had initially regarded as a reasonable tool for targeting terrorist groups began to be seen as a potentially dangerous weapon ripe for abuse by a president bent on kneecapping his rivals.
An array of nonprofit groups on the left began an intensive lobbying campaign to kill the measure, convinced that Mr. Trump would try to use it to wipe them out.
“This is the death penalty bill that we’re considering today, the bill that empowers Donald Trump to extinguish the life of any nonprofit, of any civil society group, which happens to be on his enemies list,” Representative Lloyd Doggett, Democrat of Texas, said on Thursday, warning that Mr. Trump would “use it as a sword against those he views as his political enemies.”
Republican lawmakers argue that Democrats’ fears are overblown and that the bill is necessary to choke off financial pipelines for terrorist entities, frequently citing the example of Hamas.
“This bill is desperately needed to end the tax-exempt status to organizations that have provided material support to terrorists,” Representative Jason Smith, Republican of Missouri and chairman of the Ways and Means committee, said on Thursday.
But most Democrats were unconvinced; the vote to approve the measure was 219-184, mostly along party lines.
It is unclear whether there is enough support for the measure in the Democratic-led Senate for it to clear Congress this year and be signed into law. The Senate has already unanimously passed the provision in the bill that delays tax liability for hostages in captivity. A spokesman for Senator Chuck Schumer, Democrat of New York and the majority leader, declined to indicate whether Mr. Schumer would work to bring up the terror financing language, either on its own or as part of a bigger bill, before the end of the year.
In the immediate aftermath of Hamas’s Oct. 7, 2023, attack on Israel, in which militants killed about 1,200 people, the House overwhelmingly passed a bipartisan bill to bar U.S. funds from being spent in Gaza that would in any way benefit Hamas or any other organization designated as a terrorist group.
That bill was rolled into the measure the House passed on Thursday, but the new version is much broader. It would revoke the tax-exempt status of any “terrorist-supporting organization,” meaning any group that the Treasury Department finds has given “material support or resources” to a group designated as a terrorist entity.
For weeks, a coalition of nonprofit groups — including environmental, immigration and Palestinian rights groups as well as the American Civil Liberties Union — has been sounding the alarm about the bill. They argue it lacks due process and is unnecessary because laws banning material support for terrorism already exist.
“A sixth grader would know this is unconstitutional,” Representative Jamie Raskin, Democrat of Maryland, railed on the floor. “This is an unlawful power to vest in any president, and a dangerous power to vest in a president who shows no qualms about leveling threats of retribution and revenge against his enemies.”
Proponents have defended the bill and accused critics of drumming up excuses to justify their sudden opposition.
“There are still robust due process protections in this bill,” Mr. Smith said, noting that Mr. Raskin and other Democrats who were raising alarms had previously supported the bill.
“This is the most bizarre argument that I’ve heard since I’ve been in Congress,” Representative Lloyd Smucker, Republican of Pennsylvania, said. Referring to Democrats, he added: “They’ve completely reversed their vote in just a few months.”
But even some Democratis who previously supported the bill had been public about their concerns.
“I don’t think this is a realistic possibility, but let’s suppose we had an administration that vowed to wreak vengeance on its opponents, prosecute lawyers, political operatives, donors, illegal voters and corrupt election officials to the fullest extent of the law,” Mr. Doggett said in September, when the Ways and Means Committee met to consider the bill.
He asked if there would be any limit to the new power granted in the bill, and was told there would not be. Mr. Doggett voted in favor of sending the bill to the full House anyway. On Thursday, he voted to oppose it.
On the floor on Thursday, Mr. Doggett explained his turnabout by saying: “We listened to our constituents.”
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