Bracing for Cuts, Federations Hold Tongue on Taxes

As 'Fiscal Cliff' Looms, Worries About Social Service Spending

Cuts Looming: Jerry Silverman, chief of the Jewish federations umbrella group, is staying out of the fight over higher taxes for the wealthiest Americans.
ROBERT A. CUMINS/JFNA
Cuts Looming: Jerry Silverman, chief of the Jewish federations umbrella group, is staying out of the fight over higher taxes for the wealthiest Americans.

By Nathan Guttman

Published November 16, 2012, issue of November 23, 2012.
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Jewish federation leaders are bracing for substantial cuts in government funding for the social services their agencies provide as attention turns toward deficit reduction following the presidential election.

Just how much will depend on the outcome of the post-election debate now unfolding on President Obama’s proposal to increase tax rates on the wealthy to help close the federal deficit.

But discussions with federation officials in the hallways and conference rooms at the General Assembly of the Jewish Federations of North America here from November 11 through November 13 indicated that this is a debate in which the federations will take no part, despite its impact on their missions.

“From a reality and a practical point of view, it looks like there will be some cuts,” said Jewish Federations of North America president and CEO Jerry Silverman. Silverman declined to state JFNA’s position on a tradeoff that would include tax hikes in return for limiting budget cuts.

Instead, said Silverman, whose group is the umbrella organization for 155 Jewish federations in the United States and Canada, the Jewish community is focused on “trying to mitigate at least the amount of cuts” to social services. Federations are the largest providers of social services to the Jewish community and administer $10 billion in federal funds through Medicaid and Medicare. Federations also are reliant on other federal programs helping the needy within Jewish communities, including Supplemental Nutrition Assistance Programs (formerly known as food stamps), urban and communal block grants and other housing programs, as well as Department of Homeland Security funds for protection of Jewish institutions.

As the Obama administration begins talks with Congress on a package to avoid the “fiscal cliff” — a set of budget cuts and tax hikes scheduled to kick in at the end of December — Jewish leaders are aware of the fact that any such deal would include some cutbacks in government services. To the extent they could, federations, many of whose revenues have taken a hit in the great recession, would have to dig even deeper into their pockets in order to mitigate the shortfall.

Historically, the federation system has been reluctant to take on tax issues or other key fiscal legislation due to built-in tensions between the federation-affiliated service providers and key donors who oppose tax increases on themselves and on their businesses.


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