The House of Representatives passed a bill late Thursday that would empower the the treasury secretary to unilaterally strip the tax-exempt status of any nonprofit they deem to be a "terrorist supporting group," effectively killing the organization.
The Stop Terror-Financing and Tax Penalties on American Hostages Act, or H.R. 9495, passed 219-184, with 15 Democrats joining the Republican majority in giving an incoming Donald Trump administration sweeping power to target his political foes. A previous attempt to fast-track the bill with a two-thirds majority vote failed last week, with 52 Democrats voting in support and 145 voting against.
A handful of vocal lawmakers and a broad alignment of civil rights groups, including the American Civil Liberties Union and a coalition of 55 Jewish organizations, have taken the lead on opposing the legislation, warning that Trump could abuse the powers conferred by the legislation to attack his critics.
The bill is largely unchanged since it was introduced in November 2023, but it once enjoyed much wider bipartisan support as it was introduced by staunchly pro-Israel lawmaker Rep. Claudia Tenney, R-N.Y., with the goal of cracking down on pro-Palestine groups under the guise of blocking them from helping Hamas. The election of Trump, however, has given an increasing number of its Democratic supporters pause, with Rep. Alexandria Ocasio-Cortez, D-N.Y., saying that many of her colleagues were persuaded to vote no after receiving calls from concerned constituents.
It is already illegal for nonprofits to provide material aid to terrorist groups, and the federal government can enforce the law with prosecution and sanctions. Critics say the bill that passed on Thursday, however, would override due process and allow the Treasury Department to declare a nonprofit a "terrorist supporting group" without adhering to normal evidentiary standards. Although targeted groups could appeal to the IRS and courts, they warn that the legal costs and reputational damage alone would have a chilling effect on free speech, especially speech by any group advocating for Palestinian rights or some other political cause Trump doesn't like.
Rep. Lloyd Doggett, D-Texas, warned on the House floor that "a tyrant tightens his grip not just by seizing power, but when he demands new powers and when those who can stop him willingly cede and bend to his will."
“Donald Trump says you’re a terrorist, so you’re a terrorist," added Rep. Jim McGovern, D-Mass. "My friends on the other side of the aisle know it’s nuts, even if they don’t want to admit it."
