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Stormy Congressional Session Expected Washington (JTA) — Con- gress is back at work last week after a month-long recess, and the returning legislators will im- mediately set out to resume some old unresolved battles and to wage a few new oness in a ses- sion that is expected to be the stormiest since President Rea• gan took office. The issues of special concern to many in the Jewish commun- ity are myriad and diverse, ranging from tax reform to arms sales for Arab countries, and from school prayer to an inter- national agreement barring genocide. But perhaps the greatest source of anticipation in Washington right now is to be found in legislation ,already adopted at the end of last ses- sion. The controversial Gramm- Rudman budget balancing law will force the Administration to reduce the federal deficit in several stages over the next five years, with automatic cuts ap- plied to government programs if Congress fails to meet its man- dated targets. The Administration has an- nounced that the law sill re- quire a budget-trimming for fiscal year 1986 of $11.7 billion. The cuts, half of which must be taken from the military budget and half from non-military spending, will go into effect automatically on March 1, un- less laws are enacted before then that would reduce the deficit by the same amount. Reagan is expected to present Congress with a budget for 1987 sometime next month that will meet the legislated requirement of cutting more than $50 billion more out of the nation's deficit. But if Congress and the White House fail to thrash out a final plan, automatic cuts will go into effect across the board next fall. Of particular concern to many Jewish organizations is the fate of domestic social programs destined to feel the sharp edge of the Gramm-Rudman budget- cutting scissors. Jewish groups active in promoting social welfare programs fear that the expected cuts this year will be devastating for many of the nation's poor, among them elderly Jews. Jewish Federations are "in jeopardy of losing millions of dollars," when the cuts take effect, according to Ellen -Wit- man, Legislative Director at the Washington office of the Coun- cil of Jewish Federations. The Administration has already withheld grants, nor- mally renewed on Janu: ,,, for refugee resettlement 1,,,s oney which is used by • eration- funded agencies primarily to resettle Jewish immigrants from the Soviet Union and Eastern Europe, according to Whitman. Other Federation-' funded programs that can ex- pect to suffer are housing pro- grams, foster care and adoption services and assistance projects to the elderly. Many Jews already living below or near the poverty line are among those who will be badly hurt by social service cuts in programs administered by Jewish and non-Jewish agencies alike, Marc Pearl, Washington representative of the American Jewish Congress, pointed out. He noted that 16 to 20 percent of American Jews are either cur- rently below the poverty line or would fall below in the event of another recession. Another source of anxiety for many Jewish individuals and organizations is the tax reform issue which will almost certain- Budget trimming and tax code worry Jewish groups. ly be taken up by the Senate Finance Committee early on in the new session. The House passed a bill to revise the tax code just before winter recess. To the relief of many Jewish organizations it did not include a provision in a similar plan proposed by the Treasury Department that would have prevented nonitem- izing taxpayers from deducting any contributions to charitable institutions. The House version would permit the deductions only after the first $100. A coalition of some 600 Jewish and non-Jewish philan- thropic bodies involved in welfare, cultural, educational and religious programs, has vigorously opposed the Treas- ury's proposal, claiming it would substantially reduce donations to charity. The Jewish Federations, for exam- ple, which raise more than $600 million a year, could lose, ac- cording to a study by the coali- tion, over a sixth of their average ammallearnings. As the tax filing deadline ap- proaches, Israel Bond holders will almost certainly be relieved by of a new tax burden of which most are undoubtedly unaware. A proVision of the 1984 Deficit Reduction Act would require lenders to pay tax on the full amount of interest they would get if the loans had been made at prevailing market rates. If Israel Bonds are not exemp- ted from the 1984 act, Bond holders would be required to pay tax on more interest than they actuallyearned, since the bonds' four percent interest falls well below the current approximate market rate of ten percent. This could result in a loss of potential bond purchasers, some members of Congress have pointed out.