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After President Barack Obama announced his $3.8 trillion budget for the upcoming fiscal year, major Jewish organizations responded with mixed reviews.

The Jewish Federations of North America (JFNA), the umbrella organization that represents 157 Jewish federations and 400 independent network Jewish communities across North America, released a statement praising the budget's support for social service funding and its proposal for charities to receive a $5,000 tax credit for every new employee hired in 2010, but criticized its proposal to limit the value of charitable deductions for upper-income earners.

JFNA applauded the proposed budget's plan to extend funding for the Federal Medicare Assistance Percentage (FMAP) rate, the formula used to allocate Medicaid funding to states as well as its funding for the Administration on Aging's recently launched Caregivers Initiative. With $102.5 million allocated to this new program, the Caregivers Initiative supports pre-existing caregiver services and temporary respite care as well as home and community-based supportive services.

"Jewish Federations and our affiliated social service agencies are continuing to respond to the devastation of the current economic crisis, and look to Congress and the Obama Administration for a fiscal lifeline to counter the enormous demand for our social programs," William Daroff, vice president for public policy and director of The Jewish Federations of North America's Washington office, said in the statement.

Several Jewish organizations, including JFNA expressed criticism of the budget's proposal to limit the value of itemized deductions of charitable contributions for those who earn more than $250,000 a year from a rate of 35 percent to 28 percent. JFNA said that this proposal would serve as a "disincentive" for giving. This proposal would mean if an individual who earned a quarter of a million dollars or more annually, gave, for example, a $10,000 chartable donation, they would receive a $2,800 tax break as opposed to a $3,500 one.

"We are very encouraged and excited by the proposed tax credit to support hiring in non-profits," Nathan Diament, director of public policy for the Orthodox Union, told The Jewish State. "On the other hand, when it was proposed, we are concerned about reducing the tax rate for charitable donations, which we think would have an adverse impact on giving."

Obama proposed a similar limit in last year's budget, but it was rejected by Congress after bipartisan opposition.

According to a study by Indiana University's Center on Philanthropy, if such a proposal was enacted in 2006, the latest year for which itemized deduction data are available, itemized giving by the highest-income households would have dropped $3.87 billion, or 4.8 percent, from $81.26 billion and the drop for households overall would have been approximately 2.1 percent.

"We don't usually deal with tax or budget issues, but these two particular issues came up," Diament said of the proposal to grant tax credit to non-profits that make new hires and the limitation on itemized deductions respectively, "and in the Orthodox community, synagogues and day schools, are really suffering in this economy."

Diament said that he "expects and hopes" that Congress will address this proposed limitation in the budget and said he remains encouraged by the fact that the House of Representatives' health care reform bill did not include a charitable tax deduction as a way to help cover the projected costs of the $900 billion plan.

"We've been in touch with members of Congress that understand our concerns," he said.

"As with any budget, especially one of this size, there is good and bad," Richard Foltin, the director of national and legislative affairs at the American Jewish Committee's Office of Government and International Affairs in Washington, D.C, told The Jewish State, noting positively the tax credit for each new hire as well as increased funding for foreign affairs.

"But we are concerned, as we were a year ago, with the notion of capping the rate of charitable tax deductions, especially at a time when the role of non-profits is more crucial than ever," he added.

Foltin said that he understands that the president is trying to balance priorities, but that the proposal "has the potential to have a devastating effect on the ability of non-profits to fulfill their essential missions."

Chuck Maar, the director of Federal Tax Policy at the Center on Budget and Policy Priorities in Washington, D.C., said that he does not believe that the proposed limit on itemized deducations would significantly affect charitable giving.

"We think the concern has been exaggerated," he said, adding that the tax credit for new employees as well as the budget's proposal to extend the estate tax rate would prove beneficial for charitable organizations.

"Overall, I think that for charities designed to help low-income individuals, we feel that the budget is very positive," Maar said.