In Washington, a nationwide initiative by Republicans to enhance private school voucher programs has encountered a significant challenge. On Friday, the Senate parliamentarian announced that the proposal conflicts with procedural guidelines.
The long-anticipated initiative sought to introduce a federal tax credit system to bolster scholarships that would enable families to enroll their children in private schools or alternative educational options apart from their local public institutions. However, the parliamentarian warned against incorporating this proposal into President Trump’s tax cut and spending legislation.
This development adds to the growing list of complications Republicans are facing, as their critical suggestions are deemed unsuitable for the filibuster-proof reconciliation package. Although the parliamentarian’s opinions are advisory, they are typically heeded. It remains uncertain if Republicans will attempt to modify the proposals or choose to exclude them altogether.
Additionally, another educational proposal, which was intended to exempt religious colleges from a federal endowment tax, was also ruled ineligible for reconciliation. This plan aimed to increase the tax rate for wealthier college endowments while exempting religious institutions such as Hillsdale College, a Michigan-based conservative, Christian institution and a Trump administration ally.
Oregon Senator Jeff Merkley, the leading Democrat on the Senate Budget Committee, remarked, “We have succeeded in eliminating parts of this bill that would harm families and workers, but the process is ongoing. Democrats will continue to challenge every provision in this Big, Beautiful Betrayal of a bill that contradicts Senate rules.”
The school voucher provision was celebrated as a triumph for advocates who have championed the concept for years. A comparable proposal faced congressional rejection in 2019 under the leadership of Betsy DeVos, Trump’s former education secretary. While campaigning for a second term, Trump reiterated his commitment to delivering “universal school choice.”
Under the proposed reconciliation plan, benefactors contributing cash or stock to K-12 scholarship initiatives would receive a full refund of their donations in tax cuts. This would enable stockholders to avoid taxes typically applicable when contributing or transferring their stock.
Most families would qualify for the scholarships, except those earning over thrice their region’s median income. The House’s version of the bill allocated $5 billion in yearly tax credits until 2029, whereas the Senate’s version capped it at $4 billion without specifying an expiration.
Proponents argue that the plan would widen educational choices for families across the nation, offering alternatives in communities with underperforming public schools. Critics, however, argue that it could divert funds from public schools and pave the way for potential fraud and misuse.
Republican-majority states have instituted similar programs, like Texas, which recently enacted a $1 billion initiative. States have increasingly extended vouchers to families beyond just those in dire need, escalating budgetary concerns as costs accumulate swiftly.
The Senate’s college endowment initiative aimed to escalate the levy on schools’ investment incomes, proposing an increase from 1.4% to either 4% or 8% based on wealth metrics. This would solely apply to institutions with endowments of no less than $500,000 per student, excluding religious establishments. Hillsdale College and a handful of others were advocating for the exemption.
Some small institutions affected by the proposal are hopeful Republicans will consider a broad exemption for all smaller colleges. Lori White, president of DePauw University in Indiana, noted, “The religious exemption indicates senators’ apprehension regarding the endowment tax hike’s effects on small colleges. Following the parliamentarian’s deliberations, exempting all colleges with under 5,000 undergraduate students is the optimal approach to shield these and other small establishments from the tax increase.”