Senate Passes A Different Version Of Federal School Vouchers

Forbes

01-07-2025

Still carving
Voucher supporters beat back a late night attempt to remove the federal school voucher tax shelter language from Donald Trump's Big Beautiful Bill, but the Senate ultimately approved language with some significant differences from the House version.
At 2:15 AM Tuesday morning, Senator Hirono, along with Senators Reed, Kaine and van Hollen proposed an amendment that would have removed the federal voucher language. That amendment came up one vote short of passage.
However, the language in the bill that passed on Tuesday is different from the House version. Leigh Dingerson, a public school advocate who works with In The Public Interest passed along updates from Washington.
The federal voucher is proposed as a tax credit scholarship, meaning that every dollar taxpayers put into the voucher program is a dollar of revenue the federal government does not collect (and for which each donor gets a dollar for dollar tax credit, a deal unlike any available for other donation credits). The House version has a cap on the amount of tax revenue the government will give up; the Senate version has no such cap.
However, the House version allowed donors to give up to 10% of their income to the voucher program, the Senate version limits donations to no more than $1,700.
The House version would impose school vouchers on states that do not have voucher programs of their own. The Senate version allows states to opt in to the program. Scholarship granting organizations would only be able to administer the program in their own state; the House version left open the possibility that an SGO could fund programs in other states.
The House version included a typical voucher disclaimer that the government could not exert any sort of control or regulation of private and religious schools that accept the vouchers. The Senate removed that language.
The Senate version gives the Secretary of the Treasury authority to oversee the scholarship granting organizations that would administer the voucher funds. That comes with broad powers to oversee and regulate the program, which could also translate into oversight of schools receiving vouchers.
Voucher supporters are unlikely to be happy about the possibility that the federal dollars will come with federal strings attached. State voucher laws usually include specific 'hands off' language that allows private and religious schools to collect taxpayer-funded vouchers free of any government oversight or regulation. The Senate bill's lack of that sheltering language as well as the prospect of oversight by the Treasury Department may make this version of federal vouchers unpalatable for voucher fans.
The Big Beautiful Bill will head back to the House next as Congress tries to work out its differences with the bill, so we don't yet know what version of the federal vouchers will emerge, if any.