Senate parliamentarian nixes tax incentives for school choice, religious college exemptions

Yahoo

3 days ago

WASHINGTON — A handful of education-related tax provisions were stripped from the Senate reconciliation bill on Friday morning after the parliamentarian ruled they did not adhere to strict budgetary rules that would relieve them from a filibuster.
One of the biggest proposals Republicans sought to include in the massive tax package was a plan to promote school choice by providing scholarships to students who wish to attend private secular or religious schools. Much of the proposal was based on the Educational Choice for Children Act to implement a tax credit scholarship plan, legislation that Utah Rep. Burgess Owens co-sponsored in the House.
'Overnight, the Senate parliamentarian struck down key school choice provisions in the One Big Beautiful Bill,' Owens told the Deseret News in a statement. 'Every child deserves the freedom to learn, and every parent deserves the power to choose what's best for their family. I'm grateful to our partners in the Senate for their continued leadership as we work together on next steps to ensure school choice reaches every child in every zip code.'
One of the major tenets of the program is a $4 billion annual tax credit for those who donate to scholarship organizations that help pay for educational expenses such as private school tuition, books, or the cost of homeschooling supplies. The program would expand school choice, Republicans argue, by opening the door to private education for families who otherwise could not afford it.
Families would be eligible for the program so long as they earned at or below 300% of the area's median gross income. For example, in Salt Lake County where the median income is $94,658, any child in a household earning less than $283,974 could qualify.
The tax credit scholarship plan was estimated to cost roughly $26 billion over the next decade, according to the Joint Committee on Taxation.
The parliamentarian also nixed language exempting religious schools from a proposed endowment tax that Republicans hope to tuck into their massive reconciliation bill, making it unclear whether the planned taxes will remain in the package.
Republican lawmakers are pushing to increase endowment taxes for U.S. universities, proposing a new tiered system that could cost elite colleges hundreds of millions of dollars each year. The proposal initially included language carving out exceptions for most religious schools, exempting them from the higher taxes.
But under the rulings issued on Friday, the religious exemptions do not adhere to reconciliation guidelines and would instead be subject to the 60-vote threshold.
Through the budget reconciliation process, Republicans can circumvent a filibuster and Democratic opposition to expedite the passage of certain legislation by a simple majority vote.
There are certain rules that dictate how often reconciliation can be used, and the procedure can only be used to advance budget-related legislation such as taxes, spending and the debt limit.
However, if provisions run afoul of those rules, it will instead be subject to the typical 60-vote threshold. Once a budget reconciliation blueprint is finalized, it then only requires a simple majority in the House and Senate to pass.
The parliamentarian removed several proposals on Medicaid and other tax-related measures throughout this week, sending Republicans into a scramble to adjust the bill language and finalize the full package before their self-imposed deadline next week.