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  • The Senate Passes Trump’s Big Ugly Budget Deal, and Vouchers Are in It

    The Senate Passes Trump’s Big Ugly Budget Deal, and Vouchers Are in It


    The U.S. Senate just passed Trump’s massive budget bill, which renews tax cuts for the rich and makes deep cuts to Medicaid, about $1 trillion. Three Republican Senators voted against it: Rand Paul of Kentucky, Thom Tillis of North Carolina, and Susan Collins of Maine. Vice-President JD Vance cast the tie-breaking vote. Many hoped that Lisa Murkowski of Alaska would also oppose the bill but the leadership bought her off by adding special exemptions and benefits for Alaskans.

    In The Washington Post:

    Combined with the impact of Trump’s tariffs — which the White House has argued will help pay for the bill’s tax cuts and new spending — the bottom 80 percent of households would see their take-home incomes fall, according to the Yale Budget Lab.

    “The right way to understand this bill is it is the largest wealth transfer from the poorest Americans to the richest Americans in modern history,” said Natasha Sarin, the Budget Lab’s president.

    Shortly before the bill passed, I received two reports on the education section. Contrary to earlier reports, the Republicans restored vouchers. Apparently they satisfied the objections of the Senate Parliamentarian or decided to ignore them.

    Leigh Dingerson, public school advocate who works for “In the Public Interest,” sent out this update shortly before the Senate passed the bill. The biggest takeaway: Vouchers are in again.

    For the last 24 hours (more, actually), the Senate has been voting on a slew of amendments to the bill. Most are going down along party lines. At the same time, the Senate parliamentarian has been reviewing the bill for germaneness.  She has struck out several provisions including, initially, the voucher language (this was Friday). But it was reinserted Saturday morning. Since then, some tweaks to the voucher language were made in an effort to win over some reluctant senators. Each time the language was changed, it had to go back through the parliamentarian. 

    This morning at about 2:15 am, Senator Hirono, along with Senators Reed, Kaine and van Hollen, presented their amendment on the floor of the Senate — an amendment to strike the voucher section altogether.  That amendment needed 51 votes to pass.  It got 50.  All the Democrats voted in favor. All Republicans with the exception of Senators Fischer, Collins and Murkowski opposed it.

     The voucher language currently in the bill has some important differences from where it started. Here are some key changes to the bill:

    • The tax credit is permanent, and now unlimited. There is no federal ceiling on how much can be spent. Republicans removed the $4 billion volume cap on the total amount of donations.
    • But!!  Current language limits the amount a donor can get a tax credit on: The text now allows any individual to donate to an SGO for a dollar-for-dollar tax credit worth $1,700 (rather than 10% of adjusted gross income originally).
    • States can now “opt in” to the program and must provide a list of approved scholarship granting organizations. And the bill clarifies that SGOs can only administer school vouchers within their state. This eliminates our worry that an SGO in Florida, for example, could hand out vouchers in Nebraska.
    • The Senate has removed the provision asserting that there shall be no Federal control over private or religious schools.  In other words, the door has been opened to federal regulation of schools funded with federal vouchers.
    • The bill provides broad authority for the Secretary of Treasury to regulate the program, including explicit authority to regulate scholarship granting organizations and opening the door to regulate private schools.

    So as you can see, there have been a lot of changes, some good, some bad. 

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    The NATIONAL COALITION FOR PUBLIC EDUCATION released the following statement:

    National Coalition for Public Education Denounces Senate Vote on Private School Voucher Program in “OBBB”

    Today, the Senate voted to include an uncapped national private school voucher program in its budget reconciliation bill. This represents the first time a majority of the lawmakers in the U.S. Senate have ever supported sending public dollars to private schools. Now that both chambers have voiced their support for private school voucher provisions, it is likely to become law this year, forcing tax dollars to support private religious schools that can pick and choose who they educate and discriminate explicitly against students with disabilities.

    Vouchers divert critical funds from public schools, which 90% of American families choose for their children to attend. Vouchers often go to students who never attended public schools in the first place, which drains taxpayer funds to subsidize private school tuition for well-off families who could afford it without money from the government. Under this harmful program, there will be no accountability for money sent to private schools, nor would the private schools be bound by key provisions of federal civil rights laws, which public schools follow.

    If this becomes law, the federal government will give a dollar-for-dollar tax credit to people who give money to use for payments for children to attend private schools or be homeschooled. This was not done previously with any other 501(c)3 donation in our history, and no other non-profit classified as a 501(c)3) would benefit from this one-to-one tax lowering scheme.

    America’s public schools educate all students in every community. Private schools that take taxpayer-funded vouchers, however, often discriminate against students for any number of reasons, including based on their disability status, sexual orientation, gender identity, religion, English language ability, academic abilities, disciplinary history, ability to pay tuition, or what their family looks like. The language that was in the House-passed bill about private schools maintaining policies that do not take into account whether or not a student has an Individualized Education Program (though these are not full protections under the Individuals with Disabilities Education Act) was stripped in the Senate bill and supporters of the voucher provision criticized this language.

    Public schools are a cornerstone of American democracy. NCPE condemns Congress diverting billions of dollars away from public education and toward discriminatory, ineffective private school vouchers



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  • David Dayen: What Else Is Included in the Big Ugly Budget Bill?

    David Dayen: What Else Is Included in the Big Ugly Budget Bill?


    Since this is a mostly education blog, I have covered the budget debate by focusing on what the GOP is doing to maim public schools and enrich private (especially religious schools). In the past, Republicans were strong supporters of public schools. But the billionaires came along and brought their checkbooks with them.

    The rest of the Ugly bill is devastating to people who struggle to get by. Deep cuts to Medicaid, which will force the closure of many rural hospitals. Cuts to anything that protects the environment or helps phase out our reliance on fossil fuels. Well, at least Senator Schumer managed to change the name of the bill, new name not yet determined.

    One Republican vote could have sunk the bill. But Senator Murkowski got a mess of pottage.

    David Dayen writes in The American Prospect:

    Welcome to “Trump’s Beautiful Disaster,” a pop-up newsletter about the Republican tax and spending bill, one of the most consequential pieces of legislation in a generation. Sign up for the newsletter to get it in your in-box.

    By the thinnest of margins, the U.S. Senate completed work on the One Big Beautiful Bill Act on Tuesday morning, after Sen. Lisa Murkowski (R-AK) decided that she could live with a bill that takes food and medicine from vulnerable people to fund tax cuts tilted toward the wealthy, as long as it didn’t take quite as much food away from Alaskans.

    The new text, now 887 pages, was released at 11:20 a.m. ET. The finishing touches of it, which included handwritten additions to the text, played out live on C-SPAN, with scenes of the parliamentarian and a host of staff members from both parties huddled together.

    At the very end, Senate Minority Leader Chuck Schumer knocked out the name “One Big Beautiful Bill Act” with a parliamentary maneuver, on the grounds that it was ridiculous (which is hard to argue). It’s unclear what this bill is even called now, but that hardly matters. The final bill passed 51-50, with Vice President JD Vance breaking the tie.

    Murkowski was able to secure a waiver from cost-sharing provisions that would for the first time force states to pay for part of the Supplemental Nutrition Assistance Program (SNAP). In order to get that past the Senate parliamentarian, ten states with the highest payment error rates had to be eligible for the five-year waiver, including big states like New York and Florida, and several blue states as well. 

    The expanded SNAP waivers mean that in the short-term only certain states with average or even below-average payment error rates will have to pay into their SNAP program; already, the language provided that states with the lowest error rates wouldn’t have to pay. “The Republicans have rewarded states that have the highest error rates in the country… just to help Alaska, which has the highest error rate,” thundered Sen. Amy Klobuchar (R-MN), offering an amendment to “strike this fiscal insanity” from the bill. The amendment failed along party lines.

    The new provision weakens the government savings for the bill at a time when the House Freedom Caucus is calling the Senate version a betrayal of a promise to link spending cuts to tax cuts. But those House hardliners will ultimately have to decide whether to defy Donald Trump and reject the hard-fought Senate package, which only managed 50 votes, or to cave to their president.

    In addition, Murkowski got a tax break for Alaskan fishing villages and whaling captains inserted into the bill. Medicaid provisions that would have boosted the federal share of the program for Alaska didn’t get through the parliamentarian; even a handwritten attempt to help out Alaska on Medicaid was thrown out at the last minute. But Murkowski still made off with a decent haul, which was obviously enough for her to vote yes.

    All Republicans except for Sens. Rand Paul (R-KY), Thom Tillis (R-NC), and Susan Collins (R-ME) voted for the bill. Tillis and Collins are in the two most threatened seats among Republicans in the 2026 midterm elections; Tillis decided to retire rather than face voters while passing this bill. Paul, a libertarian, rejected the price tag and the increase in the nation’s debt limit that is folded into the bill.

    Other deficit hawks in the Senate caved without even getting a vote to deepen the Medicaid cuts. That could be the trajectory in the House with Freedom Caucus holdouts. But the House also has problems with their handful of moderates concerned about the spending slashes in the bill.

    The bill was clinched with a “wraparound” amendment that made several changes, including the elimination of a proposed tax on solar and wind energy production that would have made it impossible to build new renewable energy projects. The new changes now also grandfather in tax credits to solar and wind projects that start construction less than a year after enactment of the bill. Even those projects would have to be placed in service by 2027. The “foreign entities of concern” provision was also tweaked to make it easier for projects that use a modicum of components from China to qualify for tax credits.

    The bill still phases out solar and wind tax credits rather quickly, and will damage energy production that is needed to keep up with soaring demand. But it’s dialed down from apocalyptic to, well, nearly apocalyptic. And this is going to be another source of anger to the Freedom Caucus, which wanted a much quicker phase-out of the energy tax credits.

    The wraparound amendment also doubled the size of the rural hospital fund to $50 billion. The Senate leadership’s initial offer on this fund was $15 billion. Overnight the Senate rejected an amendment from Collins that would have raised the rural hospital fund to $50 billion. Even at that size—which will be parceled out for $10 billion a year for five years—it hardly makes up for nearly $1 trillion in Medicaid cuts, which are permanent. The hospital system is expected to buckle as a result of this legislation, if it passes.

    Some taxes, including a tax on third-party “litigation finance,” were removed in the final bill. But an expanded tax break for real estate investment trusts, which was in the House version, snuck into the Senate bill at the last minute.

    The state AI regulation ban was left out of the final text after a 99-1 rejection of it in an amendment overnight.

    The action now shifts to the House, where in addition to Freedom Caucus members concerned about cost, several moderates, including Reps. David Valadao (R-CA) and Jeff Van Drew (R-NJ), have balked at the deep spending cuts to Medicaid and other programs.



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  • Jan Resseger: Trump’s Ugly Budget Bill Defunds Public Schools


    Jan Resseger is a social justice warrior who fights for the underdog. She describes here how Trump’s budget enacts the fever dreams of evangelicals and billionaires. He would change federal aid from its historic purpose–equitable funding–and turn it into school choice, diverting funds from the poorest children to those with ample resources. Since 1965–for 70 years–federal education funding for public schools has enjoyed bipartisan support. Trump ends it.

    She writes:

    Earlier this week, Education Week‘s Mark Lieberman released a concise and readable analysis of the likely impact for public education of two pieces of federal funding legislation: the “Big, Beautiful” tax and reconciliation bill currently being debated in the U.S. Senate to shape public school funding beginning right now in FY 2025, and also President Trump’s proposed FY 2026 federal budget for public schooling in the fiscal year that begins October 1st.

    Trump’s  FY 2026 budget proposal saves Head Start.

    Lieberman shares one important piece of positive news about Trump’s treatment of Head Start in next year’s federal budget: “Some programs survived the cut—including Head Start.” In early May, the Associated Press‘s Moriah Balingit reported: “The Trump administration apparently has backed away from a proposal to eliminate funding for Head Start… Backers of the six-decade-old program, which educates more than half a million children from low-income and homeless families, had been fretting after a leaked Trump administration proposal suggested defunding it… But the budget summary… did not mention Head Start. On a call with reporters, an administration official said there would be ‘no changes’ to it.”

    Federal funding for U.S. public schools looks bleak.

    Lieberman’s assessment of federal public education funding is not so encouraging.  Overall, “The administration is aiming to eliminate roughly $7 billion in funding for K-12 schools in its budget for fiscal 2026, which starts Oct. 1. Several key programs will be maintained at today’s funding level, without an increase: “Flat funding amounts to a de-facto cut given inflation. The administration is proposing to maintain current funding levels for key programs like Title I-A for low-income students ($18.4 billion), the Individuals with Disabilities Education Act, Part B for special education ($14.2 billion) and Perkins grants for K-12 and postsecondary career and technical education ($1.4 billion).”

    What has been historically a key purpose of federal public education funding—to compensate for vast inequity in the states’ capacity and the states’ willingness to fund public education—is being compromised.  Lieberman explains that much of federal funding, “is currently geared toward supporting special student populations including English learners, migrants, students experiencing homelessness, Native students, and students in rural schools. Longstanding federal programs that support training for the educator workforce; preparing students for postsecondary education; reinforcing key instructional areas like literacy, civics, and the arts… would disappear. A new K-12 grant program would offer a smaller pool of funds to states and let them decide whether and how to invest in those areas. And for the first time, all federal funding for special education would flow to states through a single funding stream…. Experts view Trump’s budget as part of an effort to roll back a half-century of effort by the federal government to help make educational opportunities more consistent and equitable from state to state and district to district.”

    The “Educational Choice for Children Act,” an alarming federal school voucher bill, is hidden inside the “Big Beautiful” bill.

    Lieberman worries about the enormous tuition tax credit voucher plan embedded deep in the weeds of the “Big, Beautiful” tax and reconciliation bill now being considered in the U. S. Senate: “Separate from the federal budget process, Congress is currently advancing a massive package of tax changes, including a proposal for a new tax-credit scholarship program that fuels up to $10 billion a year in federal subsidies for private K-12 education. Annual spending on that program could approach the amount the Trump administration is proposing to cut from elsewhere in the education budget.”  The voucher proposal is called the Educational Choice for Children Act (ECCA).

    In a separate analysis of the “Big, Beautiful” bill as the House passed it in late May, Lieberman describes this proposed ECCA tuition-tax-credit voucher program: “House lawmakers narrowly approved a sweeping legislative package with $5 billion in annual tax credits that fuel scholarships and related expenses at K-12 private schools. The federal subsidies would come in the form of dollar-for-dollar tax credits for individuals and corporations that donate to largely unregulated state-level organizations that give out scholarship funds for parents to spend on private educational options of their choosing. Any student—even in states that have resisted expanding private school choice—from a family earning less than 300 percent of the area median gross income would be eligible to benefit from a scholarship paid for with a federally refunded donation.”

    Lieberman adds: “No other federal tax credit is as generous. The Internal Revenue Service doesn’t currently supply tax credits worth the full donation amount for any cause, as the private school choice scholarship credit would do. The federal government currently offers tax credits on donations for disaster relief, houses of worship, veterans’ assistance groups, and children’s hospitals at roughly 37 percent of the donated amount.  A $10,000 donation to those causes would yield a tax credit of $3,700.  By contrast, under the proposed legislation, if a taxpayer donates $10,000 to a scholarship (voucher)-granting organization, the IRS would give them a tax credit of $10,000.”

    The Institute for Taxation and Economic Policy’s Carl Davis explains that because these federal school vouchers are primarily a tax shelter, they might appeal to wealthy people who are not even supporters of school privatization: “The tax plan…  includes a provision granting extraordinarily generous treatment to nonprofits that give out vouchers for free or reduced tuition at private K-12 schools. While the bill significantly cuts charitable giving incentives overall, nonprofits that commit to focusing solely on supporting private K-12 schools would be spared from those cuts and see their donors’ tax incentive almost triple relative to what they receive today. On top of that, the bill goes out of its way to provide school voucher donors who contribute corporate stock with an extra layer of tax subsidy that works as a lucrative tax shelter. Essentially, the bill allows wealthy individuals to avoid paying capital gains tax as a reward for funneling public funds to private schools.” “We estimate the bill would reduce federal tax revenue by $23.2 billion over the next 10 years as currently drafted, or by $67 billion over the next ten years if it is extended beyond its four-year expiration date… As currently drafted, the bill would facilitate $2.2 billion in federal and state capital gains tax avoidance over the next 10 years.”

    The Brookings Brown Center on Education Policy’s Jon Valant warns that the vouchers are so deeply buried in the “Big, Beautiful” bill that lots of people would not be aware of the plan’s existence until after it is passed: “The Educational Choice for Children Act (ECCA) continues to move, quietly, towards becoming one of America’s costliest, most significant federal education programs. Now part of the One Big Beautiful Bill, ECCA would create a federal tax-credit scholarship program that’s unprecedented in scope and scale.  It has flown under the radar, though, and remains confusing to many observers…  ECCA’s stealthiness is partly due to the confusing nature of tax-credit scholarship programs. These programs move money in circuitous ways to avoid the legal and political hurdles that confront vouchers.”

    Valant explains how tax-credit vouchers work: “Tax-credit scholarship programs like ECCA aren’t quite private school voucher programs, but they’re first cousins. In a voucher program, a government gives money (a voucher) to a family, which the family can use to pay for private school tuition or other approved expenses. With a tax-credit scholarship, it’s not that simple. Governments offer tax credits to individual scholarship granting organizations (SGOs). These SGOs then distribute funds… to families.”

    Valant creates a scenario that shows how this tax credit program could help the wealthy and leave out poorer families. A rich donor, Billy, donates $2 million in stock to an SGO: “Billy’s acquaintance, Fred, lives in the same town as Billy, which is one of the wealthiest areas in the United States. In fact, Fred set up the SGO, looking to capture ECCA funds within their shared community… Like Billy, Fred doesn’t particularly care about K-12 public education… It might seem that Fred’s SGO couldn’t distribute funds to families in their ultra-wealthy area, since ECCA has income restrictions for scholarship recipients. That’s not the case. ECCA restricts eligibility to households with an income not greater than 300% their area’s median income. In Fred and Billy’s town, with its soaring household incomes, even multimillionaire families with $500,000 in annual income are eligible… So, Fred is looking to give scholarship money to some wealthy families in his hometown.”

    Valant summarizes the result if the “Big, Beautiful” bill is enacted: “This bill would introduce the most significant and costliest new federal education program in decades. It has virtually no quality-control measures, transparency provisions, protections against discrimination, or evidence to suggest that it is likely to improve educational outcomes. It’s very likely to redirect funds from poor (and rural) areas to wealthy areas.”



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