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$5 Billion Federal School Voucher Plan Advances, But Faces Steep Opposition in Senate

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$5 Billion Federal School Voucher Plan Advances, But Faces Steep Opposition in Senate

On May 22, 2025, the U.S. House of Representatives narrowly passed the "One Big Beautiful Bill Act," a comprehensive tax and spending package central to President Donald Trump's legislative agenda. The bill passed with a 215-214 vote, reflecting deep divisions within Congress. It now advances to the Senate for further consideration.

The legislation aims to make permanent the tax cuts enacted during Trump's first term and introduces new tax reductions, including exemptions on tips and overtime pay. It also proposes significant changes to social programs, such as imposing stricter work requirements for Medicaid and the Supplemental Nutrition Assistance Program (SNAP), and eliminating certain clean energy tax credits. Additionally, the bill allocates substantial funds to border security and defense spending.

How the Proposed Voucher Program Would Work

The initiative seeks to create a $5 billion annual program utilizing the federal tax code to encourage donations to Scholarship Granting Organizations (SGOs). Individuals who contribute to these SGOs would receive a dollar-for-dollar federal tax credit, making this incentive more generous than those for other charitable donations. Per NPR, the SGOs would then distribute the funds as scholarships to families, which could be used for various educational expenses, including private school tuition, textbooks, and homeschooling costs.

Senator Bill Cassidy (R-La.), a proponent of the bill, stated, "Giving parents the ability to choose the best education for their child makes the American Dream possible."

Support and Opposition

Supporters argue that the proposal empowers families, particularly those in low-performing school districts, by offering educational alternatives. They view it as a means to promote "education freedom" and provide parents with more control over their children's education.

However, critics express concerns that the plan could divert resources from public schools and primarily benefit wealthy donors through tax shelters. Sasha Pudelski of the AASA, the School Superintendents Association, warned that the proposal "is opening the door even wider to what has already plagued voucher programs around the country, which is rampant waste, fraud, and abuse."

Additionally, opponents highlight that the program could lead to significant tax avoidance. Donors could contribute appreciated stock to SGOs, thereby avoiding capital gains taxes while still receiving the full tax credit. This mechanism could result in substantial tax benefits for wealthy individuals.

Potential Implications for Public Education

Public education advocates, including the Campaign for Children, argue that the proposal could undermine the public school system by reallocating funds to private institutions. They contend that this shift could exacerbate existing inequalities and reduce the quality of education for the majority of students who attend public schools. In an OSBA report, the National Coalition for Public Education emphasized that "instead of focusing on private school vouchers that benefit only small numbers of students, lawmakers must consider solutions that advance opportunity for the 90% of U.S. students who attend public schools."

The proposal is currently under consideration in the Senate, and has not been enacted into law. Its inclusion in the budget reconciliation process means it could pass with a simple majority, bypassing the need for bipartisan support. However, the bill faces opposition from Democrats and some education advocacy groups, making its future uncertain.

As the debate continues, the outcome of this proposal could have far-reaching implications for the U.S. education system, potentially reshaping the landscape of educational funding and access nationwide.

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