House Passes Budget Bill

On Thursday, May 22nd, the US House of Representatives passed their budget bill which includes some key items to watch as the bill heads to the Senate.

  • Overall the bill seeks to reduce spending (except for the Department of Defense and border control) and increase tax cuts.
  • Tax cuts are extended from President Trump’s first term. There was a small increase ($500) to the Child Tax Credit, along with credits for car loan interest and no tax on tips. Energy related tax cuts will be reduced or sunset. Also the State and Local Tax credits (SALT) will increase.
  • The bill includes a dollar for dollar tax credit for donations to Scholarship Granting Organizations (SGOs) which will effectively crate a national voucher system for private school tuition. This will be an important issue to watch as it could generate large tax credits and capital gains tax revenue reductions, and becasue many of the scholarship dollars go to religious schools. There are  conflicting opinions both for and against this item.
  • This bill proposes cutting Medicaid funding by up to $700 billion over the next decade which would result in many millions of Americans losing their healthcare. In addition, work requirements and work reporting requirements would change, creating more challenges to qualifying for Medicaid,
  • SNAP, Supplemental Nutrition Assistance Program or food stamps would  potentially see up to a 30% reduction,  that would result in losses of benefits. This would  include shifting more of the financial responsibility for this program to the states, which will cause potential reductions, or could cause states to increase taxes to maintainf funding levels.
  • Department of Eduction cuts that we reported in our last update are still in this bill, with a potential 15% reduction in the department budget, including:
    • States could have to assume reposnsibility for funding work study programs for students, SEOG funding for low income students would be eliminated as well as subsidized student loans.
    • The $60 million increase for charter schools

Supreme Court Upholds Charter School Law

Also on Thursday, May 22nd,  the Supreme Court deadlocked 4-4, which upheld the Oklahoma Supreme Court’s decision to not allow the creation of a religious charter school. While this recent decision leaves the issue as it has been historically, advocates of religious charters have indicated they will continue to pursue change, so we may see another case in the future.  

Federal Judge Blocks the Closing
of Department of Education

A Massachusetts district court  judge ruled that the Trump administration cannot dismantle the US Department of Education without statutory change and ordered the reinstatement of employees who were fired in a mass layoffs in March.  The decision was precipitated by a lawsuit brought by multiple states, school districts and teacher unions. We expect to see this legal battle over the USED continue over the coming months and even years as the Trump administration continues to push their initiatives forward.