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CONGRESS SENDS TAX BILL TO PRESIDENT: Education Left Behind Again

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"if the bill's provisions (except the one providing relief through the Alternative Minimum Tax) ultimately are extended, the cost through 2013 will be $807 billion to $1.06 trillion. . ."

Last week, before leaving town for the Memorial Day recess, House and Senate conferees came to an agreement on a new $350 billion tax package that the President is expected to sign. The bill would provide $320 billion in tax cuts and includes $10 billion in refunds to parents for child care expenses and $20 billion in state aid. Of the $20 billion in state aid, $10 billion is specified for Medicaid costs, while the remaining $10 billion will go to a general relief fund, of which $6 billion will go to state governments and $4 billion will go to local governments. While state and local governments could choose to spend this money on education, Congress failed to specifically include any education proposals.

Left out of the package were:

  • A proposal to significantly expand the federal government’s role in paying the interest rates on school bonds for badly needed renovation and new construction of public schools
  • An annual $2,000 teacher tax credit to encourage highly qualified teachers to teach in high-need schools
  • The President’s plan to increase student loan forgiveness for teachers from $5,000 to $17,500
  • The President’s request to expand the tax deduction from $250 to $400 for out-of-pocket classroom expenses for teachers

While the bill’s cost is being reported as $350 billion, Congress employed several accounting measures, commonly known as “sunsets,” that allowed it to mask the true cost of the tax bill. According to the Center on Budget and Policy Priorities, “if the bill’s provisions (except the one providing relief through the Alternative Minimum Tax) ultimately are extended, the cost through 2013 will be $807 billion to $1.06 trillion. . .”

House Committee to Address Teacher Provisions in Coming Weeks

While the tax proposal failed to include any provisions for teachers, the House Education and the Workforce Committee has announced that is expected to mark up a teacher loan forgiveness proposal in the coming weeks. The bill, introduced by Rep. Joe Wilson (R-SC), would expand the federal student loan forgiveness program for individuals who teach math, science, or special education in disadvantaged schools. The program mirrors a bill introduced in the Senate by Sen. Lindsey Graham (R-SC) and is similar to a provision included in the President’s budget. It would increase the maximum loan forgiveness award from its current level of $5,000 to $17,500. The legislation would make the teacher loan forgiveness program mandatory and normally would be considered as part of a reconciliation tax bill. It is not yet clear how Congress will pay for it.

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