Budget Committee Advances Bill to Senate Floor for Vote
The Senate Budget Committee on Tuesday advanced the chamber's version of the Tax Cuts and Jobs Act
(S. 1), with two key Republicans voting for the measure after
previously expressing concerns. ACE has written three letters to Senate
leaders this week, urging them to reconsider their approach to higher
education as they continue working on the legislation.
The bill was approved by a party-line vote of
12-11. The vote sends the measure to the Senate floor, where it could
be considered as early as today in an effort to get legislation to
President Trump's desk before the end of the year.
Two senators, Ron Johnson (R-WI) and Bob Corker (R-TN), reportedly
were considering voting against the bill in committee if their concerns
were not addressed. Johnson believed the bill did not do enough to help pass-through businesses, while Corker was concerned about the impact on the national debt. However, they ultimately voted in favor of the measure.
Impact on Higher Education
Although the Senate bill retains the student
benefits the House bill eliminates, other problematic provisions remain,
including those reducing charitable giving, changing the state and
local tax (SALT) deduction, and creating an excise tax on private
colleges and universities.
The Senate bill also would repeal the
deduction for personal exemptions, including for college-age dependents.
And while it would retain tax-exempt private activity bonds that are
particularly important to private colleges and universities, the Senate
measure would repeal advance refunding bonds, an important tool for
institutions to refinance outstanding debt at lower interest rates, and
broaden the tax on Unrelated Business Income (UBIT), increasing the
regulatory burden, complexity, and cost.
Among the letters ACE sent to the Senate this week:
- Nov. 29 (408 KB PDF):
To express continued strong opposition to the provisions in the Senate
bill that will make college more expensive and erode the financial
stability of public and private, two-year and four-year colleges and
universities.
- Nov. 28 (401 KB PDF):
To urge the Senate to reject provisions in the House version of the Tax
Cuts and Jobs Act that repeal and make detrimental changes to education
tax benefits that help millions of students and their families finance
and repay a college education.
- Nov. 27 (753 KB PDF):
To encourage reconsideration of the endowment excise tax, referring
Senate members to two articles discussing the fundamental flaws in the
provision, one by Michael R. Strain, a scholar at the American Enterprise Institute, and the second by George Will.
The House voted 227-205 Nov. 17 to approve its version of the bill. Among the provisions ACE and the higher education community has raised objections to in that measure are:
- Sec. 1002: Changes to the standardized deduction, which will reduce charitable contributions to our institutions;
- Sec. 1002: Repeal of the Lifetime Learning Credit, while not
substantially increasing the American Opportunity Tax Credit (AOTC);
- Sec. 1204: Repeal of the Student Loan Interest Deduction (SLID);
- Sec. 117(d): Repeal of the qualified tuition reduction;
- Sec. 127: Repeal of educational assistance programs;
- Sec. 1303: Changes to the state and local tax (SALT) deduction,
which will reduce state budgets and, in turn, funding for public higher
education;
- Sec. 3601: Termination of private activity bonds;
- Sec. 3602: Repeal of advance refunding bonds; and,
- Sec. 5103: Creation of a new excise tax on endowments at private colleges and universities.
For more information and to contact Congress on the Tax Cuts and Jobs Act, see the community’s Tax Reform and Higher Education resource page.