The ECCA will allow eligible taxpayers to receive a federal tax credit for contributions up to $1,700 per year to scholarship-granting nonprofits.
In the lead-up to the July 4 holiday, Ted Cruz found himself in a rare position for a sitting U.S. senator: Arguing his case directly to the Senate parliamentarian. A school-choice provision Cruz proposed was on the verge of being cut from this year’s reconciliation package.
Up until that point the Texas senator had been a reliable “yes” vote on reconciliation. But he made clear to Senate Majority Leader John Thune that if the Educational Choice for Children Act (ECCA) was removed from the package, he would “burn the whole bill down.”
After a mad dash of rewrites, Cruz and his legislative team secured the passage of the national school-choice provision — a legislative victory he described to National Review in a wide-ranging interview as one of the most consequential, legacy-defining additions to Congress’s One Big Beautiful Bill.
The ECCA will allow eligible taxpayers to receive a federal tax credit for contributions up to $1,700 per year to scholarship-granting nonprofits. Following parliamentarian pushback on the original legislative language that applied the tax credit to all fifty states, the final version of the bill lifts the cap on tax credits but allows states to opt out of the scholarship program.
“What that means is red states will opt in — Texas will opt in — but you can expect that blue states like New York and California will opt out,” he said.
But Cruz’s team worked into the bill an important distinction: states can opt out of receiving scholarships from the nonprofits, but they can’t opt out of the tax credit, which Republicans made a permanent part of the tax code in this year’s reconciliation legislation.
“Which means people in New York can give to scholarship-granting organizations,” Cruz said. “People in California can give to scholarship-granting organizations. Every state, they can give — the scholarship-granting organizations can only give scholarships in the states that have opted in.”
While some education advocates have criticized the opt-in provision as a major loss for the school-choice movement, Cruz maintains the modified legislation will still “incentivize a vast amount of giving for scholarships that are going to help low-income kids in inner cities.”
Until this year’s bill, Cruz’s biggest school-choice legislative achievement was the amendment he authored and passed through Congress’s 2017 Tax Cuts and Jobs Act. The amendment allowed parents to pay for K–12 education expenses up to $10,000 per year by expanding Section 529 college-savings plans, and was at the time the most “far-reaching” piece of federal legislation on school choice, Cruz said.
“This time around on reconciliation, I resolved we were going to go much further,” Cruz told National Review. “And the school choice in this legislation is transformational.”
The House’s initial version of the Texas senator’s proposal allowed $5 billion of tax credits for four years and contained a last-minute “poison pill” addition that would have “effectively excluded most Catholic and parochial schools from participating,” Cruz said.
Once the bill hit the Senate, Cruz had two goals for the school-choice provision: Keep it in the package, and make it more consequential.
In early June, Cruz, Florida Representative Byron Donalds, and Utah Representative Burgess Owens went to the White House to pitch President Donald Trump on school choice.
“I told the president, ‘If you pass this, you could go down as one of the greatest civil rights presidents in the history of America — not that your critics will ever acknowledge that,'” Cruz said.
With billions of dollars in scholarships given to principally red states, Cruz is hopeful that over time, blue states will opt into the program as well. He says that in creating this school-choice tax credit, Republicans are recreating the inverse of Democrat-supported Obamacare expansion in Republican states.
“Texas is not expanding Obamacare, but the hospitals come every year and say, ‘Look at all this free money from the feds. How can you turn down this money?’ And so it creates a very strong political dynamic that pushes red states to accept the Medicaid expansion,” Cruz said. When it comes to school-choice tax credits, assume New York and California opt out of the program, he says: “Well, play that forward a couple of years.”
“Parents in blue states are going to start looking going, ‘Hey, wait, why are these other states getting all this money for their kids, and we’re not getting it for ours?'” he said. “And so I am quite hopeful that that over time, we’ll see every state opt into this, because part of it is when people see the benefits of the scholarship.”