[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[House]
[Pages H2010-H2016]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         EDUCATION TAX CREDITS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Colorado (Mr. Schaffer) is 
recognized for 60 minutes.
  Mr. SCHAFFER. Mr. Speaker, I am attempting during this next hour to 
discuss an important issue, the issue of education, and to discuss it 
within the context of education tax credits which is a new kind of 
exciting idea that is being considered here in Congress.
  It is, of course, something that many States know a lot about, but in 
Washington, it has just been under discussion on pretty serious terms, 
specifically by our President who has committed his support and pledged 
his assistance in helping us get a tax credits proposal through the 
House of Representatives and through the Senate, and ultimately on his 
own desk.
  I want to start off by issuing an invitation to our colleagues who 
may be monitoring these proceedings that if they are, at any point in 
time, compelled to come down here on the floor and join in this 
discussion, I want to leave that invitation open and encourage our 
colleagues to join us on this important matter.
  I know there are many, many people who care with improving education 
throughout the country. And that is a sentiment that extends to both 
sides of the aisle. I just returned last night from a trip overseas. I 
spent the weekend in Ukraine. I was invited by an organization called 
the East West Institute. In fact, they were the ones that paid for the 
trip. I was a speaker at a meeting an international conference on 
Saturday dealing with diplomacy and issues in the Ukraine.
  I do not to talk about that as much as something I did on the two 
extra days that followed this international conference on regional 
politics and some diplomatic matters. Those next two days, Sunday and 
Monday, I went out to some of the most remote and rural areas of 
Ukraine and I visited a few orphanages. And I want to talk about those 
just for a second, because there is a comparison to be drawn between 
the way these orphanages work in Ukraine and the way our public school 
system here in the United States operates.
  And the similarities come down to a matter of funding. But first for 
those children who are in some of these State-owned orphanages in 
Ukraine, if anybody has any concern or compassion for that part of the 
world, I would urge you to take a knee at some point in time and say a 
few prayers for those kids that I saw and others like them that did not 
have a chance to meet.
  These kids have nothing. Of course, they have lost their parents and 
are in orphanages for a variety of reasons, but even hope is a 
difficult thing to muster for some of them. I saw kids whose feet were 
sticking out of their shoes, who were wearing clothes that maybe they 
walked out of those old pictures that we are used to seeing of those 
old Nazi concentration camps. The clothing looked exactly like that.
  I saw a kid with, oh, he must have been 10 or 11 years old, he had a 
football shirt on that said 1977 Superbowl on it. It obviously was a 
piece of clothing that made its way through some kind of humanitarian 
assistance program. This kid must have been wearing that shirt for 
quite a long time, and probably other children before him. It had holes 
in it and so on and he was wearing it anyway.
  Just to give you an idea of the conditions. These children were 
stacked up in their dormitories. These beds are side by side, just 
lined up just fairly deep into the room. Just narrow beds, narrow 
walkways between them. These kids had hardly anything of their own in 
the way of possessions. It is a tough existence.
  So we went and met with them and they were asking us to take them 
home, and they were tugging on my coat and wanting to know if I needed 
a son. I remember one little boy saying in Ukrainian, I will be no 
trouble. I am good. I will work and so on.
  The reason I went to see these orphanages is because there is a bit 
of struggle in Ukraine between state-run orphanages and the new 
emerging orphanages in the country. And those new orphanages are run by 
churches and charities through the contributions and donations from 
caring people throughout the world.
  These orphanages tend to be smaller. There tends to be a little more 
contact between the care providers which are often nuns or people 
involved in various religious organizations and holy orders, and they 
are good orphanages. The kids are clean. They have lots of things to 
do. They have a learning opportunity and so on.

[[Page H2011]]

  It is a shame though that these private Christian orphanages are 
having a difficult time receiving children, getting these children into 
the orphanages. There is a struggle between the state-run institutions 
and the private-run institutions.
  When I explored the reason for this and it comes down to funding, 
which is a real shame because in one orphanage on the outskirts of 
town, the city was Kuznetsorsk in Ukraine, a little west of Kiev, the 
nation's capital, we would see the state-run orphanage with hundreds of 
kids in it, clearly overcrowded; and yet a few miles away would be a 
private orphanage with empty beds in it. And while the children in the 
state-run orphanages were suffering and had no clothes, or least 
clothes that were just deplorable and very pathetic, the children just 
nearby were doing quite well and thriving. And so what is the 
difference between the two? It was a real shame to see this.

                              {time}  1700

  Here is the answer. In State-run orphanages, each child represents a 
certain dollar amount to the people who run that orphanage, and they do 
not want to give up those kids because if a child leaves and goes to a 
private orphanage run by a church or a charity, if a child were to 
leave the State-run orphanage, the funding would be reduced somewhat at 
that institution, and eventually if enough kids left, some of the 
people who have jobs at these orphanages feel that those jobs would be 
threatened, and they would lose their opportunity for employment.
  So the kids suffer so that the institution and the people who work 
there can benefit and the institution can exist. Meanwhile, 
opportunities for children to thrive just across town are not being 
utilized because of this funding issue.
  It seems such a shame, especially when we realize the loss of 
opportunity for so many young children in Ukraine, until we realize 
that this is the same model we use in America to fund our children's 
school systems. It really works the same way, and the motivations are 
quite similar when it comes right down to it.
  We have schools throughout the country that are run by private 
organizations, sometimes religious organizations, that have a 
remarkable track record. They have empty desks because they can 
accommodate more children, rescue more children from inner cities, 
provide education and academic opportunity for them, yet they are 
involved with the struggle between the private institutions and the 
State-owned or the government-owned institutions, just a few miles away 
in many cases.
  So while children languish in America, typically in inner city 
schools, and sometimes in rural schools, it could be anywhere, I 
suppose, the solution is clearly there, but the kids are not 
relinquished to the better opportunity because the people who run the 
failing inner city government-owned schools believe that if someone has 
a choice, they have some level of competitiveness, that their jobs 
would somehow be threatened.
  It does not have to be that way, and it is my hope that we could find 
a better solution, a better model than that that we have seen in the 
former Soviet Union and maybe come up with a solution that more closely 
approximates our American traditions, the tradition of honest, hard 
work, of free market competition, of marketplace choices that give 
parents real power, customers real authority to determine the terms of 
quality, to drive down costs and to ensure a certain level of 
professionalism that is designed to achieve the expectations of the 
customers themselves.
  We have that to some degree today. There are many private schools 
around the country that do fairly well, that manage to attract 
children, but usually it is predicated upon the wealth of the child's 
parents. They have the cash to pay the tuition and the income to forego 
the taxes they have already paid to buy the child's spot in the 
government-owned school. Then they might send their child to one of 
these private schools, and if enough do it, there may be a savings 
according to scale that allows the institution to reach out to some 
children in poverty. We see that in Jewish schools, Catholic schools, 
Christian schools of a variety of sorts, a handful of private schools 
that are not associated with any denomination or religious faith and 
are just targeted toward low income kids.
  We have also seen the emergence of scholarship organizations where 
people contribute their money, even people who do not have children 
necessarily who contribute their hard-earned cash to these scholarship 
organizations to provide some assistance to poor children so that they 
might be able to have a choice and attend the school that they and 
their parents believe is in the best interests of their child.
  Those are exciting trends, and it is that trend that has inspired 
Congress to consider tax credits, and we are not the first to arrive on 
the scene, by any means, and I want to give credit where that is due. 
That credit is due to the States. There are several States, about 10 of 
them, that have moved forward pretty aggressively on establishing 
choice elements in their laws, sometimes in their tax law, sometimes 
through the granting of State vouchers, a voucher that would allow a 
child to attend a private school, but tonight I want to focus on those 
examples of States that have created tax incentives to encourage and 
facilitate and ease the desires of taxpayers within their jurisdictions 
to contribute voluntarily to scholarship organizations that allow the 
most needy children in their States to attend the best schools.
  According to those who actually make the decisions to choose that, it 
is an important distinction because we are not talking about schools 
that are determined to be high quality or in the best interests of a 
child based on some judgment of government and government workers, 
bureaucrats, but rather quality as determined by the marketplace, by 
the customers, by those who presumably have the greatest level of 
interest for the child, and those tend to be people who actually know 
the names of these children. More specifically, we are talking about 
parents and guardians.

  We are just a few weeks away, maybe not even that long, of 
introducing an exciting tax credit bill that is modeled after some of 
the success stories in a handful of States, and the bill will simply 
reduce the obligation of a taxpayer to send their tax dollars here to 
Washington if they will instead send a certain amount of their tax 
obligation directly to one of these scholarship organizations or to a 
private or a public school. It would be their choice.
  What it does is it gets away from this notion that we have today of 
taxpayers working hard, shovelling mountains of cash to Washington, 
D.C., so that the politicians here can distribute it according to 
government-driven formulas, and some day those dollars actually get 
back to children in classrooms. By the time it does, there is just a 
fraction of those dollars left, and that is unfortunate.
  What we want to do is through manipulation of the Tax Code, tax law, 
encourage a direct contribution from taxpayer to child.
  I have got a chart here, Mr. Speaker, of where our tax dollars go 
now. I know this is a very difficult chart to see, but I will describe 
what I am pointing out if my colleagues cannot see it.
  Up here at the top is a figure of a guy working. He is sawing a piece 
of wood. So here is our worker in America who is earning a wage, and 
based on those wages, paying taxes. He pays his taxes to the Treasury 
Department. This is where the IRS would be found.
  From the Treasury Department those dollars go to politicians who we 
would find right here in this area. Those are people like me here in 
Congress and others like us. We divvy up these dollars, the dollars 
that people work hard to earn. We divvy up the tax dollars. In fact, I 
should write that in here. Politicians should be right here. There is 
one more step in this filter of tax dollar process.
  So we redistribute the wealth of the country. We spend a portion of 
it on the U.S. Department of Education who we would find in this column 
here. The Department of Education redistributes these dollars through a 
variety of Federal programs to the States.
  At the State level, the State legislators get ahold of these funds, 
more politicians, and redistribute that wealth further within their own 
States, distributing those dollars through the State departments of 
education down to school districts, which is where we find more 
politicians, school board members, who redistribute the wealth

[[Page H2012]]

down to schools in their communities, and ultimately and finally, those 
dollars will trickle down to the child way down here at the bottom.
  That is a long list of steps for a dollar to get from the taxpayer to 
the tax recipient and, again, I mention some of the shortcomings of my 
chart here. I apologize for that. There are a few of the things that 
are missing along the way as well, so there are actually more steps in 
this chart than this chart actually represents.
  As we can see, every one of these agencies along the way takes their 
cut. So by the time our dollars really get down to a child, first of 
all, the government has decided which school buildings are going to get 
the money. They have decided which children are going to be the winners 
or the losers, and they have decided that there are other things 
important in life like paying for all this bureaucracy that is, in 
fact, a higher priority to many here in Washington and at the State 
levels and even at the school district levels than the poor child down 
here at the bottom. So we have a different idea of getting dollars to 
children.
  For those who are here in Washington, and there are plenty of them, 
who think this is a really great idea, this model of all these 
different steps of getting money to children, it is not here by 
accident. It is here because politicians built it this way. They like 
this. Some of their friends work in these agencies and departments. 
Some of their friends get some of the cash that goes to these different 
levels of government. Some of their teachers' unions get these dollars 
instead of these children.
  So there are lots of people who win in this model here, and many have 
proposed getting rid of all of this nonsense, and that may be a good 
idea, but that is not what we are here to propose today because it is 
just too difficult. The politics supporting this whole structure and 
this system is pretty impressive. It is gigantic, as a matter of fact.
  Mr. HOEKSTRA. Mr. Speaker, will the gentleman yield?
  Mr. SCHAFFER. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Mr. Speaker, if the gentleman will let me have the 
chart for a minute, I think the interesting thing about this chart is 
as soon as the step takes place from the individual working, the 
taxpayer, putting the money into the Treasury Department by paying 
their taxes on April 15 or through Mr. FICA, which they pay on a weekly 
basis, this all of a sudden so many people no longer refer to as the 
taxpayer's money but as soon as that goes into here, this becomes a 
government dollar. So people will talk about government dollars and 
they will forget that really this should not be the top, this should be 
the foundation of the chart. The foundation of the chart is 280 million 
Americans paying taxes in to Washington, D.C. with private dollars, and 
then all of the sudden somewhere in between the taxpayer and the 
Department of Treasury, this becomes a government dollar.
  Let me tell my colleagues why I brought that up. There is a great 
story this week in USA Today talking about churches heed a calling to 
educate poor children. We all recognize that perhaps some of our lowest 
performing schools or lowest performing areas are in the inner city 
urban areas, but in their first paragraph, ``for an expected flood of 
neighborhood children who may soon have government dollars.'' So in the 
first paragraph they are talking about government dollars.
  These are not government dollars, and the article spends a lot of 
time talking about vouchers. That is not what my colleague and I are 
talking about. What we are talking about is allowing individuals with 
their private dollars to make investments in schools and education and 
make it in every type of school, a learning opportunity that is 
available today in America, so that if somebody wants to make a 
donation to their local public school for a specific program or a 
specific endeavor that they have at their local public school, they can 
do that.
  If they want to make a donation to a private school or parochial 
school or to an education investment fund that offers assistance to low 
income students to receive the kind of education that they might want, 
and really what it does is, as Secretary Rod Paige says, he says, here 
it is kind of interesting for our parents today. A quote, Parents pick 
out everything from book bags and haircuts to clothes but then their 
children march off to a school that some bureaucracy has chosen for 
them, not to a school that the parents have said this is my child, I 
know this kid pretty well and this is the kind of environment that they 
are going to learn best in.
  It goes on to talk about Mr. Sullivan, who is the mayor of 
Indianapolis or, excuse me, he is an Indianapolis pastor and a former 
teacher, established his own Northstar Christian Academy because, ``I 
saw the need for spiritual, moral values being taught as a foundation 
on which to build the academics I felt that was the key to a lack of 
motivation for learning.''
  Now, is that the appropriate model for every child in America? 
Probably not. Is that the appropriate model for the individuals that 
Pastor Sullivan knows? It may be exactly what that community and what 
his parishioners may need.
  He goes on, and talking about, ``Churches are probably one of the 
most stable black-owned institutions in this Nation, and black churches 
have stayed in the community,'' Sullivan says. ``Anything short of 
operating our own schools and having access to these children is going 
to show minimal results because the schools have them for seven hours a 
day, the church has them for a couple of hours a week. It is not 
realistic to think we can turn a student around in a couple of hours.''
  Some would argue that it is hard to determine whether the churches 
are the answer, but what is happening around the country today is that 
some parents are saying it is worth the gamble.

                              {time}  1715

  For example, the story goes on to talk about security guard Trinidad 
Casas of San Antonio. He began selling blood four times a month to make 
up the difference left from the privately financed scholarship. That is 
exactly what my colleague and I are talking about is that individuals 
would have the opportunity to receive privately financed scholarships, 
to make up the difference his son gets to attend the Christian Academy 
of San Antonio. He also tries to work as much overtime as possible to 
earn tuition money.
  It is just incredible, says Yolanda Molina, principal of the 2-year-
old academy, which has doubled in size in 1 year and has a waiting list 
of 85. That is just one story of many.
  And, again, think about this. We are not only expanding the dollars 
in education, we are growing the education investment in America's 
schools, again for public schools, for private schools, for parochial 
schools, and for tutoring. So we are growing the education pie. We are 
not talking about saying, hey, this money right now goes to public 
schools and we are going to take some of that and give it so kids can 
go somewhere else. We are saying to the public school folks that have a 
great tradition in America and do a great job that we are going to 
allow them to raise more money and we are going to allow others to 
raise more money for their things.
  And what we will see then is we will increase the education 
investment in America, and we also will increase educational 
opportunities and choices in America; so that the school that Pastor 
Sullivan wants to start in his community in Indianapolis, he can do it. 
We will get more people involved in education; we will get more folks 
focused on kids, and that is what this is all about. It is all about 
the kids.
  Mr. SCHAFFER. I appreciate the gentleman speaking in those terms, 
about the fact that we are trying to find a way to inject more cash in 
the education system.
  We mentioned this very inefficient process we have today of getting 
education dollars to a child going through this whole filter of 
government. And we are not really talking about disrupting this at all 
or even funding it less. This system is going to continue to get more 
because it has a lot of advocates here. But we want to introduce a new 
tax manipulation that will allow more dollars, a massive cash infusion 
into America's education system.
  Mr. HOEKSTRA. If the gentleman will yield, it would be very similar 
to

[[Page H2013]]

the significant cash infusion that we did today for child care in the 
welfare reform bill.
  Mr. SCHAFFER. Right.
  Mr. Speaker, I yield to the gentleman from Florida, who has got 
almost a very similar chart.
  Mr. WELDON of Florida. I have a chart very similar to the gentleman; 
and, Mr. Speaker, I first want to commend both the gentleman from 
Colorado (Mr. Schaffer) and the gentleman from Michigan (Mr. Hoekstra) 
for their leadership in support of real meaningful education reform for 
our kids.
  Our children are the most important heritage we have. We devote so 
much of what we do in this country to raising up the next generation of 
children in the hope that they will be able to become responsible 
citizens and become the leaders of tomorrow. We have a great heritage 
in the United States. Millions of great Americans have gone before us 
walking in all kinds of fields of knowledge and expertise, from the 
sciences to politics, to poetry, to education, the arts; and what we do 
and how we go about raising up the next generation is, in many ways, 
the most important thing that we do.
  In my opinion, we do have in many ways an inefficient system of 
helping educate our kids. We take a dollar out of a taxpayer's pocket 
and then what do we do with it? This chart to my left, I think, lays it 
out very, very clearly. It goes from the taxpayer's back pocket to the 
Department of the Treasury, then it goes to the Department of 
Education, then it goes to the State, and then from the State it 
typically goes to the State Department of Education, after it gets 
politically manipulated, and then it goes ultimately down to the local 
school district.
  In the State of Florida, which I represent, it goes to the county. We 
have a county system of school districts. So the county I happen to 
live in, Brevard County, Florida, 500,000 people, they have a very 
large school district, over a billion dollar budget. They get these 
Federal dollars that comes through the Department of Education and 
through the State, through the State Department of Education, finally 
to the local school district; and ultimately, it ends up at the school 
level.
  But here, way down here on my left, here is poor Johnny. And what we 
are really talking about here is that dollar that came out of the 
taxpayer's pocket is not a dollar when it arrives down here. I do not 
know what the figure is, maybe one of these gentlemen here can help me. 
Is it 50 cents, 60 cents?
  Mr. HOEKSTRA. If the gentleman will yield.
  Mr. WELDON of Florida. I would be happy to yield; however, I think 
the gentleman from Colorado controls the time.
  Mr. SCHAFFER. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Well, basically, in the work my colleague and I have 
done in the Committee on Education and the Workforce, we have found 
that when a dollar goes into the Federal Treasury and then goes through 
the Department of Education and goes through all those steps, we think 
that through that process we lose somewhere in the neighborhood of 25 
to 35 cents. So that only about 65 cents ever makes it down to your 
local school to Johnny's classroom.
  I do not know if the gentleman has a dry marker with him or not, but 
what we are talking about here, if we go to an education tax credit--
  Mr. WELDON of Florida. I have it right here in this chart.
  Mr. HOEKSTRA. That is it. That is what we are taking about, a $500 
tax credit per individual, $1,000 for joint filers. That thousand 
dollars does not go through that bureaucracy any more; it goes directly 
from the taxpayer directly to Johnny's school. They get full benefit of 
that thousand dollars.
  Mr. WELDON of Florida. Mr. Speaker, if the gentleman will continue to 
yield to me, that is why I am here. That is why I am speaking in 
support of this initiative.
  This man right here is a taxpayer. We are taking a dollar out of his 
pocket to send 70 cents to this young man here, who may be his son, may 
be a kid in his neighborhood, may be his grandson or his granddaughter. 
What we have here is an alternative proposal to help education in the 
United States, where we take a dollar out of his pocket, through the 
form of a tax credit, and it goes right to the kids. That is what this 
is all about.
  One of the other things I wanted to say, and I think the gentleman 
from Michigan was alluding to this earlier, if we want to get parental 
involvement, if we want to get parents more engaged in the education 
process, this is a great way to do it, where they can actually see an 
impact, where it is not going through a big bureaucracy in Washington, 
a big bureaucracy in the State capital. It is going right from the 
parents to the children.
  I think it is a great way to reinvigorate parental involvement in our 
education. Every educator I have ever spoken to in all my years in the 
political arena, they all tell me that is the most important thing in 
the success of a child's education, after good quality teachers, it is 
parental involvement. It is number one.
  So this is a great proposal. I think everybody in the Congress should 
support it, and I yield back to the gentleman.
  Mr. SCHAFFER. Mr. Speaker, first, I would just like to ask a couple 
of questions about Florida's law. Florida is one of the States that has 
really been out in front in trying to provide relief valves, or safety 
valves, for children who have languished in failing schools for any 
length of time, and it has made a real difference in the State of 
Florida.
  I would just like to commend the gentleman's State and ask him to 
comment on the difference that school choice has made for his 
constituents and his friends and neighbors.
  Mr. WELDON of Florida. Well, I thank the gentleman for bringing this 
issue up, because I just had a conversation with our Governor, Jed 
Bush, about this very issue.
  The A-Plus plan is a very simple plan. If the school is scored low, 
parents can take their child and the money that was going to their 
child and go to a private school. The education bureaucracy, teachers 
unions, liberals on the left went absolutely berserk. They said it 
would be the total demise of public education in the State of Florida. 
It was the end of the world, and the sky was falling.
  There was only one or two schools that scored really low, and a few 
kids went off into the private system. But what really happened was 
that every single school in the State made a tremendous effort, 
particularly the failing schools, the poorly performing schools, to 
improve their act. Because no school, no teacher wanted to be at a 
school that was scored low, no principal wanted to be the principal of 
that school. What happened is the entire academic performance of the 
whole State has gone up.
  The Governor of our State told me that piece of legislation was the 
single most important piece of legislation to improve the quality of 
education in the State of Florida in probably 20, 30, or 40 years. It 
motivated teachers, principals, administrators to work very, very hard 
because they knew they were being held accountable.
  In my opinion, I would say this to Governors and school 
administrators all over the United States: You want to improve 
education? Establish a program like we did in Florida. Because that is 
what happened. We were doing annual studies on all these schools, how 
many kids are failing, and the grades came up. Average grades came up, 
and schools started performing better. It was absolutely miraculous. I 
do not know what else to say.
  We need that. Part of the problem in education in America is there 
are a lot of systems where there is no accountability. They can turn 
out kids that just are not learning year after year and nothing happens 
to anybody. They keep their jobs, they keep their positions. Under the 
threat of actually being held accountable, it has been absolutely 
tremendous.
  Talk to our lieutenant governor, Frank Brogan, who previously was the 
education commissioner in the State of Florida; and he has been 
following this issue very, very closely, as well as our current 
education commissioner. And they will tell you hands down the A-Plus 
program was a fabulous, fantastic success.
  Frankly, I was disappointed we were not able to include that in the 
President's education reform package. I was very disappointed that it 
was opposed by many people in this body as well as

[[Page H2014]]

the other body; and ultimately, in the end, we were not successful in 
including it in the package. I believe we need to fight for that in the 
years ahead because it makes a difference in the lives of kids.

  I am glad the gentleman brought it up. I am happy to speak about it 
anywhere because it is the truth. The A-Plus plan helped kids, and that 
is really what it is all about.
  Mr. SCHAFFER. We had something like the Florida plan in the draft of 
the President's bill as it was introduced last year, and it got 
stripped out right at the first committee hearing. It did not last very 
long.
  That is, frankly, why we are here now, because since the choice 
elements were stripped out of the President's bill, something the 
President wanted, we have been working with the White House and have 
spoken directly with the President; and he has committed to making sure 
that a choice element, a tax credit provision, becomes law and becomes 
a high priority in this Congress.
  But I would like to ask the gentleman from Michigan to comment, if he 
would, on just this notion of choice. The gentleman from Florida 
indicated very clearly the experience we have seen in several other 
States through the research of the Committee on Education and the 
Workforce is that public schools, government-owned schools are really 
not threatened by choice.
  That is where we find the greatest resistance up front, because there 
are people who think if we allow this system to have some kind of 
alternative funding structure, that all the people who are employed at 
any of these levels are somehow going to lose their jobs, if we can, 
instead, adopt the model on that chart, of direct contributions to 
education and more of a market approach. But what we found is very 
different. These people do not lose their jobs; they just get better at 
it.
  Mr. HOEKSTRA. I thank my colleague for yielding. Let me give an 
example in Michigan.
  In Michigan, we passed a proposal called Proposal A. What Proposal A 
did is it led towards equalized funding so that if you are a student in 
Highland, Michigan, or Detroit, or whatever, you are going to get 
relatively the same amount of money per student enrolled. That has been 
very, very positive because we had great discrepancies between one 
school district versus another. So we have narrowed that gap.
  One of the sides effects of that has been that the public school 
administrators have now kind of, I like to call it, become Beggars de 
Lansing. If they get some special needs in their community or whatever, 
they no longer have that direct connection to the taxpayer and to the 
parents in their community that says, hey, we have a special need and 
we need some extra money for the next 3 to 5 years for an English as a 
second language program, or we really want to keep this school open. 
They cannot do it anymore. They have to go to the State legislature. 
And the State legislature does not really understand that community.
  What tax credits will now do, the money that will be there with the 
taxpayer, that is new money going in to education, money not being 
invested in education today; and that will help our public schools as 
well to be able to go into their community and say we have this special 
need; we want to do this, and the folks at the State capital do not 
have the latitude or the flexibility to give us this money. Will you 
give us that money? And if they have built up a credible relationship 
and they are well respected in their community, they can expect an 
infusion of additional money to meet some of the needs that they may 
have.

                              {time}  1730

  I think the gentleman is absolutely right that the case in Florida is 
that this raises all of education. It raises public education and 
provides them an important link back into their community. It can raise 
private and parochial education, and that is what we are trying to do 
here. I talked to kids from Hudsonville, Michigan, and I have three 
children, and I am very selfish. When those kids come out of college 
and high school, I want them to have the best education of any kids in 
the world. I want that to be available to every kid in America. I do 
not care if the kids in Japan match our kids' education. I hope they 
do. We want good educational opportunities for all of our kids around 
the world, but the one thing that I will not accept is that our kids 
will come out of our educational system with a second-rate education, 
that they will be second, third, fourth or fifth to kids somewhere else 
in the world because that means that the jobs that they will have, the 
life-style that they will have, and the opportunities that they will 
have will become diminished.
  We need to make sure that every single one of our kids gets the best 
education in the world. This is one other step, and combining it with 
accountability and with more money going into education and then 
raising every type of education, private, parochial and public, to 
raise education.
  Mr. SCHAFFER. I would like to talk about why this is a superior 
method to funding children in schools as opposed to the system we have 
today. We cannot reduce the tax burden of Americans to the extent that 
many of us would want, certainly the amount that I would like. I would 
be in favor of rather large tax cuts for Americans.
  Assume a constant with respect to a taxpayer's obligation to the 
Federal Government, just for purposes of this discussion. Under a tax 
credit provision, a taxpayer would really have a choice. They can 
continue to send their cash to Washington, just as we have been doing 
for years through this chart here, a taxpayer sending his money to the 
IRS, the Treasury Department, it goes through all of these stages of 
political decision making, and bureaucratic redirecting before it gets 
to a child. If somebody likes this, they can continue to send their 
money to children this way. Many Americans probably will initially, or 
they would have a choice.
  Mr. HOEKSTRA. If the gentleman would yield, they are not going to 
have a choice. That is going to stay there.
  Mr. SCHAFFER. And the tax credit will not be the equivalent amount 
that we are proposing, all of the dollars that the taxpayer is forced, 
they are still going to send money.
  Mr. HOEKSTRA. And money is still going to go through this system.
  Mr. SCHAFFER. We are offering a choice to take a portion of these 
dollars and contribute them directly to an education organization, a 
student tuition organization or an education investment organization 
that would exist as they do in many States today. That would look a 
little more like this.
  So the choice we are offering is made possible through a manipulation 
of the Tax Code through tax credits. Every dollar that somebody would 
contribute within limits in this fashion, would reduce the amount of 
cash that a taxpayer is forced today by our Tax Code to send through 
the government, and that is essentially what we are talking about.
  As I mentioned, we are not inventing the idea here. The States have 
proceeded on this long before us. Arizona probably has one of the best 
models which has been studied in great detail. There is an analysis 
just a few months old produced by Carrie Lipps and Jennifer Jacobi 
which details how successful Arizona has been in injecting massive 
amounts of cash into the education system of Arizona, again, based on 
this voluntary basis and manipulation of the Arizona Tax Code, and not 
only that, but they have been able to provide dollars in a way where 80 
percent of scholarship recipients in that State were selected on the 
basis of financial need.
  So they are really reaching out in Arizona to the children with the 
greatest need in the State. They are injecting cash through a massive 
infusion into the program, they are creating school choice in a way 
that is not only providing assistance to the private organizations 
which participate in these tax credits and these scholarships, but also 
the public schools in Arizona which have improved as a result of being 
a more exciting and vibrant marketplace.
  Mr. HOEKSTRA. Mr. Speaker, I thank my colleague, and when we 
introduce the concept of a tax credit at the Federal level, that is new 
money going into education. The typical local school district will only 
receive 7 percent of their money from Washington. When we introduce the 
concept of a Federal tax credit, this is new money going into the local 
schools, directly

[[Page H2015]]

from the community, this is not a redirection. This is growing the pie, 
and allowing the pie to grow for our public schools and allowing the 
pie to grow for all of our kids.
  That is a little different. And Americans have some concerns about 
tax credits at a State level because they think we are just redirecting 
it. We are not just redirecting it. We will have the history soon from 
Arizona, Pennsylvania and Minnesota to see whether it grew the 
educational pie or whether it redirected it.
  Clearly, when we talk about Federal education tax credits, we are 
talking about significant amounts of new money being directed into 
education, and it is being directed by the community, the parents and 
the individual at the local level. They are making the choice as to 
whether they want to invest more money into their local public schools, 
which is a wonderful opportunity.
  Mr. SCHAFFER. In Arizona, the tax credit has been studied. From 1998 
to 2000, the Arizona credit generated $32 million in new funds. It did 
not take a dime away from the Arizona public education school funding 
structure, and it provided almost 19,000 scholarships through 30 
different organizations. That is 19,000 scholarships which provided new 
freedom for children in Arizona. This is a great example, a great 
accomplishment for the State, and we hope we can do something similar 
on a nationwide basis. In States like Arizona, which already have the 
credit, this will add greater emphasis and power.

  The gentleman from Colorado (Mr. Tancredo) is here, and is very 
familiar with tax credit initiatives, one is pending right now in 
Colorado, as well as some voucher efforts that the gentleman has pushed 
in the past. I yield to the gentleman.
  Mr. TANCREDO. Mr. Speaker, I wanted to come to the floor for a couple 
of reasons. First of all, to express my gratitude to the gentleman from 
Colorado (Mr. Schaffer) who has spent as much time on this issue as he 
has. It is important for everyone to understand that an issue like this 
does not get this far without at least one person devoting himself 
almost entirely to its advancement. It is because of the dynamic 
involvement of the gentleman from Colorado (Mr. Schaffer) that we are 
actually on the cusp of doing something here with it in the House of 
Representatives.
  I thank the gentleman. We would not be talking about it, and it would 
not be formulated in a legislative package if not for the gentleman.
  It is a long history that this movement has had, the idea of school 
choice. For years we were confronted, those of us who were pushing 
concepts like vouchers, in the past, were confronted by an educational 
establishment that reverted back to the time-tested responses like this 
will take money away from public schools. This is a creaming scheme, a 
reason to get other kids, the good kids out of public schools and into 
private schools. It is not a level playing field. All of the rest of 
the stuff that we have heard for years.
  The beauty of this plan, this idea, is that it takes away all of the 
arguments that the other side has used for years to try to stop it. It 
does not take money away from public schools. As the gentleman was 
saying, it is, in fact, adding money for the most part to the 
educational pile that is out there.
  The wonderful thing about this plan, a tax credit for scholarships to 
be given out by agencies at the State level, the wonderful thing about 
it is that we can concentrate on one thing, the children. All the rest 
of the stuff, all of the spooky stuff that the enemies of educational 
reform keep throwing out, and have for years and years about the 
destruction, this will destroy public schools, all of those things are 
swept off of the table here. We are talking about one thing and one 
thing only, and that is the child. What is in the best interest of a 
child seeking an education in this Nation?
  This makes us focus on that, and it takes away all of the stuff that 
surrounds the argument otherwise about the system. What we are saying 
here is that if individuals, especially those individuals who are 
economically disadvantaged, quite frankly they are probably going to be 
the people who benefit the most as a result of this, most of the State 
scholarship organizations will probably focus on low-income kids, and 
what we are saying is we are going to give a child an opportunity to 
obtain an education, and the Federal Government is not going to 
participate by writing rules or regulations or trying to strangle the 
private school. What we are talking about is freedom.
  The one thing we know now, empirical evidence, we have thought for a 
long time that educational freedom would, in fact, enhance educational 
quality. But it was a theory. Now we know something. We have evidence 
of it. We have cities around the country, Milwaukee with a very long 
experience, Cleveland, which is just getting into this, but we have now 
tons of empirical evidence that shows us that educational freedom does, 
in fact, translate into educational quality.
  That is all we care, and that is the beauty of this concept. It has 
nothing to do with systems or trying to construct a special kind of 
educational system. What we are saying here is look, we are not the 
school board members in the sky. The Federal Government is not going to 
take on a role as the school board member for every kid. What we are 
simply saying is parents, parents will be able to make a choice. They 
will be economically empowered for the first time in their lives to 
make a choice, and that has got to accrue for the benefit of the child. 
That is what makes this so good.
  I compliment the gentleman from Colorado (Mr. Schaffer) for his 
devotion to this concept.
  Mr. SCHAFFER. Mr. Speaker, I appreciate the gentleman focusing on the 
superior quality of a tax credit proposal because it does focus on 
children rather than institutions.
  The gentleman is correct. Again, if we go through the chart here of 
how a taxpayer dollar today makes its way through this long, elaborate 
process of bureaucracies to finally get down to a child down here, each 
one of these agencies has their own political constituency that is a 
part of it.
  If we focus down here at the last stage and that is at the school 
level, and maybe even back up one to the school district level, in 
Colorado there are 163 school districts in my State. That is just one 
State. If we look at other States and add them up, there are thousands 
of these organizations. They are political entities, political 
institutions. They are institutions that exist on paper and in law 
books and exist as corporations of sorts. These institutions today is 
really how we measure fairness, by comparing these institutions.

                              {time}  1745

  We are comparing how school buildings are treated as compared to 
other school buildings; comparing how one facility is treated as 
compared to another facility; how the budget that goes into the 
management of school A is compared to the management of school B.
  For years, many of us have come down here on this House floor and 
have advocated a different model where the institutions matter less and 
the children start to matter more, so that we begin to measure fairness 
by evaluating the relationship between children.
  What we have today is a situation where children who have no option 
other than this model here tend to languish in some of the worst 
schools in America, and they have no freedom. If they happen to be 
stuck in a bad school that does not serve their needs, they have no 
place to go. They cannot afford it, and we want to give them a way to 
afford it, a way to be involved in an education in the marketplace, to 
choose the academic goals that are in their long-term best interests, 
and begin to build an education system where the children are the 
centerpiece of an education strategy for the country, not the tail-end 
of the education strategy for the country, which is where we are right 
now. That is what education tax credits allow us to accomplish.
  I want to point out for a moment now the distinction between 
education tax credits and other choice models. The word ``vouchers'' 
has come up even in this debate. Vouchers make a lot of sense when 
compared to this process of getting dollars to children. Again, this is 
just a little more visual, because you

[[Page H2016]]

can see the funding filter that takes place between taxpayer and tax 
recipient.
  A voucher removes a lot of these steps, but it still involves, when 
it comes right down to it, your cash being confiscated as taxes, going 
to the government, and the government giving those dollars back in the 
form of a voucher to a child with certain strings and conditions 
attached. Again, that is better than what we have today in American 
education, but it still has its weaknesses in that politicians and 
governments define the use of these dollars, define the terms of 
quality, define the terms of cost and so on, as opposed to a 
marketplace.
  But education tax credits really cut government out altogether and 
begin to regard the education professionals as legitimate 
professionals. Today they are really not treated that way in a 
government-run system. They are all paid the same. You can go to almost 
any school, government-owned school district in America, and the worst 
teacher is paid typically the same as the best teacher in the district, 
and it is just a function of how long they have been there and how many 
degrees they were able to add to their resume. If they manage to not 
hurt anyone or not be too terribly incompetent, they will stay there 
and continue to get pay raises, regardless of whether they leave when 
the bell rings at 3 o'clock or whether they stay until 6 o 'clock doing 
additional work. This reality is the leading cause of burnout among 
teachers in America. They last, the average time period, this has been 
studied with respect to burnout, somewhere between 3 and 4 years.
  But creating an academic marketplace begins to regard teachers as 
real professionals and education managers as professionals as well, 
because, rather than being, as the gentleman from Michigan said, 
beggars of government in the State of Michigan, he called that 
``beggars to Lansing,'' they become reconnected with the community 
instead.
  I want to elaborate on that for a moment, because it is really true. 
When funding only flows through this process, each of these agencies 
develop their own internal language between them. The grants that 
school districts apply for, that our States apply for back up this 
chain, are stated in terms that are written by other bureaucrats at 
these other levels of government. So you have got all kinds of acronyms 
and all kinds of programs and departments and a whole language that 
only people in that system understand.

  I have been at lots of meetings about this. Every Member of Congress 
has sat through meetings where people come from their districts back 
home, and maybe a principal of a school district will come to our 
offices here in Washington and talk about a specific grant they are 
applying for at the Federal level, and they have the State coordinator 
who is cooperating in this and the Federal person they need to reach.
  It is like alphabet soup. We need you to apply for an ABC grant that 
goes to the DEF agency that is going to be evaluated by the XYZ person 
in agency whatever. You get the picture. It becomes a whole internal 
language that these people understand, and they become kind of 
comfortable with it. And, if they do a good job at it, I suppose they 
become pretty comfortable in achieving these objectives.
  But this is not the language of the neighborhood. This is not the 
language of a community. When we allow our school board members and 
superintendents to only be proficient beggars of government, because 
that is the only place the money comes from, then we cause them to 
speak in a language that is just not understood by the parents, who are 
only interested in one thing, and that is their children. An education 
tax credit really allows us to break out of that old bureaucratic model 
because it gives parents choices and corporations choices, I might add, 
in the proposal we are piecing together right now.
  Imagine a school board member, if you would, or a superintendent, who 
creates an innovative program for a school, for maybe a specific target 
cohort of children, and instead of coming to Washington to try to 
describe why this would help children, they would instead go to the 
Rotary Club in their hometown, or maybe to a charitable foundation in 
their community. Maybe at this point they will start using the names of 
the kids, maybe showing them pictures, and the people sitting at the 
other end of the table might actually recognize them as children they 
go to church with or see at the baseball field or maybe even recognize 
from their own child's school.
  The conversation becomes very different. Rather than ABC program, DEF 
agency, XYZ administrator, we start talking about the children. If you 
just invest your dollars in my program at my school, we are going to 
reach out to Johnny. He has a name. And after you invest, I would 
invite you to come into the school so you can see the computers that 
you have purchased. And after you have seen the computers that you have 
purchased, maybe we can show you the evaluations of the program and 
show you how it actually helped Johnny.
  It really does not happen today to a great extent, and providing a 
change in the Tax Code to ease the ability, to make it easier for 
individuals to contribute to schools of this nature, we will see these 
kinds of funds, these enrichment funds, these opportunity funds crop up 
all across the country.
  They already exist in all 50 States today, specifically targeted for 
low income and underserved children. But if we just look at the 
examples of States that have established State tax credits, we realize 
that we are going to see lots of them, tens of thousands of them, I 
believe.
  Mr. Speaker, the State of Arizona, upon creating its tax credit, saw 
these student tuition organizations just emerge in great quantity, 
about 70 or 80 of them almost immediately. I think they have more than 
that today. But it is an exciting proposal, and it is one that I want 
to underscore with the greatest emphasis here in Congress.
  I am especially inspired and encouraged by the commitment of the 
President to see a tax credit plan pass this year and by the commitment 
of our Speaker and our leaders here in the House to bring this tax 
credit proposal about which we speak tonight to this floor during this 
session, and I am hopeful that the people of America who care about 
their own children, and care about others as well, will find a way to 
rally around this exciting tax credit proposal that will create a 
massive tax infusion in America's education system and help create an 
academic marketplace where children matter more than institutions.

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