[Congressional Record Volume 148, Number 62 (Wednesday, May 15, 2002)]
[House]
[Pages H2502-H2509]
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 as the designee of the majority leader.
  Mr. SCHAFFER. Mr. Speaker, this evening's discussion is on the topic 
of education. It is a topic which has occupied a lot of time here on 
the House floor during these Special Orders of the last few weeks. For 
those who believe, as I do, that America's children warrant a profound 
amount of attention and resources from the country, I would invite 
those colleagues who might be monitoring tonight's proceedings to come 
join us here on the floor this evening.
  I specifically want to discuss school choice, trying to create a 
market-driven education system in America, one where government-owned 
institutions, or public schools, have the opportunity to compete on an 
even playing field with other providers of academic services and 
America's schoolchildren become the beneficiaries through the market 
forces that ought to exist where education is concerned. We do not have 
that to a large degree in America today.
  We have what is effectively a government-owned, unionized monopoly 
when it comes to the most important industry in America, that being 
education. There are pockets around the country where you have a 
competitive framework for delivery of education services. Those pockets 
exist in some States. They exist in some community schools and in some 
cities. They exist for the wealthy, certainly, because only the wealthy 
in America on any given day can afford to forgo the taxes they pay to 
the government schools and then pay tuition on top of that to send 
their child to a school where services are delivered by private 
professional institutions.
  But what we really need to do today is try to eliminate this 
discrimination that exists in American education today between the 
extraordinarily wealthy and the extraordinarily poor. Because speaker 
after speaker after speaker who comes to these microphones or maybe 
testifies before any of our education committees, committees that deal 
with education, seem to have a unanimous agreement that we need to have 
a concerted effort in America involving the Federal Government and the 
States to elevate the achievement of underserved children, the poor, 
minority children, those who happen to live in school districts that 
are just not achieving that much on behalf of children, and they need 
our focus.
  Too often in Washington, the conclusion from those kinds of concerns 
results in an agreement that we should just spend more money, that we 
should just take more cash from the American taxpayers and send it to 
the Department of Education, maybe wave a little magic wand and hope 
that the speech about poor children preceding the expenditure of cash 
will somehow help underserved kids in America. We have been doing that 
for years. Sometimes we get lucky. Sometimes we just manage to have the 
right combination of devoted teachers, committed school board members, 
a community that rallies around the poorest children in their 
neighborhoods and a Federal program or two that provides some of the 
resources. We see those examples of

[[Page H2503]]

success from time to time and we celebrate them when they are known to 
occur, but those are the exception rather than the rule.
  In inner city after inner city after inner city, the children who are 
trapped in failing schools, without the opportunity to choose other 
options, are the children who are the victims. It is unfortunate 
because there are several States around the country that have really 
showed us how to reach down to the neighborhoods and empower families 
and empower children in a way that makes a meaningful difference in 
their academic futures.
  There are six States that have really gone far above and beyond the 
rest of their peers among the 50 States in moving forward on a change 
in the State tax code to benefit children. That solution involves 
education tax credits. There are some great examples around the 
country. Some of the best examples include the State of Arizona, the 
State of Pennsylvania, the State of Illinois, the State of Florida, and 
a handful of others. It is important to understand that education tax 
credits allow for a revolutionary approach to public schooling and 
private schooling, American schooling, on a nondiscriminatory basis 
that results in a massive cash infusion into America's public education 
system. And it does so in a way that reaches the children who need it 
most, the very children that we all profess to care about more than all 
the rest. This tax credit proposal is really something to be excited 
about.
  I am grateful tonight, Mr. Speaker, for the promise made by our 
Speaker of our House to move an education tax credit bill through this 
House, by the commitments from our President to support the education 
tax credit legislation that we are currently in the process of 
finalizing here in the House, and to make this concept of education tax 
credits a high national priority. It is significant from the 
President's standpoint because this really was the core of his 
education proposal last year. Not so much education tax credits, to be 
specific, but the concept of advancing the cause of academic choice, 
school choice.
  When he sent up his proposal, Leave No Child Behind, the core element 
of that plan was school choice, the bill also entailed a component that 
dealt with flexibility for States, and a third component that dealt 
with accountability through a national testing strategy. But the core 
element of school choice, the most important provision that the 
President proposed and, in fact, campaigned on, was quickly abandoned 
by the Congress. I regret to say that, because everybody rallied around 
the President's proposal. When he took the ribbons off of it and 
announced he was going to send it up here to Capitol Hill, there was 
lots of fanfare and celebration, big press conferences, lots of 
pictures. We even brought all the kids that sat in front of the podium 
at that press conference and tried to convey the message that school 
choice, flexibility for States, public accountability, were going to 
help those kids sitting in front of us.
  But as I mentioned, even before that bill had its first full hearing 
in the education committee here in the House, that core element of the 
President's proposal, the school choice provisions, were jerked right 
out of the bill. The people did not want to vote on it. I want to 
explain why. I want to explain the politics of it for those who are 
unfamiliar with the rough and tumble nature of education politics. I 
also want to explain in doing so how dollars get to children in 
American schools today and why it seems that taxpayers pay and pay and 
pay and are promised over and over again that money they send to 
Washington for education is going to help children and yet it never 
does. It rarely does. And I want to contrast that bureaucratic model, 
that is, really the framework of American education today, with the new 
model of freedom and academic liberty that is represented through 
education tax credits, a model that has now been tried in six different 
States, has been proposed in almost 40 States, and continues to be 
debated this very day in the halls of State legislatures across the 
country.
  First, let me start with the status of education funding today. This 
chart explains how a dollar gets to a child. At the top, we have the 
hard-working taxpayer that is emblematic of every wage-earning, tax-
paying American today. They work hard to raise the money that is 
confiscated by the Federal Government, taken out of their paychecks and 
given to the U.S. Treasury and goes through this process till it gets 
to the child way down here at the bottom. The Treasury Department 
collects the cash, Members of Congress, politicians, me, others, all of 
our colleagues, redistribute the wealth that has been collected by the 
Nation's Treasury Department through the Internal Revenue Service. We 
distribute that wealth through programs that we have selected, the 
charities of our choice, in the Department of Education.

                              {time}  2230

  The Department and its several office buildings just a few blocks 
from here distribute those dollars to the States and tie strings to 
those dollars as well under the pretense of accountability. At the 
State level these dollars are considered in State legislatures and 
governors' offices by more politicians, and they redistribute those 
dollars at the State level, dispensing them through State Departments 
of Education. The State Departments distribute those dollars to school 
districts. School districts, of course, are political entities; they 
are managed by elected officials, school board members, more 
politicians, who distribute those dollars according to their values to 
the various schools within a school district. Once we get those dollars 
in a school, we have a handful of managers, principals, business 
managers and program chairs who finally manage to get those dollars to 
teachers, and then to a child. By the time we go through this whole 
vortex of bureaucracy, the dollar that we work hard for every day to 
send to Washington to help children gets whittled down as each one of 
these bureaucracies, these agencies take their cut in order to run 
their various programs, and by the time these dollars actually reach a 
child, we only have maybe 60, 70 percent on a good day.
  We want to bypass all of this. We are not going to get rid of this. 
The bureaucracy has lobbyists. All of these agencies hire lobbyists 
that come to Washington to preserve this system, and we will try to 
change it as time goes on, and we have for years, but the politics are 
tough to beat. So we are content to say that you have won. This 
bureaucracy has won. This empire continues to grow. It does not matter 
whether Republicans are in charge or Democrats are in charge, this 
system gets bigger and bigger every year. So we can confront reality. 
That is going to continue until there is a wave of change around the 
country that calls for mass reform of this system. It just is not going 
to happen, and there is not enough of us here. So we are going to leave 
this in place in exchange for a tax credit proposal that the gentleman 
from Michigan will describe, which is much more simple, and a proposal 
to which the gentleman from Michigan has been supremely devoted, and I 
yield the floor to him.
  Mr. HOEKSTRA. Mr. Speaker, I thank the gentleman for yielding. I 
would like to point out the contrast between the chart that he 
outlined, which is the money that flows through the Federal Government, 
where it comes to Washington, goes through this funnel, the dollar gets 
whittled down to 60 to 70 cents on the dollar, and then that 60 to 70 
cents that is left that actually makes it to a child's classroom, not 
only is that dollar whittled down to 60 to 70 cents, but it also comes 
with strings attached, meaning that it comes for a reading program, it 
comes for a math program, it comes for a science program, it comes with 
a very specific set of requirements attached to it, and then the school 
has to report back to the Federal Government that they actually spent 
the money exactly the way that the Federal Government mandated that 
they use that dollar to help our kids.
  The gentleman from Colorado is absolutely correct. That system is 
going to stay in place. We may reach the same point that we reached 
finally a few years ago in welfare reform where we found out that it 
was a failed system and that what we needed to do was to give States 
flexibility in how they dealt with the individuals who are on welfare 
to give them hope and to actually structure programs that would move 
them off of welfare, and that may

[[Page H2504]]

happen with that system. But what we want to do is we want to put in a 
system, that number one, takes the dollar from the taxpayer and moves 
the dollar directly into a classroom, so we do not see that whittling 
down, and what we also want to do is we want that dollar to get into 
the classroom, we want that dollar to get into the school and give 
local officials a great degree of discretion as to exactly how they 
will spend that money, whether they will use it for a math program, 
whether they need to use it for English as a second language program, 
whether they want to use it for a science program, whether they want to 
use it for class size reduction, or whether they want to use it for 
technology, but the local school district will have a tremendous amount 
of flexibility in terms of how they will spend that money.
  Here is how it works. We have the one system that says, on April 15 
your taxes are due, send in a check to Washington and eventually some 
of that money will get back to your local school districts. This is 
much simpler. Here is our taxpayer, a local parent, someone in the 
community who is passionate about education in their community, they 
are passionate about the kids in their community, a local business that 
is passionate about the kids in their community. They are approached by 
the local school and they say, hey, we have this need in our school 
district. We want to keep this school open. We want to develop this 
technology program. We have done an analysis of our kids and we are 
really weak in this area. We have a program that we want to design for 
this. Will you help us?

  Joe Taxpayer, ABC Business, decides, man, I love this community. This 
community is built on values; this community is built on each of our 
kids getting a solid education. They have laid out, the school has laid 
out a great case for what they want to do for the kids in our 
community. I am going to write them a check for $1,000 and they get a 
$500 tax credit.
  So instead of whittling that dollar down from a dollar to 60 to 70 
cents, what an education tax credit does is it takes the taxpayers' 
dollar and it grows it. This person says, I am going to invest $2 in 
education, but I am only going to get a reduction in my taxes of a 
dollar. That money then goes directly to that school and that school 
can spend that money on a program as they have identified it to the 
taxpayer.
  If they do a great job, guess what? They can go back to Joe Taxpayer, 
they can go back to ABC Corporation the next year and say, wow, look at 
the kind of results and the kind of performance that we are getting. 
The accountability is directly back to the people in the community. 
They say, we really want to build on that program, or we have 
identified another need, and here we get the greatest accountability. 
Joe Taxpayer of ABC Corporation, they can make the decision as to 
whether they are going to invest in that school district again.
  We have structured this program in such a way that individuals and 
businesses can contribute to their local public school, a traditional 
public school, to a local public charter school; they could also 
contribute to an education scholarship fund, and this scholarship fund 
would enable parents to apply for scholarships for sending their kids 
to a nontraditional school, perhaps a private or parochial school.
  But what the gentleman from Colorado and I and many others in our 
conference are trying to do is we are trying to get a significant new 
investment in education that grows the investment, that grows every 
dollar of investment into $2 of education investment, make sure that it 
is under local control, and is available for all of our kids, is 
available for those kids that go to public schools, private, and 
parochial, so that these new dollars going into education are driven at 
the local level, the decisions are made at the local level as to how 
they will help our kids out, and it is going to be for all of our kids.
  There are a lot of advantages to this system, and it has been, as my 
colleague may want to explain, this has been implemented in a number of 
States. What we have seen is that there is a significant inflow of new 
money into education, so that it is not a reallocation of the money 
that is already being paid into a State government. This is new money 
coming into education, and it is benefiting all of our kids and putting 
some local control back into our schools as they have seen local 
control being eroded by States taking more responsibility and now the 
Federal Government reaching back into a local school district, reaching 
back into the States, telling States and local schools exactly how they 
are supposed to run their local school districts.
  Mr. Speaker, I yield back to the gentleman from Colorado.
  Mr. SCHAFFER. Mr. Speaker, in the State of Arizona, between 1998 and 
the year 2000, in the first 3 years since Arizona passed their tax 
credit language for education, that State raised over $30 million for 
schoolchildren in Arizona. These are new dollars. These were not 
dollars taken away from the existing public schools; these were new 
dollars that were infused into the education system, the overall 
system, the nondiscriminatory system of Arizona. Because today, when we 
talk about academic freedom and choice, these qualities of liberty are 
dispensed on a discriminatory basis. The wealthy get freedom, the 
children of the wealthy do. Those who happen to live in one of these 
unique States or neighborhoods where school choice is allowed to occur, 
they get freedom. But the vast majority of children, especially those 
who need it the most, are denied the freedom to go to the kinds of 
schools that they want. Not only that, but the administrators of the 
public schools have their hands tied behind their back because their 
ability to access these new funds are limited, and the tax credit 
proposal puts more money into the education system for private and 
public schools. It does not discriminate against children. That is the 
beauty of it and the difference between the bureaucratic model that we 
have today that I described, and the tax credit liberty model of 
education that my colleague described.
  Mr. HOEKSTRA. Mr. Speaker, if the gentleman will yield, the other 
thing that is different between what we are proposing here in 
Washington versus what is happening in Arizona is Arizona is a 100 
percent tax credit, so it is $30 million of new money flowing into 
education, and it is a reduction in these individual's taxes of $30 
million.

  What we are proposing here in Washington is if we get $30 million of 
new money invested in education that is actually, or if we get $30 
million in tax credit, it is actually $60 million of new money that is 
flowed into education and flowed into our schools at the local level. 
It is a significant difference in that it shows the power, the 
multiplier effect of this that says, I am going to put 2 bucks in, but 
it is only going to reduce the tax bite by $1.
  Mr. SCHAFFER. Mr. Speaker, we have done the research, we have done 
the analysis. Sure, it would be great to have a bigger tax credit and 
maybe some day we will, but initially we have to start out small. There 
is a cost to government, there is no doubt about that.
  Again, referring to the chart on how money is spent today, this city, 
Washington, D.C., frankly lacks imagination when it comes to finding 
new ways to fund schools. The answer for years has always been the 
same, and that is to just spend more on this system whenever we find a 
problem. When test scores take a dip, we do not really go fix the 
problem in Washington; maybe some day we will. I think our new 
President is committed to changing the management style of schools. But 
over the last 10 years, we have gone to this model $125 billion worth 
of times, and that is how much we spent over 10 years. We just keep 
spending more.
  Mr. HOEKSTRA. Mr. Speaker, if the gentleman will yield, we talk about 
the accountability. In fact, through the tax credit models, as we 
outlined, if the school district goes back to Joe Taxpayer or goes back 
to ABC Corporation a second year and asks for a tax credit, or asks for 
a donation, and they have mismanaged the funds, Joe Taxpayer at ABC 
Corporation says, are you kidding me? No. I gave last year, and you 
mismanaged it. Until you can demonstrate to me that you are going to 
use my money wisely, I am not going to give you any more. That is a 
great accountability measure.
  On my colleague's chart here, the third line down we see the 
Department of Education. Now, I applaud what

[[Page H2505]]

President Bush is doing in the Department of Education. But as the 
gentleman and I know that from 1996 on, as he and I are on the 
Committee on Education and the Workforce, year after year after year we 
would call in the officials from the Department of Education and ask 
them where the money went, and that third layer where that $120 billion 
or $40 billion a year flows through could not even get a clean audit, 
and the price for not getting a clean audit was what? How much did we 
cut their spending? We did not cut their spending.
  Mr. SCHAFFER. We did not cut it at all.
  Mr. HOEKSTRA. The least we could have done is we probably froze it.
  Mr. SCHAFFER. We increased their spending.
  Mr. HOEKSTRA. We increased their spending each and every year, even 
though they could not get a clean audit, and that is the bureaucratic 
model that says, well, being able to go back to the American people and 
getting a clean audit, that is not an essential requirement and, as a 
matter of fact, even if we do not get a clean audit, they are going to 
give us more money. There is a whole list of scandals and fraud within 
the Department of Education, so it is not only that they could not get 
a clean audit, the systems that they had in place were actually an open 
invitation to theft and corruption between the Department of Education. 
Now, that is rapidly changing under this President and Under Secretary 
Paige. But it was accepted in the Clinton administration for 4 years, 
and it was a major disappointment, and the biggest disappointment was 
when they did not perform. Rather than having their spending frozen or 
their spending cut, the bureaucratic, the Washington model said, that 
is okay, we are going to give you more money.

                              {time}  2245

  That would never happen with the tax credit.
  Mr. SCHAFFER. They might have thought to fix it too, but what they 
chose to do is ignore the problems, and that really gets back to the 
beauty of tax credits. So from our perspective, the politicians here, 
the Members of Congress who deal with these dollars that come to the 
Treasury, every dollar spent on education really does come out of our 
budget. Every dollar spent results in a dollar reduced from the 
Nation's budget and, therefore, the ability to spend those dollars 
somewhere else. But by the time those dollars get down to the child, 
there is just a fraction of those dollars left. So the dollars spent 
does not have as much buying power as a taxpayer would hope and 
certainly as taxpayers deserve, certainly as much as children deserve.
  The education tax credit, it costs us money as well. We do have the 
budget for those dollars. The difference is we do not get a negative 
like you get here. In fact, you double it through the proposal that we 
are proposing because for every dollar that we have to budget for an 
education tax credit, because it is a 50 percent tax credit, what that 
means is that the taxpayer is donating $2 to the education charity of 
his or her choice. And, again, we have run the surveys. We have done 
the models, and we know Americans are eager to invest in schools when 
they know the money is really going to get there, and that is the 
beauty of tax credits because that is the promise that taxpayers get.
  Mr. HOEKSTRA. If my colleague will hold the chart up for a minute, 
the contrast between the two charts is absolutely phenomenal. My 
colleague's chart is exactly the way the system here in Washington 
works. The total emphasis here is on the stuff in red: the Treasury 
Department, the Department of Education, the State, the politicians, 
the State Department of Education, the school district and politicians. 
That is where the whole focus is on the bureaucratic model. What is the 
process that the dollar is going to make it from Washington down 
through Lancing to Holland to Lincoln School? What is the process? What 
are the rules and the regulations that are going to follow it? What are 
the mandates that are going to follow it? And the child is kind of the 
footnote, the asterisk at the bottom, saying, oh, yeah, this is about 
kids; but most importantly this is first and foremost about process.
  And what happens with the tax credit, it becomes very, very clear, 
the focus is on two people. The focus is on the person who has the 
ability and the desire to contribute to the schools and the focus is on 
the child. The middle people are cut out. And as soon as the school can 
demonstrate to the taxpayer that the child is going to benefit, the 
dollars will flow in because that is exactly what we have seen at the 
State, that States that have this, the school districts convince Joe 
Taxpayer that if you give money to this school for that purpose, that 
child is going to benefit, and this person sees the value, they write 
the check and that is exactly what we want to have. We want to build 
that connection between Joe Taxpayer, the local parents and people who 
are passionate about education in their community and they want to give 
more money, but they do not want to send it through that process. They 
want it sent directly to their school, directly for the purpose that 
that has outlined; and if that school blows it, they will not get a 
check the second year, but they will have the opportunity to come back 
in future years and say we have addressed those concerns and these 
issues. We will fix and improve the system.
  Mr. SCHAFFER. I was at the mall this weekend with my family and 
someone stopped me and said they had seen us a couple of weeks ago 
having the same discussion on education tax credits. She remembered 
this chart because I was talking about the politics, the nature of the 
tough politics that exists within these levels of bureaucracy and how 
it is played out here in Congress. She said, Oh, Congressman, is it 
really that bad? And it really is. There is no exaggeration.
  Mr. HOEKSTRA. If my colleague will yield, it is not only that bad. It 
is probably worse than what people actually think.
  Mr. SCHAFFER. Right. If we think of this from the administrator's 
perspective, the guy that runs this school, the principal, this 
principal, in order to get money for the child because the principals 
care about the kids. There is no doubt about that in my mind. But the 
principal who is trying to get money to help the child has to beg to 
these politicians at the school board to get the cash. In order for the 
school members to get the cash, they have to beg to the State 
Department of Education here to get the money. They have to apply for 
grants. They have to go down to the State capitals. And they have to 
learn the language of education finance.
  Mr. HOEKSTRA. If my colleague will yield, at the bottom level here, 
if you do not believe the system as my colleague and I are describing 
it, all you need to do is go to your local school and go to the 
administration building and ask them if they have got a couple of 
people. Do you have a grants writer? I mean, the gentleman and I, when 
we went to I think 20, 21 States and we had the hearings around the 
country on what is wrong with this process, they all said we have to 
get grant writers. What is a grant writer? A grant writer works at the 
local school district level. They take a look at this whole 
arrangement, an assortment of Federal education programs, and they go 
through there and they figure out which one their school may qualify 
for, and they start filling out the grant applications.

  Mr. SCHAFFER. The grant writer cares about the children too. All of 
these people who work in the school, they really do care about the 
kids. But unfortunately, the system we have created for them over the 
years, the system is a bunch of nonsense, and we have created it for 
them, because in order for them to get the money to help the child, 
they have to first learn almost a foreign language in school finance, 
and they have to become proficient beggars to all of these different 
levels of bureaucracy. And if they do not figure that out, if they do 
not hire the expert who speaks in the bureaucratic language and 
understands which forms to fill out, the timing of these forms, what to 
say in the forms, even if it is not true, what to put on the forms in 
order to get somebody's attention up here, if they do not learn all of 
these things, then the child suffers. So their motivation is very pure.
  Mr. HOEKSTRA. The real question is where does accountability flow in 
that model? In that model the accountability flows from the school, to 
the politicians, to the school district, to

[[Page H2506]]

the State Department of Education. It flows away from the local 
community. And it flows away from the people who care most about the 
kids. It starts flowing to the Department of Education. We have always 
said, I am from Michigan, I wonder if we start with Secretary Paige and 
you start going down through the hierarchy when we will find the first 
person from Michigan and then when we will find the first person from 
the Second Congressional District who really knows my communities, who 
knows the difference between the needs in Muskegon and Muskegon Heights 
and Holland and Baldwin and Ludington and Cadillac, and says they are 
all a little bit different. But where is that person versus a tax 
credit? The accountability flows immediately from the child through the 
school to the taxpayer. So the accountability flows into the community, 
not away from the communities. It flows to the people who care most 
about the kids and they care most because they know the kids' names.
  Mr. SCHAFFER. Just as the gentleman says in the chart, the taxpayer 
usually knows the children. They know the children in the school. They 
know the teachers, the administrators; they know the programs that seem 
to work and which ones fail. I wish I could map this out like a map of 
the country so we could see where their dollar goes. Let us use my 
State, for example. This dollar might go from Fort Collins, Colorado, 
my hometown, to Washington, D.C. From Washington, D.C. we will send it 
just a few blocks down here to the Department of Education buildings. 
They are massive. They are just a few blocks away. Those dollars would 
be shipped to Denver, Colorado. From Denver, Colorado, to another 
building in Denver, Colorado. From Denver, Colorado to Fort Collins, 
Colorado, to the office building on La Porte Avenue, and from there to 
my kid's school and ultimately to my child.
  If these dollars got frequent flyer miles, it would be a great thing. 
But what the tax credit proposal allows to occur is it allows this 
taxpayer to give directly to the child, and it turns the leaders of the 
school from beggars of the government and bureaucracy into beggars of 
the community, people who can relate to taxpayers and speak the 
language that parents understand, that taxpayers understand, that 
communities understand, and ultimately the language the Nation needs to 
maintain its sovereignty as a free Republic.
  Mr. HOEKSTRA. I think the language, they do not become beggars. This 
is a beggar system because it is a bureaucratic system. You have to 
fill the forms out right. You have to check the exact number of boxes. 
You have to dot the I's and cross the T's. If you do all that, that 
really is a beggar system.
  Mr. SCHAFFER. This really changes the dynamic entirely to a 
partnership.
  Mr. HOEKSTRA. This becomes a visionary system. That system does not 
understand vision. It says, no, I can only write them a check if they 
have filled out this form correctly. And if they after they have spent 
the money, if they have sent the forms back in correctly telling me 
that they spent it exactly the way I have told them to, then they have 
done a good job. They do not ask whether children's performance has 
actually improved. This is a visionary system where the school board or 
a superintendent or a local principal or teacher can lay out a vision 
for their schools and for their kids, and if the community buys into 
that vision, they will embrace it and they will donate into this system 
because we have seen it happen at the State level. So they have become 
visionaries and cheerleaders for their kids and their local school 
district, and they know if they are successful it will continue.
  Mr. SCHAFFER. Here is what it means for students and for States. In 
Philadelphia, the Philadelphia Inquirer just a few days ago published a 
story, the headline is ``Nonprofit Foundations Ease Schools' Budget 
Pains,'' and it talks about the Cherry Hill Education Foundation. 
According to the Inquirer, this is an article by Kristen Graham, she 
says, ``Across the nation a growing number of districts are relying on 
grassroots, independent, nonprofit foundations to fund programs and 
foster business relationships.'' Here is a quote from somebody named 
Howie Schaffer, who is the spokesman of the Public Education Network 
which is a national association of education funds. He says, ``The 
growth is exponential around the country. There are quite a few in 
Pennsylvania and New Jersey.'' The article goes on: ``An estimated 
3,000 to 4,500 school foundations operate in the United States.''
  These foundation are the ones that benefit from a tax credit that we 
are proposing. Pennsylvania has really led the way. I am delighted the 
gentlewoman from Pennsylvania (Ms. Hart) is here to tell us about her 
experiences in Pennsylvania and tell us a little bit about some of 
these kids, perhaps, that are benefiting from tax credits in her 
hometown.
  Ms. HART. Mr. Speaker, I thank the gentleman.
  Mr. Speaker, I am pleased that the gentleman is doing this, bringing 
people's attention to the realities of how much we can do to help 
children learn more just by opening up some opportunities, different 
ideas, opportunities like Pennsylvania is now providing. I was a State 
senator there for 10 years. We did work long and hard to get somebody 
to get something to happen, and shortly after I came to Congress 
actually they passed a wonderful tax credit plan that allows for these 
foundations to collect money from corporations, money, every dollar of 
which will go to educational scholarships, every dollar. There is not 
money wasted in this plan.
  So many different organizations have started foundations. They are 
not all for religious education. They are not all for nonreligious. It 
is just very different. It gives everybody an opportunity to have all 
kinds of different options for their children, and it is something we 
have worked on long and hard in Pennsylvania. We have tried the voucher 
system. The Senate passed the plan. The House did not. That happens 
over and over again. But the general theme of it has always been to 
bring a more dynamic atmosphere to education, to make sure that our 
students all have the opportunity to get the best education they can.
  In Pennsylvania now, as was mentioned, there are, I do not know how 
many foundations, but there are a lot of folks taking advantage of this 
tax credit.
  Mr. SCHAFFER. Just to name a few that were mentioned in this 
Philadelphia Inquirer article just a few days ago, in fiscal year 2000 
the Chester Education Foundation listed revenue of $1.2 million. The 
Philadelphia Education Fund had $7.8 million in revenue in fiscal year 
2000, collecting more than $50 million since its founding in 1984.
  There are more. There is the Pew Charitable Trusts, the William Penn 
Foundation, the Carnegie Corporation. In Bucks County you have the 
Centennial Foundation, which has raised about $50,000 since 1997. These 
are funds that raised money even before the tax credit. When the tax 
credit in Pennsylvania took place making it easier for Pennsylvanians 
to contribute to education projects managed by these nonprofits, the 
revenue shot through the roof. These are dollars that were not taken 
from the Pennsylvania school budgets. These were new dollars that were 
added into the education system in a nondiscriminatory fashion.
  Mr. HOEKSTRA. If the gentleman will yield, the beauty of this and the 
amazing part of this is in the States that have established this, these 
are voluntary contributions to your local public schools, to these 
education scholarship funds. And it is amazing to watch Americans 
willing to invest that kind of money in education. As long as they are 
willing to, as long as the opportunity is there for your local public 
schools and for all of our kids, different school districts and 
different schools have different constituencies, but to watch a 
potentially new massive infusion of dollars into the educational system 
that builds the linkage between that local school and their community 
again that they have just seen erode over the last few years.

                              {time}  2300

  So what is happening in Pennsylvania, what is happening in Minnesota, 
what is happening in Arizona, Illinois, Florida, this is one of those 
areas where Washington really ought to take heed. We are going to keep 
continuing to feed that beast, the bureaucratic beast, but let us 
complement it with this tax credit proposal that is working so well and 
has passed in a number of places on a bipartisan basis.
  Mr. SCHAFFER. And how many times do we hear when we as political

[[Page H2507]]

figures are out campaigning or just in our communities from parents who 
say I care about the schools, I care about the kids? Even people who 
have no children in the schools, they are willing to invest and 
contribute and be part of an education community, but they are sick and 
tired of the wasted dollars in the programs that do not work. They are 
sick and tired of seeing the government shovel mountains of cash into 
schools that do not work and will not improve and the legacy of which 
is children who have a profound disadvantage in entering the workforce 
and becoming part of our economy.
  These parents tell us all the time if we would just build them a 
system that works, they will be a part of it. The gentlewoman from 
Pennsylvania (Ms. Hart), this is her first term, and she ran a pretty 
vigorous campaign and were in touch with thousands of people in her 
District. What do they say?
  Ms. HART. Mr. Speaker, in general, people are not happy with one 
system, and I think the reality of the tax credit, the voucher, 
whatever we are talking about, changing the system as it is, we improve 
each sector of it, and I think that is one of the arguments that has 
always been made for either a tax credit or school choice.
  What people tell me, and unfortunately too many people have told me, 
is that they cannot afford to send their kid to the school they want 
to. The individual tax credit that we consider here on the Federal 
level for parents who send their children to schools that require 
tuition is a wonderful thing, and it only makes sense for us to do 
that. Ultimately, a parent that chooses to send his or her child to a 
public school will end up getting a better education there as well.
  I think this is one of the things for many, many years that has been 
sort of talked about by a lot of people involved in public education. I 
am not really sure why a lot of them oppose this, because it does give 
them a number of different things. One, it gives them more opportunity 
to ease overcrowding which has become a huge burden and, of course, 
comes to us here in the Congress in the form of requests for dollars 
for new school construction. We could avoid a lot of that if we would 
spend much fewer dollars on a tax credit. We would find that we would 
not need those new school buildings. We probably would not need a lot 
of things that we are convinced that we need because we are so wedded 
to a certain system.
  Mr. SCHAFFER. Mr. Speaker, if I can interject, if the District really 
did need a new building and that was the education enrichment project 
that a school District chose to undertake, the way we have got the tax 
credit proposal written right now, that is a real priority in a 
community and the community buys into it, the tax credit can be used as 
a revenue stream to construct that facility or to buy the new computers 
or to establish the new curriculum for underserved children.
  Ms. HART. If the gentleman would yield, in a community that is truly 
growing and that is a necessity, I think that is wonderful. However, 
there are a lot of communities that have convinced themselves that they 
do need new buildings when they actually do not.
  One of the examples we always look at is the city of Philadelphia 
where they have had a spike in young children, which is going to drop 
again, and the question is do we need to build a whole bunch of new 
elementary schools or should we allow more options in education, and if 
we would allow more options in education and now we do, we will find 
that they do not have that pressure, and they can spend the money 
directly on the classroom, having the best quality teachers in that 
classroom and then ultimately having those children be served better.
  The thing is, like the gentleman asked me, what parents say in my 
District, I am out in the District all the time as are my colleagues, 
and I think we probably hear a lot of the same things. All parents 
really want is to make sure that their child is going to be able to 
succeed down the road. That means he or she needs tools. How do they 
get those tools? The parents teach them as well as they can at home 
right from wrong and all the other kinds of things, but they need 
quality education.
  How do they get that? We are part of the cog in the wheel providing 
it, but we need to provide more freedoms for them, especially on the 
State, to do what they want, and that has been I think our mantra for a 
long time in Pennsylvania. It took a long time to get to that point. I 
know Arizona has been doing a lot of creative things for a long time. 
What we will see in Pennsylvania, I think we will see results in other 
places, not just tax credits where it helps families to afford it, but 
the tax credits for businesses like we have in Pennsylvania where it 
helps more families to make a decision they were not even considering 
before because they just did not have the wherewithal to do it.

  Then ultimately that competition in the system, where there are 
options, there is always a more dynamic system. That helps if we expect 
our kids to do better in a dynamic future and a dynamic economy in the 
United States and in the world. We certainly better get them adjusted 
to it all their lives, that way I think they will be comfortable with 
it. They will be more likely to succeed, and these kinds of programs 
certainly present to them more of a real world opportunity for them 
early, to get used to it, to like the competition, to strive harder, 
which is exactly what we want them to do.
  Mr. HOEKSTRA. Mr. Speaker, will the gentleman yield?
  Mr. SCHAFFER. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Mr. Speaker, I think what the gentlewoman from 
Pennsylvania is pointing out, in Pennsylvania they have the tax credit 
and they have seen this kind of explosion of new funds moving into 
education. Even in the State of Michigan, where we do not have a tax 
credit, what we have seen is that some people will say that the tax 
credit, that money is only going to stay in the wealthier suburbs and 
those types of things but in education.
  I think, again, one of the great things about America, we recognize 
the importance of education, that a child get a good education. The 
other thing that I think is happening in a State like Michigan where 
there is a potential of leaving too many kids behind, the community and 
really the State is stepping up and businesses are stepping up and 
saying it is not just okay for kids from this side of the State, to 
make sure that no child is left behind in this side of the State. We 
need to make sure that every child in Michigan has the opportunity for 
a good education.
  So even without a tax credit, proposal or model in place in Michigan, 
there are dollars flowing into education in Michigan because people 
want to step up, and those dollars are going into Detroit. They are 
going into all different parts of the State, and what we want to do is 
we want to accelerate that, and we want to grow that number through a 
Federal tax credit, and I wish we could do it through a State tax 
credit so that we could get the same dynamics kind of going on as in 
Pennsylvania.
  We know that when a State does it, we get an infusion of new dollars, 
and what we want to do is we want to accelerate that process and 
accelerate the number of dollars and new dollars, and I think that is 
also the difference between what we are talking about with a tax credit 
versus a voucher. Too often vouchers are viewed as being, rather than 
what they do is they say okay, here is the education pie, now if the 
State does vouchers, it means some people are going to win because they 
are now going to get a croucher and they did not get one before, and 
there are going to be certain people that lose because that education 
pie is going to be split more ways than what it was before.
  What a tax credit does it takes this education pie and grows it so 
that there will be more dollars invested in it, and basically our 
public schools will win, our kids that go to public schools will win. 
Our private and parochial schoolers, home schoolers, just they will all 
now have an opportunity, and we have a much better probability that we 
will not leave a child behind than what we have under the current 
system.
  Mr. SCHAFFER. Mr. Speaker, every system has these education 
scholarship foundations that exist but the requests for scholarships, 
the applications, are far exceeded by dollars available, and usually 
these foundations are started

[[Page H2508]]

by some philanthropist who wants to help them and make a difference in 
one neighborhood or another, but we just need more of them because the 
record is very clear. These foundations, these scholarship funds work.
  I brought with me today some testimony from a little boy in Colorado 
who testified in the Colorado legislature, before the Colorado 
legislature as it considered an education tax credit in my State, and 
here I will just read a couple paragraphs. His name was Joe Ray Sierra, 
and this testimony was delivered just last February.
  He says, ``I am really glad that I do not have to go to my old school 
anymore. There are always people selling drugs there. I was afraid to 
go to school because I did not want to get beat up anymore at my old 
school. They gave me answers to the CSAP test,'' which is the State 
standardized test in my State. ``They gave the kids the answers,'' and 
I will go on.
  ``They were not very helpful to me with math, reading and writing. I 
did not like my old school at all. I like my new school because they 
help me better. They teach me in a way that is right for me. The 
teacher is nice to me and so are the other school kids. I also like 
that I do not have to switch classes. I like Dove Christian Academy so 
much that I want to come back again. The new school I go to does help 
me a lot more. Dove Christian Academy does different things to help me 
learn. I read a lot better now and I think my math and writing are 
better, too. I am really thankful to ACE,'' and ACE is the name of the 
scholarship foundation, one of them, in Colorado.
  ``I am really thankful to ACE for the money they have given me. I am 
so glad I was able to come to the school and learn.''

                              {time}  2310

  ``Now I have that chance to get a good education and maybe even go to 
college. I never would have ever thought that before, if it weren't for 
ACE.'' And Joe's teacher also testified that ``Joe Ray was designated 
learning disabled in the local public school. At the end of his fifth 
grade year he was reading between a second and third grade level. He 
hated writing anything. His distraction level was extremely high. And 
to complicate things more, he had some fine motor problems.''
  So he was basically doomed in the school that the government told him 
to attend. Some schools are great for kids. Most public schools are 
great for kids and kids who are just like Joe Ray. But in this case the 
school was not what he needed. He got the scholarship, and he is at the 
school that makes more sense for him now, an academy that better meets 
this child's needs, and the kid is back up to grade level and now he is 
even talking about going before the State legislature and talking about 
going to college.
  It is kids like this that stand to gain from this tax credit debate. 
We are going to have some opposition from people who think choice is a 
bad idea or that liberty tends to threaten the power of the 
bureaucracy. And that is true to a degree. And if we only care about 
the bureaucracy, then we are going to keep voting to give it exclusive 
monopoly status in running schools. But if we decide that kids like Joe 
Ray Sierra matter more than the government, matter more than the 
bureaucracy, matter more than programs and the internal language of 
education generally, then we will make the country better for lots of 
kids just like him.
  Mr. HOEKSTRA. Mr. Speaker, if the gentleman will yield, I think this 
really points out a couple of things. Number one, whatever we do in 
education, the focus has to be on the kids. It has to be focused on Joe 
Ray. It cannot be focused on the bureaucracy or the system. So we have 
to keep the focus on the kids.
  The second thing is we have to keep the focus on every child. We 
cannot afford to leave a single child behind.
  The third thing is we really have to drive for parental involvement, 
or adult involvement with every kid to enable them to learn. Somebody 
has to ask them at the end of the day how their day was at school, what 
they have to get done, and what they have to get ready for for 
tomorrow.
  And the other thing we need to do is what Joe Ray pointed out here, 
is that every child has the right to go to a school where the only 
thing that they have to worry about and be afraid of is the test, the 
next test, the next exam, not about the drugs or the violence that is 
going on. Every child deserves and has a right to go to a safe and 
drug-free school, where the only thing they fear is the exam they are 
going to get in the afternoon and not walking from class to class or 
from their locker to their next classroom.
  Mr. SCHAFFER. We hear all the time from the defenders of the 
bureaucracy that if we move forward with these simple choice 
mechanisms, and we found a way to move forward with a choice mechanism 
that does not even affect a single penny of the money appropriated to 
the bureaucratic model, they still tell us this is going to somehow 
harm education.
  The gentlewoman from Pennsylvania has seen that choice makes a 
difference in the lives of Pennsylvania children.
  Ms. HART. The whole situation of labeling a child has become, I 
think, a big problem in a lot of our government schools. If a child is 
told at a young age there is something wrong with him or her, then that 
child is going to believe it. I think the ultimate solution is, as the 
gentleman suggests and as Joe Ray pointed out, every child who is given 
an opportunity to excel and encouraged to excel will. They will to the 
degree that they are able, instead of to the degree someone told them 
they can.
  One of the opportunities tax credits would also gives us is the 
opportunity for children who would not be able to afford some of the 
institutions that might believe specialize and be able to help them 
through a difficulty, whether it is a speech difficulty or some other 
kind of behavioral problem, that they will have access. I think it is 
important for their parents to be the ones who can make the choice of 
which type of educational institution is going to be best for the 
child.
  Unfortunately, right now, cost prohibits them from doing that in a 
lot of cases and they only have one option. And sometimes that works 
for the student, but a lot of times it does not. We find some wonderful 
institutions closing their doors because the parents who would love to 
send their children there just cannot find the resources to do it. So 
this is another way to help those unique and diverse institutions that 
can help a lot of kids to continue to provide those services.
  Mr. SCHAFFER. I want to point out again, Mr. Speaker, that the 
existing bureaucratic structure of education funding in America that is 
represented by this chart will not be affected by an education tax 
credit proposal. Now, that is a disappointment to some. I think this 
needs to be reformed. No doubt about that.
  And I want to point out again for those who believe we are giving up, 
we are not giving up. We are going to continue to work on this at other 
committees and at other points in time. But the politics of this system 
is pretty brutal. All of these agencies that relate to one another 
fight very hard to make sure we here in Congress do not tamper with 
their line of work and their business. So fairness in the American 
education system of today is measured by the relationship between all 
of these agencies, the relationship between different programs within 
the Department, the relationship between all 50 States and districts.
  Mr. HOEKSTRA. If the gentleman will yield for just a second. We had a 
great example today. The House was in recess for, what, 7 hours today, 
as we debated welfare reform, or certain people debated welfare reform. 
And the focus on the debate was not about what is good for the 
individual recipient at the end of the welfare stream, to give them a 
helping hand up, the whole debate was between the politicians as to who 
was going to control the spending and who was going to put the 
accountability measures in.
  We spent a whole day waiting as politicians fought not about what was 
best, but who was going to be in control, whether it was going to be 
politicians in Washington or bureaucrats and politicians at the State 
level. The debate was in the red parts here, without any consideration 
to the people at the bottom and without any consideration to the people 
at the top, the taxpayers.
  Mr. SCHAFFER. And it is not just about the bills being proposed in 
Congress. These groups, they have organizations, sometimes they 
unionize, they

[[Page H2509]]

raise money, and they spend money on campaigns. Talk about campaign 
finance reform. These organizations that represent employees of this 
bureaucratic structure of education are the most powerful political 
forces in American politics today, especially when you get down to the 
school level.
  These schools are organized, and the employees of them constitute the 
largest union in America and spend more money on the political process 
than anyone else. So that is why we get the system we have. It is not 
by accident. This system was deliberately designed, if you can believe 
that, and it was because these people have such powerful political 
influence.
  I would ask my colleague from Pennsylvania to tell us about the 
politics of education. Do people in this vortex of education 
bureaucracy get involved in your campaign?
  Ms. HART. Unfortunately, yes. And I think a lot of us have sort of 
two different opinions of people involved in the education system. We 
all know that there are some fantastic educators out there. Some of 
them we would count probably as our best friends, spouses, family. But 
there is also this behemoth structure of sort of protecting the 
bureaucracy folks, and that is a big problem.
  Obviously, they have gotten involved in a lot of races, and I am sure 
they have been involved in the gentleman's as well as they have been 
involved in mine. The concern I hear from parents has nothing to do 
with preservation of the education bureaucracy. I never hear them 
saying, oh, please, can you make sure we still have this very strong 
bureaucracy in my school district so that we spend more money on the 
administration than in the classroom. No one ever asks me that. They 
always say how can we get more dollars to go to directly help the kids.
  Well, let us get that bureaucracy to work with us on that goal, and 
then we will all be on the same page.
  Mr. SCHAFFER. And while everybody on this chart has lobbyists, the 
two people that do not have lobbyists are the taxpayer and the child. 
That is our job.
  Mr. HOEKSTRA. When we went to the 20 States with the Education at a 
Crossroads, every time we brought in a parent or a local school 
principal or a teacher, they always focused on the child. And the 
parents would come in and say, please, do this because we have to help 
Johnny, we have to help Mary. They would come in with the names, or 
they would come in with their kids and say this is what it is all 
about.
  When we have the hearings with the bureaucracy, it is all about 
forms, rules, regulations, mandates, and there is not a name or a face 
or a child attached to it. And that was the power of going around the 
country and spending the time. Because when you bring the parents in, 
our colleague from Pennsylvania is exactly right, parents and teachers 
and local principals talk about that bureaucratic structure not very 
fondly. But they get passionate when they start talking about the kids 
in the classroom, because these principals and these teachers, that is 
why they went into education. They have got a passion for these kids. 
What they do not have a passion for is the paperwork, the rules, the 
mandates and the bureaucracy.

                              {time}  2320

  Mr. SCHAFFER. Mr. Speaker, fairness in education should not be 
measured by the relationship between all government agencies. It should 
be measured by the relationship of children.
  What we have today is a system where some children win, and some 
children lose. For one reason or another, the children from the poorest 
households, who come from inner city areas, who come from communities 
that do not have a lot in terms of public resources, those are the 
children that suffer the most. What we have seen through education tax 
credits that have existed in States through scholarship foundations is 
that the vast majority of these dollars are distributed on the basis of 
need, and I know that is true in Pennsylvania as well.
  Ms. HART. Mr. Speaker, I actually represent a school district that 
has been termed academically bankrupt. Any student who goes to that 
school district is sentenced to not learning anything, and it is not 
right. A lot of money is spent, and we are getting no results. We do 
need to change the sytem.
  Mr. SCHAFFER. Mr. Speaker, I am grateful to the commitments from our 
President, who has given his promise to help us get this bill passed, 
the promise of the Speaker and our leadership here in the House to get 
this bill to the floor. It is because of their commitment to children 
and an education tax credit that we are having this debate now. I thank 
the gentleman from Michigan (Mr. Hoekstra) and the gentlewoman from 
Pennsylvania (Ms. Hart) for participating in this Special Order. We 
will do it again next week to speak about solutions for our children.

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