Bush’s School Tax Credit Plan Elicits Mixed Jewish Reaction

President Bush is using this year’s budget proposal to take another step into the thorny area of school choice.

Included in the budget, released Monday, is a proposal for tax credits of up to $2,500 per year for parents whose children are in failing public schools.

The money could be used for private school tuition or other educational needs, such as books, computers or transportation to a better school.

The proposal elicited predictably mixed reaction in the Jewish community, with supporters heralding the move and opponents accusing the administration of pushing through a back-door voucher plan.

A final budget won’t be approved for months– the House and Senate will have to pass their own plans, which will then need to be reconciled with Bush’s proposal — which leaves the final budget numbers far from certain.

Also included in Bush’s $2.13 trillion proposal:

Full funding for Israel — $600 million in economic assistance and $2.1 billion in military aid.

This is in keeping with a plan to increase Israel’s military aid by $60 million each year while decreasing its economic aid by $120 million each year until 2009 when, according to the plan, U.S. economic aid to Israel will end.

$1.3 billion in military aid and $615 in economic aid for Egypt. This is the first time that economic aid proposed for Egypt is higher than that earmarked for Israel.

$250 million in military aid and $198 million in economic aid for Jordan;

$75 million for the Palestinians in the West Bank and Gaza Strip for projects run by the United States Agency for International Development.

$60 million to the United Israel Appeal for refugee resettlement, primarily for resettling Ethiopian refugees in Israel.

On the domestic front, many of the feared cuts did not materialize, but proposed cuts in programs for elderly housing are prompting concern.

Those in favor of the tax credit see it as a serious move that could be followed by even stronger government support for parents to help send their children to private schools.

“It’s an important step in the right direction of leveraging federal tax policy to open greater educational opportunities,” said Nathan Diament, director of the Orthodox Union’s Institute for Public Affairs.

The Orthodox community would like to see the proposal open to a larger group of low-income families and not just restricted to children already in public schools.

The O.U. is hopeful the proposal is “the beginning of a new discussion over these kinds of policies,” Diament said.

But many in the Jewish community who support the public school system and are suspicious of any attempts to move federal money to private and religious schools are unhappy with the proposal.

“This is a voucher,” said Michael Lieberman, Washington counsel for the Anti-Defamation League.

The constitutionality of tax credits and vouchers may be different, but the public policy analysis is the same, according to Mark Pelavin, associate director of the Religious Action Center of Reform Judaism.

“What is this going to do to public schools?” he asked. “Tax credits are a danger.”

The Supreme Court has said there are certain kinds of tax credit proposals that could be crafted in a constitutional manner.

But guidance from the court on issues of direct and indirect public funding to private and parochial schools could become clearer in the spring when the high court is expected to rule on a high profile voucher case.

While Bush’s proposal is important in a policy sense for the Orthodox community, from a practical standpoint the credit is unlikely to apply to many Orthodox families, who for the most part already send their children to religious schools.

But there are families, mostly immigrant families, who send their children to public school because they can’t afford a Jewish school, according to David Zwiebel, the executive vice president for government and public affairs for Agudath Israel of America, a fervently Orthodox group.

This proposal is of value to the Jewish community, he added.

School choice and flexibility for parents is a clear priority for Bush, who lost the fight to include vouchers in his education reform proposal.

The president also wants money to research school choice programs.

The $50 million Choice Demonstration Fund, included in the budget sent to Congress, will fund school choice research and demonstration in order “to study the effects of expanded educational options for low-income parents, including opportunities to send their children to private schools.”

Meanwhile, most of the feared cuts in domestic social services did not come in the White House budget proposal.

“The picture for us is not nearly as bad as it could have been,” said Diana Aviv, vice president of public policy for the United Jewish Communities, the umbrella organization of the Jewish community’s federation system.

But even with no cuts, as with the $1.7 billion Social Services Block Grant, less money goes to programs because the budget has not been adjusted for inflation.

There were some modest increases in nutrition programs but other social service programs did not fare as well.

UJC is particularly concerned with a $9 million cut in funding for elderly housing, according to Aviv, who heads the UJC’s Washington Action Office.

“We’re very upset because the housing needs are enormous,” she said.

The administration also called for a charitable deduction for taxpayers who don’t itemize their deductions on their tax returns and to permit tax-free distributions from IRAs for charitable contributions, moves supported by Jewish groups.

“This could make a real difference to the nonprofit sector and doesn’t involve the same type of controversial direct government funding as charitable choice,” Pelavin said.