Commentary

Reagan’s ABCs

By Dan Lips
June 1, 2001
During the 1980 presidential campaign, Ronald Reagan dubbed the fledgling Department of Education “President Carter’s new bureaucratic boondoggle.” Two decades and billions of dollars later, Reagan’s assessment holds true.

Under the department’s watch, the American education system has continued to slouch toward utter failure. Test scores show that one out of three fourth graders can’t read. A significant achievement gap between the races still exists. Meanwhile, a recent audit of the department’s records found that nearly a half billion dollars of taxpayer funds intended to support education were either stolen or “missing.”

Yet a Republican president will soon sign a bill passed by a Republican Congress that increases spending on that bureaucratic boondoggle by more than 10 percent. Unable to pass the only valuable components of his education package, such as parental choice and program consolidation, President Bush is settling for a bill crafted by Teddy Kennedy that arms federal bureaucrats with a national test and billions in new spending.

Conservatives need to consider the ominous prospects of expanding federal power over education. Federal funds for character education may sound fine now, but imagine what that might mean under, say, a “Hillary” administration. Before trading a vast expansion of federal authority for a bipartisan photo-op, the new administration should take a lesson from President Reagan.

While politics prevented Reagan from delivering on his promise to abolish the Department of Education, he at least slowed the growth of the federal agency to 5 percent annually throughout his administration.

More important, Reagan understood the proper role of the federal government in education: “Education is the principal responsibility of local school systems, teachers, parents, citizen boards, and state governments,” he said. Adhering to this principle, Reagan sought policies that “insure that local needs and preferences, rather than the wishes of Washington, determine the education of our children.”

While focus group politics have frightened President Bush away from even mentioning the words “abolish” and “education” in the same sentence, the new administration has an opportunity to enact a positive federal program that empowers parents and lets the states call the shots on new spending. Again, the answer lies in Reagan’s playbook.

Throughout his administration, President Reagan called for an education tax credit that allowed parents to subtract a portion of their child’s private-school tuition payment from their tax bill. While his package died in Congress, the idea is back. Conservative lawmakers across the country have taken Reagan’s tax credit and polished it into a political winner: tax credits for donations to organizations that give scholarships to poor children to attend private schools. A $500 tax credit in Arizona raised $14 million for scholarships last year. Legislators in Florida and Pennsylvania passed similar programs this spring.

Now, lawmakers on Capitol Hill are considering education tax credits. Rep. Pete Hoekstra (R-Mich.) recently introduced a scholarship tax-credit bill in the House that provides a partial tax credit for donations for up to $500 for individuals, and $100,000 for corporations. Similar education tax credits, including a dollar-for-dollar credit, have been introduced by other members of Congress.

The potential impact of these programs is enormous. A recently published fiscal analysis by the Cato Institute found that a national scholarship tax credit could potentially raise nearly $6 billion per year — enough to give $2,000 scholarships to nearly 3 million low-income children.

Along with aiding millions of families, the scholarship tax credit promises to achieve another of Reagan’s primary goals: returning federal power over education to the people. Since many of the scholarship recipients would be from public schools, state and local governments would reap significant savings — roughly $12 billion, according to Cato’s estimates — as students switch from public to private schools. State coffers will swell with surpluses — dollars that can be used for tax cuts, new education programs, or however voters see fit.

More important than the fiscal savings, this small federal program could spark additional reform initiatives that would empower parents across the country.

The 50 million school children across the country deserve more than new spending and a national test from the president who pledged education as his top priority. Instead of dumping more money into Jimmy Carter’s bureaucratic boondoggle, President Bush should get behind the scholarship tax credit. In the process, the new president could empower millions of parents with school choice, return federal power to the people, and, finally, deliver a long overdue win for the Gipper.

Dan Lips is an education research assistant.