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"We will not stand by and allow the impact that dismantling the Department of Education would have on the nation's students, parents, borrowers, educators, and communities."
U.S. Sen. Bernie Sanders on Thursday led five members of Congress in a warning against the Trump administration's plan to "unilaterally dismantle" the Department of Education and demanded answers from the acting head of the agency about recent moves "to put federal workers on administrative leave, coerce employees into leaving their jobs, provide access to students' sensitive data, and illegally freeze vital funding."
"Over the course of two weeks, the Trump administration issued sweeping executive orders and sought to broadly and illegally freeze federal financial assistance," the lawmakers—Sanders (I-Vt.), Sen. Patty Murray (D-Wash.), Sen. Tammy Baldwin (D-Wis.), Rep. Bobby Scott (D-Va.), and Rep. Rosa DeLauro (D-Conn.)—wrote in a letter to acting Education Secretary Denise Carter.
"Federal employees have been targeted, in some cases for simply following the law. Elon Musk is attempting to shut down the work of entire agencies while gaining access to some of the federal government's most far-reaching and sensitive data systems. Media reports indicate a similar effort may be underway at the Department of Education," the lawmakers noted.
The letter continues:
The Department [of Education] has been a target of President [Donald] Trump and his unelected advisers since even prior to his inauguration. And recently, the department has put workers on administrative leave for attending trainings promoted by former Secretary Betsy DeVos, once touted among results achieved by the department, and coerced employees into leaving their jobs. Workers at the department—like those across the government—have been made to fear their jobs will be reclassified so that they lose employment protections. Some staff from the entity referred to as the Department of Government Efficiency have reportedly gained access to internal department data systems, including financial aid systems that include personally identifiable information on millions of students. These actions appear to be part of a broader plan to dismantle the federal government until it is unable to function and meet the needs of the American people.
"We will not stand by and allow this to happen to the nation's students, parents, borrowers, educators, and communities," the lawmakers stressed. "Congress created the department to ensure all students in America have equal access to a high-quality education and that their civil rights are protected no matter their ZIP code."
"We urge you to provide information on the steps the department is taking to ensure the continuity of programs that Americans depend on, the ability of the department to effectively administer programs for their intended purposes without waste, fraud, and abuse, and the safeguards in place to protect student data privacy," the legislators added.
Specifically, the letter asks for a list of officials "who have been granted access to personally identifiable or sensitive information," an "explanation of all steps the department has taken to protect" such data, the names of "all individuals placed on administrative leave or terminated" since Trump took office and all department communications to such employees, and confirmation that the department "has not frozen, paused, impeded, blocked, canceled, or terminated any awards or obligations since January 20."
The lawmakers' letter came on the same day that nearly 100 Democratic members of the House of Representatives wrote to Carter requesting a meeting to discuss "reports that the Trump administration has plans to illegally dismantle or drastically reduce" the Department of Education via executive order.
Both letters came ahead of next week's scheduled Senate confirmation hearing for Linda McMahon, a top fundraiser for Trump's campaign whom the president subsequently nominated for education secretary. McMahon—a billionaire who led the Small Business Administration during Trump's first term—is expected to face tough questions from Democratic senators about what one campaigner called her "documented history of enabling sexual abuse of children and sweeping sexual violence under the rug" during her tenure as World Wrestling Entertainment CEO.
The very future of the Department of Education is uncertain, as Trump has repeatedly vowed to abolish the agency, which was established during the administration of President Jimmy Carter in 1979.
"I told Linda, 'Linda, I hope you do a great job and put yourself out of a job,'" Trump quipped earlier this week.
"We do not need to spend almost a trillion dollars on the military, while half a million Americans are homeless and children go hungry," said Sen. Bernie Sanders.
The United States Senate overwhelmingly passed an $895 billion military funding bill on Wednesday as critics blasted what many called misplaced spending priorities and highly controversial provisions that ban gender-affirming health coverage for children of active-duty service members and prohibit the Pentagon from citing casualty figures issued by the Gaza Ministry of Health.
Senators voted 85-14 for the National Defense Authorization Act (NDAA) for fiscal year 2025. The following senators voted against the legislation: Tammy Baldwin (D-Wis.), Cory Booker (D-N.J.), Mike Braun (R-Ind.), Andy Kim (D-N.J.), Mike Lee (R-Utah), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Rand Paul (R-Ky.), Bernie Sanders (I-Vt.), Adam Schiff (D-Calif.), Debbie Stabenow (D-Mich.), Elizabeth Warren (D-Mass.), Peter Welch (D-Vt.), and Ron Wyden (D-Ore.). Sen. JD Vance (R-Ohio), the vice president-elect, did not vote on the bill.
"We do not need to spend almost a trillion dollars on the military, while half a million Americans are homeless and children go hungry," Sanders explained earlier this month.
The peace group CodePink said it was "disappointed" by the Senate's passage of the NDAA, "which allocates nearly $1 trillion in taxpayer dollars to weapons and warfare while essential services like healthcare, education, food, and housing remain underfunded."
"Half of the budget will go directly to the pockets of private military companies in the form of contracts and weapons deals," the group continued. "On top of the massive topline and the large allocation to private companies, the Pentagon has never been able to pass an audit. Much like every Pentagon budget before, this money will be largely unaccounted for, with very little transparency."
"This budget is a huge slap in the face to working-class families who are struggling to make ends meet," CodePink added.
An amendment introduced on Monday by Baldwin and co-sponsored by two dozen of her Democratic colleagues "to remove language that would strip away service members' parental rights to access medically necessary healthcare for their transgender children" failed to pass.
Speaking on the Senate floor on Tuesday, Baldwin said that Congress has "broken" its commitment to the troops "because some Republicans decided that gutting the rights of our service members to score cheap political points was more worthy."
"We're talking about parents who are serving our country in uniform, having the right to consult their family's doctor and get the healthcare they want and need for their transgender children," she added. "Some folks poisoned this bill and turned their backs on those in service and the people that we represent."
Olivia Hunt, director of federal policy at Advocates for Trans Equality, said in a statement Wednesday that "every military family deserves respect and access to essential healthcare—free from the interference of political agendas."
Hunt continued:
Denying lifesaving, medically necessary care to trans members of military families creates profound hardships, forcing service members to make impossible choices between their duty and the health and well-being of their loved ones. Politicizing access to evidence-based healthcare undermines the principles of fairness, dignity, and respect that our nation aspires to. No one should have to choose between their duty and protecting their family.
By passing this harmful legislation, the Senate has failed our service members and their families. This decision prioritizes political gamesmanship over the dignity, rights, and well-being of those who serve our nation and sets a dangerous precedent of governmental overreach into decisions that should remain between doctors and families.
Some advocates including Hunt want President Joe Biden to veto the bill.
"If signed by the president, the passage of the NDAA will mark the first piece of federal legislation to restrict access to medically necessary healthcare for transgender adolescents," Hunt added. "It would be heartbreaking for an administration that has sought to advance the rights of LGBTQI+ Americans more than any other to date, to enact a law that would endanger countless trans youth. We urge President Biden to take a strong stance for trans youth and their families and veto this bill."
Congress has passed the NDAA, which contained a provision banning the coverage of gender affirming care for the children of active duty military. This is the first anti-LGBTQ bill to pass congress in almost 3 decades but certainly won't be the last. This will be Biden's legacy.
— Alejandra Caraballo ( @esqueer.net) December 18, 2024 at 10:02 AM
Human Rights Campaign president Kelley Robinson said that "President Biden has the power to put a stop to this cruelty."
"He should make good on his promises to protect LGBTQ+ Americans, defend military service members and their families, and ensure this country's politics reflect the best of who we are," Robinson added. "President Biden must veto this bill."
The NDAA also contains a provision prohibiting the Department of Defense from officially citing "fatality figures that are derived by United States-designated terrorist organizations" or governmental entities or organizations that rely upon such data. Critics say the measure is meant to censor the truth about Israel's 14-month assault on Gaza, which has left more than 162,000 Palestinians dead, maimed, or missing. Various United Nations agencies, international charities and rights groups, and even the Israeli military and U.S. State Department have cited Gaza Health Ministry casualty figures, which have been deemed accurate—and likely an undercount—by experts around the world, including Israeli military intelligence and U.S. officials.
"In other words," Security Policy Reform Institute co-founder Stephen Semler said of the provision, "it's effectively a ban on talking about deaths in Gaza."
The financiers are spending big on candidates that will preserve the carried interest tax deduction, which allows them to pay a lower 23.8% tax rate on the capital gains passed on to them as compensation rather than the top income tax rate of up to 40.8%.
Eleven of the top 50 individual contributors to political campaigns this election cycle work in the finance industry—specifically in private equity—and are betting big on congressional and presidential candidates who will protect one very special federal tax break worth billions of dollars to them: the carried interest loophole.
So far this election cycle, these 11 private equity billionaires have already contributed more than double the amount that more than 147 private equity firms pumped into federal elections in all of the 2016 election cycle. Private equity—which largely entails rich investors buying and selling companies—is only a part of a larger finance industry that includes hedge funds, securities firms, banks, and investment companies and managers.
This loophole, of course, is not the only tax perk that private equity firms favor. They also push to keep the tax rate on capital gains much lower than the tax rate on ordinary income.
Finance—securities and investments—tops the list of industries giving the most money to date this round, with more than $1 billion in contributions to candidates, parties, and PACs, according to the nonpartisan political funding tracker Open Secrets.
The 11 private equity leaders have contributed more than $223 million to congressional and presidential candidates and the super PACs that support them, accounting for almost 20% of all money contributed by thousands of companies in the finance sector, according to Open Secrets data. During the 2016 election cycle, the Center for Media and Democracy (CMD) reported that the 147 private equity firms it analyzed contributed $92 million to candidates and super PACs.
The carried interest tax deduction allows private equity investment managers to pay a lower 23.8% tax rate on the capital gains passed on to them as compensation rather than the top income tax rate of up to 40.8% they would pay on the same amount if it were considered wage or salary income.
“Carried interest is a form of compensation paid to investment executives like private equity, hedge fund and venture capital managers,” CNBCexplains. “The managers receive a share of the fund’s profits—typically 20% of the total—which is divided among them proportionally. The profit is called carried interest, and is also known as ‘carry’ or ‘profits interest.’”
The $223-million investment these 11 private equity billionaires are making in campaign contributions in hopes of keeping the loophole intact will save the industry an estimated $14 billion in taxes over 10 years, as Senate Democrats pointed out in 2022 when they were forced to let go of legislation to get rid of it.
This loophole, of course, is not the only tax perk that private equity firms favor. They also push to keep the tax rate on capital gains much lower than the tax rate on ordinary income. And some private equity managers have other public policy interests, like billionaire Jeffery Yass, the largest individual donor this election cycle, who gives millions of dollars to school choice groups and other conservative causes.
On April 15, 2024, Sen. Tammy Baldwin (D-Wis.) introduced the Carried Interest Fairness Act (S. 4123), which she co-sponsored with 14 other senators, in order to eliminate the tax loophole, something that Democrats have long sought to fix. The proposed legislation treats the buying and selling of companies as ordinary income if that is a firm’s primary business. “By closing the carried interest loophole, we’ll make our tax code fairer for working families, cut the deficit, and ensure that those at the top of the food chain aren’t exploiting the system to further enrich themselves,” Baldwin said in a press release.
While 90% of the private equity contributions made so far this election cycle have gone to Republicans or the PACs that support them, not every Democrat is opposed to eliminating the loophole.
Before Sen. Kyrsten Sinema (I-Ariz.) left the party to become an independent in 2022, she “courted private equity titans and received the maximum allowed amount from the PACs of leading private equity firms such as The Carlyle Group, along with the industry’s trade organization, the American Investment Council (AIC),” CMD reported.
Private equity billionaires have dramatically increased their spending since Sinema decided not to run for reelection this year.
In 2017, as part of then-President Donald Trump’s Tax Cuts and Jobs Act, the length of time needed to trigger the long-term capital gains tax was raised from one year to three just for private equity. The loophole itself was kept in the bill because of fierce industry lobbying, even though Trump groused that those who took the tax break were “getting away with murder.”
Former President Barack Obama and President Joe Biden both pledged to get rid of the unfair tax loophole. Obama never followed through, and Biden dropped the loophole fix from the Inflation Reduction Act due to opposition from Sinema. Anti-tax zealot Grover Norquist compares the situation to a dog chasing a bus. “You didn’t mean to catch the bus, you meant to whine about the bus,” he famously said.
Vice President Kamala Harris, the presumptive Democratic nominee for president, has made few comments so far on private equity and has not yet expressed her views about the carried interest loophole.