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Why Republicans have failed to scrap the Department of Education

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“That department should be abolished,” said President Ronald Reagan about the Department of Education in 1983, echoing a campaign promise. In 1995 while running for president, Lamar Alexander, a former education secretary under President George H.W. Bush, vowed to eliminate the department he once ran. In 2022 Betsy DeVos, after serving as education secretary under President Donald Trump, said she thought her department “should not exist”. In September Mr Trump himself chimed in: “I’m dying to get back to do this. We will ultimately eliminate the federal Department of Education.” Republicans have threatened to abolish it for decades. So what is taking them so long?

The Education Department (ED) was established in 1979 by President Jimmy Carter as part of a campaign promise to the National Education Association, America’s largest teachers’ union. Before that education matters were handled by the Department of Health, Education and Welfare. Detractors argued that there is no constitutional authority for a federal education department. Since then, the issue has reliably surfaced as a Republican talking point. In the current cycle the topic duly appeared in Project 2025, a presidential-transition plan developed by the Heritage Foundation, a conservative think-tank, for Mr Trump.

Yet it turns out that breaking up is hard to do. The department handles all federal financial aid for students, which involves over half of all undergraduates. That this matters is particularly obvious when it goes wrong: witness this year’s FAFSA debacle, when a buggy website prevented hundreds of thousands of students from applying for federal aid and potentially enrolling in college. If the ED were eliminated, this task would have to go somewhere else, probably to the Treasury Department.

The ED also provides funding to public schools (though they receive most of their money from state and local governments). Federal money helps schools support poor students and those with disabilities. In the absence of the ED that funding would have to be disbursed from somewhere else—again, probably Treasury. Another of the ED’s responsibilities is overseeing civil-rights enforcement in schools. Without it, that would probably fall to the Department of Justice. The agency collects national data on schools. If the ED were eliminated, this task could migrate to the Census Bureau.

To truly eliminate the ED, and the tasks within it, Congress would need to act. That probably won’t happen. Reagan realised as much in 1985. “I have no intention of recommending the abolition of the department to the Congress at this time,” he wrote in a letter to Senator Orrin Hatch, a fellow Republican and chairman of the Senate Labour and Human Resources Committee. He cited lack of support in Congress as his reason for keeping it.

Mr Trump, if re-elected, would probably face the same obstacle. Americans generally want to fund public schools. Although 60% of adults (and 88% of Republicans) think that the government is spending too much, 65% of adults (and 52% of Republicans) say it is spending too little on education. And even if he could win congressional support, abolishing the ED would not affect what children learn on a daily basis.

“The only thing the Department of Education definitely doesn’t do is education,” says Daniel Currell, a former senior adviser in the ED in the Trump administration. Most decisions about what children learn and do from kindergarten until they graduate from high school are handled by the state and local authorities. That is why Republican politicians have been able to use local rules to remove critical-race theory from classrooms, for example, and ensure that transgender children do not take part in some school sports.

So why do Republicans keep banging on about abolition? Probably because it is a lot easier than talking about policy nuances such as the privatisation of federal aid, supporting local control and fears of government overreach. In 2011 Rick Perry, then the governor of Texas and competing in the Republican primary, listed the departments he would eliminate should he be elected president: Commerce, Education. “The third one I can’t. Sorry. Oops.” The third was the Department of Energy, the agency he would later run under Mr Trump. Perhaps he should have forgotten Education instead.

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Economics

At the state level, democracy in America is fracturing

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The residents of Bristol, Tennessee and Bristol, Virginia share a border, a downtown and even a Nascar speedway. But thanks to the quirks of American federalism, the 27,800 Bristolians who live in the Volunteer State reside in America’s least democratic state, while their 16,800 neighbors to the north live in one of the most democratic.

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Economics

BOI Reporting and the impact of the recent Federal Injunction

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The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency

The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency and mitigate risks such as money laundering, terrorist financing, and other illicit financial activities. The CTA aims to close loopholes and create a fairer business environment by requiring certain entities to disclose their beneficial ownership information. However, recent legal developments have temporarily impacted compliance requirements, bringing attention to the act’s ongoing litigation and implementation.

Federal Court Decision and Its Implications

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al. (No. 4:24-cv-00478). This injunction temporarily halts the enforcement of the CTA, specifically its beneficial ownership reporting requirements. Additionally, the court order stays all deadlines for compliance.

As a result, reporting companies are currently not obligated to submit beneficial ownership information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). During the injunction, these entities are also shielded from liability for non-compliance with CTA mandates.

Despite this pause, FinCEN has clarified that companies may still voluntarily submit their BOI reports. This voluntary reporting option remains available for businesses that wish to align with the CTA’s transparency goals.

Overview of the Corporate Transparency Act

The CTA mandates that certain entities provide information about their beneficial owners—individuals who own or control a business. The act is intended to increase transparency, enhance national security, and reduce the anonymity that can facilitate financial crimes.

While the CTA has garnered support for its objectives, it has also faced legal challenges questioning its constitutionality. Courts in different jurisdictions have issued varying rulings, with some upholding the law and others granting temporary injunctions. For example, district courts in Virginia and Oregon have ruled in favor of the Department of the Treasury, asserting the CTA’s alignment with constitutional principles.

Compliance During the Injunction

Currently, the federal injunction exempts businesses from mandatory BOI filing requirements nationwide. This temporary halt will remain in place until further developments, such as a decision by an appellate court or a reversal of the injunction.

In response to the ruling, the Department of Justice, representing the Department of the Treasury, has filed an appeal. While the case proceeds through the legal system, FinCEN has confirmed its compliance with the court order.

Looking Ahead

The legal proceedings surrounding the CTA highlight the evolving nature of financial regulation. As courts continue to deliberate, businesses should monitor updates to remain informed about their obligations. By staying informed and prepared, businesses can effectively manage their compliance responsibilities and contribute to efforts that promote financial integrity and transparency.

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Economics

After a chaotic scramble, Congress strikes a budget deal

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Donald Trump is the most powerful Republican politician in a generation, but the president-elect is still no match for the most nihilistic members of his own party. The budget chaos that unfolded on Capitol Hill as the Christmas break approached is only a preview of the difficult realities Mr Trump will face when he starts to govern next month.

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