Lily Belle Poling, Staff Reporter

Connecticut legislators are fighting a Republican budget bill that would increase the federal tax on Yale’s endowment.

The proposed legislation, dubbed the “One Big Beautiful Bill Act,” was advanced by the U.S. House of Representatives early Thursday morning by a single vote. If passed by the Senate and signed into law, the expansive bill would impact healthcare, military spending and small businesses, as well as increase taxes on universities’ investment incomes. 

The bill proposes a 21 percent excise tax on private university endowments that allot more than $2 million per student — a cutoff which will impact a few wealthy institutions, including Yale. The current tax level, established under President Donald Trump in 2017, is 1.4 percent for schools with endowments of more than $500,000 per student. 

Yale President Maurie McInnis sent an email to university affiliates on Thursday encouraging them to contact their senators and ask them to vote against the bill. She emphasized that Yale’s endowment of roughly $41 billion is fundamental to the University’s global impact and ability to support students. Last fiscal year, Yale spent $1.9 billion of its endowment income. Eighteen percent of that expense was allocated toward student financial aid. 

“The Republican budget bill advances the Trump Administration’s reckless and irresponsible assault on higher education,” Connecticut Senator Richard Blumenthal wrote in a statement to the News. “This full blown attack targets thousands of students who depend on financial aid and loan programs and threatens lifesaving research – many of them funded by endowments that would be taxed.”

The tax increase is considered a front in the U.S. president’s attack on elite universities, which he has cast as left-wing echo chambers. In its proposal for the bill, the House Ways and Means Committee wrote that the One Big Beautiful Bill Act “holds woke, elite universities that operate more like major corporations and other tax-exempt entities accountable, ensuring they can no longer abuse generous benefits provided through the tax code.” 

The proposed legislation would also amend student loan policy. It would cut direct subsidized loans, which relieve student debtors from paying interest on their loans while enrolled in school. This change could drive up student debt and increase the amount of time students spend paying off their loans. 

Roughly six percent of Yale students take out loans, as of June 2024. 

Connecticut’s five representatives in the House, all Democrats, voted against the bill, which passed 215-214 along party lines. Congressional Democrats have criticized the bill’s cuts to social services, including Medicaid and the Supplemental Nutrition Assistance Program. The bill’s Republican champions have touted its individual and small business tax cuts and boosted funding for defense.

Congressional Republicans proposed the bill using the budget reconciliation process, which means that the bill will require only a simple majority to pass in the Senate — and will be immune to filibuster use. However, the One Big Beautiful Bill Act is expected to face challenges in the Senate as Republican legislators seek major amendments. 

Ahead of the bill’s passage in the House, Rosa DeLauro, the representative for Connecticut’s third Congressional district, which includes New Haven, pointed out the legislation’s disproportionate benefits for high-earning Americans.

“Prices are rising at the hospital, at the grocery store, at home, on baby supplies, and in child care,” DeLauro wrote in a press release last week. “We need policies that put more money in hardworking Americans pockets – not handouts for billionaires and the biggest corporations.” 

Connecticut Senator Chris Murphy, a leading anti-Trump voice in Congress, took to social media with a video denouncing the bill. 

He cited an analysis from the nonpartisan Congressional Budget Office which found that roughly 15 million people could lose health insurance due to the bill’s Medicare cuts.

“We’re going to mobilize all across the country to try to stop final passage of this legislation,” Murphy said in the post. “It’s an absolute disaster for our economy. It’s a disaster for families.”

Representative Jodey Arrington of Texas is the lead sponsor of the One Big Beautiful Bill Act.