Donald Trump was never a major presence in the school-choice world—he didn’t give give to activist groups, or back New York’s growing charter-school movement. But over the last few months he’s begun loudly singing their praises, a major change of thought that coincides with the growing influence within his campaign of donors—many with hedge fund backgrounds—who help fund that movement.
Trump’s campaign has framed the new emphasis as part of his new effort to reach out to black and Hispanic voters. His polling numbers with both demographics are abysmal, and he needs all the help he can get. But the real calculus behind his shift is likely more complicated. And it puts him in the middle of a debate that involves billionaire hedge-fund bosses, multimillion-dollar pension sums, and—in theory—every school child in America.
A handful of hedge fund bosses have long played outsize roles in the school-choice movement, which looks to increase enrollment in charter schools and give families vouchers to spend at the school of their choice. Several of those bosses are now backing Trump, just as he seems to have finally embraced their cause. Robert Mercer, for instance, heads a fund called Renaissance Technologies, and his family foundation has spent big to boost pro-school choice efforts. And John Paulson, another major Trump backer who heads a hedge fund, has poured millions into New York’s Success Academy charter school network.
Investopedia reported in March of this year that the federal tax code provides benefits to hedge funds that invest in charter schools. In 2000, then-President Bill Clinton set up a tax credit for banks and private equity funds that lend nonprofits the money they need to start charter schools.
“By combining the various credits with the interest from the loan itself, a lender can almost double his investment over the seven-year period,” wrote Juan Gonzalez at the New York Daily News. Not bad!
Trump, of course, isn’t a hedge-fund guy. And he’s criticized tax policies that give them special perks. He also hasn’t been a big school-choice guy; he briefly mentioned charter schools in his 2000 book The America We Deserve, but otherwise stayed mum on them until launching his 2016 bid. He mentioned them briefly at the Miami Republican primary debate in March, saying Ben Carson supported them.
And in April, Ben Carson told The Washington Post that he had encouraged Trump to start talking about school choice.
“He’s been very enthusiastic about that suggestion,” Carson continued. “He’ll have to follow through and get through to those kids and families who don’t feel like they’re getting the best possible education.”
But despite that alleged enthusiasm, Trump still didn’t make much of a point to praise the charter-school movement.
In the meantime, he took a little heat for his silence. A few hours before he delivered his convention speech on July 21, the Washington Examiner ran a story headlined, “GOP megadonor wants Trump to start praising school choice.” The piece suggested that Betsy DeVos—one of the most powerful Republican mega-donors, and an ardent backer of charter schools—wouldn’t back Trump unless he started vocally praising the school-choice movement.
A few hours later, in Trump’s convention speech, he alluded to the charter-school movement.
“We will rescue kids from failing schools by helping their parents send them to a safe school of their choice,” he said. “My opponent would rather protect bureaucrats than serve American children.”
Less than a month later, Trump’s support for school choice had ramped up from understated to explicit. On Aug. 17 in West Bend, Wisconsin, he explicitly endorsed the school-choice movement.
“On education, it is time to have school choice, merit pay for teachers, and to end the tenure policies that hurt good teachers and reward bad teachers,” he said.
EdWeek noted that the mogul mentioned school choice at least three times in August: in West Bend, in his major economic policy speech in Detroit, and again during a speech in Wilmington, North Carolina.
Quite a change for a guy who, just a month earlier, evinced no understanding of the difference between a charter school and a charter bus.
And it raised eyebrows in the pro-school choice world. One longtime school-choice activist, who didn’t want to speculate about the Trump campaign’s internal calculations on the record, noted that Jeb Bush, Marco Rubio, Ted Cruz, and Rand Paul all have close ties to those efforts. But from Trump, they just got crickets—until his RNC speech.
“Glad someone got to him,” he emailed earlier this week.
The Trump campaign didn’t respond to a request for comment on who that someone might have been. But Trump’s brand spanking new focus on charter schools coincides with the growing clout of the Mercer family in his presidential campaign. On Aug. 17, The Hill reported that billionaire family—who had previously supported Ted Cruz—was behind major staffing shifts that Trump made. Politico and The Washington Post have also explored the Mercers’ substantial influence on him.
Rebekah Mercer, who runs the family’s charitable foundation and homeschools her four children, is known as a strong supporter of school-choice policies. Her foundation is a generous supporter of the Moving Picture Institute, which has made movies that support the school-choice movement. Their foundation also gave almost $1 million to the Barry Goldwater Institute from 2011 to 2014. That organization is known nationwide for its role in supporting Arizona’s school-choice policy overhauls. Mercer is also a board member of a conservative think tank called the Manhattan Institute, which has drawn ire from national teachers unions for its support of charter schools.
The Wall Street Journal reported in June that American Federation of Teachers head Randi Weingarten has pushed for school districts to divest their pension funds from hedge funds whose managers support the think tank. The paper noted that Weingarten can influence decisions regarding the investment of teacher pension plans worth $1 trillion—that’s trillion with a T.
That’s how politically electric the school-choice issue has become. And the Mercers are in the thick of it. Thanks (probably) to their influence, Trump is too.