Senate Passes Bill Allowing Education Saving Accounts
WASHINGTON (AllPolitics, June 24) -- The Senate Wednesday approved an education bill that would allow parents to set up tax-sheltered education savings account but the vote was too narrow to override a promised veto from President Bill Clinton.
With eight Democrats joining the Republican majority, the proposal passed with a 59-36 margin. Last week, a House vote was 57 votes short of a veto-proof majority.
"The president will veto it, and there are ample votes to sustain the veto. So, that was an exercise in total futility," commented Minority Leader Tom Daschle after the vote.
The new law would expand the tax-free education savings accounts that were created for college savings and approved by Congress last year. Other provisions would allow:
- The accounts could be used for school expenses starting with kindergarten.
- The maximum annual contribution would be $2,000.
- Deposits would not be tax-free but interest and withdrawals would.
- The money could be spent on children in public or private schools and pay for such things as tuition, equipment or transportation.
- There would also be tax breaks for prepaid tuition plans and employer-paid tuition.
Ideological divide shows again
"The point is, let's encourage America's families to save for
education," said Dianne Feinstein (D-Calif.), one of the
supporters of the bill. The plan also includes a provision, introduced by Feinstein, that would make it easier to discipline students who take firearms to school.
The majority of Democrats though took Clinton's view that the proposal was "bad education policy and bad tax policy."
"It won't do anything to strengthen our schools and, in fact would weaken public education by siphoning limited federal resources away from public schools," Clinton said in April. At that time the president called instead for school repairs and the hiring of 100,000 new teachers.
The president's position was echoed Wednesday by Sen. John Kerry (D-Mass.), who warned of the social danger entailed by the bill. Kerry maintained the measure would perpetuate "divisions in our country between those who have and those who don't."
However, Republicans -- all but two of whom voted in favor of the bill -- take the position that the savings accounts would give parents and local authorities more control over how education dollars should be spent.
Republicans have also accused Democrats of underestimating the incentive of the bill, which they say would likely leverage billions of dollars in private savings for education.
The savings would help with such ordinary costs as books, supplies, tutors, computers and transportation, and the special needs of disabled children, Republicans underline.
Experts estimate that the Education Savings Accounts bill would provide an average $7 annual tax break for parents with children in public school and $37 for parents with children in private school.