GOP Spoils for a Fight With Education Bill

Steaming toward an election-year showdown with President Clinton over education reform, Republican negotiators in Congress on Wednesday reached agreement on a bill that would provide new tax breaks for families who save for education costs--including tuition at private and parochial schools.

The measure, expected to clear Congress and go to the White House next week, would mark a significant departure from long-standing government education policies that have kept federal aid targeted on public schools.

Clinton has promised to veto the bill, which would allow parents of elementary and secondary school students to save up to $2,000 a year for tuition and other education-related expenses in special tax-sheltered savings accounts. A small band of Democrats who supports the bill is hoping to change Clinton’s mind but so far he has shown no willingness to bend.

If the bill is vetoed, Republicans are prepared to seize the opportunity to portray Democrats as defenders of a discredited status quo in public education in this fall’s campaign.

“I urge the president to abandon his stubborn defense of failed education policies and join our effort to implement real education reform,” said Sen. Paul Coverdell (R-Ga.), the bill’s principal author.

Democrats, for their part, hope to make a campaign issue out of the GOP’s opposition to Clinton’s more expensive proposals to reduce class size and repair crumbling school buildings. “The American people want real change, not spare change,” Education Secretary Richard W. Riley has said.

To ensure that the savings-account measure makes it to the president’s desk rather than stall in the Senate, GOP leaders decided to drop amendments that were even more controversial than the savings proposal: a permanent ban on Clinton’s plans to offer national math and science tests and a provision to give states vast new authority to decide how to spend federal education money.

“We’re bound and determined that one major piece of education reform actually goes to the president of the United States to see whether or not he will sign it,” said Sen. Slade Gorton (R-Wash.).

Those concessions are not likely to change Clinton’s position but they have won over a handful of Democrats--including Sen. Dianne Feinstein (D-Calif.)--who voted against the bill earlier.

Sen. Barbara Boxer (D-Calif.) opposed the expanded version of the bill but her office said Wednesday that she is undecided about the revised measure and plans to review it.

The compromise bill, which was drafted to resolve differences between versions passed earlier by the House and Senate, must be approved again by both chambers before it can be sent to the White House. Sponsors said that they are within reach of 67 votes for the bill in the Senate--the two-thirds majority that would be needed to override a veto. But the sponsors conceded that the House is unlikely to produce a veto-proof majority.

At issue is the plan to let most families put up to $2,000 in after-tax money every year into designated education savings accounts. Interest could accrue and money could be withdrawn tax free, so long as it is used for education expenses. Along with paying for tuition at private schools, withdrawals from the accounts could be used for such expenses as computers, uniforms and after-school tutoring.

Coverdell calculated that, if a family saved $2,000 a year for the first 10 years of a child’s life in an account earning 7.5% interest, it would earn $8,294 in interest and save $2,322 in tax payments.

Individual taxpayers earning more than $110,000 a year and joint filers with a combined income above $160,000 would not qualify for the accounts. The proposal’s estimated cost in lost tax revenue is $1.6 billion over 10 years.

Proponents said that the bill would encourage middle-class families to save for education costs and give them modest help in paying for private schools if they are dissatisfied with public education. A key political force behind the bill have been conservative pro-family groups, such as the Family Research Council.

Opponents have said that the measure would divert limited federal resources from public to private education. Clinton and major education groups--including the National Education Assn., the nation’s leading teachers group--have argued that the money would be better spent on his proposals to help states reduce the number of students in classrooms and renovate crumbling schools.

The bill was made even more unacceptable to Clinton when the Senate added amendments blocking his education initiative and allowing states to get more control over federal aid by giving them the option to accept the money as a block grant with few strings attached.

Those provisions were dropped in House-Senate negotiations after Senate Democrats threatened to filibuster the bill because of them.

* SCHOOL-CHOICE VICTORY: Wisconsin Supreme Court rules tax funds can pay for religious-school education of poor. A20