House Votes to Broaden Scope of Tax-Free School Savings Accounts

Sounding key themes in this year’s education debate, the Republic-led House voted Thursday to expand tax-free savings accounts to cover payments for private or religious school tuition along with other school expenses.

The vote was 225-197. The bill also is expected to clear the Senate, but President Clinton has promised to veto it.

Republicans and a few Democrats presented the measure as giving families more power over education spending. Families could use the savings of up to $2,000 a year and their tax-free interest for books, tutors, computers, transportation or other public school expenses if not tuition at private or parochial schools. The money could also be saved for college.

“We’re helping all sorts of families make different choices for their kids,” said Rep. Jerry Weller (R-Ill.), whose district south of Chicago has many Catholic schools.

Clinton and other Democrats argued that the measure, costing about $1.6 billion over 10 years, would help mostly affluent families with children in private schools while giving a tax benefit of only $7 a year to the average family. They want federal tax dollars to be spent for the first time on building and repairing schools and hiring teachers to reduce class sizes.

“The people who benefit from this bill are not ordinary citizens,” said Rep. Albert Russell Wynn (D-Md.). “What’s wrong is when you take tax dollars away from public education and give tax relief to the rich.”

The measure would expand tax-free accounts permitted by a law that Clinton supported last year for college savings. The maximum allowed savings would grow from $500 a year to $2,000. Also, friends, corporations, employers and other sponsors, including family members other than parents, would be able to contribute to the accounts on a child’s behalf.