WASHINGTON (BP)–Legislation to permit tax-free savings accounts to be used for public and private education from kindergarten through high school has been reintroduced in the U.S. Senate with newfound optimism it will not be blocked by the White House.
The bill would enable parents and others to place as much as $2,000 a year for a child in an account with no tax on the interest if it is used for education. The money could be used for elementary and secondary students at private, religious or home schools, but it also could be utilized for such expenses as tutoring, home computers, uniforms, supplies and after-school programs for public-school students.
Such education savings accounts already are allowed at the college level for as much as $500. The measure would expand the ceiling on college accounts to $2,000.
Contributors to the accounts would not be limited to parents. Others — including family members, friends and employers — also would be eligible to donate.
The Southern Baptist Ethics & Religious Liberty Commission has endorsed the legislation.
Supporters have every reason to believe President Bush will sign the bill after President Clinton blocked its enactment three times following congressional approval. In his education plan, Bush has established a higher limit of $5,000 for education savings accounts from kindergarten through college. Sens. Tim Hutchinson, R.-Ark., and Robert Torricelli, D.-N.J., decided to keep their legislation at the $2,000 limit of earlier versions in order to maintain its support, a congressional aide said.
In 1997, Clinton insisted ESAs be removed from the budget package before he would sign it. He vetoed the proposal as a free-standing measure in 1998. The following year, he vetoed a tax-relief bill in which ESAs were included.
“ESAs will infuse billions of new, private dollars into education,” Hutchinson said in a Feb. 7 written release announcing introduction of the bill. “ESAs leave public money in public schools while giving parents increased resources for their child’s increasing education needs.”
Torricelli previously championed the legislation with Sen. Paul Coverdell, R.-Ga., who died last year.
Rep. Kenny Hulshof, R.-Mo., is expected to be the chief sponsor of a companion bill in the House of Representatives but has not introduced it yet.