Clinton Kills K-12 Education Savings Accounts . . .
After addressing an adoring audience of public school teachers at the annual convention of the American Federation of Teachers, President Bill Clinton returned to the White House and wasted no time in giving the labor union just what it wanted: a veto of bipartisan legislation that would have given parents a small tax break on the interest earned on $2,000 a year placed in savings accounts designated for K-12 educational expenses. Similar savings accounts for higher education were approved by Congress and endorsed by the President last year.
In killing the K-12 education savings account bill, the President said it "would not create a meaningful incentive for families to increase their savings for educational purposes." He asserted that more than 70 percent of the benefits would go to families in the top 20 percent income bracket, who already put money aside for K-12 private schools.
The President’s claim is directly contradicted by a congressional Joint Tax Committee report, which determined that nearly 70 percent of the tax benefits from the bill would go to parents earning $75,000 a year or less. Half of the parents of students attending private or religious schools earn annual incomes of $50,000 or less, and a quarter earn less than $35,000.
"Even families with very small incomes are willing to pay for more opportunities for their children," notes Theodore Forstmann of the Children's Scholarship Fund. Fund research demonstrates that across the country, private and religious institutions offer many reasonably priced schools from which to choose. In the Washington, DC area, for example, 84 schools charge an annual tuition less than $3,500.
The education savings account legislation, cosponsored by Senator Paul Coverdell (R-Georgia) and Robert G. Torricelli (D-New Jersey), had strong support among minorities and a 60 percent approval rating among all Americans, according to a recent Wall Street Journal/NBC poll. Despite the modest nature of the measure, teacher unions mounted vigorous opposition, with National Education Association President Bob Chase calling on the union's almost 3 million members to demand a veto from Clinton.
Coverdell called the President’s July 21 veto "a new low in shameless pandering." "America's children lose and the union bosses win," he lamented.
One measure of the unions’ successful manipulation of media coverage of the proposal was the frequent news reference to the measure as a "voucher bill," a false and misleading label. Unlike vouchers--which give parents some measure of control over some of the tax dollars spent on their child’s education--the Coverdell/Torricelli proposal merely permits parents to save their own money tax-free in an account little different from the IRAs already used by millions of Americans to save money for their retirements.
President Clinton's opposition to this tiny step in the direction of school choice was apparently so strong that he was willing to sacrifice his own education reform proposals in order to veto the education savings bill. According to US News and World Report, the President rejected a GOP offer of support for his proposals in return for his signature on the Coverdell/Torricelli bill. By vetoing the GOP bill, the President also killed a tax break on prepaid tuition plans for higher education, an action that affects some 500,000 children in twenty states.
George A. Clowes is managing editor of School Reform News. His email address is email@example.com.