Rebuffed by Congress, President Obama Now Embraces 529 Plans
The season isn’t the only thing changing in Washington right now—so is the administration’s recollection of where it stands on 529 plans, the savings accounts that help make college more affordable for many American families.
Yesterday, President Obama attended a town hall meeting in Iowa to talk about college affordability, a subject rich with irony when you consider his budget proposal to tax 529s just a few short months ago.
When asked about the college savings accounts, President Obama opted instead to pass the mic off to his counterpart, Education Secretary Arne Duncan, whose answer may have been a little different from the administration’s talking points.
“My wife and I are putting money actively into 529s and trying to save, and getting the federal government to support that more, or encourage that, would be fantastic,” said Secretary Duncan, according to the New York Times. He added, for parents trying to save for college, “we need to incentivize that and reward that.”
Our sentiments exactly. Strengthening 529s is a great solution for families who are faced with skyrocketing college tuition costs all over the nation. So that’s why earlier this year, the House passed H.R. 529, legislation introduced by Ways and Means member Rep. Lynn Jenkins (R-KS) to expand, modernize, and strengthen tax-free 529 college-savings plans.
As Rep. Jenkins explained, “As little as $500 in a savings plan sees children three times as likely to enroll, and four times as likely to graduate from college. Therefore, a sensible solution must be making saving for higher education more attainable for any American.”
Maybe it was this commonsense logic that helped President Obama change his mind. Faced with outrage from both sides of the aisle, the administration quickly withdrew its proposal because of the “distraction” it was causing. Distraction? More like bad policy.
Either way, we’re happy to accept the administration’s change of heart. By expanding 529 accounts, we can provide more certainty about the future and help make college more affordable for millions of Americans.
As Chairman Ryan said upon passage of H.R. 529, “We should strengthen these important tools, not tax them away.” Now that we know President Obama is reconsidering his views, we might suggest he work with Congress to get H.R. 529 signed into law.