Obama Pulls Proposal on College Savings Plans

“President Obama, facing angry reprisals from parents and from lawmakers of both parties, will drop his proposal to effectively end the popular college savings accounts known as 529s, but will keep an expanded tuition tax credit at the center of his college access plan,” the New York Times reports.

First Read: “There are two big lessons here: One, it shows why tax reform is so hard; you touch one popular tax break (even if it makes ton of economic/efficiency sense), and folks will scream bloody murder. Two, it’s a story about the political/journalist class. Raise your hand if you have one of these 529 accounts for your children or grandchildren… the benefits under the program are disproportionately skewed to Americans earning six figures or above — who represent just a sliver of the population. Still, we’re surprised the White House didn’t see this blowback coming when it first proposed the plan.”

“Yet there’s another story here, too: That the White House yanked it so quickly — especially while the president was overseas — suggests it’s still holding out hope to strike some sort of tax deal with congressional Republicans. If you want to see tax reform happen in the 114th Congress, the speed of the Obama White House’s retraction might give you hope.”