Veto expected from Clinton on tax measure

Amy Olson

A bill passed by a congressional committee extending tax breaks to aid students, parents and employers paying for education costs will probably not earn the president’s signature.
The measure, passed by a vote of 12 to eight last week by the Senate Finance Committee, would provide about $4 billion in education-related tax benefits over the next five years. Those benefits would include extending the tax deduction for interest paid on student loans and increasing tax breaks for people who used pre-paid tuition programs.
But the bill also contains a provision that would expand the use of educational savings accounts, allowing parents to use the money — which grows tax-free — to pay for elementary and secondary education expenses, including private school tuition. Some senators have said Clinton administration officials warned them that the president would veto the bill because of that measure.
The president vetoed similar legislation in the last legislative session; during the committee proceedings last week, several Democratic members unsuccessfully sought to remove the provision from the bill.
“It’s a voucher system dressed up in another name,” said Andy McDonald, spokesman for Sen. Paul Wellstone, D-Minn. “The proposal represents a great leap backward in our commitment to provide quality education opportunities for all people.”
McDonald said Wellstone is not a member of the committee and has not seen the other provisions in the bill. But when legislation with a similar voucher provision was introduced last year, Wellstone voted against it.
The bill would also extend an existing tax break for employers who provide financial assistance to employees who take undergraduate-level courses, and expand the benefit to cover graduate-level courses.
Under the Regents’ Scholarship, University employees who work an average of at least 30 hours per week can take up to two classes each at no cost. Under the existing program, the scholarship can only be used for undergraduate degrees.
If the bill is enacted, it could allow the University to change that policy to include graduate-level courses.
The bill still faces several legislative hurdles before it could reach Clinton’s desk.
Bethany Young, spokeswoman for Congressman Martin Sabo, D-Minn., said no similar provision has been introduced in the House of Representatives; even if the measure passes the Senate, it is unlikely the bill would go before the House until later this summer.