'Shelf life of about a week': President drops plan to cut tax benefits of 529 college savings plans

If there was any message to take from President Obama’s State of the Union address, it was that he intended to raise taxes in order to pay for some great free stuff, like two years of community college. That generous offer came with the caveat that 529 college savings plans, which let Americans save money tax-free for higher education expenses, would lose their tax benefits.

The New York Times reports Tuesday, though, that that idea, which had become “a distraction,” is now off the table.

Good, it's an awful idea, would hurt middle class. | NYT: Obama Will Drop Proposal to End ‘529’ College Savings Plans http://t.co/XhJ1m6RVkz

— Senator John Thune (@SenJohnThune) January 27, 2015

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

The decision came just hours after House Speaker John A. Boehner of Ohio demanded the proposal be withdrawn from the president’s budget, due out Monday, “for the sake of middle-class families.”

WOW! Obama drops proposal to end '529' college-savings account even before publishing budget. http://t.co/0EL2nHVX0e

— David Wessel (@davidmwessel) January 27, 2015

Obama's plan to tax college savings funds lasted a whole week. http://t.co/3TFQZfUguW

— ryan teague beckwith (@ryanbeckwith) January 27, 2015

Has any SOTU proposal been dropped faster than the ill fated 529 plan? Gone in seven days!

— Glenn Kessler (@GlennKesslerWP) January 27, 2015

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The White House is giving up on its college savings tax hike because it's a "distraction"…i.e. a really bad idea. http://t.co/guEitJM8Mp

— Ken Calvert (@KenCalvert) January 27, 2015

The crazy thing is that the White House ever thought taxing 529 plans was a good idea or politically viable in the first place.

— Ben White (@morningmoneyben) January 27, 2015

@morningmoneyben struck me as result of policy staffer searching for every large untaxed column they could find simply to make math work

— Chuck Todd (@chucktodd) January 27, 2015

https://twitter.com/hymnforrachel/status/560211702969794561

Wow, that was quick. Lesson 1: don't take on your own base. Lesson 2: for Dems, that's the coastal upper middle class http://t.co/9RUE68UCMB

— Jeremy Senderowicz (@jsende) January 27, 2015

Pres Obama drops plan to tax 529 college plans. Good move cause it was a dumb idea that hurt families & students

— DeborahNorville (@DeborahNorville) January 27, 2015

https://twitter.com/DivineTurbine/status/560213555916832768

https://twitter.com/AdamHarding/status/560208275421933568

Obama Praised 529 College Savings Plans in “The Audacity of Hope” – Americans for Tax Reform http://t.co/mYKRqOXue3 #Pinoy

— J.F. (@PinoyBuilt) January 27, 2015

I guess President Obama got a phone call from Senator Obama re: 529 plans.

— John Hart (@johnhart333) January 27, 2015

https://twitter.com/kesgardner/status/560208422579499008

Obama to Drop Proposal to End ‘529’ College Savings Plans… http://t.co/664iZQWpQN Pelosi told him this was a bad idea. Seriously, Pelosi.

— Joseph Curl ❎ (@josephcurl) January 27, 2015

Going after #529 plans, Obama became too much of a Marxist even for Nancy Pelosi. Scary. #tcot #tlot #p2

— Fascist leftists run Tw!tter. I'm our. (@FreeBlackMan) January 27, 2015

Whose idea was it to end 529 college savings plans anyways?

— Blake News (@blakehounshell) January 27, 2015

https://twitter.com/CuffyMeh/status/560202575757447168