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The decision came just hours after House Speaker John A. Boehner of Ohio demanded the proposal be withdrawn from the president’s budget, due out Monday, “for the sake of middle-class families.”