Republicans Look to Gain on Obama’s Education Blunder

On Tuesday, President Obama dropped his proposal to reform popular college savings plans. On Wednesday, Republicans wouldn’t let him hear the end of it.

“I’m not sure why President Obama would have sought to undermine them in the first place, but it’s certainly good to see the President coming around to Republicans’ pro-middle class view on this matter,” said Senate Majority Leader Mitch McConnell on the chamber floor.

“What crazy tax hike scheme will the White House dream up next,” tweeted House Speaker John Boehner.

“Well, that must have polled badly,” taunted the conservative Wall Street Journal editorial board.

The proposal—ending a tax break for mostly wealthy families and redistributing the billion dollars saved towards tax breaks for the less well-off—was a part of a broader plan but so politically perilous that House Democratic Leader Nancy Pelosi pressed the President to drop it while aboard Air Force One on Tuesday.

White House Press Secretary Eric Schultz said Wednesday that the proposal was a “distraction” and dropped because it could “jeopardize” a larger education strategy that included $50 billion in tax reforms and a plan to make two years of community college free.

But Republicans will keep the issue in the spotlight. Kansas Rep. Lynn Jenkins, a member of the House GOP leadership, introduced a bill this week with Wisconsin Democrat Ron Kind to strengthen the nearly 12 million savings accounts, which are known as 529s. Americans accumulated nearly $245 billion in the plans last year, according to the Investment Company Institute.

“These are particularly important goals as college costs continue to rise and students struggle with extreme amounts of student loan debt,” says Jenkins, who notes that there is a “spotlight” on the issue due to the president’s “misstep.” “We certainly are going to call on him to support [the bill.]”

The bill aims to reduce paperwork, allow students to withdraw from college without a refund penalty and updates the current law by including computers as a qualified expense. Jenkins says that she expects the bill to hit the House floor in a month.

Kind says that the Administration could have done a better job of educating members of its plans ahead of the State of the Union.

“This has become a trusted vehicle for education savings and therefore calling for the tax benefit elimination from 529s seems to be a giant step too far,” he says.

Kind laughed when asked if he thought Republicans would use the President’s fumble to their own political advantage.

“It’s the world in which we live,” he said. “Unfortunately that’s what makes entitlement reform so hard. When you have people honestly trying to put forward some straightforward provisions only to be attacked by the right or the left. That’s what makes developing consensus very difficult.”