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Clinton, GOP at Odds Over Tax Cuts for Higher Education

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Washington

President Clinton and House Republicans jousted last week over the size of higher education tax breaks in a bill designed to balance the federal budget in five years.

In a tax bill released June 9, GOP leaders came up $13 billion short of an earlier agreement to offer $35 billion over five years in tuition tax relief, the president said last week. Their plan "shortchanges" community college students and adults who want to go back to school to learn new skills, he added.

The bill unveiled by Rep. Bill Archer, R-Texas, the chairman of the House Ways and Means Committee, would give a federal tax credit for half of a student's postsecondary tuition and book expenses, up to $1,500. The president's plan would match what a student spends on tuition and books, also with a tax credit of up to $1,500.

While the maximum credits are equal, the plans do work differently. Under the Archer plan--which gives credit for half of a student's costs--a student whose education expenses totaled $1,500 would receive a $750 tax credit.

Under the Clinton plan, the same student would receive a $1,500 tax credit. Mr. Clinton contends the GOP plan is unfair to those who choose schools with lower tuition.

"Those who go to less expensive schools, like community colleges, would have [their tax savings] cut in half by the House plan," Mr. Clinton said during a Rose Garden ceremony only a day after Mr. Archer released his bill.

But Mr. Archer said the GOP plan was "consistent with the budget agreement reached by President Clinton and congressional leaders" last month. "I think it will be very popular with the American people," he predicted.

Late last week, Rep. Archer's committee was marking up the GOP proposal.

Subtle Differences

While the Republican bill also includes, in addition to a tax credit, the $10,000 tax deduction for tuition that the president proposed, it gives students only a four-year window to take advantage of it.

Mr. Clinton's plan would make the deduction available for an unlimited number of years, giving adults an incentive to go back to school, he says.

The two sides aired their differences throughout last week, demonstrating how difficult it will be to write laws implementing the five-year balanced-budget program that Mr. Clinton and Republican leaders agreed to in broad outline.

GOP leaders pledged to include $35 billion in higher education tax incentives, including education savings accounts, in their final budget bill, but Mr. Clinton and his advisers expressed their disappointment over Mr. Archer's plan after it was released last week.

But neither Mr. Clinton nor his advisers talked about vetoing the Republican bill.

In the budget agreement announced last month, GOP leaders agreed to increase funding for education programs such as Head Start and the Pell Grant student-aid program. ("Clinton-Hill Accord Would Hike Ed. Funding," May 14, 1997.)

Appropriators still must write bills to keep those promises in line-by-line spending plans that may be unveiled as early as this month.

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Related Stories
Web Resources
  • Read the American Council on Education's analysis of President Clinton's college proposals.
  • Read Chester Finn's opinion of the Clinton tax credit, from the Educational Excellence Network's Web page.
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