WASHINGTON — Under bipartisan pressure, the White House on Tuesday quietly abandoned a proposal to raise taxes on a popular program used to save for college.
President Barack Obama had proposed earlier this month to eliminate tax breaks adopted in 2001 for new contributions to 529 college savings plans. But he faced a backlash from members of both political parties, as well as operators and users of the state-based plans.
“A tremendous outpouring of support for retaining these 529 tax incentives has come from 529 plans, members of Congress, the media, and, most importantly, the families who have benefited and are benefiting from their participation in a 529 plan and achieved a better life through post-secondary education,” said an alert from the Virginia program.
A White House official said that Obama decided to drop the proposal after a personal plea from House Minority Leader Nancy Pelosi, D-Calif., aboard Air Force One en route from India to Saudi Arabia. The top Democrat on the House Budget Committee, Maryland’s Chris Van Hollen, also lobbied the administration.
