Today, the Union of Orthodox Jewish Congregations of America, through its Institute for Public Affairs, applauded action yesterday by the Senate Finance Committee to include the expansion of tax-free education savings accounts to K-12 education. The expansion was offered by Senator Robert Torricelli (D-NJ) as an amendment to the Committee Chairman’s proposed “Affordable Education Act.” The amendment was approved and the bill was reported out of committee by a unanimous vote.
Education Savings Accounts would permit parents to invest up to $2000 in a tax free IRA account each year after the birth of a child. (Middle income taxpayers eligible for the $500 child tax credit could contribute up to $2500 annually.) Parents could withdraw money invested in the IRA for use towards a broad range of primary, secondary or college education expenses including tuition, activity fees, supplies, tutoring or transportation costs. The legislation would permit parents to use these funds to further their children’s education at any school – public, private, sectarian or home school.
Identical legislation was passed by congress last year but vetoed by President Clinton. President Bush has included a similar, but broader, provision in his education proposal – it would allow investment of up to $5,000 in the tax-free accounts. The measure proposed in committee by Senator Torricelli is cosponsored by Senator Tim Hutchinson (R-Ark.).
“We believe this type of savings account would provide meaningful support to parents in their struggle to provide the best education to their children,” said Nathan Diament, director of the Union’s Institute. He continued: “America already has tax-free education savings accounts for college education expenses and we all realize that the early years of education are where the foundation for a better life is laid; therefore, we must support parents in their effort to provide the best K-12 education for their kids as they see fit – whether in public, private or parochial schools.”