Beyond the substance in the headlines is the reality many have outlined. A disconnected, amateur White House policy team removes a tenet of their prior tax/legislative proposal just days before they present the Fiscal Year 2016 budget proposal.
In addition, what the heck is Nancy Pelosi doing flying around with President Obama all week?   Obviously, Democrat political alliances are tenuous and trust amid the various factions of the Dem scheme team is now an issue…  This is an outcome of self-driven interests, but you won’t see it reported in the MSM.  The selfish frenzy and positioning is going to get worse once Hillary Clinton announces her intentions.
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WASHINGTON — President Obama, facing angry reprisals from parents and from lawmakers of both parties, will drop his proposal to 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The decision came just hours after House Speaker John A. Boehner of Ohio demanded the proposal be withdrawn from the president’s budget, due out Monday, “for the sake of middle-class families.” But the call for the White House to relent also came from top Democrats, including Representatives Nancy Pelosi of California, the minority leader, and Chris Van Hollen of Maryland, the ranking member of the Budget Committee.
Ms. Pelosi pressed the case to senior administration officials on board Air Force One as she flew with the president from India to Saudi Arabia, according to Democratic aides familiar with the discussions.
Obama Pelosi“Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support, as well as the President’s broader package of tax relief for child care and working families,” a White House official said.
The official added that Mr. Obama’s proposed increase in the capital gains tax rate and change to the taxation of inherited wealth would be more than enough money to fund the tax plan.
What to White House economists was a clearheaded assessment of tax fairness has proved to be a cautionary tale for politicians focusing their efforts on the shriveling middle class and trying to overhaul and simplify the tax code. The idea was to end one tax break tilted toward the wealthy and plow that billion-dollar savings over 10 years into a far larger expansion of another tuition tax credit aimed more squarely at the middle class.
But in the days since the plan was rolled out, all anyone seems to remember of Mr. Obama’s college access plan is the proposed end to 529 accounts, which has angered more affluent savers, prompted a backlash from Wall Street and the state governments that run the accounts, and given Republicans an opening to claim they are the guardians of the struggling middle class.
Mr. Boehner said Tuesday that “529 plans help middle-class families save for college, but now the president wants to tax those plans.”  (read more)
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