Politics
White House Drops Plan to Scale Back College Savings Plans
STEPHEN OHLEMACHER, Associated Press
WASHINGTON (AP) — The White House said Tuesday it is dropping a proposal to scale back the tax benefits of college savings plans amid a backlash from both Republicans and Democrats.
President Barack Obama made the proposal last week as part of his State of the Union address. It was part of Obama’s plan to consolidate and simplify a sometimes confusing array of tax breaks for college students.
Resistance from Congress was swift. Republicans publicly criticized the plan, and aides said House Democratic Leader Nancy Pelosi pushed senior administration officials to drop it as she flew with the president aboard Air Force One from India to Saudi Arabia.
Other Democrats also privately weighed in against the plan, including Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, and Sen. Charles Schumer, D-N.Y.
A White House official said Tuesday the proposal had become a distraction.
“We proposed it because we thought it was a sensible approach, part of consolidating six programs to two and expanding and better targeting education tax relief for the middle class,” said the White House official. “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.”
The officials spoke on condition of anonymity because they were not authorized to be quoted by name.
Obama’s plan would reduce the tax benefits of future contributions to the popular 529 college savings plans. Current accounts would have been grandfathered, so existing funds could still grow and be withdrawn, tax-free.
The administration said all the additional tax revenue would have been used to help expand and make permanent a $2,500 tax credit that families can use for education expenses. Under current law, the tax credit is scheduled to expire at the end of 2017.
Contributions to college savings plans are not tax-deductible at the federal level. But once the money is invested, it can grow and eventually be withdrawn with no tax on the earnings, as long as the money is spent on tuition, fees, books and supplies needed to attend postsecondary school.
The savings plans, which are sponsored by states, can also be used to prepay college tuition.
About 12 million families take advantage of college savings plans. About half were held by families making more than $150,000, according to a 2012 report by the Government Accountability Office.
About 30 percent of plans were held by families who make less than $100,000, the report said.
The White House said Obama’s proposal to scale back the tax benefits for savings plans was a small part of his overall plan to cut taxes for the middle class and to make college more affordable. Obama is also proposing a $60 billion plan to make the first two years of community or technical college free.
“The President’s plan has the puzzle pieces necessary to bring the middle class back, but this particular piece didn’t fit,” Schumer said in a statement.
Earlier in the day, at a Capitol Hill news conference, House Speaker John Boehner, R-Ohio, called on Obama to abandon his plan for the college-savings account.
After the White House decision was made public, Boehner’s official Twitter account tweeted: “BREAKING: Americans spoke out. Now, #middleclass families won’t have college savings taxed. Let’s keep up the fight.”
Sen. Susan Collins, R-Maine, said, “This is welcome news for the countless hardworking parents who make sacrifices to save and provide for their children’s futures.”
___
Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Activism
Oakland Post: Week of December 25 – 31, 2024
The printed Weekly Edition of the Oakland Post: Week of December 25 – 31, 2024
To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.
Alameda County
Last City Council Meeting of the Year Ends on Sour Note with Big Budget Cuts
In a five to one vote, with Councilmembers Carroll Fife and Janani Ramachandran excused, the council passed a plan aimed at balancing the $130 million deficit the city is facing. Noel Gallo voted against the plan, previously citing concerns over public safety cuts, while Nikki Fortunato-Bas, Treva Reid, Rebecca Kaplan, Kevin Jenkins, and Dan Kalb voted in agreement with the plan.
By Magaly Muñoz
In the last lengthy Tuesday meeting of the Oakland City Council for 2024, residents expressed strong opposition to the much needed budget cuts before a change in leadership was finalized with the certification of election results.
In a five to one vote, with Councilmembers Carroll Fife and Janani Ramachandran excused, the council passed a plan aimed at balancing the $130 million deficit the city is facing. Noel Gallo voted against the plan, previously citing concerns over public safety cuts, while Nikki Fortunato-Bas, Treva Reid, Rebecca Kaplan, Kevin Jenkins, and Dan Kalb voted in agreement with the plan.
Oakland police and fire departments, the ambassador program, and city arts and culture will all see significant cuts over the course of two phases.
Phase 1 will eliminate two police academies, brown out two fire stations, eliminate the ambassador program, and reduce police overtime by nearly $25 million. These, with several other cuts across departments, aim to save the city $60 million. In addition, the council simultaneously approved to transfer restricted funds into its general purpose fund, amounting to over $40 million.
Phase 2 includes additional fire station brownouts and the elimination of 91 jobs, aiming to recover almost $16 million in order to balance the rest of the budget.
Several organizations and residents spoke out at the meeting in hopes of swaying the council to not make cuts to their programs.
East Oakland Senior Center volunteers and members, and homeless advocates, filled the plaza just outside of City Hall with rallies to show their disapproval of the new budget plan. Senior residents told the council to “remember that you’ll get old too” and that disturbing their resources will only bring problems for an already struggling community.
While city staff announced that there would not be complete cuts to senior center facilities, there would be significant reductions to staff and possibly inter-program services down the line.
Exiting council member and interim mayor Bas told the public that she is still hopeful that the one-time $125 million Coliseum sale deal will proceed in the near future so that the city would not have to continue with drastic cuts. The deal was intended to save the city for fiscal year 2024-25, but a hold up at the county level has paused any progress and therefore millions of dollars in funds Oakland desperately needs.
The Coliseum sale has been a contentious one. Residents and city leaders were originally against using the deal as a way to balance the budget, citing doubts about the sellers, the African American Sports and Entertainment Group’s (AASEG), ability to complete the deal. Council members Reid, Ramachandran, and Gallo have called several emergency meetings to understand where the first installments of the sale are, with little to no answers.
Bas added that as the new Alameda County Supervisor for D5, a position she starts in a few weeks, she will do everything in her power to push the Coliseum sale along.
The city is also considering a sales tax measure to put on the special election ballot on April 15, 2025, which will also serve as an election to fill the now vacant D2 and mayor positions. The tax increase would raise approximately $29 million annually for Oakland, allowing the city to gain much-needed revenue for the next two-year budget.
The council will discuss the possible sales tax measure on January 9.
Activism
Protesters Gather in Oakland, Other City Halls, to Halt Encampment Sweeps
The coordinated protests on Tuesday in San Francisco, Oakland, Vallejo, Fresno, Los Angeles and Seattle, were hosted by Poor Magazine and Wood Street Commons, calling on cities to halt the sweeps and focus instead on building more housing.
By Post Staff
Houseless rights advocates gathered in Oakland, San Francisco, Los Angeles, and other city halls across California and Washington state this week protesting increased sweeps that followed a U.S. Supreme Court decision over the summer.
The coordinated protests on Tuesday in San Francisco, Oakland, Vallejo, Fresno, Los Angeles and Seattle, were hosted by Poor Magazine and Wood Street Commons, calling on cities to halt the sweeps and focus instead on building more housing.
“What we’re dealing with right now is a way to criminalize people who are dealing with poverty, who are not able to afford rent,” said rights advocate Junebug Kealoh, outside San Francisco City Hall.
“When someone is constantly swept, they are just shuffled and things get taken — it’s hard to stay on top of anything,” said Kealoh.
Local houseless advocates include Victoria King, who is a member of the coordinating committee of the California Poor People’s Campaign. She and Dr. Monica Cross co-chair the Laney Poor People’s Campaign.
The demonstrations came after a June Supreme Court ruling expanded local governments’ authority to fine and jail people for sleeping outside, even if no shelter is available. Gov. Gavin Newsom in California followed up with an order directing state agencies to crack down on encampments and urging local governments to do the same.
Fresno, Berkeley and a host of other cities implemented new rules, making it easier for local governments to clear sidewalk camps. In other cities, such as San Francisco, officials more aggressively enforced anti-camping laws already on the books.
-
Activism4 weeks ago
Oakland Post: Week of November 27 – December 3, 2024
-
Activism2 weeks ago
Butler, Lee Celebrate Passage of Bill to Honor Congresswoman Shirley Chisholm with Congressional Gold Medal
-
Activism2 weeks ago
Post News Group to Host Second Town Hall on Racism, Hate Crimes
-
Activism2 weeks ago
Delta Sigma Theta Alumnae Chapters Host World AIDS Day Event
-
Business2 weeks ago
Landlords Are Using AI to Raise Rents — And California Cities Are Leading the Pushback
-
Activism3 weeks ago
Oakland Post: Week of December 4 – 10, 2024
-
#NNPA BlackPress4 weeks ago
National Action Network Announces 2025 Inauguration Day Rally
-
Activism2 weeks ago
Oakland Post: Week of December 11 – 17, 2024