Senate Approves Roth Amendment to Education Bill
WASHINGTON -- By a vote of 59-40, the Senate today approved an amendment to the Affordable Education Act authored by Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) that makes the education tax breaks in the legislation permanent and eliminates provisions increasing taxes to offset the cost of the bill.
"My amendment significantly strengthens this bill. One of the most important provisions of my amendment is to make permanent the increased annual education IRA contribution limit. This helps make saving for college easier and more certain. With this change, parents will know that they can contribute $2000 every year, and that savings will make a meaningful contribution to their child's education. In fact, parents who contribute $2000 a year from their child's birth will have $65,200 after 18 years -- and that assumes a 6 percent rate of interest," Roth stated.
"Like the Little Engine that Could, my amendment makes this legislation the Education Savings Plan that Will. Parents and children getting on this savings train will get off at college with a better future."
Specifically, Roth's amendment:
• Makes permanent $2000 annual contribution limit to education IRA (under original legislation, the annual contribution limit would revert back to $500 in the year 2003)
• Makes option to use education IRA funds for K-12 expenses permanent (under original legislation, this provision would sunset in the year 2003)
• Ensures that students who take a disturibtion from an educational IRA can also be eligible for a HOPE scholarship or Lifetime Learning Credit (provision in original legislation was temporary)
• Makes permanent the tax free treatment of employer-provided educational assistance (under original legislation, this assistance would revert back to tax-deferred status in a few years)
• Eliminates all revenue raisers
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