[AllPolitics - News]

Clinton Supports An Education Tax Credit

[Clinton] By Wolf Blitzer and Jill Dougherty/CNN

PRINCETON, N.J. (AllPolitics, June 4) -- President Bill Clinton, in a commencement talk at Princeton University today, proposed a tax break to finance two years of post-high school education. (224K WAV sound)

"It's America's most basic bargain," Clinton told the graduating seniors. "We'll help create opportunity if you'll take responsibility."

Clinton's call for a tax break to support higher education came just one day after Republican rival Robert Dole called for a balanced budget and tax cuts.

Dole dismissed the president's sincerity. "There he goes again," Dole told the Associated Press while campaigning in Chester, Va. "Who knows what taxes he'll increase if he should be re-elected."

[Speech]

Administration officials say the president wants to "make clear that two years of college should be as universal as high school."

The White House called the proposal "America's Hope" scholarships. It would provide all high school students with a $1,500 refundable tax credit for full-time tuition in their first year ($750 for half-time), and another $1,500 for their second year, if they stay off drugs and earn at least a "B" average in their initial year.

The $1,500 tax credit would pay for more than the average full-cost tuition at the nation's community colleges. It could be used for certified training and technical programs and as a partial payment at more expensive, four-year colleges.

The program is modeled on the "Georgia Hope" scholarship program started four years ago by Georgia Gov. Zell Miller. The White House says it would make tuition free for 67 percent of all community college students, and the credit would be indexed to inflation.


[Quote from Clinton]

The president's plan also will maintain a $10,000 tax deduction for all education and training in college, graduate school, community colleges and certified technical training programs. However, Clinton is lowering the income levels to make it more accessible to people with lower incomes.

The deduction had been phased out for joint filers with incomes between $100,000 and $120,000, and for single filers with incomes between $70,000 and $90,000. It will now be phased out for joint filers with incomes between $80,000 and $100,000, and for single filers with incomes between $50,000 and $70,000.

The cost of the original $10,000 tax deduction program, plus the new $1,500 tax credit program, is $42.9 billion over six years. All but $7.9 billion is already paid for in the president's current budget.

The $7.9 billion would be financed by:

  • Limiting the ability of corporations to decrease their tax liability for products they export ($3.5 billion).
  • Auctioning off bands on the radio spectrum ($2.1 billion).
  • Increasing the international passenger departure fee from $6 to $16 ($2.3 billion).

"This is about more than money," Clinton said in his third commencement speech this year. "This is about giving every single, solitary soul in this country a chance to be more fully alive."

The president's top political strategist, Dick Morris, had pushed for this latest tax proposal and wants even more, although others inside the White House are resisting. All this comes at a time when Dole's advisers are openly talking about dramatic new tax breaks of their own, including a possible 15 percent across-the-board cut.

White House officials say they're happy to battle over tax cuts, and they deny they're pandering for votes.

"This is not just a wild, 15 percent across-the-board reduction tax cut," said White House Chief of Staff Leon Panetta. "This is a responsible, targeted tax cut that is aimed at education."

Former Republican presidential candidate Steve Forbes spoke briefly with the president, but later said Clinton's plan doesn't go far enough.

"We need big strides, not baby steps," Forbes said.

The president's advisers know he's already being accused of simply copying Dole to compete for votes. They say they're ready to take the political heat, because they believe that in the process, they'll win over many middle class -- read formerly Republican -- voters.


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