Capital Brief: Veto Seen on Hiking Tax-Free School Savings

President Clinton is expected to veto a bill passed by the House last week to increase contributions allowable to education savings accounts.

In a compromise worked out with the Senate, the measure would let people set aside $2,000 annually in a tax-free account for a child's education costs.

The legislation passed 225 to 197, or 57 votes short of the two-thirds needed to override a veto. The Senate may vote on the compromise as early as this week.

Separately, the sponsors of a plan to increase the size limits on FHA loans decided not to force a House Appropriations subcommittee to vote on their legislation. Instead, they will offer the measure when the parent committee votes on $94.2 billion of funding for veterans and housing programs. The ballot could come as early as Wednesday.

The plan would raise the limits on FHA-insured loans to $106,000, from $86,000 in most areas. In high-cost areas the limit would be raised to $197,000, from $170,000.