Capital Briefs: Congress to Tweak Bills For Education Savings

Under the threat of a presidential veto, the House and Senate will soon appoint negotiators to resolve conflicting bills that would expand education savings accounts.

The Senate passed legislation on a 56-43 vote last week that would raise to $2,000 the amount parents may deposit annually in the accounts and get a tax break. These after-tax contributions would earn tax-free interest and could be used for primary and secondary education expenses at public and private schools.

A 1997 law created education savings accounts, which are similar to individual retirement accounts, but set the deposit maximum at $500 and restricted their use to higher education expenses.

The House version of the legislation, approved last fall, has a slightly higher deposit limit of $2,500.

President Clinton has said he will veto the legislation because it would favor higher-income families and would drain spending away from public schools.