Obama Relents on Proposal to End ‘529’ College Savings Plans

President Obama, facing angry reprisals from parents and from lawmakers of both parties, will drop his proposal to effectively end the popular college savings accounts known as 529s, but will keep an expanded tuition tax credit at the center of his college access plan, White House officials said Tuesday.

The decision came just hours after Speaker John A. Boehner of Ohio demanded that the proposal be withdrawn from the president’s budget, due out Monday, “for the sake of middle-class families.” But the call for the White House to relent also came from top Democrats, including Representatives Nancy Pelosi of California, the minority leader, and Chris Van Hollen of Maryland, the ranking member of the Budget Committee.

Ms. Pelosi pressed the case to senior administration officials on Air Force One as she flew with the president from India to Saudi Arabia, according to Democratic aides familiar with the discussions.

The move was an abrupt turn for the president, who had made the proposal during his State of the Union address only a week ago, a proposal he called part of his pitch for “middle-class economics.”

“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, as well as the president’s broader package of tax relief for child care and working families,” a White House official said.

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