[Congressional Record Volume 145, Number 8 (Tuesday, January 19, 1999)]
[Senate]
[Page S375]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. COVERDELL (for himself and Mr. Torricelli):
  S. 14. A bill to amend the Internal Revenue Code of 1986 to expand 
the use of education individual retirement accounts, and for other 
purposes; to the Committee on Finance.


                 education savings account act of 1999

  Mr. COVERDELL. Mr. President, I rise today to introduce the Education 
Savings Account Act of 1999.
  Under this bill, parents will have more control over their children's 
education through IRA-style savings accounts that allow parents to save 
money tax-free for elementary and secondary education expenses. This 
legislation allows parents, grandparents, or scholarship sponsors to 
contribute up to $2,000 (post-tax dollars) a year per child for 
educational expenses while at public, private, religious or home 
schools--from kindergarten through high school. The accumulated 
interest in the savings accounts is tax-free if used for the child's 
education.
  Just consider the benefits of these innovative education savings 
accounts: if a parent placed $2,000 each year in an education savings 
account beginning in the year of a child's birth, then assuming a 7.5% 
interest rate, $14,488 would be available by the first grade, $36,847 
by the time the child starts junior high school, and $46,732 when the 
child starts high school.
  For a child attending public school, this money could be used for 
after-school tutoring, car pooling or other transportation costs, 
school uniforms, or for a home computer. The Joint Committee on 
Taxation estimates that 75% of all families using these accounts--10.8 
million families--will use them to support children in public schools.
  These savings accounts give parents the power to obtain the necessary 
tools to overcome current obstacles to obtaining a quality education 
for their children.
  This legislation is modeled on the Education Savings Accounts that 
were established for college as part of the bipartisan Taxpayer Relief 
Act of 1997. Last year, a similar version of this bill passed both the 
House and the Senate but was vetoed by President Clinton.
  I am confident that because this is an idea that benefits millions of 
working American families, President Clinton will put aside his 
differences and join us in our effort this Congress.
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