President Obama's disastrous foray into trying to destroy "529" college savings plans unravelled Tuesday. A bipartisan consensus—including Speaker of the House John Boehner and Minority Leader Nancy Pellosi—persuaded the president to drop the matter, according to The New York Times:
Ms. Pelosi pressed the case to senior administration officials on board Air Force One as she flew with the president from India to Saudi Arabia, according to Democratic aides familiar with the discussions.
"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.
The official added that Mr. Obama's proposed increase in the capital gains tax rate and change to the taxation of inherited wealth would be more than enough money to fund the tax plan.
Obama had originally proposed closing the tax "loophole"—which allows middle class families to set aside money for their kids' college funds in tax-free accounts—in order to help pay for his free community college plan. Reason editor Nick Gillespie criticized the move:
[President Obama is] always talking about going after the Thurston Howells and Richie Riches of the world. But when it rains on the wealthy, the middle class get soaked, because they ultimately have the sorts of assets and savings that can actually be taxed en masse.
As obvious an example of robbing Peter to pay Paul as they come, the effort was a clear political miscalculation on the part of the White House.