In brief: Obama drops plan to tax 429 accounts

INDIANAPOLIS – President Barack Obama said Friday he dropped a widely criticized plan to scale back tax benefits for college savings accounts because the savings weren’t worth it.

Obama, who revealed that he uses the 529 savings accounts for his own daughters, said he looked at reducing the tax savings because the accounts tend to be used by “folks who were a little more on the high end.” He said other taxpayers struggled to save enough to participate.

About 12 million families take advantage of college savings plans, in which money can eventually be withdrawn with no tax on earnings to pay for postsecondary education costs. About half the accounts were held by families making more than $150,000, according to a 2012 report by the Government Accountability Office.

The administration initially estimated that scaling back the tax breaks would bring in about $1 billion over 10 years. Obama had planned to use the savings to help fund his proposal to make two years of community college free for all. “Our thinking was you could save money by eliminating the 529 and shifting it into some other loan programs that would be more broadly based,” Obama said at a town hall meeting at Ivy Tech Community College.

But he quickly backed off after lawmakers from both parties objected.

“It wasn’t worth it for us to eliminate it,” Obama said. “The savings weren’t that great. So we actually, based on response, changed our mind and are going to be paying for the two years of free community college with other sources.”

Friend debunks notion of Lee’s imcompetence

MONTGOMERY, Ala. – A longtime friend who visited “To Kill a Mockingbird” author Harper Lee the day before the world learned she would release a sequel said she was feisty but didn’t mention her new book.

Historian Wayne Flynt, a friend of the famous author, said he believes Lee was capable of giving permission for the previously unpublished manuscript to be released.

“This narrative of senility, exploitation of this helpless little old lady is just hogwash. It’s just complete bunk,” historian Wayne Flynt said in an interview with the Associated Press.

Flynt visited with Lee on Monday at the assisted-living facility where she lives in her hometown of Monroeville, Alabama. That was a day before a division of HarperCollins Publishers announced the publication of “Go Set a Watchman.” The publisher said Tonja Carter, an attorney who practiced with Lee’s sister, found the manuscript, which will be released in July as a sequel to the beloved novel.