Chuck Grassley: “I thank the Chair. So, obviously, this is going to help stimulate the economy because this $1,000 is going to go to…”

“I thank the Chair. So, obviously, this is going to help stimulate the economy because this $1,000 is going to go to low-income families who do not have very much discretionary income and can use it to improve their lot. But at the same time it will stimulate the economy--whether it is spent or whether they save it. We have improvements in the education savings accounts, or what we might call education individual retirement accounts, individual education IRAs. The annual limit on contributions to the education savings account increases from $500 to $2,000. The definition of qualified education expenses that may be paid tax free from the education savings account is expanded to include elementary and secondary school expenses. The phaseout ranges--for married taxpayers filing joint returns, it is increased to become twice the rate of single taxpayers, so more families can take advantage of this. Corporations and other entities, including tax-exempt groups, are permitted to make contributions to education savings accounts. These changes are effective right now, this taxable year. Then we have expanded consideration of prepaid tuition programs. Several provisions will encourage participation in prepaid tuition programs for higher education. Investment gains will be tax free, and private colleges and universities happen to be offering these plans. This provision goes into effect now. There is an exclusion for employer-provided educational assistance.…”