U.S. Senate votes to expand federal ESAs

The U.S. Senate in March approved a bill to expand the use of education savings accounts (ESAs) for K-12 education.

The bill would allow parents, employers, and others to deposit as much as $2,000 per child each year into an ESA bearing tax-free interest. The money could be spent at public, private, or parochial schools, for such expenses as tuition, books, transportation, and tutoring.

Existing law allows only for an annual deposit of $500 for higher-education costs.

Republicans praised the bill as one that decentralizes power from Washington, giving individuals and parents more control over their children's education.

"In Washington, sometimes we get a one-size-fits-all mentality, but everyone knows that every child in this country is different and every child has different needs," Texas Sen. Kay Bailey Hutchison told The Washington Post. "What we should be doing in Washington is giving parents the ability to choose what is best for their particular child."

Republican sources told the Post that the House likely will pass the bill. Despite his support for higher-education savings accounts, President Clinton has threatened to veto the measure.