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House OKs tax-free accounts to pay private-school tuition

A House-passed bill would let families use tax-free savings to pay for books, computers, tutors and other school expenses, including private school tuition.

House Democrats and the Clinton administration contend that only well-off families would benefit, not the urban poor and ordinary families cited by Republicans.President Clinton is likely to veto the measure if it also clears the Senate. Thursday's vote in the House was 230-198. (Utah's three representatives voted for the measure.)

The bill would authorize tax-free savings accounts for school expenses from kindergarten through high school. Families, relatives or even corporations and foundations could put up to $2,500 a year into an account.

"What we're trying to do is to help middle-income and poorer folks in America save the money they can save to help their children get a better education," said Rep. John Boehner of Ohio, chairman of the House Republican Conference.

But Democrats, armed with data from Clinton's Treasury Department, contended 70 percent of the tax breaks would go to the richest 20 percent of families, and money would be siphoned away from public schools.

"How many people making $25,000 a year with their children in public schools are going to be able to save $2,500 a year?" asked Rep. Tim Roemer, D-Ind.

Democrats also said the kinds of spending covered by the breaks are so vague that they would invite Internal Revenue Service snooping at the same time the House is trying to curb the agency's reach.

Opponents stressed the questionable deductions and suggested that parents could even try to write off expenses for an automobile.