The Book of Ron Paul
1998 Ron Paul Chapter 62

Parent And Student Saving Account Act

18 June 1998

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Congressional Record (Page H4735)   Cached

1998 Ron Paul 62:1
Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I oppose the Conference Report of the Parent and Student Saving Account Act (H.R. 2646). This, despite having been an original cosponsor, and having been quite active in seeking support, of the original House bill. I remain a strong supporter of education IRAs, which are a good first step toward restoring parental control of education by ensuring parents can devote more of their resources to their children’s education. However, this bill also raises taxes on businesses and expands federal control of education. I cannot vote for a bill that raises taxes and increases federal power, no matter what other salutary provisions are in the legislation.

1998 Ron Paul 62:2
I certainly support the provision allowing parents to contribute up to $2,000 a year to education savings accounts without having to pay taxes on the interest earned by that account. This provision expands parental control of education, the key to true education reform as well as one of the hallmarks of a free society. Today the right of parents to educate their children as they see fit is increasingly eroded by the excessive tax burden imposed on America’s families by Congress. Congress then rubs salt in the wounds of America’s hardworking, taxpaying parents by using their tax dollars to fund an unconstitutional education bureaucracy that all too often uses its illegitimate authority over education to undermine the values of these same parents!

1998 Ron Paul 62:3
I also support the provisions extending the exclusion of funds received from qualified state tuition programs, and excluding monies received from an employer to pay for an employee’s continuing education from gross income. Both of these provisions allow Americans to spend more of their resources on education, rather than hand their hard-earned money over to the taxman.

1998 Ron Paul 62:4
Returning control over educational resources to the American people ought to be among Congress’ top priorities. In fact, one of my objections to this bill is that is does not go nearly far enough in returning education dollars to parents. This is largely because the deposit to an education IRA must consist of after-tax dollars. Mr. Speaker, education IRAs would be so much more beneficial if parents could make their deposits with pretax dollars. Furthermore, allowing contributions to be made from pretax dollars would provide a greater incentive for citizens to contribute to education IRAs for others’ underprivileged children.

1998 Ron Paul 62:5
Furthermore, education IRAs are not the most effective means of returning education resources to the American people. A much more effective way of promoting parental choice in education is through education tax credits, such as those contained in H.R. 1816, the Family Education Freedom Act, which provides a tax credit of up to $3,000 for elementary and secondary expenses incurred in educating a child at public, private, parochial, or home schools. Tax credits allow parents to get back the money they spent on education, in fact, large tax credits will remove large numbers of families from the tax roles!

1998 Ron Paul 62:6
Therefore, I would still support this bill as a good first (albeit small) step toward restoring parental control of education if it did not further expand the federal control of education and raise taxes on American businesses!

1998 Ron Paul 62:7
In order to offset the so-called “cost to government” (revenue loss) H.R. 2646 alters the rules by which businesses are taxed on employee vacation benefits. While I support efforts to ensure that tax cuts do not increase the budget deficit, the offset should come from cuts in wasteful, unconstitutional government programs, such as foreign aid and corporate welfare. Congress should give serious consideration to cutting unconstitutional programs such as “Goals 2000” which runs roughshod over the rights of parents to control their children’s education, as a means of offsetting the revenue loss to the treasury from this bill. A less than 3% cut in the National Endowment for the Arts budget would provide more funding than needed for the education IRA section of this legislation.

1998 Ron Paul 62:8
Mr. Speaker, we in Congress have no moral nor scientific means by which to determine which Americans are most deserving of tax cuts. Yet, this is precisely what Congress does when it raises taxes on some Americans to offset tax cuts for others. Rather than selecting some arbitrary means of choosing which Americans are more deserving of tax cuts, Congress should cut taxes for all Americans.

1998 Ron Paul 62:9
Moreover, because we have no practical way of knowing how many Americans will take advantage of the education IRAs, or the other education tax cuts contained in the bill, relative to those who will have their taxes raised by the offset in this bill, it is quite possible that H.R. 2646 is actually a backdoor tax increase! In fact, the Joint Committee on Taxation has estimated that this legislation would have increased revenues to the Treasury by $24 million over the next eight years!

1998 Ron Paul 62:10
It is a well-established fact that any increase in taxes on small businesses discourages job creation and, thus, increases unemployment! It is hard to see how discouraging job creation by raising taxes is consistent with the stated goal of H.R. 2646 — helping America’s families!

1998 Ron Paul 62:11
Mr. Speaker, this bill not only raises taxes instead of decreasing spending, it increases the federal role in education. For example the conference report on H.R. 2646 creates a new federal program to promote literacy, the so-called Reading Excellence Act. This new program bribes the states with monies illegitimately taken from the American people, to adapt programs to teach literacy using methods favored by Washington-based “experts.” Mr. Speaker, enactment of this literacy program will move America toward a national curriculum since it creates a federal definition of reading, thus making compliance with federal standards the goal of education. I ask my colleagues how does moving further toward a national curriculum restore parental control of education?

1998 Ron Paul 62:12
This bill also creates a new federal program to use federal taxpayer funds to finance teacher testing and merit pay. Mr. Speaker, these may be valuable education reforms; however, the federal government should not be in the business of education engineering and using federal funds to encourage states to adopt a particular education program.

1998 Ron Paul 62:13
While the stealth tax increase and the new unconstitutional programs provide significant justification for constitutionalists to oppose this conference report, the new taxes and spending are not even the worst parts of this legislation. The most objectionable provision of H.R. 2646 is one that takes another step toward making the federal government a National School Board by mandating that local schools consider a student’s bringing a weapon to school as evidence in an expulsion hearing.

1998 Ron Paul 62:14
The issue is not whether local schools should use evidence of possessing a weapon as evidence in a discipline procedure. Before this Congress can even consider the merits of a policy, we must consider first whether or not the matter falls within our constitutional authority. The plain fact is as the tenth amendment to the Bill of Rights makes clear, Congress is forbidden from dictating policy to local schools.

1998 Ron Paul 62:15
The drafters of the United States Constitution understood that to allow the federal government to meddle in the governance of local schools, much less act as a national school board, would inevitably result in the replacement of parental control by federal control. Parents are best able to control education when the decision making power is located closest to them. Thus, when Congress centralized control over education, it weakens the ability of parents to control, or even influence, the educational system. If Congress was serious about restoring parental control on education, the last thing we would even consider doing is imposing more federal mandates on local schools.

1998 Ron Paul 62:16
In conclusion, although the Conference Report of Parent and Student Savings Account Act does take a step toward restoring parental control of education, it also raises job-destroying taxes on business. Furthermore, the conference report creates new education programs, including a new literacy program that takes a step toward nationalizing curriculum, as well as imposes yet another mandate on local schools. It violates the Tenth Amendment to the Constitution and reduces parental control over education. Therefore, I cannot, in good conscience, support this bill. I urge my colleagues to join me in opposing this bill and instead support legislation that returns education resources to American parents by returning to them monies saved by deep cuts in the federal bureaucracy, not by raising taxes on other Americans.


1998 Ron Paul Chapter 62
The text of this chapter was inserted in Congressional Record as an extension of remarks, and was not spoken on the House floor.

1998 Ron Paul 62:4
pretax dollars perhaps should have been pre-tax dollars in both instances.

1998 Ron Paul 62:5
tax roles! probably should have been tax rolls!

1998 Ron Paul 62:15
decision making power probably should have had a hyphen: decision-making power.
Thus, when Congress centralized control over education, it weakens .... probably should have been, Thus, when Congress centralizes control over education, it weakens ....

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