From .......... GOVERNING AMERICA - An Insider's Report

By Joseph A. Califano, Jr.

301 ...................... EDUCATION

When committee member Dan Rostenkowski found out about Ullman's agreement on the tuition tax credit, he was furious.

At the committee meeting that Friday evening, the House and Senate conferees tentatively agreed on a $227 billion Social Security financing package, but the Senate would not retreat on Roth's tuition tax credit. Long taunted Ullman and the House conferees by insisting they take the tuition tax credit to the House floor for a vote, where he knew it would pass overwhelmingly. Angry at Long's teasing demand, the House conferees walked out.

I called House Speaker [Roman Catholic] Tip O'Neill early Saturday morning. He agreed with [Roman Catholic] Rostenkowski's judgment that the House conferees would let the Social Security financing bill die before accepting the tuition tax credit. O'Neill also confirmed my concern that we could not pass these new Social Security taxes the following year because of the 1978 congressional elections. I called the President, brought him up to date, and suggested that I hold a tough press conference. at the White House, indicating that "I would recommend a veto if the Social Security bill is sent to you with the tuition tax credit in it." Carter agreed, but wanted me to soften my statement about a veto to preserve his flexibility.

I then called Nelson Cruikshank, the White House Counselor on Aging, who was deeply interested in the Social Security bill. He said he would let the aging groups in Delaware know that Senator Roth was holding up legislation needed to preserve the financial viability of the Social Security system.

At the White House that afternoon, I denounced the Roth proposal. I pointed out that his tuition tax credit was irrelevant to the Social Security bill, and "an incoherent way to make education policy." I accused Roth of "holding the viability of the Social Security program" and America's elderly "hostage" to a tax credit that would help the wealthy send their children to private schools. I talked to Long that afternoon; he was still noncommittal, waiting to assess the impact of the press conference and pressure on Roth before deciding what to do.

On the following Tuesday morning, Louisiana Congressman Joe Waggoner, a Russell Long intimate who opposed the tuition tax credit, told me,

By Wednesday, Roth agreed to drop the tuition tax credit from the Social Security bill in return for Long's commitment to take it up early in the next Congress.

302 ....................... GOVERNING AMERICA

We won the first round on the tuition tax credit largely on the basis of its irrelevance to the Social Security legislation, the opposition of the House conferees because no hearings had been held on the House side, and the threat of a presidential veto. But the broader Packwood-Moynihan proposal was gaining momentum as more and more senators and representatives expressed support. Senate Finance Committee hearings were scheduled for January 1978.

In his State of the Union message the evening before the hearings began, Carter announced a 14 percent increase in education funding and promised financial aid to middle class college students. Still, the hearings left no doubt that the tuition tax credit proposal would sail through the Senate. Russell Long warned me,

On January 27, I had breakfast with House education leaders John Brademas, Bill Ford, who chaired the House Education Subcommittee. and Frank Thompson.

''If the President thinks Long is difficult to deal with now, remind him that Russell will have jurisdiction over education if the tax credit passes," Brademas added.

Clearly some relief was needed for middle income Americans. By the 1977-78 school year, the cost for tuition, room, and board at a private college was averaging $5,000 per year; at some of the nation's best colleges, it was more than $7,000. Many public universities charged more than $2,500 per year. These costs had risen far more rapidly than inflation generally, and they did not include the related expenses of laboratory fees, books, athletic equipment, clothing, and travel that added at least another $1,000 to the annual bill. For a family earning $25,000 in 1977 - then the 80th percentile of income in this country - a $5,000 - to - $7,000 - a year education expense was an unwieldy burden; it was a financially unbearable one for a family with the median income of $15,000.

Working with House Education and Labor Committee Chairman Carl Perkins, Bill Ford, Claiborne Pell, and others, we prepared a program and sent it to Carter on February 4. We proposed to raise the amounts a family could earn and still remain eligible for student grants and loans, in order to provide grants for the neediest and loans to ease the cash flow problems of those with more family income. My memorandum noted that the $500 Packwood-Moynihan tax credit was estimated to cost $4.4 billion just for higher education. Even at that cost, the credit was too little to help needy families and not enough to have any effect on the educational decision of wealthy families. Unlike a low-interest loan, it failed to meet the need of a middle income family to spread a much larger share of educational costs over a longer time.

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GOVERNING AMERICA - An Insider's Report

From the White House and the Cabinet

By Joseph A. Califano, Jr.

Published by Simon and Schuster 1981

ISBN 0-671-25428-6