How Can You Be This Dumb And Still Be President?
Tax college funds? Hello?

Peter Suderman at reason sees a bright side in it. As the headline to his piece goes: "How Obama's 529 College Tax Plan Debacle Proves the Welfare State is Doomed":

To understand just how bad the politics of Obama's now-withdrawn plan to tax 529 college savings were, think about it this way: Obama, under heavy pressure from both Democrats and Republicans, made a public show of pulling a proposal that already had no chance of passing.

Even as an inert fantasy proposal, it was so widely disliked that the White House had to back down.

It's a minor but revealing political fiasco--one that shows how distant the White House is even from the interests of its own party while offering a preview of economic policy debates and welfare-state fiscal challenges for decades to come.

The political optics of the plan were flat-out terrible for Obama, who put forth the proposal in the context of a State of the Union address built around the theme of Middle Class Economics. The gist was that Obama proposed taxing the wealthy in order to pay for new middle class benefits, like free community college tuition.

But, somewhat awkwardly, given the president's chosen theme, 529 plans are tax-advantaged savings vehicles that currently benefit an awful lot of middle class people. In particular, they benefit middle and upper-middle class families in high-tax blue states.

So it is not exactly surprising to find that, in addition to the entirely predictable GOP pushback against the proposal, Rep. Nancy Pelosi, a Democrat from California, and Rep. Chris Van Hollen, a Democrat from Maryland, lead a seperate Democratic push for the White House to drop the plan. This is an administration that is now so isolated and out of touch that it does not grasp the obvious interests of its own party.

The plan was also tremendously awkward for Obama himself. As the folks at Americans for Tax Reform have noted, Obama was not only a public booster of 529s, someone who as a Senator voted to make them permanent and praised them as tools to help families with college expenses in his book, he was also someone who had relied on a 529 himself, contributing $240,000 to a 529 college fund for his own children back in 2007. Obama took advantage of the plan's tax benefits--then proposed closing the door behind him.