A proposal aimed at helping lower-income families save for college -- part of the Bush administration's FY08 budget proposals unveiled Monday -- might have found a receptive ear in Senate Finance Chairman Baucus...

In unveiling its proposed FY08 budget, the White House proposed to make contributions to a Section 529 qualified tuition plan count toward the computation of the saver's credit.

As a result, qualifying taxpayers would be eligible for a tax credit of up to $2,000 to match a portion of contributions made to either retirement or Section 529 plans. The latter are college savings accounts in which contributions are made in after-tax dollars, but in which interest accumulates tax-free.

The Senate Finance Committee aide said Baucus wants to ensure that Section 529 plans are available to all Americans, and is "very interested in seeing if this proposal would work to serve that purpose."

Ray Boshara, vice president and director of asset building at the New America Foundation, said his group proposed expanding the saver's credit to include Section 529 contributions more than a year ago -- as one of a number of ideas to make such benefits available to lower income families.

He said he was surprised that the idea turned up in the White House budget proposal...

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