(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 132. DISTRIBUTIONS NOT REQUIRED FROM INDI-
VIDUAL RETIREMENT PLANS AT AGE 701⁄2. 
Paragraph (9) of section 401(a) of the Internal Rev-
enue Code of 1986 (relating to required distributions) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(I) EXCEPTION FOR INDIVIDUAL RETIRE-
MENT PLANS.—The requirements of this para-
graph shall not apply to any individual retire-
ment plan for any calendar year after 2009.’’. 
SEC. 133. NO IRA DISTRIBUTION DURING 2009 INCLUDED IN 
GROSS INCOME. 
Subsection (d) of section 408 of the Internal Revenue 
Code of 1986 (relating to individual retirement accounts) 
is amended by adding at the end the following new para-
graph: 
‘‘(10) DISTRIBUTIONS DURING 2009.— 
‘‘(A) IN GENERAL.—Gross income of an 
individual for the taxable year does not include 
any distribution during 2009 from an individual 
retirement plan (other than a plan described in 
subsection (k) or (p)) to the extent such dis-
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tribution is otherwise includible in gross in-
come. 
‘‘(B) APPLICATION OF SECTION 72.—Not-
withstanding section 72, in determining the ex-
tent to which an amount is treated as otherwise 
includible in gross income for purposes of sub-
paragraph (A), the aggregate amount distrib-
uted from an individual retirement plan shall be 
treated as includible in gross income to the ex-
tent that such amount does not exceed the ag-
gregate amount which would have been so in-
cludible if all amounts from all individual retire-
ment plans were distributed. Proper adjust-
ments shall be made in applying section 72 to 
other distributions in such taxable year and 
subsequent taxable years.’’. 
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TITLE 
II—ACROSS-THE-BOARD 
RESCISSIONS 
IN 
NON-DE-
FENSE 
DISCRETIONARY 
SPENDING FOR FISCAL YEAR 
2009 
SEC. 201. ACROSS-THE-BOARD RESCISSIONS IN NON-DE-
FENSE DISCRETIONARY SPENDING FOR FIS-
CAL YEAR 2009. 
(a) ACROSS-THE-BOARD
RESCISSIONS.—There is 
hereby rescinded an amount equal to 1 percent of— 
(1) the budget authority provided (or obligation 
limitation imposed) for fiscal year 2009 for any non- 
defense discretionary account in any fiscal year 2009 
appropriation Act; 
(2) the budget authority provided in any ad-
vance appropriation for fiscal year 2009 for any 
non-defense discretionary account in any prior fiscal 
year appropriation Act; and 
(3) the contract authority provided in fiscal 
year 2009 for any program that is subject to a limi-
tation contained in any fiscal year 2009 appropria-
tion Act for any non-defense discretionary account. 
(b) NON-DEFENSE DISCRETIONARY ACCOUNT.—For 
purposes of subsection (a), the term ‘‘non-defense discre-
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tionary account’’ means any discretionary account, other 
than— 
(1) any account included in a Department of 
Defense Appropriations Act; 
(2) any account included in a Military Quality 
of Life and Veterans Affairs Appropriations Act; or 
(3) any account for Department of Energy de-
fense activities included in an Energy and Water 
Development Appropriations Act. 
(c) PROPORTIONATE APPLICATION.—Any rescission 
made by subsection (a) shall be applied proportionately— 
(1) to each discretionary account and each item 
of budget authority described in such subsection; 
and 
(2) within each such account and item, to each 
program, project, and activity (with programs, 
projects, and activities as delineated in the appro-
priation Act or accompanying reports for the rel-
evant fiscal year covering such account or item, or 
for accounts and items not included in appropriation 
Acts, as delineated in the most recently submitted 
President’s budget). 
(d) SUBSEQUENT APPROPRIATION LAWS.—In the 
case of any fiscal year 2009 appropriation Act enacted 
after the enactment of this section, any rescission required 
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by subsection (a) shall take effect immediately after the 
enactment of such Act. 
(e) OMB REPORT.—Within 30 days after the enact-
ment of this section (or, if later, 30 days after the enact-
ment of any fiscal year 2009 appropriation Act), the Di-
rector of the Office of Management and Budget shall sub-
mit to the Committees on Appropriations of the House 
of Representatives and the Senate a report specifying the 
account and amount of each rescission made pursuant to 
subsection (a). 
TITLE III—INCREASED 
INCENTIVES FOR EDUCATION 
SEC. 301. INCREASED DEDUCTION FOR QUALIFIED HIGHER 
EDUCATION EXPENSES. 
(a) IN GENERAL.—Paragraph (2) of section 222(b) 
of the Internal Revenue Code of 1986 (relating to dollar 
limitations on qualified tuition and related expenses) is 
amended to read as follows: 
‘‘(2) DOLLAR LIMITATIONS.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after 2008, the applica-
ble dollar amount shall be equal to— 
‘‘(i) in the case of a taxpayer whose 
adjusted gross income for the taxable year 
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does not exceed $75,000 ($150,000 in the 
case of a joint return), $6,000, 
‘‘(ii) in the case of a taxpayer not de-
scribed in clause (i) whose adjusted gross 
income for the taxable year does not ex-
ceed $90,000 ($180,000 in the case of a 
joint return), $2,000, and 
‘‘(iii) in the case of any other tax-
payer, zero. 
‘‘(B) ADJUSTED
GROSS
INCOME.—For 
purposes of this paragraph, adjusted gross in-
come shall be determined— 
‘‘(i) without regard to this section and 
sections 199, 911, 931, and 933, and 
‘‘(ii) after application of sections 86, 
135, 137, 219, 221, and 469.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 302. INCREASED DEDUCTION FOR INTEREST ON STU-
DENT LOANS. 
(a) INCREASED DEDUCTION.—Paragraph (1) of sec-
tion 223(b) of the Internal Revenue Code of 1986 (relat-
ing to interest on education loans) is amended to read as 
follows: 
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