PETER SUDERMAN: How Obama’s 529 College Tax Plan Debacle Proves the Welfare State is Doomed: Someone has to pay for it—but no one wants to foot the bill.

To understand just how bad the politics of Obama’s now-withdrawn plan to tax 529 college savings were, think about it this way: Obama, under heavy pressure from both Democrats and Republicans, made a public show of pulling a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.

Maybe the GOP should pass it, and put him in the uncomfortable position of having to veto his own proposal. . . .

But here’s the real point: “In the bigger picture, the existing welfare state is unaffordable. Either it will have to be cut, or reformed, or paid for—by someone, somehow. The administration and its allies would like to reassure you that the someones who will pay for all of this will be limited to the richest of the rich, but in practice there’s only so much money that can be squeezed out of the extremely wealthy.” Sooner or later, you run out of other people’s money.