To repeal the restrictions added by the Tax Reform Act of 1986 on the deduction for retirement savings and to facilitate the use of amounts from individual retirement plans to pay long-term health care insurance premiums, educational expenses, and first home acquisition costs.

Amends the Tax Reform Act of 1986 to repeal provisions relating to limitations on IRA (Individual retirement account) deductions for active participants in certain pension plans and nondeductible contributions to individual retirement plans, thus restoring the prior law for deduction for retirement savings. Amends the Internal Revenue Code to exempt from the penalty on early distributions from individual retirement plans distributions for: (1) long-term health care insurance premiums; and (2) educational expenses for higher education or a vocational school.

Provides a tax exclusion for distributions from such plans used to acquire a first home. Limits such distribution to $10,000.