Lifetime Savings Accounts for All Children, Beginning at Birth
In each Congress since the 108th (covering 2003 and 2004), a bipartisan coalition in Congress has introduced a version of the America Saving for Personal Investment, Retirement, and Education Act (“The ASPIRE Act”) which would set up a special account at birth for every child in America. The "Lifetime Savings Account" can later be used to pursue post-secondary education, buy a first home, or build up a nest-egg for retirement. The ASPIRE Act, which primarily benefits low-income kids, is based on research provided by the Asset Building Program and from the asset building field. Reid Cramer recently wrote on the history of lifetime savings accounts, including the contributions of the SEED Initiative--click here to read "Promoting the Vision." In the 110th Congress (2007 and 2008) Representatives Patrick Kennedy (D-RI), Phil English (R-PA), Jim Cooper (D-TN), Rep. Rahm Emanuel (D-IL) and Tom Petri (R-WI) introduced the bill as H.R. 3740 in the House. Senator Charles Schumer (D-NY) introduced the bill as S. 3557 in the Senate. The 111th Congress' version of the ASPIRE Act will be introduced in the coming months.
The ASPIRE Act calls for each child’s "Lifetime Savings Account" to be endowed with a one-time $500 contribution at birth. Children living in households with incomes below national median income will be eligible for both a supplemental contribution of up to $500 at birth as well as the opportunity to earn up to $500 per year in matching funds for amounts saved in the account. Financial education would be offered in conjunction with the accounts.
More information about the planned version of the ASPIRE Act is available here, including a brief summary of the bill, a citizen's guide which includes a detailed explanation of each section of the bill and a question-and-answer paper that addresses a number of frequently asked questions.
For more information about the history and evolution of the ASPIRE Act, you can use these links to Thomas to see the 108th Congress' versions of the bill (House and Senate); the 109th Congress versions of the bill (House and Senate) and the 110th Congress' versions of the bill (House and Senate).
At a recent campaign stop with the Congressional Black Caucus, Sen. Hillary Rodham Clinton said, “I like the idea of giving every baby born in America a $5,000 account.”
That was enough to generate a few headlines and some right-wing outrage. The Drudge Report was quick to tweak one of its favorite targets and drive some Internet traffic with a bold banner, “A Bond for Every Bassinet.”
The conservative Washington Times and New York Post blasted the idea within 24… more
Countrywide Financial, the nation’s largest mortgage lender, has a curious new idea -- or, more precisely, an old one. No longer will it use wads of Chinese cash recycled through Wall Street to make subprime loans to unqualified borrowers. Instead, it will take in deposits from small savers and lend them out to people who might actually repay them -- just like that humble thrift institution president George Bailey did in It’s a Wonderful Life.
The value of saving is finally making a comeback. After years of over consumption and accelerating debt -- and more than two years with a negative personal savings rate -- Americans are finally beginning to fret over their empty coffers and negative balance sheets. As headlines profile subprime borrowers going into default around the country, the average American’s sense of economic security has jumped from unease to panic. As policymakers scramble to develop new policies to bolster working families, echoes… more
Governor Schwarzenegger was cheered when he recently talked about post-partisanship in Washington, D.C. But the post-partisan waters don’t run deep back home in California. Two state senators who just crossed the aisle to forward a creative solution to a pressing problem are getting more grief than glory.
Senator Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference on February 28 to introduce their bill to create a California Kids Account for every newborn. The goal is to… more
Even though California is being modeled as the birthplace of post partisanship, ideological divisions still run deep in the political process. Two state senators who just crossed the aisle to forward a creative solution to a pressing state problem are getting more grief than glory.
Sens. Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference two weeks ago to introduce their bill to create a California KIDS Account for every newborn. The goal is to encourage parents… more
What
does the bill do?
Why
is a bill to promote asset building for children necessary?
Who
is eligible? Will illegal immigrants or children who become citizens get
accounts?
Will
children born before the bill takes effect get accounts?
Why
do wealthy people get these accounts?
Why
do poor people who don't pay taxes get accounts?
Is it
unrealistic to expect those with low incomes to save when they already
struggle to get by?
How
The America Saving for Personal Investment, Retirement, and Education Act of 2009 ("The ASPIRE Act of 2009")
Purpose of
the Bill
To encourage savings, promote
financial literacy, and expand opportunities for young adults by establishing a
Lifetime Savings Account for every newborn child.
In recent years, the role that savings and
assets play in shaping people's lives has increasingly captured the attention
of researchers, policy analysts and elected officials. Their interest in
savings and building wealth has grown along with an increased awareness of
specific policy tools and interventions, such as matched savings accounts
available for lower-income workers. The launch of the SEED Initiative in
October 2003 was an important marker in this process because it introduced the
An unlikely group of legislators, spanning the full political spectrum, is proposing a fresh, long-term response to the challenges of saving, financial education, and retirement security: KIDS Accounts.
By providing every newborn child a savings account at birth, with matching deposits for lower-income children, KIDS Accounts will create a national culture of savings and investing, promote financial education, and encourage life-long asset accumulation-especially higher education, homeownership, and a nest-egg for retirement.
America’s personal savings rate is abysmally low. Last year the personal savings rate was negative, the lowest annual rate since the Great Depression. Whether the objective is to promote retirement security, improve educational attainment or increase financial literacy, the need to increase household savings is vitally clear.
Children’s Savings Accounts (CSAs), which can be established automatically at birth, are gaining momentum as they form the base of many new and exciting proposals to increase savings. Many believe that CSAs hold great… more
Over 100 people, including key congressional staffers, leaders from the financial community, and policy advocates attended Solutions for Increasing Savings, Ownership and Retirement Security, co-sponsored by the New America Foundation and the Retirement Security Project, in conjunction with the Congressional Savings and Ownership Caucuses. Senator Jon Corzine (D-NJ), Congressman Philip English (R-PA), Congressman Harold Ford (D-TN) and Congressman Jim Cooper (D-TN) were active participants throughout the half-day conference, bolstering an event that included many of the pre-eminent scholars on… more
An unlikely group of legislators, spanning the full political spectrum, is proposing a fresh, long-term response to the challenges of financial education, saving, and retirement security: KIDS Accounts.
By providing every newborn child a savings account at birth, with matching deposits for lower-income children, KIDS Accounts will create a national culture of savings and investing, promote financial education, and encourage life-long asset accumulation
The America Saving for Personal Investment, Retirement, and Education Act (The ASPIRE Act) will provide a KIDS Account for every child born after December 31, 2006. Each account will be endowed with a one-time $500 contribution, and children in households earning below the national median income will be eligible for a supplemental contribution of up to $500. The accounts will be supported by incentives designed to encourage savings, promote financial literacy, and expand asset-building opportunities. The legislation is based on… more
