ASPIRE Act/KIDS Accounts: Publications, Events and More

ASPIRE Act | U.S. News & World Report

Cecille Isidro — Tue, 06 Oct 2009 06:17:00 -0400

The purpose of the accounts, says Reid Cramer, director of the Asset Building Program at the New America Foundation, is to get people invested in their future. ...

Lifetime Savings Accounts Plan Could Liberate Future Generations | San Francisco Examiner

Cecille Isidro — Fri, 17 Jul 2009 12:18:00 -0400

What if every child started out in life with his or her own personal savings program for college, for first-time home purchases and for retirement?

A savings program started at birth has more years to earn and accumulate interest, resulting in a bigger nest egg through time. Granting every child such an opportunity would result in broader and more equal ownership of savings and capital for each citizen. Such widespread capital ownership would empower and liberate every American in their personal pursuit of happiness and the American Dream.

Senator Charles Schumer Announces Intent to Introduce ASPIRE Act

Asset Building — Wed, 08 Jul 2009 12:02:00 -0400

The ASPIRE Act of 2009

Asset Building — Wed, 01 Jul 2009 14:01:00 -0400

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
read more

The ASPIRE Act of 2009 Bill Summary

Asset Building — Wed, 06 May 2009 01:00:00 -0400

Title of the Bill

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.

Lifetime Savings Accounts

Promoting the Vision

Asset Building — Fri, 16 Jan 2009 10:26:00 -0500

Introduction/Background

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

Ray Boshara in U.S. News & World Report | 'A Buy Signal for Washington'

Communications — Mon, 27 Oct 2008 08:14:00 -0400

...Analyst Ray Boshara of the New America Foundation also thinks that the stock market remains a key to boosting our future standard of living. Here's why: Unless rising Asia becomes disappearing Asia, excess global labor supply will continue to push down hard on wages. "We are not going back to the 1950s," Boshara says. "The return from labor has been diminishing. Families have to earn income not just from a job but from assets."

But rather than Social Security privatization, Boshara is a proponent of "baby bonds." Each of the 4 million kiddies born every year would receive a $1,000 to $6,000 deposit from Uncle Sam into a "stakeholder account," where it would stay, compounding away, until the child hit 18. After that, the money could be used for college or a down payment on a home.

The stock market may be entity non grata in Washington right now. But let's hope it will be invited back to attend some future State of the Union address... Full story

Ray Boshara in The Record (NJ) on Child Savings Accounts

Communications — Mon, 22 Oct 2007 08:26:00 -0400

Concerned about the nation's poor savings rate, lawmakers such as Sen. Hillary Clinton have been talking about getting the government directly involved in establishing savings accounts for children.

The New York senator caused a stir last month when she said she would like to see every newborn receive a $5,000 bond that could be used later for college or a home purchase. Her remarks drew derision, and she has since backed away from that idea. About 4 million babies are born every year in the United States.

Lawmakers have kicked around a more modest plan for several years, one initially co-sponsored in 2004 by Jon Corzine, a Democrat, and Rick Santorum, a Pennsylvania Republican, who were serving in the Senate at the time. That plan would give every newborn $500 in a savings account. Sen. Charles Schumer, D-N.Y., reintroduced the bill this month.

The proposal calls for creation of an account at birth with a one-time $500 government contribution. Children living in households with incomes below the national median would be eligible for an extra contribution of as much as $500 at birth as well as the opportunity to earn $500 per year in matching funds. The money could be… more

Baby Bonds Pay Bipartisan Dividends

Cecille Isidro — Tue, 16 Oct 2007 12:33:00 -0400

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 hours, and Republican presidential candidate Rudy Giuliani called it “pandering” and promptly incorporated it into his next fundraising appeal.

But with some pundits denouncing the proposal as some hyperliberal expansion of the welfare state, it’s worth noting that this idea has been simmering for some time in both Democratic and Republican policy circles.

Unfortunately, much of the discussion that followed Clinton’s remark occurred without any context at all beyond the $5,000 figure, which is a real attention getter to be sure.

For starters, the New York senator was not poised to unveil a multibillion-dollar initiative designed to remake the social contract. It hasn’t been included in any of her formal campaign proposals, but it wasn’t an idea just cooked up on the campaign trail, either.

In a July 2006 speech to the Democratic Leadership Council, Clinton proposed giving every newborn child a $500 endowment, calling it a “baby bond” to distinguish it from a similar proposal championed by the very conservative then-Sen. Rick Santorum (R-Pa.).

But this time, Clinton didn’t say $500; she said $5,000. And at that level, the proposal not only is novel but also costs about $18 billion more per year. The unscripted musing of the sure-footed candidate has made more news than the substance of the proposal. That would hardly be a first, but it remains a shame since this is still a good idea, with good politics to boot.

In the past year alone, there have been similar proposals to use children’s accounts to support these purposes, which have been promoted by the likes of Republican Sens. Jeff Sessions (R-Ala.) and Jim DeMint (R-S.C.), as well as Democratic senators such as Charles Schumer (D-N.Y.) and Joe Biden (D-Del.).

Just last week, a bipartisan coalition of lawmakers reintroduced a bill called the America Saving for Personal Investment, Retirement and Education, or ASPIRE, Act, which provides every baby with a $500 endowment, untouchable for 18 years and then restricted to paying for college, putting a down payment on a home or saving for retirement.

These policymakers have crossed the aisle because they recognize that with the country’s growing wealth gap, low personal savings rate and poor financial literacy, we need to find ways to seed more savings and property ownership.

Access to even a modest pool of assets can provide an essential element of economic security, helping people weather income shocks and take advantage of strategic opportunities.

Much of this simply can’t be achieved through social insurance that is geared toward specific risks like unemployment or very low pay, or specific services such as health care. Assets provide the flexibility families need to navigate a volatile economy.

And there are a number of benefits to starting this savings process at birth. Not only do you get to maximize the advantage of compound interest, but these accounts can become a teaching tool to deliver the fundamentals of financial education -- a primary skill for navigating our 21st-century economy.

This is actually the approach that they are using in the United Kingdom, which is already implementing a similar accounts-at-birth proposal with support from both the Labor and Tory parties.

If we engage in a dialogue that goes beyond headlines, the merits of baby bonds could garner support from progressives and social conservatives alike. That’s because, at its core, this policy is about ownership and opportunity, offering a little something for everyone.

Supporters of President Bush’s ownership society should feel right at home providing a means to spread property ownership through the population, which might change how people think, behave and plan for the future -- ultimately promoting self-sufficiency in the process.

Liberals are more likely to focus on how savings accounts can serve as investments in children that can create opportunities down the road to overcome economic disparities.

We’ve already seen the potential of this idea to create some common ground.

When debates on Social Security had broken down along partisan lines in 2004 and 2005, Santorum and then-Sen. Jon Corzine (D-N.J.) were able to momentarily sing each other’s praises as the initial co-sponsors of the ASPIRE Act. Perhaps Clinton, or some other Democratic standard-bearer, will find other strange bedfellows to work with who see creating children’s savings accounts as an investment worth making.

Forget Easy Money

Cecille Isidro — Sun, 07 Oct 2007 07:12:00 -0400

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.

Imagine: a bank that promotes thrift! This could be the start of something big. Writing recently in the American Banker, Eugene Ludwig, a former comptroller of the currency, advised financial institutions to stop relying "on the easy money that comes from wholesale funding" and to concentrate instead "on harder-to-get core deposits." How quaint. Remember when banks actually tried to instill the savings habit by going into schools and helping kids set up small passbook accounts? Today, the first experience most younger Americans have with a bank comes during freshman orientation at college, when they come across a table laden with giveaways and credit-card applications.

This return to thrift comes none too soon. Not since the Great Depression have so many Americans lost their homes in one year -- and we’re not even in a recession, at least not yet. But we’re still on course to see 2 million foreclosures in 2007, afflicting one in 62 households. That’s a 67 percent increase from 2006, according to RealtyTrac. The Federal Reserve’s recent decision to cut its benchmark rate by half a point, while widely praised on Wall Street, will do little to stop the slide.

Also not since the Great Depression have Americans saved so little. Even with unemployment at historically low levels, Americans spent more than they earned in both 2005 and 2006 -- and charged the difference. Household debt, not including mortgages, now eats up nearly 15 percent of disposable income -- more than food and gasoline combined. One in seven families is dealing with a debt collector. Children today are more likely to live through their parents’ bankruptcy than their parents’ divorce. Americans’ stunning lack of savings not only brings personal tragedy but also is causing the dollar to plummet against all major currencies, jeopardizing our economic growth and threatening the financial system worldwide.

What’s going on? No doubt, some of us like to shop too much, but it’s also true that the "fixed costs" of middle-class life have soared. Elizabeth Warren, a professor at Harvard Law School, shows that while family incomes have gone up in the past generation, the costs of health care, education, housing, child care and transportation have risen even higher.

Meanwhile, not only does the government itself borrow as though there were no tomorrow, primarily through unfunded health and pension plans, but it promotes what David Blankenhorn of the Institute for American Values calls "anti-thrift" institutions. Today, 41 states plus the District of Columbia and Puerto Rico run lotteries, and 11 states encourage casinos. Government has also allowed for the mainstreaming of other anti-thrift institutions -- some charging annual interest of more than 500 percent -- that once existed, if at all, only in the shadows of society. Payday lenders, rent-to-own stores, auto-title lenders, some franchise tax preparers and chain pawn shops are all now as common across the landscape of middle-class America as Applebee’s.

After the terrorist attacks of 2001, President Bush told us that the patriotic thing to do was to shop. But Osama bin Laden is still out there, gas is more expensive than ever, the credit card is maxed out and our homes are depreciating. There’s a better way: the old-fashioned virtue called thrift.

Historically, thrift didn’t carry its current association of being cheap or stingy. Rather, it meant the wise use of resources. It meant an abhorrence of waste, whether of raw materials, time, energy or money. In short, it meant conservation.

To conserve money, working-class men and women banded together to create "thrift" institutions. Before these institutions were deregulated and taken over by the fast-buck crowd in the 1980s, they provided a staid but reliable vehicle for building a nation of "freeholding" middle-class homeowners and small-scale entrepreneurs. Most Americans understood, until the triumph of the anti-thrift institutions, that their own freedom from wage slavery -- and, indeed, the civic health and wealth of the republic -- depended on the savings habit and the widespread ownership of unencumbered small properties that it makes possible.

Today, by contrast, while many Americans understand the need to conserve energy and natural resources, they have trouble seeing what any of that has to do with credit cards and subprime mortgages. But conserving financial resources is not only still essential to individual liberty; it is also essential to moderating wasteful consumption and saving the environment.

Reviving the American thrift ethos won’t be easy, and it will probably take at least a generation. But we can take some small steps now that would make saving easy, automatic and frequent. Our goal should be to generate new savers as well as new savings -- in sharp contrast to current government policy, which allocates considerably more than $100 billion a year in tax breaks to high-income earners who would save anyway.

First, we should take advantage of one of the most powerful forces in human nature: inertia. Studies in behavioral economics show that when new hires have to opt out of a 401(k) retirement plan, as opposed to having to opt in, savings rates skyrocket. Also, building on the "Opportunity NYC" initiative (which is being privately funded by the Rockefeller Foundation, New York Mayor Michael R. Bloomberg and several other donors), governments, civic-minded corporations and philanthropies could make automatic savings deposits to individuals who engage in socially desirable behavior. Finish high school, volunteer in your community or buy an energy-efficient appliance, and your savings account receives a deposit.

Technology, if fully exploited, can also make the cost of maintaining a bank account far lower, thereby giving financial institutions a greater incentive to serve small savers and giving freedom to the "unbanked" poor from the gouging fees that payday lenders charge to cash checks. Imagine that your debit card is also an interest-paying savings card, to which your employer, the Internal Revenue Service and other entities can make automatic deposits. Some innovative firms are already offering such a product, which combines low cost with convenience and security.

Meanwhile, regulators should encourage more community-focused banks, credit unions and thrift institutions. These can resume their historical role of promoting thrift by helping customers become savers as well as (eventually) homeowners and small-business owners.

Congress should do its part as well. The bipartisan New Savers Act, for example, makes it easier to open bank accounts, buy savings bonds, put money away for college and receive financial education. Another bipartisan measure, the Automatic IRA Act, encourages automatic payroll deposits into IRAs. Other proposals authorize tax credits for low-income savers, as well as remove savings penalties for those on public assistance.

Finally, to usher in this "new thrift" across generations, Congress should establish a lifelong savings account for all children when they are born -- a reality in Britain and elsewhere and an idea that’s rapidly gaining bipartisan momentum in the United States.

If you’re an American born in the 20th century, thrift probably strikes you as a musty, downscale word -- reminiscent of used clothes, aged relatives who wrapped their sofas in plastic or perhaps the grandmother who saved Green Stamps. But it’s worth remembering, as did generations of Americans struggling up from poverty and privation, that thrift is still the essential virtue that makes the American dream possible.

Ray Boshara and the ASPIRE Act in the Los Angeles Times

Communications — Sun, 07 Oct 2007 03:08:00 -0400

In 2004, Sens. Rick Santorum (R-Pa.) and Jon Corzine (D-N.J.) proposed the America Saving for Personal Investment, Retirement and Education (ASPIRE) Act, legislation that would have given every baby a minimum $500 endowment, untouchable for 18 years, at which time it could be used to help pay for college, put a down payment on a house or start a business....

The notion of a baby bond is grounded, according to supporters, in the concept of the American ownership society, which was a tenet of President Bush's 2004 campaign (when the practical application was privatizing Social Security).

"The intellectual history of this idea is property ownership -- the Homestead Act, the GI Bill -- conscious efforts to spread property ownership through the population," said Ray Boshara, director of the Asset Building Program at the nonpartisan New America Foundation, which helped craft the ASPIRE legislation and advised British officials on their program. "That has broad bipartisan support." The idea, he said, is to put children on a path toward lifetime savings and wealth accumulation, a notion that appeals to conservatives and liberals. On Wednesday, in fact, the ASPIRE legislation was quietly reintroduced in the House of Representatives by… more

Bipartisan Lawmakers Introduce 'KIDS Account' Bill to Build Savings, Financial Education, and Retirement Security

Communications — Fri, 05 Oct 2007 05:28:00 -0400

A bipartisan coalition introduced the America Saving for Personal Investment, Retirement, and Education Act (“The ASPIRE Act”) which would set up a “KIDS Account” at birth for every child in America which they can later use to pursue post-secondary education, buy their 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 New America Foundation’s Asset Building Program. Representatives Patrick Kennedy (D-RI), Phil English (R-PA), Jim Cooper (D-TN), Rahm Emanuel (D-IL), and Tom Petri (R-WI) introduced the ASPIRE Act in the House on Wednesday. The Senate bill will be led by Senator Charles Schumer (D-NY).

“There couldn’t be a better time to re-establish a savings culture in America,” remarked Ray Boshara, Vice President and Director of New America Foundation’s Asset Building Program. “With a negative personal savings rate two years in a row, and one in seven Americans now dealing with a debt collector, we need to put every child – and especially the 39% of kids who grow up in homes with no assets – on a path of lifetime savings and wealth accumulation.”

The ASPIRE Act calls for each child’s KIDS 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 $500 per year in matching funds for amounts saved in the account. Financial education would be offered in conjunction with the accounts, which later can be used to pay for post-secondary education, a first home, or retirement.

“New America commends this visionary group of legislators who’ve crossed party lines in support of building a nation of savers, investors, and owners. These kids – like Jamar Nembard, a 10th grade student from Delaware participating in the SEED Initiative, who joined policymakers at a forum on KIDS Accounts on Capitol Hill on Wednesday -- will be better positioned as young adults to grow the American economy in the 21st century,” said Boshara. “We also thank and commend those diverse, forward-looking persons and organizations who stood up at Wednesday’s forum in support of establishing savings at birth for all kids – the United Way of America, Edelman Financial Services, the Institute for American Values, Junior Achievement Worldwide, David Brooks of the New York Times, and Citi’s Office of Financial Education. New America greatly values their leadership and partnership in this critical effort.”

A detailed summary and other information on the ASPIRE Act can be found at www.aspireact.org.

KIDS Accounts

Communications — Wed, 03 Oct 2007 09:00:00 -0400

A New America Event
10/03/2007 - 2:00pm

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.

There could not be… more

Marketplace Interviews Ray Boshara on Kids' Savings

Communications — Wed, 03 Oct 2007 04:17:00 -0400

Scott Jagow: A bill being introduced in Congress this morning might breathe new life into an old idea: Savings accounts for children…

Sarah Gardner: The idea is simple: give every American newborn $500 in a tax-free savings account. At age 18, kids can use it for college -- or they can sock it away until later for a first home or retirement.

Supporter Ray Boshara at the New America Foundation says more than a third of children grow up in households without investments.

Ray Boshara: If we don't endow these kids with assets at birth, I think their opportunities for a better life are diminished. So-called "baby bonds" have high-profile support. Hillary Clinton recently proposed giving everyone $5,000 at birth…

To listen to the interview with Ray Boshara, please visit Marketplace's website, or download the attached MP3 file below.

Ray Boshara is director of New America's Asset Building Program. For more information on child savings accounts, please visit www.aspireact.org.

A Citizen's Guide to the ASPIRE Act

Asset Building — Mon, 01 Oct 2007 11:09:00 -0400

Introduction in the 111th Congress is Currently Pending

Section Titles

Ray Boshara Interviews with CNBC on Hillary's "Baby Bonds"

Communications — Mon, 01 Oct 2007 02:36:00 -0400

Presidential hopeful Hillary Clinton is pushing the idea of giving infants special bonds in order to give them a headstart in life, with Ray Boshara, New America Foundation V.P. ...

"This was the only proposal in the multibillion dollars that brought Democrats and Republicans together back when we were talking about savings and retirement security," said Ray Boshara.

"It's important to teach financial basics and to reestablish a savings culture in america."

"It's the kind of entitlement that more that pays for itself over time... If you start with wealth you create more owners and investors."

Ray Boshara is also Director of the Asset Building Program. To view this video from "On the Money," please visit the CNBC website.

ASPIRE Act Frequently Asked Questions

Asset Building — Mon, 01 Oct 2007 02:00:00 -0400

The attached document answers the following questions about the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act:

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 much money will the government put into an account?
How much of the benefits will go to lower-income families?
Will assets in the accounts penalize people applying for public assistance?
Who can contribute to the accounts?
Why is there a limit on private contributions to the account?
Who will control the accounts?
How much will this cost?
Can America really afford this? How is this paid for?
Are there restrictions on account withdrawals? How can money in the account be used?
How will the account be taxed?
Why is there a minimum account balance, even after age 18?
Has this been done before?
How do KIDS Accounts differ from the UK’s Child Trust Fund Accounts?
Will this raise college tuition?
What if my child needs money to pay for college before they are 18?
Who will manage this program?
Why can’t the private sector offer accounts?
Why not let the private sector handle accounts of those under 18?
How much can a child save in a KIDS Account? What will they have when they are 18?
Where will money in KIDS Accounts be invested?
How will this bill help promote financial literacy?
Who supports this bill?
What is the legislative strategy for moving this bill through Congress?
How is this year’s bill difference from previous versions?

Ray Boshara Discusses 'Baby Bonds' and Asset Reform on ABC News

Communications — Fri, 28 Sep 2007 04:07:00 -0400

Sen. Hillary Clinton, D-N.Y., floated the idea Friday of giving every child born in America a $5,000 "baby bond" from the government to help pay for future costs of college or buying a home...

"I'm pleased that Sen. Clinton keeps talking about 'baby bonds,' whether $500 or $5,000 at birth," said Ray Boshara, the vice president of the New America Foundation.

Boshara, who has worked with Clinton's policy staff on the concept, did not see the different dollar figure floated by Clinton on Friday as reflecting a definite policy change. Rather, he saw it as an affirmation of her excitement with the concept and expects her to continue to work out the details when she develops a formal proposal.

"I think Sen. Clinton is very, very excited about accounts at birth and hasn't settled on the right combination between initial deposits and matching deposits until 18," said Boshara. "She and her staff told me in the next several months we'll work on the details. . . . When we work out the details, we'll figure out the best way to get to around $20,000 at 18 -- that's what matters."

Ray Boshara is Director of New America's Asset Building Program,… more

Restoring the Value of Saving

Cecille Isidro — Tue, 04 Sep 2007 08:09:00 -0400

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 calling for the return of the American value of thrift are beginning to grow louder.

Any middle class American will tell you that it is increasingly difficult to afford a middle-class lifestyle on a middle-class income. Tuition at four-year institutions -- in 2005, averaging $11,441 a year -- amounts to 25% of median income; in 1990, a year of higher education cost just 16% of annual household income. Increase in the median home price has also outpaced income growth. Throughout the 1980s and 1990s the cost of a new home was 3.8 to 4.2 times greater than the median household income; today a new home is 5.1 times greater than median household earnings. The accelerating costs of higher education and homeownership -- both hallmarks of the middle-class lifestyle and trophies of the American Dream -- have made these goods largely unattainable to those who rely solely on income to advance.

Americans are quickly beginning to realize they’ll need more than just stable wages to get ahead in the new economy. And with foreclosure rates skyrocketing, and student loan and credit card debt continuing to mount, families are rightfully hesitant to take on more debt. This leaves only one option: for hard working families to afford a middle-class lifestyle -- while avoiding the paralysis of debt -- they must restore the virtue of thrift and begin to develop personal assets through saving.

Saving has already emerged on the campaigned trail as one not-so-novel way to bring low- and middle-income American’s back onto solid economic footing. Just last week, John Edwards proposed the creation of “Get Ahead Accounts” that will provide matching dollars for working families who save. It is with savings, Edwards argues, that families will achieve economic security -- by investing in assets such as higher education or homeownership.

Just off the campaign trail back on Capitol Hill, savings proposals are gaining traction in a divided Congress looking for a bipartisan way to support working families who feel increasingly marginalized. Just before the August recess, Senators Clinton (D-NY) and Smith (R-OR) introduced the New Savers Act, a comprehensive bill designed to promote new savings, especially among low- and middle-income families, and enhance existing savings vehicles. In addition, members from both chambers and both sides of the aisle have proposed reforming asset limits -- rules in public assistance programs that prevent low-income families from saving while receiving benefits. The savings agenda appears to safely occupy the ever-receding common ground in both parties’ approach to social and economic policy, making it fertile ground for innovative policies that can actually become law.

One bold initiative rooted in this shared agenda has the potential to instantly reinvigorate America’s saving culture and provide every citizen with a vehicle to invest in his or her own economic future. To date there are a number of legislative proposals, from both Democrats and Republicans, to create a Children’s Savings Account for every child in America. These accounts, which could be started with government seed money and grown through personal deposits, would provide every individual with the start up capital needed to transition into adulthood. By limiting the use of these funds to investments in higher education, homeownership, or retirement, we can ensure that every young person has the opportunity to pursue the American Dream and the capital needed to secure a middle-class lifestyle through hard work and prudent investment.

Making homeownership, higher education, and retirement security a reality for families earning the median income in the new economy will require a fundamental shift away from debt and consumption back to the inherently American value of thrift on which our middle class emerged and thrived. Policies both big and small can help increase the incentive to save and expand access to savings products, but it will take a cultural reawakening for America to remember that the trophies of a middle-class lifestyle are bought with hard work and prudent investment, not with easy credit.

Columnist Neal Peirce Extols Ray Boshara, Kids Savings Accounts

Communications — Mon, 18 Jun 2007 10:12:00 -0400

Are the bad old days back? Read the headlines and you'd think so: "Violent Crime Blazing Back in America" and "Big-city murders way up since '04..."Let's assume the recent rise is serious. What's happening? Lots of competing explanations get offered: Gang problems are now growing in smaller cities. Gun laws are loose and the politicos fear to stiffen them. Because we have the world's highest incarceration rate, rising numbers of inmates are being released from prisons — far too few rehabilitated or able to land a job...

Everyone wants truly dangerous criminals behind bars — indeed for as long as possible...

How about prevention — investing early, systematically in kids and families? This is the issue all the alarming crime headlines, and quick political fixes, ignore. Poverty, broken families, poor education and significant crime are inextricably bundled. Early childhood nutrition, care and education can pay off hugely later...

What of the argument that we can't "afford" the depth of early-childhood services such as other advanced nations provide?Ray Boshara of the New America Foundation has a radically better idea: Establish an "American Stakeholder Account" for every child at birth — initial government deposit $6,000, plus eligibility for dollar-for-dollar matching funds… more