U.S. Senate Introduces Legislation to Provide Long-Term Savings Account for Every Child

Legislation that would provide every American child with a long-term savings account was introduced in the U.S. Senate this month by Senators Rick Santorum (R-PA), Jon Corzine (D-NJ), Chuck Schumer (D-NY), and Jim DeMint (R-SC). The America Saving for Personal Investment, Retirement, and Education (Aspire) Act would provide a $500 savings account for every child who is born after December 31, 2006, and who is issued a social security number. Children whose families earn less than the national median income would have their “Kids Accounts” supplemented with up to an additional $500 and would receive a dollar-for-dollar match on private contributions, up to $500 per year until they turn 18 years old.

The bill was praised by CFED, the national nonprofit organization working to expand economic opportunity, as a bold strategy for combating childhood poverty. CFED is currently managing a program of experimental children’s accounts in communities across the country. CFED and its partners are testing similar accounts through the SEED (Savings for Education, Entrepreneurship, and Downpayment) program, a matched savings program for children at 12 sites in various states and Puerto Rico. The SEED program is working to give information on how children will be able to save through a program such as Aspire and how these programs can best be administered.

The Sargent Shriver National Center on Poverty Law is one of the 12 SEED partners that are offering an incentive for parents to save for their children. Now in its second year in SEED, the William M. and Charles H. Mayo Elementary School in Chicago educates 75 elementary school students between 6 and 10 years old in addition to their parents.

“As members of Congress look at Aspire as a serious proposal to provide opportunity for America’s next generation, they will rely on SEED to provide insight into how such a program can work and what impact it can have on individual children, their families, and entire communities,” said Andrea Levere, president of CFED. “The Aspire Act is the best proposal in years to give every child the chance for economic security,” she added.

For more information and related links regarding the Aspire Act, see www.assetbuilding.org and www.cfed.org.