|
Senator Santorum Joins Senate and House Colleagues to Encourage Asset Building for Children
May 26, 2005 - Washington, D.C. - U.S. Senator Rick Santorum (R-PA), Chairman of the Senate Republican Conference, joined Senator Jon Corzine (D-NJ) and other Members of Congress to discuss recently introduced legislation, the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act of 2005 which would provide every newborn with a savings account called a KIDS Account. Senators Santorum, Corzine, Jim DeMint (R-SC), and Charles Schumer (D-NY) are the original cosponsors of the bipartisan legislation.
“I appreciate this opportunity to discuss the advantages of KIDS Accounts and to hear from children who are currently saving for their future,” said Senator Santorum. “KIDS Accounts are an outstanding way to provide an automatic savings account for every child so families can begin to think about investing in their child’s future from the day they are born.”
Jemel Jones, a sixth grade student from Philadelphia, attended today’s event to represent children who are currently saving for their future. Jemel is enrolled in a children’s savings program known as SEED (Saving for Education, Entrepreneurship, and Downpayment), which enabled him to open a savings account that receives matched deposits. Students also take financial education classes and take part in entrepreneurial activities to raise money for their savings accounts.
KIDS Accounts would provide every child born after December 31, 2006 with a one-time $500 contribution. Children in households earning below the national median income would 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.
Once established, families and others will be allowed to contribute additional resources into these accounts. The Senate bill allows for contributions up to $1,000 a year. These voluntary contributions will be after-tax and will not be tax deductible, but account earnings will be tax-free. To further encourage investment, children in households earning below the national median income will be eligible to receive a dollar-for-dollar match on the first $500 contributed to the account. The automatic initial government contribution of $500 must eventually be paid back.
Senator Santorum’s interest in financial education and asset building for low-income families prompted him to initiate the bipartisan and bicameral Congressional Savings and Ownership Caucus which explores and advances policies for the many Americans who face an ongoing savings and assets crisis. One third of all Americans have no assets available for investment, and another fifth have only negligible assets. The United States household savings rate lags far behind that of other industrial nations, constraining national economic growth and keeping many Americans from entering the economic mainstream by buying a house, obtaining an adequate education, or starting a business.
As Chairman of the Senate Finance Subcommittee on Social Security and Family Policy, Senator Santorum recently presided over a hearing regarding building and ownership for low-income families in which the advantages of KIDS Accounts, among other topics, were discussed.
Also in attendance at today’s event: David Brooks, columnist for The New York Times; Ray Boshara, New America Foundation; Laura Levine, Jump$tart Coalition; Vic Wolff, INGDIRECT; Benita Melton, Charles Stewart Mott Foundation; and Robert E. Friedman, Corporation for Economic Development (CFED).
###
|
|
