Ownership & Assets: The Latest From New America

How Much Does the Federal Government Spend To Promote Economic Mobility, And For Whom?

Fiscal Policy — Thu, 17 Apr 2008 09:30:00 -0400

In an economically mobile market economy, individuals and families are able to raise their private incomes, wealth, and ability (sometimes referred to as human capital) over time and across generations. In the United States, many associate economic mobility with the pursuit of the American Dream. Education, work experience, and saving enhance the opportunity for upward economic mobility. To this end, many federal spending and tax expenditure or tax subsidy programs aim to enhance economic mobility. But exactly how much does the federal government encourage economic mobility? What form does this encouragement take? And who benefits from these efforts?

To begin answering these… more

Asset Building in California

Asset Building — Tue, 08 Apr 2008 19:45:00 -0400

In the current legislative session, New America’s Asset Building Program in California is pursuing the following initiatives: Senate Bill 752 (Steinberg D-Sacramento) California Kids Investment and Development Savings (KIDS) Accounts Assembly Bill 167 (Bass D-Los Angeles) CalWORKs Savings Act Assembly Bill 1502 (Lieu D-Torrance) Banking Development Districts Assembly Bill 1693 (Eng D-Los Angeles) The Refunds to Savings Act Assembly Joint Resolution (Jose Solorio D-Santa Anna, Bonnie Garcia R-Cathedral City) California Subprime Mortgage Foreclosure Resolution Assembly Bill 2123 (Ted Lieu D-Torrance) The California Financial Literacy Initiative Assembly Bill 2368 (Felipe Fuentes D-San Fernando) The CalWORKs Mobility Initiative Assembly Bill 2940 (Kevin… more

Financial Services Corps

Asset Building — Wed, 02 Apr 2008 09:06:00 -0400

Today’s complex financial marketplace makes it increasingly difficult for individuals to understand and navigate the array of products and services available from a variety of financial service providers. For low to middle income individuals who have fewer financial resources to begin with, a solid grounding in personal finance and a clear understanding of the options and implications of one’s financial decisions are all the more critical.

While there is a wide range of financial education curricula available, there is a dearth of financial advisors and educators to help low and middle-income families understand the complexities of the financial services sector, access… more

The Assets Report 2008

Asset Building — Wed, 12 Mar 2008 03:03:00 -0400

The purpose of this annual report is to summarize and take stock of the current state of federal policy through an asset-building lens, especially as it affects the asset base of families with lower incomes and fewer resources, which is the focus of our work. The report is divided into three sections. The first is a review of policy developments from the past year related to asset building, highlighting administration action and significant legislation, including assets-related bills introduced in the first year of the 110th Congress; the second is an examination of the President’s budget proposals for Fiscal Year… more

Rethinking Social Insurance

Fiscal Policy — Tue, 19 Feb 2008 00:00:00 -0500

The single greatest threat to the fiscal health of the United States is the runaway growth of the nation’s major retirement and health care entitlement programs. Social Security and Medicare are projected to grow from 7.5 percent of GDP today to almost 13 percent of GDP by 2030. Already, the two programs consume over a third of the federal budget. The total present value of costs that will exceed earmarked revenues of Social Security and Medicare over the next 75 years is $41 trillion, or, as the Government Accountability Office points out, a debt burden of $135,000 for every man, woman, and child in America. If… more

The California Assets and Transaction Account

Asset Building — Wed, 06 Feb 2008 11:43:00 -0500

In support of state-wide efforts to bring more Californians into the financial mainstream, the State of California could deliver a pre-paid account through the state’s tax filing process. The Assets and Transaction Account, or ATA, would expedite tax filers’ access to their tax refunds and serve as a safe, affordable, and convenient financial tool for lower-income Californians to conduct routine financial transactions and build saving throughout the year.

The state tax filing process presents a unique opportunity to reach and deliver a valuable financial product to millions of under-banked Californians, while also saving the state government millions… more

Saving Promises

Asset Building — Wed, 19 Dec 2007 10:14:00 -0500

For the first time since 1952, the absence of incumbents vying for the nomination of each major party has created a wide open race, one where the stakes are remarkably high. This has contributed to an extended campaign process that will last almost two years by the time the presidential election is held in November of 2008. While some lament the length of this campaign cycle, it has generated a great deal of activity in the policy arena as each candidate has sought to articulate their vision for America’s future and proposed policies that will help take us there. … more

The Assets and Transaction Account

Asset Building — Fri, 16 Nov 2007 10:13:00 -0500

Over the past two decades, policymakers, academics, and others have pursued an array of policies and strategies to help lower and middle income households to build savings and assets and access reasonably-priced financial products at mainstream institutions. While some progress has been made, there have been few advances to delivering a high-value, affordable financial product at scale.

Over the last five years, however, technological developments, new entrants into the financial services market, and new insights into consumer demand, particularly the financial behavior of lower income consumers, have boosted the creation of innovative financial products. Prepaid products–accounts that are pre-funded and accessible… more

Asset-Based Welfare Policy in the U.K.

Asset Building — Fri, 09 Nov 2007 13:49:00 -0500

While traditional anti-poverty efforts have focused on maintaining a social safety net to protect the poor, there is a growing recognition that economic well-being hinges on a household’s ability to accumulate a wide range of assets. The value of assets is based not only on the economic security they provide but in how they enable people to make productive investments in their future. This approach has contributed to a wide range of policy proposals designed to help households build assets, including matched savings accounts, children’s accounts, and accessible saving plans.

Since 2000, the United Kingdom has begun implementing a number… more

Public Policy Ideas to Improve Financial Education and Help Consumers Make Wise Financial Decisions

Asset Building — Wed, 17 Oct 2007 11:51:00 -0400

Although the number of financial education programs has grown over the last decade, few policies have been enacted to evaluate, support and expand effective financial education and increase financial capability. Although the government is not the only entity that can help improve financial education, there is an important role for the government sector to play that complements the efforts of the private sector, the nonprofit sector, and the efforts of individuals to take personal responsibility to access financial education. All levels of government can develop policies that help prepare youth and adults to make wise financial decisions. … more

A Citizen's Guide to the ASPIRE Act

Asset Building — Mon, 01 Oct 2007 13:09:00 -0400

The Section-by-Section Summary of the Bill KIDS Account Fund KIDS AccountsCertifications Related to Government ContributionsRules Governing KIDS Accounts Relating to Investment, Accounting and ReportingTax Treatment of KIDS AccountsPrivate Management of KIDS AccountsKIDS Accounts Fund BoardFiduciary ResponsibilitiesAssignment, Alienation and Treatment of Deceased IndividualsAccounts Disregarded in Determining Eligibility for Federal BenefitsReportsPrograms for Promoting Financial Literacy

For a detailed description of each section of the ASPIRE Act, please see the PDF document below.

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… more

Analyzing the Relationship Between Account Ownership and Financial Education

Asset Building — Mon, 17 Sep 2007 08:33:00 -0400

Account ownership and financial knowledge are understood to be critical components of financial stability and wealth accumulation. Presumably, combining financial education and accounts reinforces the positive effects of each on the other and enhances the recipient’s financial well being. To date, however, no testing of this hypothesis has been undertaken. This report sets out to do that. It presents a review of programs across the country that combine account ownership with financial education to analyze their relationship and the impact that each component has on the other to inform financial service and education policies for lower-income… more

The New Markets Tax Credit

Asset Building — Sun, 22 Apr 2007 12:01:00 -0400

In an era of declining federal resources dedicated to economic development, the New Markets Tax Credit stands out as a success story and a particular boon for metropolitan areas, which have received the majority of credits to date. Despite its complexity and initial doubts about whether it could be effectively implemented, it has shown signs of providing an important extra boost to many types of development in underserved urban and rural communities. As the program has developed, participants have become bolder and more creative in their uses of the Credit, and pushed more of the Credit’s limited subsidy into severely… more

The Assets Agenda 2007

Asset Building — Wed, 11 Apr 2007 21:48:00 -0400

America’s personal savings rate has been negative for the last two years, a dubious economic feat not achieved since the Great Depression. While many Americans own assets, most of our public policies that support savings and ownership leave out those who own little or nothing. If we are to successfully broaden savings and assets ownership, our policy efforts must be expanded, strengthened, and targeted to those with the greatest need.

The purpose of this issue brief is to summarize a federal public policy agenda to broaden savings and asset ownership opportunities for Americans with lower incomes and fewer resources. It reflects… more

The Assets Report 2007

Asset Building — Thu, 01 Mar 2007 00:29:00 -0500

The purpose of this annual report is to summarize and take stock of the current state of federal policy through an asset-building lens, especially as it affects the asset base of families with lower incomes and fewer resources, which is the focus of our work. The report is divided into three sections. The first is a review of policy developments from the past year related to asset building; the second is an examination of the president’s budget proposals for fiscal year 2008 from an assets perspective; and the third is a forecast of the assets policy issues that may be… more

Eliminating the CalWORKS Asset Limit

Asset Building — Tue, 20 Feb 2007 03:01:00 -0500

For families making the difficult transition from welfare to work, developing assets is critical to achieving true economic independence. In order to prevent a complete backslide to public assistance, low income working families must begin to develop their own safety nets through personal saving for use in the event of an unexpected income shock due to illness or temporary unemployment. As personal saving is essential to achieving self-sufficiency – the stated goal of the CalWORKs program – saving should be encouraged, not penalized, by welfare policy and social service agencies.

Expanding Homeownership in California

Asset Building — Tue, 20 Feb 2007 00:04:00 -0500

California ranks second to last (ahead of New York) among US states in the percent of households who own their own homes (2005 ACS). Only 57% of Californian households are homeowners, compared to over 70% nationally. As Figure 1 illustrates, this current gap is representative of a persistent growing trend; as homeownership rates have risen nationally, California has failed to keep pace.

Promoting Tax Time Saving

Asset Building — Mon, 19 Feb 2007 21:06:00 -0500

California should amend its state income tax forms to allow filers to purchase savings bonds -- for themselves or their children—with a portion of their refunds. By making it easier for Californians to save part of their hard-earned refunds, policymakers can help families build the personal safety nets they need to thrive in today’s economy. With this change, California would lead the nation in harnessing tax time savings to build families’ economic security.

California Kids Accounts

Asset Building — Mon, 19 Feb 2007 20:54:00 -0500

What difference would it make if every Californian grew up knowing that she or he had a nest egg to go to college or buy a home? What benefits would accrue to individuals, families, and California as a whole? California can find out by creating California KIDS accounts.