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.