Kennedy Introduces Bipartisan Legislation to Invest in Children
February 24, 2010
The following information was released by the office of Rhode Island Rep. Patrick Kennedy:
Today, Congressman Patrick J. Kennedy (D-RI) introduced bipartisan legislation that will encourage savings, promote financial literacy, and expand opportunities for young adults. Joined by Rep. Thomas Petri (R-WI) and Jim Cooper (D-TN), the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act will create a Lifetime Savings Account (LSA) for every newborn child in America.
Achieving the American dream is contingent on the equality of opportunity. Far too many Americans go through life without ever surmounting the disadvantage beset upon them by their financial circumstances, said Kennedy. From college tuition costs, to home ownership, to retirement, opportunities are lost because the importance of saving was not learned early enough. Educating children in financial literacy, personally entrusting them with their head start on fiscal security, is one of the best investments we can make in future generations.
Under the ASPIRE Act, each child would be given an LSA with $500 at birth, with children in families below the national median income eligible for up to an additional $500 at birth and matching funds up to $500 each year for additional funds saved in the account. Additional incentives to promote savings include tax-free earning and financial literacy education.
Accountholders would be unable to withdraw from the account until they reached the age of 18, at which point the funds could be used for post-secondary education. After age 25, the funds could be withdrawn for additional purposes such as home ownership or as a nest-egg for retirement.
The ASPIRE Act would give children a chance to learn the basics of financial education at the same time as they plan for their future, said Reid Cramer, Director of the Asset Building Program at the New America Foundation. It not only would bring more Americans into the financial mainstream, but it would build a strong foundation for a more vibrant national economy based on greater savings and investment rather than borrowing and spending.
Introduction of the ASPIRE Act coincides with America Saves Week, which aims to provide societal encouragement and support for Americans to build wealth through personal savings. Congressman Kennedy has been a co-sponsor of the ASPIRE Act since it was first introduced in the 108th Congress, and has been the lead sponsor of the bill since 2007. Senator Chuck Schumer (D-NY) will be introducing companion legislation in the Senate.