Sec. 2. Findings
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/bill/113/hr/5576/ih/section-2·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Congress finds the following: There is a strong link between savings and economic opportunity. Children in the poorest fifth of households who manage to move up the income ladder as adults have almost ten times the wealth of those who remain at the bottom. Even a small amount of children’s savings can have a significant impact on college success, a key driver of economic mobility. Low- and moderate-income children with less than $500 saved for college are three times more likely to enroll in college and four times more likely to graduate than children with no savings.
Most working families in America lack savings and face financial insecurity as a result. 44 percent of families are “liquid asset poor,” meaning they lack accessible savings to survive for three months at the Federal poverty level. Families with children face additional barriers to building savings. These families are more likely than childless households to live in asset poverty. The Great Recession has exacerbated financial insecurity for millions of American families. Between 2009 and 2011, the bottom 93 percent of households saw a drop in net worth, while the wealthiest 7 percent of households saw a significant increase in net worth.
Children’s savings accounts programs are evidence-based and have been tested throughout the country. In 2003, the Saving for Education, Entrepreneurship, and Downpayment
(SEED)national demonstration project was established to evaluate the policy and practice of savings accounts for children. SEED found that even very low-income parents will save and invest for their children’s future if given the opportunity. Since 2009, publicly funded, universal children’s savings accounts programs have launched citywide in San Francisco, California, countywide in Cuyahoga County, Ohio, and statewide in Nevada and Maine. Additional children’s savings programs serving thousands of children have launched or are launching in Colorado, Hawaii, Illinois, Kansas, Michigan, Minnesota, Mississippi, New Mexico, New York, Pennsylvania, South Dakota, Texas, Washington, and Washington, DC. In order to expand economic opportunity and spur economic growth, the United States should promote savings and investments for all Americans.