Sec. 2. Findings
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/bill/114/hr/4045/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: Americans recognize the importance of savings to create a more secure financial future for their family but barriers to entry have blocked participation in savings programs, leading to drastic disparities in asset building and wealth creation. Most working families in America lack savings and face financial insecurity as a result. Forty-four percent of families are liquid asset poor , meaning they lack accessible savings to survive for three months at the Federal poverty level.
Of that number, over two-thirds of African-Americans (67 percent) could be considered liquid asset poor as are nearly three-fourths of Latinos (71 percent). Families with children face additional barriers to building savings. These families are more likely than childless households to live in asset poverty. 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.
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. In 2011, the city of San Francisco began offering child savings accounts, expanding them to all children enrolled in public kindergarten starting in 2013. Their experiment proves what SEED documented in 2003—very low-income parents will save and invest for their children's future if given the opportunity. Data from San Francisco’s nascent Kindergarten to College Account program demonstrates that families, even those of lower income, are contributing their own funds towards their child’s education at a rate of four times higher than Americans of all income limits are towards tax advantaged 529 college savings plans. 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. In the 4 years that the San Francisco Pilot program has been in existence, families have deposited over $1 million in new savings, helping to build assets for participating families. In order to expand economic opportunity and spur economic growth, the United States should promote savings and investments for all Americans.