Two House Democrats have introduced legislation that would set up a new federal government program aimed at helping kids save money, in part by having the government make contributions to those accounts.
Rep. Joe Crowley (D-N.Y.) and Keith Ellison (D-Minn.) introduced the bill, which would create new USAccount Funds for kids under the age of 17.
Under the bill, the Treasury Department would register children under these USAccounts, and would start by depositing $500 per child into those accounts. After that, private contributions could be made, and the government would match those contributions up to $500 per year.
Distributions to the children could not take place until they are 18 years old, and the accounts would be eliminated when they turn 19.
Crowley and Ellison said the bill is needed because too many children start out poor and have less opportunity throughout their lives because of that bad financial start. They said a savings program would give more kids a chance to go to college or at least help avoid financial insecurity later in life.
“There is a strong link between savings and economic opportunity,” the bill said. “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,” it added.
The bill did not estimate how much the program would cost, and said simply that funds would be appropriated to run it. Read the bill here: