If U.S. Sen. Chuck Schumer gets his way, every child born in America will start life with a savings account, and a first deposit from the federal government.
Schumer is reviving a plan from 2006 to create savings accounts for every child born to a U.S. citizen and to give each child $500 to begin saving for college, a home or retirement.Ã‚Â Children born into poor families would receive $1,000.Ã‚Â The money and any interest it earns would be tax free, anyone can add to the account and the money could only be used to pay for college expenses, buy a home or save for retirement.Ã‚Â The amount given to each child would go up with inflation.
“It’s a way to encourage people to save,” Schumer said in his weekly conference call with reporters (which you can hear below). “It leaves people with a nest egg.”
Schumer’s office estimates that more than 1,100 babies are born in Oswego County each year.Ã‚Â Schumer’s program would pump more than $500,000 into savings accounts each year for those local children.Ã‚Â The Senator said that if a family added just $300 a year to the child’s account, and it earned 7% interest a year, there’d be $20,000 to help pay for college when the child turned 18.
“Middle class people are really hurting right now,” Schumer said. “At a time of record college prices and financial uncertainty, providing seed money so our children start to save early is more important than ever.”
A similar plan failed in 2006.Ã‚Â Schumer claims support from both parties for the bill, the inspiration for which came, he said, from someone he usually disagrees with — Republican former House Speaker Newt Gingrich.
Sen. Schumer’s conference call: