Democratic New Jersey Sen. Cory Booker and Democratic Massachusetts Rep. Ayanna Pressley on Wednesday reintroduced “baby bonds” legislation to fund child savings accounts.
Booker and Pressley’s American Opportunity Accounts Act would create a $1,000 savings account for every child at birth with additional deposits each year until the child turns 18. Deposits would be up to $2,000 depending on household income and funding would come from raising federal inheritance and estate taxes. (RELATED: EXCLUSIVE: Ted Cruz, GOP Colleagues Call For National Archives To Explain Why Pro-Life Students Were Kicked Out)
In a country as wealthy as ours, no child should be denied access to economic opportunity & a chance to achieve upward mobility. I’m proud to re-introduce Baby Bonds legislation that would help level the playing field & close the racial wealth gap. https://t.co/CXqtljprPr
— Sen. Cory Booker (@SenBooker) February 15, 2023
“The racial wealth gap in America is the result of generations of precise and intentional policy violence, so we must be as intentional and as precise about advancing policies that address it head on,” Pressley said in a press release Wednesday. “Black lives and Black wealth matter, which is why Congress must pass our bill without delay.”
The savings accounts would accrue an estimated 3% interest and receive additional deposits until the child turns 18. Account holders would be permitted to spend the money on “allowable uses” such as buying a home and paying for education when they are eligible.
“Americans today are having a harder time accessing homeownership, higher education, and a secure retirement than their parents did just a generation before them,” Booker said. “‘Baby Bonds’ would fix our broken tax code by providing every American child with startup capital for their life, and helping to drive down the wealth inequality that holds American families back from their full potential.”
The bill is co-sponsored by 14 Democratic senators and Independent Vermont Sen. Bernie Sanders.