Representative Patrick Kennedy (D-RI), along with Representatives Tom Petri (R-WI) and Jim Cooper (D-TN), introduced the America Saving for Personal Investment, Retirement and Education (ASPIRE) Act of 2010 today. It is especially poignant that the sponsors chose to do so during America Saves Week.
The ASPIRE Act would set up a special account at birth for every child in America. The "Lifetime Savings Account" (LSA) can later be used to pursue post-secondary education, buy a first home, or build up a nest-egg for retirement. The ASPIRE Act calls for each child’s LSA to be endowed with a one-time $500 contribution at birth. Children living in households with incomes below national median income will be eligible for both a supplemental contribution of up to $500 at birth as well as the opportunity to earn up to $500 per year in matching funds for amounts saved in the account.
In a press release endorsing the introduction of the bill Reid Cramer said, "We know that the presence of assets on a household balance sheet promotes security, economic mobility, and helps families take advantage of economic opportunities over the long term. It is high time we help families jump start the savings process."
This is a remarkably bold and sweeping proposal (if we do say so ourselves) and has a diverse base of sponsors standing behind it today. In addition, Senator Chuck Schumer has supported the bill in past Congress' and has announced his intention to introduce the bill in the Senate again. Politicians from former Senator Rick Santorum and Newt Gingrich to current White House Chief of Staff Rahm Emanuel have supported ASPIRE in the past. Today's introduction marks the fourth consecutive Congress in which a version of ASPIRE has been introduced. It comes at a time when the positive impacts of asset building are more widely recognized than ever before, and the White House has put significant time and effort into promoting asset building proposals, from simple items like the return of Savings Bonds to the tax form, though Auto-IRA and the expanded Saver's Credit, even promoting asset limits reform in their 2011 budget proposal.
By creating an inclusive system of children’s accounts, the ASPIRE Act has the potential to expand opportunity, broaden asset ownership, and fortify the American economy for the long haul by helping children and their families plan to save. Kudos to Congressmen Kennedy, Petri, and Cooper for standing up for this idea.