Tom Messina (l), Congressman Joe Crowley (r.)
At a meeting in Van Nest last night, Congressman Joe Crowley representative Tommy Messina unveiled to Bronx residents the Congressman’s new plan to create a national savings account program for every American who are eligible from the time of birth, funded with federal dollars, matching funds, and parents/family contributions.
The plan is meant to help help create a culture of saving and investment from their earliest days, according to the Congressman. The bill also authorizes an expansion of the successful Child Tax Credit, giving low-income families the opportunity to contribute to the savings account.
“American families are struggling to make ends meet and pay for basic necessities, let alone set aside savings for their children’s futures,” said Crowley, who announced his plan at an Aspen Institute event on retirement savings policy. “The result is a new generation of Americans growing up with no assets and little ability to either climb the economic ladder or simply weather a difficult time. My legislation will give every American child, regardless of their economic background, the opportunity to start their financial future on the right foot.”
Crowley’s legislation will create a new savings program called USAccounts, to be established by the Social Security Administration (SSA). USAccounts will be funded through a combination of federal seed money, matching funds, and family contributions. Upon the birth of a child, a USAccount will be established in the child’s name, and the federal government will contribute $500 in initial seed money the first year. The child’s family will be allowed to deposit up to $2,000 into the account annually, and the government would provide dollar-for-dollar matching funds to a maximum annual match of $500 per account, per year.
The bill authorizes an increase of the refundable Child Tax Credit up to a maximum of $500 annually to give low-income families the opportunity to support a family contribution to the account. While USAccounts will be established through the SSA, parents will have the option of keeping the account within the SSA or moving it to an approved financial services institution.
Once independent, the account holder can access the funds to pay for college, buy a home, or start a small business. The funds can also be rolled over to a 401k, IRA, or traditional private savings account, giving the account holder the opportunity to continue to save for retirement.
“Right now, the savings picture in America is bleak,” continued Crowley. “If we want to change the course of poverty in America, we must start by making saving for the future a possibility for more American families.”
Congressman Crowley is the eight-term representative from the 14th Congressional District of New York, which includes sections of Queens and the Bronx. He is a member of the powerful Ways and Means Committee and serves as Vice Chair of the Democratic Caucus in the House of Representatives.
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