[Congressional Record Volume 145, Number 152 (Tuesday, November 2, 1999)]
[House]
[Pages H11208-H11212]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1030
 ENCOURAGING EDUCATION OFFICIALS TO PROMOTE FINANCIAL LITERACY TRAINING

  Mr. PETRI. Madam Speaker, I move to suspend the rules and agree to 
the concurrent resolution (H. Con. Res. 213) encouraging the Secretary 
of Education to promote, and State and local educational agencies to 
incorporate in their education programs, financial literacy training.
  The Clerk read as follows:

                            H. Con. Res. 213

       Whereas in order to succeed in our dynamic American 
     economy, young people must obtain the skills, knowledge, and 
     experience necessary to manage their personal finances and 
     obtain general financial literacy;
       Whereas all young adults should have the educational tools 
     necessary to make informed financial decisions;
       Whereas despite the critical importance of financial 
     literacy to young people, the average student who graduates 
     from high school lacks basic skills in the management of 
     personal financial affairs;
       Whereas a nationwide survey conducted in 1997 by the 
     Jump$tart Coalition for Personal Financial Literacy examined 
     the financial knowledge of 1,509 12th graders;
       Whereas on average, survey respondents answered only 57 
     percent of the questions correctly, and only 5 percent of the 
     respondents received a `C' grade or better;
       Whereas an evaluation by the National Endowment for 
     Financial Education High School Financial Planning Program 
     undertaken jointly with the United States Department of 
     Agriculture Cooperative State Research, Education, and 
     Extension Service demonstrates that as little as 10 hours of 
     classroom instruction can impart substantial knowledge and 
     affect significant change in how teens handle their money;
       Whereas State educational leaders have recognized the 
     importance of providing a basic financial education to 
     students in grades kindergarten through 12 by integrating 
     financial education into State educational standards, but by 
     1999 only 14 States

[[Page H11209]]

     required schools to implement personal finance standards into 
     the academic curriculum;
       Whereas teacher training and professional development are 
     critical to achieving youth financial literacy;
       Whereas teachers confirm the need for professional 
     development in personal finance education;
       Whereas in a survey by the National Institute for Consumer 
     Education, 77 percent of a State's economics teachers 
     revealed that they had never had a college course in personal 
     finance;
       Whereas personal financial education helps prepare students 
     for the workforce and for financial independence by 
     developing their sense of individual responsibility, 
     improving their life skills, and providing them with a 
     thorough understanding of consumer economics that will 
     benefit them for their entire lives;
       Whereas financial education integrates instruction in 
     valuable life skills with instruction in economics, including 
     income and taxes, money management, investment and spending, 
     and the importance of personal savings;
       Whereas the consumers and investors of tomorrow are in our 
     schools today; and
       Whereas the teaching of personal finance should be 
     encouraged at all levels of our Nation's educational system, 
     from kindergarten through grade 12: Now, therefore, be it
       Resolved by the House of Representatives (the Senate 
     concurring), That Congress encourages--
       (1) the Secretary of Education to use funds available in 
     the Fund for the Improvement of Education (part A of title X 
     of the Elementary and Secondary Education Act of 1965) to 
     promote personal financial literacy programs; and
       (2) State and local educational agencies to incorporate 
     personal financial management curriculums into their 
     education programs.

  The SPEAKER pro tempore (Mrs. Biggert). Pursuant to the rule, the 
gentleman from Wisconsin (Mr. Petri) and the gentleman from Michigan 
(Mr. Kildee) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. Petri).
  Mr. PETRI. Madam Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Dreier), the author of the resolution 
before us.
  (Mr. DREIER asked and was given permission to revise and extend his 
remarks.)
  Mr. DREIER. Madam Speaker, I would like to begin by extending my 
great appreciation to the gentleman from Wisconsin (Mr. Petri) and to 
the gentleman from Michigan (Mr. Kildee) and to the hard-working 
members of their staff who have helped us put together this very 
important piece of legislation.
  The gentleman from Wisconsin (Mr. Petri) very appropriately described 
it at the outset. We all know that we live in a global economy; and, as 
such, it is very important for our young people to be prepared to 
compete.
  One of the issues that we have dealt with in this House is to make 
sure that we have qualified expertise to deal with the high-tech 
industry, the industry that has created 45 percent of our gross 
domestic product growth in the past 3 years.
  I think that education can, in fact, allow us to ensure that in the 
future we will have qualified Americans to do not only those jobs in 
the high-tech industry but a wide range of other jobs. There is a very 
important component of that, and it is financial literacy.
  For a number of years, an organization known as the Jumpstart 
Coalition has been focusing on this. I have been working with a number 
of people to make sure that we would get this legislation moved, and 
that is why I again express my appreciation to those on the committee 
who have provided us with very important assistance.
  It is unfortunate that bankruptcy filings are very high. They 
continue to move up. Consumer debt is at an all-time high. And, as we 
all know, the rate of savings in this country is at a very low level. 
So it is more important now than ever, I believe, for us to teach young 
people about the importance of how to manage money and their credit.
  The survey that was done by that organization I just mentioned, the 
Jumpstart Coalition, which is a private nonprofit group that promotes 
financial literacy, gave only 5 percent of the 12th graders a C grade 
or better when asked about their financial management skills. However, 
financial management instruction, based on empirical evidence that we 
have, does work.
  The National Endowment for Financial Literacy conducted a study and 
found that as little as 10 hours of classroom instruction can affect 
how teens handle their money. Fifty-eight percent of the students who 
had that 10 hours, in fact, we were able to see improvement in their 
spending habits, and 56 percent of those students who benefitted from 
that 10 hours of training actually improved their personal savings 
habits.
  Now, this resolution, as was pointed out by the gentleman from 
Wisconsin (Mr. Petri), simply encourages the Secretary of Education to 
give our teachers and schools extra resources to teach financial 
literacy to our kids. The measure is a common-sense approach to 
addressing educational needs at the Federal level by providing States 
with resources while also, something that is very important in this 
106th Congress, ensuring that the flexibility is there in designing and 
implementing those education programs that they deem absolutely 
necessary.
  Now, there was a survey that was done by the American Savings and 
Education Council that found that 79 percent of students have never 
taken a personal financial course; and of those who took a 3-month 
course, 41 percent then began saving, 28 percent increased their 
savings, and 19 percent of them developed their own budget.
  Right now, about 94 percent of students learn about money from their 
parents. So, keeping in mind this last statistic and the fact that 
personal savings rates are at a very low level and bankruptcies are 
high, it seems to me that financial instruction outside of the home is 
a very important thing.
  This resolution is aimed to educate our youth in the importance of 
financial literacy, but it also aims to serve the disadvantaged youth 
who need to be equipped with financial management skills as they tend 
to enter the workforce at an even earlier age.
  The measure does not create or encourage a new program. It does not 
encourage a new program to address these needs. It simply allows the 
Secretary of Education to provide assistance to those high schools 
seeking to fill a void in knowledge thought to be obtained in the home.
  So again, let me just say in closing, as we charge towards the 
millennium and look at the importance of our remaining competitive 
globally, we need to ensure that financial literacy is a component of 
that.
  I want to express my appreciation to the gentleman from Wisconsin 
(Mr. Petri) and to the gentleman from Michigan (Mr. Kildee) and again 
to the hard-working members of their staff and to say that we are 
moving ahead with what I think is a very important measure.
  Mr. KILDEE. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I rise in support of H. Con. Res. 213, encouraging the 
Secretary of Education to promote financial literacy as part of the 
State and local education programs.
  The authors of this resolution, the gentleman from North Dakota (Mr. 
Pomeroy) and the gentleman from California (Mr. Dreier), should be 
commended for bringing this issue to the attention of the House.
  Federal funding through Title I and other programs have focused on 
reading, writing, and mathematics to ensure that children, especially 
disadvantaged children, can compete with their peers academically. 
These programs have been critical in giving our Nation's children an 
opportunity to succeed.
  While we have been focusing our energies on academic success in the 
core subject areas, many young people still lack basic skills in 
personal financial management. Many American high school students are 
unable to balance a checkbook, and most simply have no insight into the 
basic survival skills associated with earning, spending, saving and 
investing.
  As a result, too many young Americans develop bad financial 
management habits and stumble through their lives learning by trial and 
error.
  H. Con. Res. 213 raises the awareness of the Congress to the issue of 
financial literacy. With bankruptcies totaling over 1 million every 
year, more and more of our teens and young adults desperately need some 
focus on financial training and literacy. Being financially literate 
ensures that today's children will make better informed decisions in 
purchasing homes, buying cars, and investing for college education or 
retirement.
  This resolution, which encourages both the Secretary of Education and

[[Page H11210]]

State and local educational agencies to promote financial literacy, is 
an important step forward in recognizing a solution to this pressing 
problem.
  Again, I want to thank the authors of this resolution for bringing it 
before us today.
  Madam Speaker, I reserve the balance of my time.
  Mr. PETRI. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, although our economy remains strong, some of us in 
Congress believe that we should be focusing our efforts to find ways to 
address our Nation's high consumer debt, numerous bankruptcies, and 
unacceptably low savings rate.
  A way to focus our efforts on solving these problems without merely 
treating the symptoms is to increase our Nation's children's knowledge 
about and appreciation of financial literacy. I join my distinguished 
colleague the gentleman from California (Mr. Dreier) in expressing my 
view that educating our Nation's youth about personal finance should be 
a priority for our schools across the country.
  The Jumpstart Coalition for Personal Financial Literacy recently 
found that the average student who graduates from high school lacks 
basic skills in the management of personal financial affairs. Students 
are unable to balance a checkbook and have little or no insight in the 
basic financial principles involved with earning, spending, saving, and 
investing.
  In its nationwide survey conducted in 1997, the Jumpstart Coalition 
examined the knowledge of over 1,500 12th graders. On average, survey 
respondents answered only 57 percent of the questions correctly, and 
only 5 percent of the respondents received a grade of C or better.
  Evidently, many young people fail in the management of their first 
consumer credit experience, establishing bad financial management 
habits, and stumble through their lives as consumers learning by trial 
and error.
  Our Nation's students are taught about a multitude of subjects, 
including reading, writing, history, mathematics, science, and the list 
goes on. But do we teach our children how to balance a checkbook? Do we 
teach them about compounding interest? Do we teach them about the 
necessity of good credit? Do we train students to understand how to 
budget their money and about their relationship between taxes, 
spending, and investing?
  Madam Speaker, because of our students' inability to understand and 
manage finances, it should come as no surprise that our Nation's 
personal bankruptcies are at an all-time high and personal savings 
rates at an all-time low.
  Despite the importance of youth financial education, the average 
American high school senior lacks these basic skills and is unable to 
manage personal financial affairs. However, these shortcomings when 
properly addressed can be turned around.
  A recent study by the National Endowment for Financial Education has 
shown that personal finance education improves students' saving and 
spending habits and money management skills.
  Madam Speaker, I am pleased to support H. Con. Res. 213, introduced 
by our colleagues, the gentleman from California (Mr. Dreier) and the 
gentleman from North Dakota (Mr. Pomeroy), to promote financial 
literacy training.
  Specifically, this resolution encourages the Secretary to use funds 
available from the Fund for the Improvement of Education, Part A of 
Title X of the Elementary and Secondary Education Act, to promote 
personal literacy programs.
  In addition, H. Con. Res. 213 encourages States and local educational 
agencies to incorporate personal financial management curriculums into 
their education programs.
  Madam Speaker, we all know that an investment in education is an 
investment in our future. It is time we focus on efforts to promote 
financial literacy to help ensure that our children will have the tools 
they need to prosper in the next millennium.
  I urge my colleagues to support the resolution before us.
  Madam Speaker, I reserve the balance of my time.
  Mr. KILDEE. Madam Speaker, I yield 4 minutes to the gentleman from 
North Dakota (Mr. Pomeroy), a sponsor of the bill.
  Mr. POMEROY. Madam Speaker, I thank the gentleman for yielding me the 
time.
  Madam Speaker, I rise in strong support of H. Con. Res. 213.
  In passing this resolution, Congress will take an important step 
forward in recognizing the importance of youth financial education to 
the future of our Nation's children.
  Today's global economy demands more of our young people than ever 
before. Young people are making important financial decisions long 
before they enter the workforce. In order to make informed choices 
regarding personal finances, our children have to have proper skills 
and experience to manage their money and prepare for their future.
  This resolution expresses the sense of Congress that personal 
financial education plays an important role in securing our children's 
future. This is not just a lofty goal, it is an urgent priority. 
Because survey after survey has demonstrated average high school 
seniors in this country lack even basic knowledge of personal financial 
affairs.
  A nationwide survey conducted in 1997 by the Jumpstart Coalition for 
Personal Financial Literacy looked at the basic financial information 
of 1,500 high school seniors. One in five answered seven out of ten 
questions successfully, not a passing grade for our seniors.
  Because of their lack of financial knowledge, many American students 
run into financial trouble in college. An estimated 50 to 70 percent of 
all college students own at least one credit card, with debts ranging 
between $580 and $725.
  Yesterday the Washington Post ran a story about a student who had to 
drop out of school to pay off $2,500 in credit card debt. Youth 
financial education could help prevent this situation. Young adults who 
understand the cost of credit will not fall prey to the high cost of 
interest rates and mounting credit card debt.
  The crisis, of course, in financial literacy goes far beyond our high 
schools. American investors lack basic knowledge of financial concepts.

                              {time}  1045

  A 1996 poll showed that fewer than one in five Americans are what we 
call financially literate. Only half of all adults in this country, for 
example, understand that investment diversification actually reduces 
investment risk. So it should come as no surprise that personal 
bankruptcies are at an all-time high. Adults in this country need to 
understand basic financial concepts in order to provide for their 
families and prepare for their retirements and we need to get the 
information out there starting in the school years. I would hope in 
following up on this resolution, this body would also adopt a piece of 
legislation that the gentleman from California (Mr. Dreier) and I have 
introduced, H.R. 2871, the Youth Financial Education Act. That bill 
would commit $500,000 to carry out the financial education programs in 
elementary and secondary schools. This legislation encourages State and 
local education agencies to integrate financial education into existing 
courses, such as economics or mathematics, and devotes resources 
necessary to develop teacher training and professional development 
activities in personal financial education. I look forward to working 
with my colleagues on both sides of the aisle to include H.R. 2871 in 
the Elementary and Secondary Education Act later this year.
  Clearly, we must do a better job of preparing our children to make 
informed decisions about money, how to use it, and how to prepare for 
their future. The question then becomes how we concentrate our efforts, 
and I believe the answer lies in our schools, with our children and 
their teachers, and not enough to rely on the ad hoc, the wonderful but 
totally ad hoc efforts, we need to put in a curriculum.
  Mr. PETRI. Madam Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Gary Miller).
  Mr. GARY MILLER of California. Madam Speaker, I rise in strong 
support for the Financial Literacy Training Act. This resolution 
encourages State and local educational agencies to incorporate personal 
financial management curricula into their educational program system.
  Prior to being in politics, I was in the development industry for 
about 30

[[Page H11211]]

years. The old statement that it is easier to earn money than it is to 
keep it is a true statement and this goes a long way to basically 
giving young people the financial training that they need.
  When you get money, what do you do with it? It is like giving a young 
person $10. What does a young person do with it? Do they have any 
concept of what they should do with their finances, any concept of 
where that money should be placed, or should the money just be spent? 
We need to teach our young people how to invest money and what to do 
with money once they earn it.
  In the building industry, we watch many, many builders go broke 
because they succeeded in a given project and they failed in the future 
because they did not understand financial planning, did not understand 
what they should do in the future. The best way to resolve this is to 
be involved with the young people, to give them the financial training 
and financial literacy that they need when they are young.
  I would like to commend the gentleman from California (Mr. Dreier), 
he represents a neighboring district in California, for his hard work 
and effort in drafting this important piece of legislation. If we are 
going to invest anywhere, let us invest in our children. If we are 
going to invest in our children, let us teach them how to invest the 
assets that they acquire, teach them how to invest in their future and 
plan for their future.
  Mr. KILDEE. Madam Speaker, I yield 4 minutes to the gentleman from 
Wisconsin (Mr. Kind).
  Mr. KIND. I thank the ranking member for yielding me this time.
  Madam Speaker, I rise today in strong support of this resolution. It 
is very appropriate and important for this Congress to encourage the 
Federal, State and local education policymakers to incorporate course 
work on personal finance as part of our children's education.
  There are some worrisome trends that the young people of this country 
now face, Madam Speaker. It is no secret that the number of 
bankruptcies filed in this country has skyrocketed in recent years, but 
a closer look at the trends are truly frightening.
  Twenty years ago, the total number of bankruptcy filings was just 
under 332,000 people. According to the American Bankruptcy Institute, 
the total number of filings for 1998 was a staggering 1.5 million 
people. Even more startling is the fact that while the number of 
business filings for 1998 is almost equal to the number filed back in 
1980, the number of consumer filings for bankruptcy has increased by 
almost five-fold. In fact, 97 percent of all bankruptcies are now filed 
by consumers rather than businesses. In my home State of Wisconsin, 
5,000 bankruptcy claims were filed just in the second quarter of 1999.
  Another trend that supports the call for better K-12 education in 
personal finance is the use of credit cards among young adults. Just 
yesterday, the Washington Post carried an article describing the ease 
at which college freshmen can get credit cards and the extent to which 
college students amass credit card debt. Fifty-five to 70 percent of 
college students own at least one credit card, and experts believe that 
number is growing. Furthermore, the average American household carries 
four credit cards, with balances of $5,000. Consumer debt in this 
country tops $1.2 trillion, $540 billion of which is in revolving 
credit. And as a Nation we have a negative per capita savings rate 
today.
  Madam Speaker, there can be no doubt that our children need to know 
basic finance principles and skills before they become consuming 
adults. I realize it seems that there are advocates for a wide variety 
of issues who identify one more subject that must be added to the core 
requirements of reading, writing and arithmetic but, Madam Speaker, 
without at least a basic understanding of personal finance and finance 
principles generally, our young people enter a brave new world as 
unprepared as they would be without being able to read.
  In this day and age, people are handling their finances in ways only 
professionals would just 5 or 10 years ago. We do not use cash to make 
purchases that much. We pay with credit cards. Or we choose to use a 
debit card instead of checks. How many workers do not make substantive 
choices involving how their retirement funds are being invested? Fewer 
and fewer. In a world of global trade and e-commerce, young people who 
do not understand the importance of fiscal responsibility and the long-
term consequences of reckless spending will suffer deeply for years to 
come.
  As a member of the Committee on Education and the Workforce, I am 
glad to see that this measure addresses the need to provide better, or 
in some instances basic training and professional development for the 
teachers. Too many teachers complain that they do not themselves have 
the background to adequately teach their students about personal money 
management. We just passed a major teacher training and professional 
development bill about 3 months ago, and this resolution nicely 
complements that piece of legislation.
  We often speak of the need for the government to make tough choices 
and exercise fiscal responsibility. I submit that each American must 
also exercise wise judgment in personal finances. Our national debt is 
the cause of much concern and gut-wrenching debate here on Capitol 
Hill. Young people must also recognize that personal debt is nothing to 
take lightly. This is especially true given the need for more and more 
college students to take out sizeable loans to finance their education.
  I ask my colleagues to join in support of this resolution today, and 
in my sincere hope that schools nationwide will be able to offer key 
personal finance education to all of our students.
  Mr. KILDEE. Madam Speaker, I yield 2 minutes to the gentlewoman from 
California (Ms. Sanchez).
  Ms. SANCHEZ. I thank the gentleman for yielding me this time.
  Madam Speaker, I rise in strong support of this bill, and I thank my 
friends on the other side of the aisle, my fellow Members from 
California, for bringing this matter to the House's attention.
  I am very saddened by the statistics that reveal the financial 
illiteracy that plagues our young people. Many American high school 
students are unable to balance a checkbook, and they really have no 
training in the basics of financial life, how to earn, how to spend, 
how to save and how to invest.
  Without teaching our students these skills, we force young people to 
learn these lessons by trial and error, and by the costly mistakes that 
result. In an era where young people have the highest access to credit 
cards in American history, yet no training in how to responsibly manage 
this responsibility, can we be surprised that debt and bankruptcy are 
so much on the rise?
  A nationwide survey conducted in 1997 by the Jump Start Coalition for 
Financial Literacy tested 1,509 12th graders on four knowledge areas, 
income, money management, savings and investment, and spending. Sadly, 
only 5 percent of the respondents received a ``C'' grade or higher. 
Five percent.
  Madam Speaker, these rates are abysmal. We can and we must do better. 
I commend the sponsors of this legislation. I urge my colleagues to 
support it.
  Ms. SANCHEZ. Mr. Speaker, I thank the gentleman for yielding. I rise 
in strong support of H. Con. Res. 213. I thank my friends on the other 
side of the aisle, my fellow Members from California, for bringing this 
matter to the House's attention.
  I am very saddened by the statistics that reveal the financial 
illiteracy plaguing our young people. Many American high school 
students are unable to balance a checkbook. They really have very 
little training in the basics of financial life--how to earn, spend, 
save and invest.
   Without teaching our students these skills, we force young people to 
learn these lessons by trial and error--and by the costly mistakes that 
result.
  In an era where young people have the highest access to credit cards 
in American history, yet no training in how to responsibly manage this 
opportunity, can we be surprised that debt and bankruptcy are on the 
rise?
  A nationwide survey conducted in 1997 by the Jump$tart Coalition for 
Financial Literacy, tested 1,509 12th graders on four knowledge areas: 
income, money management, savings and investment, and spending. Only 5 
percent of the respondents received a ``C'' grade or higher.
   Mr. Chairman, these rates are abysmal. We can and must do better.
   I commend the sponsors of this legislation and urge my colleagues to 
support it.

[[Page H11212]]

  Mr. KILDEE. Madam Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. PETRI. Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mrs. Biggert). The question is on the motion 
offered by the gentleman from Wisconsin (Mr. Petri) that the House 
suspend the rules and agree to the concurrent resolution, House 
Concurrent Resolution 213.
  The question was taken.
  Mr. PETRI. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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