[Congressional Record Volume 146, Number 7 (Wednesday, February 2, 2000)]
[Senate]
[Pages S287-S288]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LIEBERMAN (for himself, Mr. Santorum, Ms. Landrieu, Mr. 
        Abraham, Mrs. Feinstein, Mr. Robb, and Mr. Bayh):
  S. 2023. A bill to provide for the establishment of Individual 
Development Accounts (IDAs) that will allow individuals and families 
with limited means an opportunity to accumulate assets, to access 
education, to own their own homes and businesses, and ultimately to 
achieve economic self-sufficiency, and for other purposes; to the 
Committee on Finance.


                SAVINGS FOR WORKING FAMILIES ACT OF 2000

 Mr. LIEBERMAN. Mr. President, I rise today to proudly 
introduce with my esteemed colleagues, Senators Santorum, Abraham, 
Feinstein, Landrieu, Bayh, and Robb, the Savings for Working Families 
Act of 2000. This legislation directly addresses a problem that is now 
starting to receive the attention that it deserves: the growing wealth 
gap in our country. This legislation builds on a bipartisan effort 
begun last session to help more low-income working families join our 
country's economic mainstream by addressing that wealth gap. Passing 
this legislation will help expand our economic winner's circle to 
include more working families. Because what goes up for the richest 
families, particularly in these boom times, need not come down for 
other families.

  Today with my colleagues, I put forward a modest yet promising 
proposal that we believe will help more low income families share in 
our country's economic prosperity. Today we will introduce new 
legislation to support the expansion of Individual Development 
Accounts, or IDAs, an innovative and powerful tool to help the working 
poor save and develop the assets they need to get ahead and thrive in 
the new economy--to enter the winner's circle.
  The Savings for Working Families Act of 2000 will benefit working, 
low-income families across this country to share in the unprecedented 
prosperity of our booming economy. Our bill brings together Republicans 
and Democrats, policy wonks and working mothers, and even financial 
institutions and consumers, all in support of a new approach to 
sustaining some American ideals--hard work, thrift, individual 
responsibility, and entrepreneurship. The Savings for Working Families 
Act of 2000 provides the real incentives and real opportunities for the 
working poor to build assets, both human and financial capital, which 
they in turn will be able to invest in our national economy.
  Today's economy is defying gravity. The stock market is jumping to 
record highs while inflation and unemployment are hovering at record 
lows. Millions of Americans are reaping the benefits of the longest 
economic expansion in our history, including millions of working middle 
class families. Unfortunately, millions more are not.
  Several recent studies have documented a growing income gap in the 
U.S.--an increasing income disparity between the rich and poor with 
declining incomes for both poor and low-income families. In addition to 
that income gap, a report released recently by the Federal Reserve 
Bank, has identified a significant asset gap in this country. A gap 
where the net worth--or assets--of the typical American family has 
risen substantially since 1989, while the net worth--or assets--of 
lower income families has actually declined during the economic boom of 
recent years.
  According to the Fed report, families earning under $10,000 a year 
had a median net worth of $1,900 in 1989. That climbed to $4,800 in 
1995, but had slipped back to $3,600 by 1998. Those families earning 
$10,000 to $25,000 saw their net worth drop from $31,000 in 1995 to 
$24,800 in 1998. More specifically, while the percent of all U.S. 
families that own a home or business has risen during the boom years of 
1995-98, the percent among lower income families has decreased. For 
example, in 1995, 36.1% of families earning under $10,000 annually 
owned their home. By 1998 the rate had dropped to 34.5%. The drop for 
families earning $10,000 to $25,000 was from 54.9% to 51.7%. The same 
story is true for the percent of lower income families owning a 
business.
  The Savings for Working Families Act of 2000 will directly address 
exactly this asset gap. Our bill seeks to address this imbalance by 
dramatically expanding the use of IDAs. IDA programs

[[Page S288]]

do work and are reporting real success in spurring savings and asset 
building on a small scale in hundreds of communities across the 
country. Already 27 states have passed some form of IDA program 
legislation.
  In my home state of Connecticut, there is today only one pilot IDA 
program in existence. A handful of low income individuals are now 
starting to take part in a strong IDA program run by the Committee for 
Training and Employment, or CTE, a cutting edge community-based 
organization providing a range of services and activities to address 
poverty issues in the greater Stamford area. In Connecticut we are 
hopeful that we will soon be seeing an expansion of IDA accounts and 
programs. A statewide IDA Task force, convened by Connecticut State 
Treasurer, Denise L. Nappier, recently released a report to jump-start 
more IDA activity in the state. Its thoughtful analysis and 
authoritative recommendations will certainly help to increase IDAs in 
our state. The Savings for Working Families Act of 2000 was drafted in 
consideration of the excellent IDA work under way in states and 
communities all across the country.
  The idea is simple, but powerful. Low income workers who put their 
hard earned dollars into IDAs would get matching funds from financial 
and other private entities. A federal tax credit will provide the 
incentives for those private sector investments in IDAs. The IDA 
savings could then be used by low income working families to develop 
assets, specifically for the purchase of a home, the pursuit of a 
postsecondary education, or to start a business. In essence, this 
legislation extends to lower income working families the type of 
incentives for building assets, such as the home mortgage interest 
deduction, preferential capital gains rates and pension funds 
exclusions and incentives, that are now available on a large scale to 
the non-poor and wealthy.
  Just last week, President Clinton underscored the promise of this 
approach in his State of the Union Address, when he put forward his 
Retirement Savings Account (RSA) proposal. Those RSAs are similar to 
the IDAs in this bill. In his proposal, the President rightly 
identified the potential of the private sector in strengthening the 
economic security of many of our most vulnerable citizens. Just as 
important, he made clear, as we do in the Savings for Working Families 
Act, that these IDA accounts are not simply an empty promise for a 
handout. They are a means to integrate more Americans into the broader 
economic mainstream.
  In drafting this new IDA legislation, our objective was to keep it 
simple and based closely on S. 895, a bill that Senator Santorum and I 
introduced last year and that enjoyed strong bipartisan support. 
Modifications in the Savings for Working Families Act of 2000 are 
primarily technical in nature, recognizing that the IDA field has grown 
and evolved in the last year. We have also made a concerted effort in 
the new bill to realize the potential of critical private sector and 
nonprofit organizations to be effective IDA providers, including credit 
unions and community service organizations.
  Moving forward, we are confident that we can get this bill passed 
because it addresses a threat to our fundamental faith in the American 
dream and to the vitality and long-term stability of our national 
economy. Our bill cannot singlehandedly eliminate the wealth gap, but 
we are confident that it will help carve out a little more space in 
that winner's circle and move us a step closer to making the American 
dream real for more working families.
  Finally, I would like to thank each of the cosponsors of this bill, 
especially Senators Santorum and Abraham. Through their hard work, and 
in conjunction with the financial services industry and the IDA field, 
we have legislation that achieves a very public interest. In 
particular, I would like to note the leadership of the Corporation for 
Enterprise Development (CFED) for helping to bring the voice of the IDA 
community to this creation of this bill. With the Savings for Working 
Families Act of 2000, we are able to harness the creative forces of the 
marketplace to help secure our core democratic values, holding out the 
hope of free enterprise without the false promise of a free lunch, and 
giving some tangible meaning to those core values of community, 
opportunity and responsibility. In expanding the use of IDAs across the 
country as an empowerment tool for working families, this legislation 
speaks to our shared aspirations as Americans.
                                 ______